<PAGE>

                         SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C.  20549
                                          
                                     FORM 10-Q
                                          
                  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
                                          

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998 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
       incorporation or organization)                  Identification No.)

           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 August 12, 1998, there were 9,769,883 shares of Common Stock outstanding.

<PAGE>

PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                                      VDI MEDIA
                              CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>

                                       ASSETS


                                                                         December 31,          June 30,  
                                                                             1997                1998    
                                                                         ------------        ------------
                                                                                              (Unaudited)
<S>                                                                      <C>                 <C>         
 Current assets:

   Cash and cash equivalents                                             $  2,921,000        $  2,533,000
   Accounts receivable, net  of allowances for doubtful
     accounts of $607,000 and $583,000, respectively                       11,532,000          14,655,000
   Inventories                                                                285,000             521,000
   Prepaid expenses and other current assets                                  382,000           1,071,000
   Deferred income taxes                                                      330,000             619,000
                                                                         ------------        ------------
         Total current assets                                              15,450,000          19,399,000

   Property and equipment, net                                              7,808,000          13,524,000
   Deferred income taxes                                                      119,000                 -  
   Other assets, net                                                          124,000             301,000
   Goodwill and other intangibles, net                                      9,406,000          17,655,000
                                                                         ------------        ------------
         Total Assets                                                    $ 32,907,000        $ 50,879,000
                                                                         ------------        ------------
                                                                         ------------        ------------

                                       LIABILITIES AND SHAREHOLDERS' EQUITY

 Current liabilities:
   Accounts payable                                                      $  3,964,000        $  4,002,000
   Accrued expenses                                                         3,147,000           1,889,000
   Income taxes payable                                                       791,000                 -  
   Borrowings under revolving credit agreement                              1,086,000          17,889,000
   Current portion of notes payable                                           350,000              26,000
   Current portion of capital lease obligations                               758,000             697,000
                                                                         ------------        ------------
         Total current liabilities                                         10,096,000          24,503,000
                                                                         ------------        ------------

   Deferred income taxes                                                          -                24,000
   Notes payable, less current portion                                        552,000                 -  
   Capital lease obligations, less current portion                            727,000             449,000

Shareholders' equity:
   Preferred stock; no par value; 5,000,000 authorized;
     none outstanding                                                             -                   -  
   Common stock; no par value; 50,000,000 authorized; 9,580,000
     and 9,769,883 shares, respectively, issued and outstanding            18,880,000          20,608,000
   Retained earnings                                                        2,652,000           5,295,000
                                                                         ------------        ------------
         Total shareholders' equity                                        21,532,000          25,903,000
                                                                         ------------        ------------
                                                                          $32,907,000         $50,879,000
                                                                         ------------        ------------
                                                                         ------------        ------------

</TABLE>

See accompanying notes to consolidated financial statements


                                       2
<PAGE>

                                   VDI MEDIA
                        CONSOLIDATED STATEMENT OF INCOME
                                  (Unaudited)
<TABLE>
<CAPTION>

                                                              Three Months Ended             Six Months Ended
                                                                    June 30,                      June 30,
                                                          ---------------------------   ---------------------------
                                                              1997           1998           1997           1998    
                                                          ------------   ------------   ------------   ------------
<S>                                                     <C>            <C>            <C>            <C>         
Revenues                                                  $  8,811,000   $ 14,250,000   $ 17,298,000   $ 25,893,000
Cost of goods sold                                           5,345,000      8,555,000     10,417,000     15,693,000
                                                          ------------   ------------   ------------   ------------

Gross profit                                                 3,466,000      5,695,000      6,881,000     10,200,000

Selling, general and administrative expense                  2,084,000      2,973,000      4,236,000      5,496,000
                                                          ------------   ------------   ------------   ------------
Operating income                                             1,382,000      2,722,000      2,645,000      4,704,000
Interest expense                                                46,000        140,000        165,000        241,000
Interest income                                                 99,000          3,000        151,000         16,000
                                                          ------------   ------------   ------------   ------------
Income before income taxes                                   1,435,000      2,585,000      2,631,000      4,479,000
Provision for income taxes                                     566,000      1,060,000        757,000      1,836,000
Establishment of deferred tax liability (Note 1)                   -              -          185,000            -  
                                                          ------------   ------------   ------------   ------------
Net income                                                    $869,000     $1,525,000     $1,689,000     $2,643,000
                                                          ------------   ------------   ------------   ------------
                                                          ------------   ------------   ------------   ------------

Earnings per share:
   Basic:
      Net income per share                                       $0.09          $0.16          $0.20          $0.27
      Weighted average number of shares                      9,580,000      9,768,848      8,551,333      9,702,024
   Diluted:
      Net income per share                                       $0.09          $0.15          $0.20          $0.27
      Weighted average number of shares including
         the dilutive effect of stock options                9,640,071      9,872,154      8,582,538      9,823,461

