<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
 
                                Washington, D.C. 20549
 
                                 Amendment No. 1 to
 
                                     FORM 10-Q/A
 
(Mark One)

( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
       THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 1997
 
                                       OR
 
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
     THE SECURITIES EXCHANGE ACT OF 1934 


For the transition period from __________ to _______________
 
Commission file number 1-8654


                              Unitel Video, Inc. 
-------------------------------------------------------------------------------
              (Exact name of registrant as specified in its charter)



Delaware                                                       23-1713238)
-------------------------------------------------------------------------------
(State or other jurisdiction of                             (I.R.S.  Employer
incorporation or organization)                             Identification  No.


                  555 West 57th Street--New York, New York 10019 
-------------------------------------------------------------------------------
                     (Address of principal executive offices) 


                                 (212) 265-3600 
-------------------------------------------------------------------------------
               (Registrant's telephone number, including area code)


-------------------------------------------------------------------------------
               (Former name, former address and former fiscal year, 
                if changed since last report)


    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding twelve months and (2) has been subject to such
requirements for the past 90 days.

      .....                                                             .....
YES   . X .                                                        NO   .   .
      .....                                                             .....

                       APPLICABLE ONLY TO CORPORATE ISSUERS:
 
Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practicable date. 

2,674,665 Common shares outstanding as of July 8, 1997 
(Number of shares)                         (Date)


<PAGE>
                               UNITEL VIDEO, INC.
 
                                  FORM 10-Q/A
 
                           QUARTER ENDED May 31, 1997
 
<TABLE>
<CAPTION>
                                                                               PAGE
                          INDEX                                               NUMBER
                                                                             --------
<S>                      <C>                                                 <C>
 
Part I.   FINANCIAL INFORMATION
 
          Item 1.   Financial Statements
 
                    Consolidated Balance Sheets May 31, 1997 (Unaudited)
                    and August 31, 1996                                         3-4
 
                    Consolidated Statements of Operations May 31, 1997
                    (Unaudited) and May 31, 1996 (Unaudited)                      5
 
                    Consolidated Statements of Cash Flows May 31, 1997
                    (Unaudited) and May 31, 1996 (Unaudited)                    6-7
 
                    Notes to Consolidated Financial Statements
                    (Unaudited)                                                8-11
 
          Item 2.   Management's Discussion and Analysis of
                    Financial Condition and Results of Operations             11-14
 
Part II.  OTHER INFORMATION
 
          Item 5.   Third Quarter Adjustment                                     15
 
          Item 6.   Exhibits and Reports on Form 8-K                             15
</TABLE>

                                        2
<PAGE>

                                 UNITEL VIDEO, INC. 

                                   FORM 10-Q/A 

                              QUARTER ENDED May 31, 1997

Part 1.   FINANCIAL INFORMATION

          ITEM 1.   Financial Statements
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                     ------------------------------------- 

<TABLE>
<CAPTION>

                                                                        MAY 31, 1997     AUGUST 31,
                                                                         AS RESTATED        1996
ASSETS                                                                    (UNAUDITED)       (NOTE)
------                                                                 -------------  --------------
<S>                                                                    <C>            <C>
 

 
Current Assets: 

  Cash..............................................................   $     75,000   $    192,000
 
  Accounts receivable, net..........................................      7,417,000      8,701,000
 
  Other receivables.................................................         82,000        333,000
 
  Prepaid income taxes..............................................        186,000        142,000
 
  Prepaid expenses..................................................        500,000        735,000
 
  Net assets held for sale..........................................         --          1,587,000
 
  Deferred tax asset................................................        844,000        844,000

                                                                       -------------  --------------
Total current assets................................................      9,104,000     12,534,000

Property and equipment--at cost 
  Land, buildings and improvements..................................     20,287,000     19,915,000
 
  Video equipment...................................................    103,263,000     97,023,000
 
  Furniture and fixtures............................................      4,107,000      3,502,000
                                                                       -------------  --------------

                                                                        127,657,000    120,440,000
 
Less accumulated depreciation.......................................     75,550,000     69,974,000
                                                                       -------------  --------------
 
                                                                         52,107,000     50,466,000
 
Deferred tax asset..................................................      1,625,000      1,625,000
 
Goodwill............................................................      1,755,000      1,859,000
 
Other assets........................................................      1,126,000      1,134,000
                                                                       -------------  --------------
 
                                                                       $ 65,717,000   $ 67,618,000
                                                                       -------------  --------------
                                                                       -------------  --------------
</TABLE>

    Note: The balance sheet at August 31, 1996 has been taken from the audited
consolidated financial statements at that date.

