<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.  20549

                                      FORM 10-Q

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


 FOR THE QUARTER PERIOD ENDED MARCH 31, 1997      Commission File Number 0-21917

                                  _________________

                                      VDI MEDIA
                (Exact name of registrant as specified in its charter)



               California                               95-4272619          
    (State of or other jurisdiction of     (I.R.S. Employer Identification No.)
    incorporation or organization)

         6920 Sunset Boulevard,                            90028 
         Hollywood, California                           (Zip Code) 
(Address of principal executive offices)

          Registrant's telephone number, including area code (213) 957-5500
              Securities registered pursuant to Section 12(b) of the Act
                                        None.

              Securities registered pursuant to Section 12(g) of the Act
                             Common Stock, no par value.
                                    _____________

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 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.  Yes /x/   No / /

As of May 13, 1997, there were 9,580,000 shares of Common Stock outstanding. 

<PAGE>

PART I.   FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                            VDI MEDIA
                     CONSOLIDATED BALANCE SHEET

                              ASSETS

<TABLE>
<CAPTION>
                                                           DECEMBER 31,     MARCH 31, 
                                                           ------------   ------------
                                                               1996           1997   
                                                               ----           ----    
                                                                          (UNAUDITED)
<S>                                                        <C>            <C>
Current assets:
    Cash.................................................   $   564,000    $11,626,000
    Accounts receivable, net allowances for doubtful
      accounts of $460,000 and $620,000, respectively....     4,537,000      6,540,000
    Amounts receivable from officer......................     1,214,000
    Amounts receivable from employees....................       224,000          8,000
    Inventories..........................................       144,000        213,000
    Prepaid expenses and other current assets............         2,000         38,000
                                                           ------------   ------------
      Total current assets...............................     6,685,000     18,425,000

    Property and equipment, net..........................     3,520,000      6,125,000
    Deferred offering costs..............................       876,000
    Goodwill, net (Note 2)...............................                    2,081,000
    Other assets, net....................................        97,000         98,000
                                                           ------------   ------------
      Total assets.......................................   $11,178,000    $26,729,000
                                                           ------------   ------------
                                                           ------------   ------------

                   LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
    Accounts payable....................................    $ 2,394,000    $ 2,763,000
    Accrued expenses....................................      1,606,000      1,998,000
    Current portion of notes payable....................        728,000         33,000
    Current portion of capital lease obligations........         32,000        657,000
    Deferred tax liability (Note 3)                                            185,000
                                                            ------------   ------------
      Total current liabilities.........................      4,760,000      5,636,000
                                                           ------------   ------------

    Notes payable, less current portion.................      1,102,000          1,000
                                                           ------------   ------------
    Capital lease obligations, less current portion.....         75,000      1,222,000
                                                           ------------   ------------

Shareholders' equity:
    Preferred stock; no par value; 5,000,000 shares
      authorized; none outstanding......................
    Common stock; no par value; 50,000,000 shares
      authorized, 9,580,000 shares issued and 
      outstanding                                             1,015,000     19,056,000
    Retained earnings....................................     4,226,000        814,000
                                                           ------------   ------------
      Total shareholders' equity.........................     5,241,000     19,870,000
                                                           ------------   ------------
                                                            $11,178,000    $26,729,000
                                                           ------------   ------------
                                                           ------------   ------------

</TABLE>
See accompanying notes to consolidated financial statements

                                      2
<PAGE>
                              VDI MEDIA
                    CONSOLIDATED STATEMENT OF INCOME
                             (unaudited)

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED MARCH 31,
                                                           ---------------------------
                                                               1996           1997   
                                                               ----           ----    
<S>                                                        <C>            <C>
Revenues...............................................    $  5,837,000   $  8,487,000
Cost of good sold......................................       3,647,000      5,072,000
                                                           ------------   ------------
Gross profit...........................................       2,190,000      3,415,000

Selling, general and administrative expense............       1,418,000      2,151,000
                                                           ------------   ------------
 
Operating income.......................................         772,000      1,264,000
Interest expense.......................................          70,000        119,000
Interest income........................................           5,000         51,000
                                                           ------------   ------------