</TABLE>
See accompanying notes to consolidated financial statements


                                       3

<PAGE>



                                   VDI MEDIA
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                Six Months Ended June 30,
                                                               ---------------------------
                                                                   1997           1998    
                                                               ------------   ------------
<S>                                                          <C>            <C>         
Cash flows from operating activities:
     Net income                                                $  1,689,000   $  2,643,000
  Adjustment to reconcile net income
    to net cash provided by operating activities:
     Depreciation and amortization                                1,599,000      2,227,000
     Change in deferred taxes                                       185,000       (146,000)
     Provision for doubtful accounts                                 65,000        (24,000)
Changes in assets and liabilities:
     Decrease (increase) in accounts receivable                      65,000       (246,000)
     (Increase) decrease in inventories                             (11,000)        33,000
     Increase in prepaid expenses and other current assets         (390,000)      (546,000)
     Increase in other assets                                           -         (177,000)
     Decrease in deferred offering costs                            876,000            -  
     Decrease in accounts payable                                  (607,000)    (1,213,000)
     Decrease in accrued expenses                                  (106,000)    (1,290,000)
     Decrease in income taxes payable                                   -         (791,000)
                                                               ------------   ------------
Net cash provided by operating activities                         3,365,000        470,000
                                                               ------------   ------------

Cash used in investing activities:
     Capital expenditures                                          (329,000)    (2,851,000)
     Net cash paid for acquisitions                              (4,278,000)   (15,323,000)
                                                               ------------   ------------
Net cash used in investing activities                            (4,607,000)   (18,174,000)

Cash flows from financing activities:
     S Corporation distributions to shareholders                 (5,555,000)           -  
     Change in revolving credit agreement                               -       16,803,000
     Proceeds from sale of common stock                          18,041,000            -  
     Proceeds from exercise of stock options                            -        1,728,000
     Repayment of notes payable                                  (1,816,000)      (876,000)
     Repayment of amounts receivable from officer                 1,225,000            -  
     Repayment of capital lease obligations                        (470,000)      (339,000)
                                                               ------------   ------------
Net cash provided by financing activities                        11,425,000     17,316,000

Net increase in cash                                             10,183,000       (388,000)
Cash at beginning of period                                         564,000      2,921,000
                                                               ------------   ------------
Cash at end of period                                           $10,747,000     $2,533,000
                                                               ------------   ------------
                                                               ------------   ------------

Supplemental disclosure of cash flow information:
Cash paid for:
  Interest                                                         $165,000       $241,000
                                                               ------------   ------------
                                                               ------------   ------------

  Income tax                                                     $1,316,000     $3,224,000
                                                               ------------   ------------
                                                               ------------   ------------
</TABLE>


See accompanying notes to consolidated financial statements


                                      4
<PAGE>

                                  VDI MEDIA
                                          
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                June 30, 1998


NOTE 1 -- THE COMPANY

     VDI MEDIA (the "Company") provides broadcast quality video duplication, 
distribution and related value-added 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 Los Angeles, Santa Monica, Burbank and San Francisco, 
California; Chicago, Illinois; New York, New York; and Dallas, Texas.

     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.

     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 adjustments) considered 
necessary for a fair presentation have been included.  Operating results for 
the six months ended June 30, 1998 are not necessarily indicative of the 
results that may be expected for the year ending December 31, 1998.  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, 1997.

NOTE 2 -- ACQUISITIONS

     On June 9, 1998, the Company acquired all of the assets of The Dub 
House, Inc. ("The Dub House").  The Dub House distributes broadcast media for 
advertising agencies, independent producers and other broadcast media 
providers. As consideration, the Company will pay the owners of The Dub House 
a maximum of $1.7 million, of which $1.5 million was paid in the second 
quarter of 1998.  The remaining balance is subject to earn-out provisions 
which are predicated upon The Dub House attaining certain sales goals, as set 
forth in the purchase agreement, through June 1999.

     On June 12, 1998, the Company acquired substantially all of the assets 
of All Post, Inc. ("All Post").  All Post provides full service duplication, 
distribution, video content storage and ancillary services to major motion 
picture studios and independent production companies for 


                                      
<PAGE>

both domestic and international use.  As consideration, the Company will pay 
the owners of All Post a maximum of $14.5 million, of which $13.0 million was 
paid in the second quarter of 1998.  The remaining balance is subject to 
earn-out provisions which are predicated upon All Post attaining certain 
gross profit goals, as set forth in the purchase agreement, through June 1999.

     The Company has accounted for both of these acquisitions as purchases. 
Goodwill arising from these transactions is being amortized over twenty 
years. The contingent purchase price for each of these transactions, to the 
extent earned, will be recorded as an increase to goodwill.  The consolidated 
statement of income includes both The Dub House and All Post's results of 
operations from the effective date of their acquisitions.