    See notes to consolidated financial statements.

                                       3

<PAGE>

                                UNITEL VIDEO, INC. 

                                  FORM 10-Q/A 

                      CONSOLIDATED BALANCE SHEETS (Continued)

<TABLE>
<CAPTION>

                                                                        MAY 31, 1997     AUGUST 31,
LIABILITIES AND STOCKHOLDERS' EQUITY                                     AS RESTATED        1996
------------------------------------                                   -------------  --------------
                                                                        (UNAUDITED)       (NOTE)
<S>                                                                    <C>            <C>

Current liabilities: 

  Accounts payable..................................................   $  6,471,000    $  4,967,000
 
  Accrued expenses..................................................        848,000       1,450,000
 
  Payroll, benefits and related taxes...............................      1,538,000       2,947,000
 
  Current maturities of long-term debt..............................      7,090,000       8,362,000
 
  Current maturities of subordinated debt...........................      1,167,000       1,166,000

  Current maturities of ESOP loan...................................         30,000         166,000
 
  Current maturities of capital lease obligations...................      2,120,000       1,832,000
                                                                       -------------  --------------
 
  Total current liabilities.........................................     19,264,000      20,890,000
 
Deferred rent.......................................................        114,000         325,000
 
Long-term debt, less current maturities.............................     21,786,000      19,706,000
 
Subordinated debt, less current maturities..........................      1,667,000       1,979,000
 
Long-term leases, less current maturities...........................      4,928,000       5,604,000
  
Accrued retirement..................................................      1,208,000       1,304,000
 
Stockholders' equity:
 
Common stock, par value $.01 per share 
  Authorized 5,000,000 shares 
  Issued 2,674,665 and 3,532,554 shares respectively, and 
  outstanding and 2,666,265 shares respectively.....................         27,000          26,000
 
Additional paid-in capital..........................................     27,538,000      27,545,000
 
Accumulated deficit.................................................     (2,809,000)     (1,592,000)
 
Common stock held in treasury, at cost (866,289 shares).............     (7,974,000)     (7,974,000)
                                                                       -------------  --------------
                                                                         16,782,000      18,005,000
 
Unearned employee benefit expense...................................        (32,000)       (195,000)
                                                                       -------------  --------------
 
  Total stockholders' equity........................................     16,750,000      17,810,000
                                                                       -------------  --------------
 
                                                                       $ 65,717,000    $ 67,618,000
                                                                       -------------  --------------
                                                                       -------------  --------------
</TABLE>

Note: The balance sheet at August 31, 1996 has been taken from the audited
consolidated financial statements at that date.

See notes to consolidated financial statements.

                                       4
<PAGE>

                               UNITEL VIDEO, INC. 

                                 FORM 10-Q/A 

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                  (Unaudited)

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED MAY 31,    NINE MONTHS ENDED MAY 31,
                                                      ----------------------------  ----------------------------
 
<S>                                                   <C>            <C>            <C>            <C>
                                                          1997           1996            1997           1996
                                                      -------------  -------------  -------------  -------------
                                                       AS RESTATED                   AS RESTATED

 
Sales...............................................  $  15,840,000  $  19,281,000  $  47,210,000  $  62,750,000
 
Cost of sales:
 
  Production costs..................................     10,993,000     13,910,000     31,937,000     44,897,000
 
  Depreciation......................................      2,101,000      2,205,000      6,410,000      5,711,000
                                                      -------------  -------------  -------------  -------------
 
                                                         13,094,000     16,115,000     38,347,000     50,608,000
                                                      -------------  -------------  -------------  -------------
 
Gross profit........................................      2,746,000      3,166,000      8,863,000     12,142,000
 
Operating expenses:
 