Income before income taxes.............................         707,000      1,196,000
Provision for income taxes.............................          12,000        190,000
Establishment of deferred tax liability (Note 3).......                        185,000
                                                           ------------   ------------
Net income.............................................    $    695,000   $    821,000
                                                           ------------   ------------
                                                           ------------   ------------

Net income per share...................................                   $       0.11
                                                                          ------------
                                                                          ------------

Weighted average number of shares......................                      7,522,667
                                                                          ------------
                                                                          ------------

</TABLE>



See accompanying notes to consolidated financial statements

                                      3
<PAGE>
                            VDI MEDIA
                CONSOLIDATED STATEMENT OF CASH FLOWS
                           (unaudited)

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED MARCH 31,
                                                           ---------------------------
                                                               1996           1997   
                                                               ----           ----    
<S>                                                        <C>            <C>
Cash flows from operating activities:
    Net income............................................ $    695,000   $    821,000
Adjustment to reconcile net income
  to net cash provided by operating activities:
    Depreciation and amortization.........................      451,000        798,000
    Increase in deferred taxes............................                     185,000
    Provision for doubtful accounts.......................       72,000         20,000
Changes in assets and liabilities net of effects from
  purchase of Woodholly Productions:
    Increase in accounts receivable.......................     (138,000)      (431,000)
    (Increase) decrease in other receivables..............      (20,000)       206,000
    (Increase) decrease in inventories....................       60,000        (69,000)
    Decrease in prepaid expenses and other current assets.       35,000         25,000
    Decrease in other assets..............................        1,000
    (Increase) decrease in deferred offering costs........      (25,000)       875,000
    Decrease in accounts payable..........................     (496,000)      (120,000)
    (Decrease) increase in accrued expenses...............     (138,000)        97,000
                                                           ------------   ------------
Net cash provided by operating activities.................      497,000      2,407,000

Cash used in investing activities:
    Capital expenditures..................................     (314,000)      (232,000)
    Payment for purchase of Woodholly, net of cash 
     acquired.............................................                  (4,091,000)
                                                           ------------   ------------
Net cash used in investing activities.....................     (314,000)    (4,323,000)

Cash flows from financing activities:
    Distributions to shareholders.........................                  (4,233,000)
    Change in revolving credit agreement..................     (100,000)

    Proceeds from sale of common stock....................                  18,041,000
    Repayment of notes payable............................     (194,000)    (1,795,000)
    Repayment of amounts receivable from officer..........                   1,225,000
    Repayment of subordinated notes payable to related 
     parties..............................................      (20,000)
    Repayment of capital lease obligations................      (38,000)      (260,000)
                                                           ------------   ------------
Net cash (used in) provided by financing activities.......     (352,000)    12,978,000
Net (decrease) increase in cash...........................     (169,000)    11,062,000
Cash at beginning of period...............................      415,000        564,000
                                                           ------------   ------------
Cash at end of period..................................... $    246,000   $ 11,626,000
                                                           ------------   ------------
                                                           ------------   ------------
Supplemental disclosure of cash flows information:
Cash paid for:
    Interest.............................................. $     64,000   $    119,000
                                                           ------------   ------------
                                                           ------------   ------------
    Income tax............................................ $     40,000   $     53,000
                                                           ------------   ------------
                                                           ------------   ------------

</TABLE>
See accompanying notes to consolidated financial statements

                                      4
<PAGE>
                                      VDI MEDIA

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    March 31, 1997


NOTE 1 -- THE COMPANY

    VDI MEDIA ("The Company") is a provider of high quality value-added video 
distribution and duplication services including distribution of national 
television spot advertising, trailers and electronic press kits.  The 
Company's services consist of (i) the physical and electronic delivery of 
broadcast quality advertising, including spots, trailers, electronic press 
kits and infomercials, and syndicated television programming to television 
stations, cable television and other end-users nationwide and (ii) a broad 
range of video services, including the duplication of video in all formats, 
element storage, standards conversions, closed captioning and transcription 
services, and video encoding for air play verification purposes.  The Company 
also provides its customers value-added post production and editing services. 
The Company is headquartered in Hollywood, California and has additional 
facilities in West Los Angeles and Culver City, California and Tulsa, 
Oklahoma.