  Selling...........................................        413,000        496,000      1,407,000      1,832,000
 
  General and administrative........................      2,072,000      2,429,000      5,193,000      7,416,000
 
  Interest..........................................        900,000        984,000      2,674,000      2,755,000
 
  Restructuring charge (Note 5).....................      1,055,000      1,246,000      1,055,000      1,246,000
 
  Impairment charge.................................       --              261,000       --            2,000,000
                                                      -------------  -------------  -------------  -------------
 
                                                          4,440,000      5,416,000     10,329,000     15,249,000
                                                      -------------  -------------  -------------  -------------
 
Earnings (loss) from operations.....................     (1,694,000)    (2,250,000)    (1,466,000)    (3,107,000)
 
Other income (loss).................................         96,000        (37,000)       250,000        (37,000)
                                                      -------------  -------------  -------------  -------------
 
Earnings (loss) before income taxes.................     (1,598,000)    (2,287,000)    (1,216,000)    (3,144,000)
 
Income taxes........................................        (18,000)         3,000          1,000          3,000
                                                      -------------  -------------  -------------  -------------
 
Net earnings (loss) applicable for common stock       $  (1,580,000) $  (2,290,000) $  (1,217,000) $  (3,147,000)
                                                      -------------  -------------  -------------  -------------
                                                      -------------  -------------  -------------  -------------
 
Net earnings (loss) per common share                  $        (.59) $        (.88) $        (.45) $       (1.21)
                                                      -------------  -------------  -------------  -------------
                                                      -------------  -------------  -------------  -------------
 
Weighted average of common and common equivalent
  shares outstanding................................      2,681,000      2,611,000      2,690,000      2,591,000
                                                      -------------  -------------  -------------  -------------
                                                      -------------  -------------  -------------  -------------
</TABLE>

    See notes to consolidated financial statements.

                                       5
<PAGE>

                               UNITEL VIDEO, INC. 

                                  FORM 10-Q/A 

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                NINE MONTHS ENDED
                                                                         ---------------------------
                                                                      MAY 31, 1997 
                                                                       AS RESTATED             MAY 31, 1996
                                                                      ------------             ------------
<S>                                                                  <C>                      <C>
Cash Flows From Operating Activities:
  Net loss                                                            $ (1,217,000)            $ (3,147,000)
  Adjustments to reconcile net income to net 
    cash provided by operating activities:
  Depreciation and amortization...................................       6,621,000                5,728,000
  Net gain on disposal of equipment...............................        (211,000)                 (17,000)
  Amortization of deferred financing costs........................         115,000                  174,000
  Deferred financing costs........................................          --                     (585,000)
  Deferred rent...................................................        (211,000)                (457,000)
  Accrued retirement expense......................................         (96,000)                 123,000
  Impairment and restructuring charges............................         780,000                2,000,000

Decrease (Increase) in:
  Accounts receivable.............................................       1,284,000                3,291,000
  Other receivables...............................................         251,000                   54,000
  Prepaid expenses................................................         235,000                  615,000
  Prepaid taxes...................................................         (44,000)                 116,000
  Other assets....................................................        (104,000)                (118,000)
  Deferred tax asset..............................................          --                      (79,000)

Increase (Decrease) in:
  Accounts payable................................................       1,504,000               (3,244,000)
  Accrued expenses................................................        (602,000)                 (30,000)
  Payroll and related taxes.......................................      (1,409,000)                (716,000)
                                                                      ------------            -------------
Total adjustments.................................................       8,113,000                6,855,000
                                                                      ------------            -------------
    Net cash provided by operating activities.....................       6,896,000                3,708,000

Cash Flows From Investing Activities:
  Capital expenditures............................................      (9,373,000)              (6,340,000)
  Proceeds from disposal of equipment.............................       2,230,000                  898,000
                                                                      ------------            -------------
    Net cash used in investing activities.........................      (7,143,000)              (5,442,000)


                                                                       (Continued)

</TABLE>


                                        6


<PAGE>


                               UNITEL VIDEO, INC. 

                                  FORM 10-Q/A 

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  (Continued)

<TABLE>
<CAPTION>
                                                                                NINE MONTHS ENDED
                                                                         ---------------------------
                                                                      MAY 31, 1997 
                                                                       AS RESTATED             MAY 31, 1996
                                                                      ------------             ------------
<S>                                                                  <C>                      <C>





Cash Flows From Financing Activities:
  Proceeds from long-term financing..................................  $ 9,874,000              $ 24,503,000
  Proceeds from issuance of common stock.............................       39,000                   223,000
  Repayment of loan to ESOP..........................................     (136,000)                 (142,000)
  Principal repayments...............................................   (9,765,000)              (22,950,000)
  Release of ESOP quarterly shares...................................      118,000                   146,000
                                                                      ------------             -------------

  Net cash provided (used) by financing activities...................      130,000                 1,780,000
                                                                      ------------             -------------
Net Increase (Decrease) in Cash......................................     (117,000)                   46,000
Cash Beginning of Year...............................................      192,000                   161,000
                                                                      ------------             -------------
Cash End of Nine Months.............................................. $     75,000             $     207,000
                                                                      ------------             -------------
                                                                      ------------             -------------
Schedule of income taxes and interest paid:
  Income Taxes Paid.................................................. $     30,000             $      77,000
  Interest Paid......................................................    2,416,000                 2,237,000
                                                                      ------------             -------------
                                                                      $  2,446,000             $   2,314,000
                                                                      ------------             -------------
                                                                      ------------             -------------


                                See notes to consolidated financial statements.


</TABLE>


                                        7


<PAGE>


                                UNITEL VIDEO, INC. 
                                  FORM 10-Q/A
                           NINE MONTHS ENDED MAY 31, 1997 
                                  AS RESTATED
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
                                  (Unaudited)


1. CONSOLIDATED FINANCIAL STATEMENTS
 
The condensed consolidated balance sheet as of May 31, 1997, the consolidated 
statements of operations for the nine months and quarters ended May 31, 1997 
and 1996, and the consolidated statements of cash flows for the nine months 
then ended have been prepared by the Company without audit. In the opinion of 
management, all adjustments (which include only normal recurring adjustments) 
necessary to present fairly the financial position, results of operations, 
and cash flows at May 31, 1997 and for all periods presented have been made.
 
Certain information and footnote disclosure normally included in the 
financial statements prepared in accordance with generally accepted 
accounting principles have been condensed or omitted. It is suggested that 
these condensed consolidated financial statements be read in conjunction with 
the financial statements and notes thereto in the Company's August 31, 1996 
Form 10-K filed with the Securities and Exchange Commission. The results of 
operations for the nine months ended May 31, 1997 are not necessarily 
indicative of the operating results for the full year.
 
2. STOCKHOLDERS' EQUITY
 
During the nine months ended May 31, 1997, stockholders' equity decreased due 
to:

 
<TABLE>
<CAPTION>
<S>                                                               <C>
Net loss.........................................................  $(1,217,000)
Reduction in unearned employee benefit expense...................      163,000
Reduction in additional paid in capital resulting 
  from the allocation of ESOP shares.............................      (45,000)
Purchase of stock under the Unitel Video Inc. Employee 
  Stock Purchase Plan............................................       39,000
                                                                    ----------
Total decrease in stockholders' equity...........................  $(1,060,000)
                                                                   -----------
                                                                   -----------
</TABLE>
 
3. PER SHARE DATA
 
Per share data for the quarter and nine months ended May 31, 1997 and 1996 is 
based on the weighted average number of common shares outstanding. In the 
quarter and nine months ended May 31, 1997, unreleased Employee Stock 
Ownership Plan shares are not considered outstanding for earnings per share 
calculations. (See Note 4). 
 

                                        8


<PAGE>


4. 401(k) Employee Savings and Stock Ownership Plan

The Company sponsors a 401(k) savings and stock ownership plan (the "Plan") 
which requires the Company to match employee contributions to the 401(k) 
portion of the Plan in shares of the Company's Common Stock up to the maximum 
amount set forth in the Plan. Effective September 1, 1994, the Company has 
adopted the provisions of Statement of Position 93-6, "Employer's Accounting 
for Employee Stock Ownership Plans" ("SOP 93-6").
 