    In the first quarter of 1997, the Company completed the sale of 3,120,000 
common shares, no par value ("Common Stock"), in an initial public offering 
(the "Offering").  Prior to the Offering, the Company had elected S 
Corporation status for federal and state income tax purposes.  As a result of 
the Offering, the S Corporation status terminated.  Thereafter, the Company 
has paid federal and state income taxes as a C Corporation.  The termination 
of the Company's S Corporation status resulted in the establishment of a net 
deferred tax liability calculated at normal federal and state income rates, 
causing a one-time non-cash charge of $185,000 against earnings for 
additional income tax expense in the quarter ended March 31, 1997.

    In May 1996, the Company effected a 333-for-1 common stock split and 
increased the number of authorized shares to 50,000,000 shares of Common 
Stock. All share amounts in the accompanying financial statements have been 
retroactively restated to reflect this split.

    The accompanying unaudited financial statements have been prepared in 
accordance with generally accepted accounting principles and the Securities 
and Exchange Commission's rules and regulations for reporting interim 
financial information.  Accordingly, they do not include all of the 
information and footnotes required by generally accepted accounting 
principles for complete financial statements.  In the opinion of management, 
all adjustments (consisting of normal recurring accruals) considered 
necessary for a fair presentation have been included.  Operating results for 
the three months ended March 31, 1997 are not necessarily indicative of the 
results that may be expected for the year ending December 31, 1997. These 
financial statements should be read in conjunction with the financial
statements and related notes contained in the Company's Form 10-K for the year
ended December 31, 1996.

NOTE 2--WOODHOLLY ACQUISITION

    On January 1, 1997, the Company acquired all of the assets of Woodholly 
Productions ("Woodholly Productions").  Woodholly Productions provides full 
service duplication, distribution, video content storage and ancillary 
services to major motion picture studios, advertising agencies and 
independent production companies for both domestic and international use.  
As consideration, the company will pay the partners of woodholly productions 
a maximum of $9 million, of which $4 million is to be paid in installments 
commencing in January 1997. The remaining balance is subject to earn-out 
provisions which are predicated upon Woodholly Productions attaining certain 
operating income goals, as set forth in the purchase agreement in each quarter 
through December 31, 2001.  The Company has accounted for this acquisition as a
purchase.  The contingent purchase price, to the extent earned, will be 
recorded as an increase to goodwill and will be amortized over 20 years.


                                      5
<PAGE>
    The accompanying consolidated financial statements include the accounts 
of Woodholly Productions and the Company.  All material intercompany 
transactions and balances have been eliminated.  The consolidated statement 
of income includes Woodholly Productions' results of operations only for 
the period subsequent to the acquisition.

NOTE 3 -- S CORPORATION TERMINATION

    In connection with the termination of its S Corporation status (see Note 
1), the Company distributed $3.0 million of the net proceeds of the Offering
("S Corp Distribution") to its three shareholders in respect of previously 
taxed and undistributed earnings of the Company. A final distribution of 
approximately $1.5 million is expected to be made in June 1997.

                                      6
<PAGE>
                                  VDI MEDIA

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
        RESULTS OF OPERATIONS

    Except for the historical information contained herein, certain of the 
matters discussed in this report are "forward-looking statements" as defined 
in the Private Securities Litigation Reform Act of 1995, which involve 
certain risks and uncertainties, which could cause actual results to differ 
materially from those discussed herein, including but not limited to the risk 
of competition from competitors in the industry, customer and industry 
concentration, the Company's dependence on technological developments, risks 
of expansion, ability to maintain and improve service quality, dependence on 
key personnel, fluctuation in results of operations and seasonality, and risks 
relating to control by management. See the relevant discussions elsewhere 
herein, and the risk factors set forth in the Company's prospectus as filed 
with the Securities and Exchange Commission on February 19, 1997, for a 
further discussion of these and other risks and uncertainties applicable to 
the Company's business.

THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996

    REVENUES.  Revenues increased by $2.7 million or 45.4% to $8.5 million 
for the three month period ended March 31, 1997 compared to $5.8 million for 
the three month period ended March 31, 1996 due to the acquisition of 
Woodholly Productions as well as the increased use of the Company's services 
by existing customers and the addition of new customers.  This increase in 
use of the Company's services and addition of new customer was due to (i) the 
availability of new services and capacity resulting from the acquisition of 
Woodholly Productions and (ii) substantially increased marketing of the 
Company's national distribution capabilities through the Tulsa Control 
Center.  

    GROSS PROFIT.  Gross profit increased $1.2 million or 55.9% to $3.4 
million for the three month period ended March 31, 1997 compared to $2.2 
million for the three month period ended March 31, 1996.  As a percentage of 
revenues, gross profit increased from 37.5% to 40.2%.  The increase in gross 
profit as a percentage of revenues was attributable to (i) a reduction in the 
cost of fiber optic and satellite costs which resulted from improved video 
trafficking logistics through the Tulsa Control Center and (ii) lower 
shipping expenses for the services provided by Woodholly Productions which 
generally distributes to fewer locations.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSE.  Selling, general and 
administrative expense increased $0.7 million or 51.6% to $2.2 million for 
the three month period ended March 31, 1997 compared to $1.4 million for the 
three month period ended March 31, 1996.  As a percentage of revenues, 
selling, general and administrative expense increased to 25.3% for the three 
month period ended March 31, 1997 compared to 24.3% for the three month 
period ended March 31, 1996.  This increase is due to increased staffing in 
the Company's sales and marketing departments and, in addition, selling, 
general and administrative expense for the three months ended March 31, 1997 
includes salaries paid to the former owners of Woodholly Productions; such 
amounts were formerly recorded as partnership distributions and, as such, 
were not reflected in Woodholly Productions' results of operations.

    OPERATING INCOME.  Operating income increased $0.5 million or 63.9% to 
$1.3 million for the three month period ended March 31, 1997 compared to $0.8 
million for the three month period ended March 31, 1996.

    INCOME TAXES.  The Company previously has operated as an S Corporation.  
As such, the Company was not responsible for federal income taxes and 
provided for state income taxes at reduced rates.  As a result of the 
Offering, the Company's S Corporation status has terminated.  Accordingly, 
the Company will, in future periods, provide for all income taxes at higher 
statutory rates.  These factors are estimated to result in an effective tax 
rate for periods subsequent to the Offering of approximately 40%.  For the 
quarter ending March 31, 1997, the Company has recorded an additional 
one-time non-cash charge of $0.2 million for additional deferred taxes based 
upon an increase in the effective tax rate from the Company's S Corporation 
status (1.5%) to C Corporation status (40%) applied to the temporary 
differences between the financial reporting and tax bases of the Company's 
assets and liabilities.

    NET INCOME.  Net income for the three month period ended March 31, 1997 
increased $0.1 million or 19.3% to $0.8 million compared to $0.7 million in 
1996.  Such increase is primarily attributable to the previously described 
factors.

                                      7
<PAGE>
                                  VDI MEDIA
                MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES

    This discussion should be read in conjunction with the notes to the 
financial statements and the corresponding information more fully described 
in the Company's Form 10-K for the year ended December 31, 1996.

    Since its inception, the Company has financed its operations through 
internally generated cash flow, borrowings under lending agreements with 
financial institutions and, to a lesser degree, borrowings from related 
parties. On February 24, 1997 the Company completed the Offering of 2,800,000 
shares of Common Stock, 200,000 of which were sold on behalf of a selling 
shareholder. The net proceeds of the Offering to the Company were 
approximately $15.9 million after deducting the underwriters' discount of 
approximately $1.3 million and offering expenses of approximately $1.1 
million.  Additionally, on March 25, 1997, the underwriters of the Offering 
exercised their over-allotment option for an additional 320,000 shares of 
Common Stock with net proceeds to the Company of approximately $2.1 million 
after deduction of the underwriters' discount of approximately $0.2 million.