In 1987, to purchase 115,849 shares of the Company's stock, the Plan obtained 
financing from a bank amounting to $1,250,000. In 1991 the Plan purchased 
25,810 shares of the Company's stock financed by a $229,193 loan from the 
Company. The Plan is funded by the Company as required to provide the Plan 
with the funds necessary to meet its debt service requirements. The loan 
obligations of the Plan are considered unearned employee benefit expense and 
are recorded as a separate reduction of the Company's shareholders' equity. 
The bank financing is guaranteed by the Company.
 
The Plan's shares are released and allocated to participant accounts based 
upon Company contributions and certain payments made to reduce the Plan debt. 
The Company reports compensation expense based on the dollar value of the 
401(k) match expense.
 
The Plan's compensation expense was $117,000 and $39,000 for the nine months
and quarter ended May 31, 1997, respectively. A summary of the Plan's shares as
of May 31, 1997 is as follows:
 
<TABLE>
<CAPTION>
           <S>                                                  <C>
            Allocated shares................................     96,666
            Shares released for allocation..................     15,064
            Unreleased shares...............................     21,119
                                                               ---------
                                                                132,849
                                                               ---------
                                                               ---------

            Fair value of unreleased shares at May 31, 1997..  $ 127,000
                                                               ---------
                                                               ---------

</TABLE>

 
Prior to adoption of SOP 93-6, the unreleased shares were considered 
outstanding for the earnings per share computation. Accordingly, for the nine 
months ended May 31, 1997, 21,119 shares were no longer considered 
outstanding. The effect of adopting SOP 93-6 was not material on the net 
loss, and resulted in a decrease of approximately 1% on the net loss per 
share for the nine months ended May 31, 1997.
 
5. IMPAIRMENT AND RESTRUCTURING CHARGES
 
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("FASB Statement
No. 121") which provides guidance on when to assess and how to measure
impairment of long-lived assets, certain intangibles and goodwill related to
those assets to be held and used, and for long-lived assets and certain
identifiable intangibles to be disposed of. The Company adopted FASB Statement
No. 121 as of August 31, 1995.
 
                                       9


<PAGE>


In fiscal 1995 the Company determined to focus its resources toward providing 
services to the entertainment and corporate communications areas, which 
represent the Company's strength, and decided to sell its three Editel 
divisions which did not specialize in these areas. The Company recorded the 
carrying value of the assets related to these divisions as net assets held 
for sale, and a corresponding impairment charge, since these assets were no 
longer needed for the current and future operations of the Company.
 
In fiscal 1996 the Company began marketing these divisions to potential 
buyers. In the first nine months of fiscal 1996 the Company recorded an 
impairment charge of $2,000,000 relating to the assets at all three Editel 
divisions. The impairment charge recorded represented management's estimate 
of the decrease in value of these assets during the period such assets were 
held for sale based upon the depreciation method which the Company has found 
to be reasonable and appropriate.
 
In February 1996 the Company closed its Editel Chicago division, distributed 
the majority of its assets to other divisions throughout the Company and sold 
the remaining assets at an auction held in May 1996. In the third quarter of 
1996 the Company recorded a restructuring charge of $1,246,000 related to the 
real estate lease buy out for the Editel Chicago division. Also in May 1996, 
after reevaluating the potential of the Editel Los Angeles division, the 
Company decided to retain and expand this division, based on its improving 
business trend, new lines of business, new management and increased cash 
flow. In August of 1996 the Company closed its Editel New York division and 
distributed the majority of its editorial and computer graphics assets 
throughout the Company. In November 1996 the Company sold the majority of 
this division's remaining net assets held for sale of $1,587,000 to an 
unrelated third party for $1,400,000. In February 1997 the remaining Editel 
New York assets were sold at an auction or redeployed throughout the Company.
 
In April 1997 the Company announced the merger of its Unitel Hollywood and
Editel Los Angeles divisions under one roof at the Editel Los Angeles facility.
In June 1997 the merger was completed. A significant portion of the equipment
from Unitel Hollywood was moved to the Editel Los Angeles location.
Additionally, a portion of the equipment was transferred to the Company's New
York Post Production division for future use. The balance of the equipment was
sold and the proceeds in the amount of approximately $1,700,000 were used to
repay long term debt. As a result of the merger and sale, the company recorded a
restructuring charge of $1,055,000 in the third quarter of 1997.
 
6. STOCK BASED COMPENSATION
 
Statement of Financial Accounting Standards No. 123 ("SFAS No. 123"),
"Accounting for Stock Based Compensation," provides companies a choice in the
method of accounting used to determine stock-based compensation. Companies may
account for such compensation either by using the intrinsic value-based method
provided by APB Opinion No. 25 ("APB No. 25"), "Accounting for Stock Issued to
Employees," or the fair market value based method provided in SFAS No. 123. This
statement is required to be adopted by the Company during its fiscal year ending
August 31, 1997. The Company intends to use the intrinsic value-based method
provided in APB No. 25 to determine stock-based compensation. The sole effect of
the adoption of SFAS No. 123 is the


                                      10


<PAGE>


obligation imposed on the Company to comply with the new disclosure 
requirements provided thereunder.
 
7. THIRD QUARTER ADJUSTMENTS
 
During the fourth quarter of fiscal 1997, the Company recorded certain
adjustments which resulted in a restructuring charge of $1,055,000. These
adjustments related to previously issued quarterly data for the third quarter of
fiscal 1997 and the Company has restated its financial statements for the third
quarter and nine months ended May 31, 1997 to record these adjustments. The
effect of this change in the third quarter and nine months ended May 31, 1997
was to increase the loss in these periods by $.39 per share to $.59 and $.45,
respectively.
 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS.
        
LIQUIDITY AND CAPITAL RESOURCES
 
The Company is committed to keeping pace with technological developments as 
well as taking advantage of new business opportunities in the video 
communications industry. Capital expenditures were $9,373,000 during the nine 
months ended May 31, 1997, and consisted of the purchase of production, post 
production and graphics equipment for use throughout the Company including 
approximately $4,700,000 for the construction of a new digital mobile 
production unit.
 
Net cash provided by operating activities during the nine months ended May 
31, 1997 was $6,896,000 and during the nine months ended May 31, 1996 was 
$3,708,000. Net cash provided by operating activities for the nine months 
ended May 31, 1997 was offset by $7,143,000 of cash used in investing 
activities, which consisted primarily of capital expenditures (net of 
proceeds from asset dispositions of $2,230,000) and was supplemented by net 
cash provided by financing activities of $130,000, resulting in a net 
decrease in cash available of $117,000.
 
In August 1995 the Company recorded a deferred tax asset related to the 
pre-tax losses and impairment charges incurred by the Company's Editel 
divisions. During fiscal 1996, the Company incurred additional pre-tax losses 
related to the operations and closure of the Editel New York and Editel 
Chicago divisions. It is management's determination that the deferred tax 
asset will be realized in future years based upon the Company's historical 
record of pre-tax profits prior to the last two fiscal years of pre-tax 
losses and based on the Company's projected pre-tax earnings.
 
In December 1995, the Company entered into a $26 million revolving credit and 
term loan agreement with a financial institution, consisting of an $11 
million revolving credit facility and two $7.5 million term loans. In May 
1997 the loan agreement was renegotiated with $2.5 million of Term loan B 
rescheduled to become part of Term loan A. The lender also made available an 
additional $500,000 as part of Term loan A. Term loan A was then rescheduled 
to be payable in monthly principal payments of $100,000 through December 2001 
with the balance of $4,700,000 due on December 12, 2001. Term loan B is 
repayable from the proceeds of sales of fixed assets. As of May 31, 1997 Term 
Loan B


                                      11


<PAGE>

had a balance of $2,142,000 outstanding, of which $642,000 has been repaid as 
of June 29, 1997 with the remainder due by September 30, 1997. In addition, 
the lender has provided the Company with a $3.5 million bridge loan to be 
repaid from the proceeds of an $8.5 million industrial revenue bond 
financing, scheduled to close in July 1997. The industrial revenue bonds will 
be issued by the Allegheny County (Pennsylvania) Industrial Development 
Authority in an initial principal amount of $5 million and the proceeds of 
the bonds will be used by the Company to finance expenses incurred in 
connection with the construction of up to two digital mobile production 
units. At May 31, 1997 there was $3,000,000 outstanding on the bridge loan 
and $6,174,000 outstanding under the revolving credit portion of the facility.
 