    At March 31, 1997, the Company's cash and cash equivalents aggregated 
$11.6 million.  The Company's operating activities provided cash of $2.4 
million for the three months ended March 31, 1997 and $0.5 million for the 
three months ended March 31, 1996.

    The Company's investing activities used cash of $4.3 million for the 
three months ended March 31, 1997 including the effect of the acquisition of 
Woodholly Productions.  Investing activities used cash of $0.3 million for 
the three months ended March 31, 1996.  Such activities represent the 
addition and replacement of capital equipment necessary to accommodate 
increased customer demand for the Company's services.  The Company's business
is equipment intensive, requiring periodic expenditures of cash or the 
incurrence of additional debt to acquire additional videotape duplication 
equipment in order to increase capacity or replace existing equipment.

    The Company spent approximately $0.2 million on capital expenditures 
during the first quarter of 1997, primarily to upgrade and replace equipment, 
and for management information systems upgrades.

    The Company's financing activities provided cash of $13.0 million in 
the first quarter of 1997; financing activities used cash of $0.4 million for 
the three months ended March 31, 1996.  Cash flows from financing activities 
during the first quarter of fiscal 1997 include the effect of the Offering 
and the subsequent exercise of the over-allotment option, which raised net 
proceeds of approximately $18.0 million.  Using the proceeds of the Offering, 
the Company repaid $1.8 million outstanding under its term loan with a bank.  
In addition the Company paid the first installment of the final S Corp 
Distribution to its shareholders.  Such distribution represents previously 
taxed and undistributed earnings of the Company while an S Corporation.  The 
final installment, which is currently estimated to be approximately $1.5 
million, is expected to be paid on or before June 30, 1997.

    In January 1997 the Company acquired substantially all of the assets and 
assumed certain liabilities of Woodholly Productions (the "Woodholly 
Acquisition").  In connection with the Woodholly Acquisition the Company 
executed $4.0 million promissory notes.  These promissory notes bore interest 
at 8% per annum and were repaid on February 28, 1997.  The purchase price 
consists of an initial purchase price of $4.0 million plus an as yet 
undetermined contingent purchase price.  The contingent purchase price is to 
be earned and paid based on the total operating income (as defined) resulting 
from the financial results of Woodholly Productions as a separate division of 
the Company.  The contingent purchase price, in total, is limited to $4.0 
million, with an additional bonus payment of $1.0 million if Woodholly 
Productions achieves certain additional revenue and profitability targets.  
The excess of the initial consideration over the fair value of the assets 
acquired and liabilities assumed of approximately $1.8

                                      8
<PAGE>
                                  VDI MEDIA
                MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONTINUED)

million has been allocated to goodwill.  The contingent purchase price, 
to the extent earned, will be treated as an increase in goodwill and 
will be amortized coterminously with the original 20 year period.  On 
April 15, 1997 the Company made a $187,000 aggregate earn-out payment to 
the former partners of Woodholly Productions.  To the extent additional 
contingent purchase price payments are made, amortization will increase 
in future periods.  If the full contingent purchase price were earned or 
paid, goodwill would be increased by a total of $5.0 million, and annual 
amortization expense associated with such additional goodwill would be 
$0.3 million (for an aggregate annual amortization expense of $0.4 
million).  Management of the Company is in the process of reviewing the 
allocation of the purchase price and, when completed, may modify its 
preliminary allocation.  The final allocation of the purchase price may 
vary as additional information is obtained, and accordingly, the 
ultimate allocation may differ from that used in the unaudited pro forma 
combined financial statements.  The Woodholly Acquisition was accounted 
for by the Company under the purchase method of accounting.

    In connection with the purchase of a portion of the Common Stock owned by 
one of the Company's founders in April 1996, the Company borrowed an 
additional $1.2 million under its revolving credit agreement and loaned such 
amount to the Company's chief executive officer.  This loan was repaid after 
consummation of the Offering.

    As a result of termination of its S Corporation status, the Company was 
required to record deferred taxes which relate primarily to differences 
between financial and income tax reporting of depreciation and certain 
valuation allowances.  This one-time non-cash charge of $185,000 has been 
recorded in the quarter ended March 31, 1997.  In addition, the Company 
distributed approximately $3 million of the net proceeds of the Offering to 
the Company's shareholders of record prior to the Offering in respect of 
previously taxed and undistributed earnings of the Company for the period 
ending December 31, 1996.

    The Company has a $2.0 million revolving credit agreement with Union Bank 
(the "Revolving Credit Agreement").  As of May 12, 1997 the Company had $2.0 
million available for borrowing under the Revolving Credit Agreement. Amounts 
available pursuant to this agreement are determined by eligible accounts 
receivable, as defined, and are secured by substantially all of the Company's 
assets.  In addition, repayment of amounts borrowed is guaranteed by the 
Company's principal shareholders. Interest accrues at either the London 
Interbank Offering Rate "(LIBOR)" plus 2.25% or the bank's reference rate.  
The Revolving Credit Agreement imposes a number of financial and other 
conditions upon the Company, including limitations on indebtedness and 
changes in lines of business, restrictions on the disposition of assets, 
restrictions on acquisitions and certain financial ratios.  In addition, 
consummation of significant acquisitions may be subject to obtaining prior 
bank consent under the Revolving Credit Agreement.  At March 31, 1997, the 
Company was in compliance with these covenants and conditions.  The Revolving 
Credit Agreement expires on June 30, 1997. Management expects to be able to 
renew the Revolving Credit Agreement at similar terms prior to its scheduled 
expiration. At May 13, 1997, no balance was outstanding.

    In July 1995, the Company obtained a term loan in the original amount of 
approximately $2.8 million with a bank.  The term loan was secured by the 
assets of the Company and was to be repaid in monthly installments of 
principal and interest through July 2000.  Interest accrued at LIBOR plus 
2.5%.  The term of the loan agreement included covenants regarding the 
maintenance of various financial ratios.  Amounts outstanding under the term 
loan were repaid by the Company in February 1997 with a portion of the 
proceeds of the Offering.

    Management believes that cash generated from the Offering, ongoing 
operations, borrowings under its bank line of credit and its existing working 
capital will fund necessary capital expenditures and provide adequate working 
capital for at least the next twelve months.

                                      9
<PAGE>
                                  VDI MEDIA
                MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONTINUED)


    The Company, from time to time, considers the acquisition of businesses 
complementary to its current operations.  Consummation of any such 
acquisition or other expansion of the business conducted by the Company, may 
be subject to the Company securing additional financing.

    INFLATION.  The Company does not believe that inflation will have a 
significant impact on its financial condition, results of operations or 
prospects.

    The Company has been awarded the opportunity to provide services to 
several new clients during the three months ended March 31, 1997, including 
United Airlines and Hunt & Wesson. However, no material revenues were 
recorded in the quarter for these accounts and the Company cannot guarantee 
that any significant revenues will be recorded as a result of these new 
customers. Typically, new clients do not begin using the Company's services 
on an exclusive basis immediately, but rather increase their usage over 
several quarters.


                             PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

    (a)  Exhibits

             Exhibit
               No.        Description
             -------      -----------

              10.14       Lease agreement between Woodholly Productions and 
                          The Dorothy M. Krueger Living Trust, et al., 
                          dated May 25, 1993 (Woodholly storage facility).

              10.15       Lease agreement among the Company, Rodger D. 
                          Parker and Jasper A. Watt, Jr., dated January 24, 
                          1997 (Woodholly facility).

              27          Financial Data Schedule

    (b)  Reports on Form 8-K

           None.

                                      10
<PAGE>
                                  SIGNATURES

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

                               VDI MEDIA

DATE:  May 14, 1997          BY: /s/  DONALD R. STINE
                                   --------------------
                                      Donald R. Stine
                                   Chief Financial Officer
                                      and Treasurer
                                   (duly authorized officer 
                                   and principal financial officer)


                                      11