In May 1997 the Company announced the establishment of a Canadian mobile
television operation in Montreal, Canada. The expansion of the Company's mobile
operations includes sales and marketing personnel and a maintenance facility
which serves as the Company's Canadian hub allowing the Company to better serve
its North American clients while also developing business and market share.
 
RESULTS OF OPERATIONS
 
Sales were $15,840,000 and $19,281,000 for the quarters ended May 31, 1997 
and 1996, respectively. Sales were $47,210,000, and $62,750,000 for the nine 
months ended May 31, 1997 and 1996, respectively. The decrease in sales in 
the nine month period ending May 31, 1997 was due primarily to the closure of 
the Company's Editel Chicago and Editel New York divisions in fiscal 1996. 
Also contributing to lower sales was the cancellation of the "Rush Limbaugh" 
and "Mark Walberg" talk shows, which had been produced at Unitel studios 
during the majority of fiscal 1996, and the unavailability of one of the 
Mobile division's most sophisticated units during a substantial portion of 
the first quarter of fiscal 1997 while being digitally retrofitted by Company 
engineers. The sales decrease in the first nine months of fiscal 1997 was 
partially offset by a significant increase in sales at the Company's Editel 
Los Angeles division.
 
The Company's net loss for the quarter ended May 31, 1997 was $1,580,000, 
compared to a net loss of $2,290,000 for the comparable quarter of fiscal 
year 1996. The Company's net loss was $1,217,000 for the nine months ended 
May 31, 1997, compared with a net loss of $3,147,000 for the same period of 
the prior fiscal year. The Company's 1997 third quarter net loss of 
$1,580,000 was due substantially to the Company's decision to merge its West 
coast Unitel Hollywood and Editel Los Angeles facilities resulting in a loss 
of $900,000 from the Unitel Hollywood operations and a restructuring charge 
of $1,055,000 during the third quarter. The losses incurred in merging the 
West coast facilities were attributable to a loss of business related to the 
transition, severance costs and other costs which the Company incurred in its 
efforts to maintain client relationships and employee morale during the 
transition.
 
Production costs, the main component of cost of sales, consist primarily of 
direct labor, equipment maintenance expenses and occupancy costs. The 
Company's production costs, as a percentage of sales, were 69% for the 
quarter ended May 31, 1997, as compared to 72% for the quarter ended May 31, 
1996 and were 68% and 72% for the first nine months of fiscal years 1997 and 
1996, respectively. The decrease in production expenses as a percentage of 
sales in the quarter and nine months ended May 31, 1997, as compared with


                                      12


<PAGE>


the same period in the prior year, is primarily due to the closure of the 
Company's Editel Chicago and Editel New York divisions which had been 
incurring these expenses at a higher percent of sales compared with the 
Company's other divisions. Also included in the decrease in production 
expenses from the comparable period in the prior year is the impact of the 
reduction of certain cost estimates related to the closure of the Editel New 
York and Editel Chicago divisions.
 
Depreciation, as a percentage of sales, was 13% and 11% for the quarters
ended May 31, 1997 and 1996, respectively, and 14% and 9% for the first nine
months of the 1997 and 1996 fiscal years, respectively. The increase in the
quarter and nine months ended May 31, 1997 as compared with the same period in
the prior year, was a result of the reclassification of the net property and
equipment of the Company's three Editel divisions to net assets held for sale at
August 31, 1995 with the corresponding depreciation expense recorded as
impairment charges. In May 1996, the Company determined to retain its Editel Los
Angeles division and, accordingly, resumed recording depreciation expense for
this division. The impairment charge recorded in the first nine months of fiscal
1996 represents management's estimate of the decrease in value of these assets
based upon the depreciation method which the Company has used in the past and
which management has found to be reasonable and appropriate. Of the $2,000,000
impairment charge recorded in the first nine months of fiscal 1996, $777,000
related to the Editel Los Angeles division, which if recorded as depreciation
expense in 1996 would have resulted in depreciation as a percentage of sales of
10% as compared to 9% in the first nine months of fiscal 1996. In addition, the
majority of the assets of the Editel Chicago and Editel New York divisions were
redistributed throughout the Company which contributed to the increase in
depreciation expense in fiscal 1997.
 
Selling expenses for both quarters ended May 31, 1997 and 1996 were 2.6% of
sales, and 3.0% and 2.9% for the nine months ended May 31, 1997 and 1996,
respectively. The increase in the nine months ended May 31, 1997 as compared
with the same period in the prior year, is mainly due to an increase in the
sales staff at the New York divisions and at Editel Los Angeles.
 
General and administrative expenses, as a percentage of sales, for the 
quarters ended May 31, 1997 and 1996 were 13.1% and 12.6%, respectively, and 
11.0% and 11.8% for the nine months ended May 31, 1997 and 1996, 
respectively. The increase in general and administrative expenses as a 
percentage of sales during the third quarter of fiscal 1997 when compared 
with the same period of the prior year is primarily due to costs incurred 
related to the merger of the Company's West coast divisions. The decrease in 
general and administrative expenses as a percentage of sales for the nine 
months ended May 31, 1997 when compared with the same period in the prior 
year is primarily due to the closure of the Company's Editel Chicago and 
Editel New York divisions which had been incurring these expenses at a higher 
percentage of sales compared with the Company's other divisions. Also 
included in the decrease in general and administrative expenses from the 
comparable period in the prior year is the impact of the reduction of certain 
cost estimates related to the closure of the Editel New York and Editel 
Chicago divisions.

 
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Interest expense, as a percentage of sales, for the quarters ended May 31, 
1997 and 1996 was 5.7% and 5.1%, respectively, and 5.7% and 4.4% for the nine 
months ended May 31, 1997 and 1996. Since the level of outstanding debt in 
the first nine months of fiscal 1997 remained constant with the same period 
of the prior year and sales decreased in the first nine months of fiscal 
1997, interest expense as a percentage of sales increased in fiscal 1997 when 
compared with the same period of the prior year.
 
The Company's effective tax rate was 5% and 47% for the first nine months of
fiscal years 1997 and 1996, respectively. The effective tax rate for the first
nine months of fiscal 1997 is less than the federal statutory rate of 34% due to
the utilization of net operating loss carryforwards generated by the losses
incurred in fiscal 1995 and 1996. The effective tax rate exceeded the federal
statutory rate of 34% in fiscal 1996 due to state and local taxes.
 

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Part II. OTHER INFORMATION

 
ITEM 5. THIRD QUARTER ADJUSTMENT

 
The Company has restated its financial statements for the third quarter and 
nine months ended May 31, 1997 to record certain adjustments, as more 
particularly described in Note 7 to Notes to Consolidated Financial 
Statements included in item 1 above.
 

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 
    (a) Exhibits required to be filed by Item 601 of Regulation S-K.
 
        1. Exhibit 4(A). Second Amendment to Loan and Security Agreement and 
Limited Waiver dated as of February 24, 1997.
 
        2. Exhibit 4(B). Third Amendment and Limited Waiver to Amended and 
Restated Loan and Security Agreement dated as of March 21, 1997.
 
        3. Exhibit 4(C). Fourth Amendment to Amended and Restated Loan and 
Security Agreement dated as of May 7, 1997.
 
        4. Exhibit 10(A). Employment Agreement between Editel Los Angeles and 
Albert Walton dated as of March 20, 1997.
 
        5. Exhibit 10(B). Employment Agreement between Unitel Video, Inc. and 
Mark Miller dated as of March 20, 1997.
 
        6. Exhibit 27. Financial Data Schedule.
 
    (b) There were no reports filed on Form 8-K during the nine month period
ended May 31, 1997.
  

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        SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.

 
        UNITEL VIDEO, INC.

 
    By: /s/ Barry Knepper
        -----------------
        Barry Knepper
        Chief Executive Officer

 
    By: /s/ George Horowitz
        -------------------
        George Horowitz
        Chief Financial Officer

 
    Dated: January 14, 1998


 
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