                                      
<PAGE>

                                  VDI MEDIA
             MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONTINUED)

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

     In connection with the "safe-harbor" provisions of the Private 
Securities Litigation Reform Act of 1995, the Company, in its Annual Report 
on Form 10-K for the year ended December 31, 1997, outlined cautionary 
statements identifying important factors that could cause the Company's 
actual results to differ materially from those projected in forward-looking 
statements made by, or on behalf of, the Company.  Such forward-looking 
statements, as made within this Quarterly Report on Form 10-Q, should be 
considered in conjunction with the information included in the Company's 
Annual Report on Form 10-K for the year ended December 31, 1997 and the risk 
factors set forth in the Company's Registration Statement on Form S-1 filed 
with the Securities and Exchange Commission on February 19, 1997 and 
Registration Statement on Form S-3 filed with the Securities and Exchange 
Commission on June 29, 1998.  Factors that could cause future results to 
differ from the Company's expectations include, but are not limited to, the 
following: competition, customer and industry concentration, dependence on 
technological developments, risks related to expansion and acquisition of new 
businesses, dependence on key personnel, fluctuating results and seasonality 
and control by management.   

THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30, 1997

     REVENUES.  Revenues increased by $5.5 million or 61.7% to $14.3 million 
for the three month period ended  June 30, 1998 compared to $8.8 million for 
the three month period ended June 30, 1997 primarily due to the acquisitions 
of Multimedia Services, Fast Forward and All Post and also due to the 
increased use of the Company's services by existing customers and the 
addition of new customers.  The increased use of the Company's services and 
addition of new customers was primarily due to (i) the availability of new 
services and capacity resulting from the acquisition of Multimedia Services, 
Fast Forward and All Post and (ii) substantially increased marketing of the 
Company's local and national services.

     GROSS PROFIT.  Gross profit increased $2.2 million or 64.3% to $5.7 
million for the three month period ended June 30, 1998 compared to $3.5 
million for the three month period ended June 30, 1997.  As a percentage of 
revenues, gross profit increased to 40.0% from 39.3%.   The increase in gross 
profit as a percentage of revenues was primarily attributable to (i) lower 
direct materials costs from scale buying and lower direct labor costs due to 
operating leverage, (ii) a reduction in the cost of fiber optic and satellite 
costs which resulted from improved video trafficking logistics, and (iii) 
lower depreciation expenses which are allocated to cost of goods sold.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSE.  Selling, general and 
administrative expense increased $0.9 million or 42.6% to $3.0 million for 
the three month period ended June 30, 1998 compared to $2.1 million for the 
three month period ended June 30, 1997.  As a percentage of revenues, 
selling, general and administrative expense decreased to 20.9% for the three 
month period ended June 30, 1998 compared to 23.7% for the three month period 
ended June 30, 1997. This decrease was due to a reduction in the cost of 
administrative personnel, as a percent of sales, resulting from the 
elimination of staff as acquired companies were integrated.  The decrease in 
administrative wages was offset in part by increased amortization expense 
related to goodwill from acquired companies.

     OPERATING INCOME.  Operating income increased $1.3 million or 97.0% to 
$2.6 million for the three month period ended June 30, 1998 compared to $1.4 
million for the three month period ended June 30, 1997.



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

     INCOME TAXES.  The Company provided for taxes at a rate of 41% in the 
second quarter of 1998.

     NET INCOME.  Net income for the three month period ended June 30, 1998 
increased $0.6 million or 75.6% to $1.5 million compared to $0.9 million in 
1997.  Such increase is primarily attributable to the previously described 
factors.

SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997

     REVENUES.  Revenues increased by $8.6 million, or 49.7%, to $25.9 
million for the six month period ended June 30, 1998 compared to $17.3 
million for the six month period ended June 30, 1997. This increase in 
revenue was primarily due to increased volume resulting from (i) the 
integration of new clients and availability of new services resulting from 
the acquisitions of Multi-Media Services, Fast Forward and All Post, and (ii) 
the increased use of the company's services by existing clients. 

     GROSS PROFIT.  Gross profit increased $3.3 million, or 48.2%, to $10.2 
million for the six month period ended June 30, 1998 compared to $6.9 million 
for the six month period ended June 30, 1997.  As a percentage of revenues, 
gross profit decreased from 39.8% to 39.4%.  The decrease in gross profit as 
a percentage of revenues was primarily attributable to an increase in 
outsourcing costs resulting from the consolidation of acquired facilities in 
New York, San Francisco and West Los Angeles.  The increased outsourcing 
costs were partially offset by lower direct materials costs resulting from 
scale buying and lower depreciation charges which are allocated to cost of 
goods sold.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSE.  Selling, general and 
administrative expense increased $1.3 million, or 29.7%, to $5.5 million for 
the six month period ended June 30, 1998 compared to $4.2 million for the six 
month period ended June 30, 1997.  As a percentage of revenues, selling, 
general and administrative expense decreased to 21.2% for the six month 
period ended June 30, 1998 compared to 24.5% for the six month period ended 
June 30, 1997. This decrease in selling, general and administrative expense 
as a percentage of revenues was primarily due to (i) the spreading of fixed 
overhead expenses over a higher revenue base in the six month period ended 
June 30, 1998 compared to the same period in 1997, and (ii) the elimination 
of several selling, general and administrative personnel as acquired 
companies were integrated.

     OPERATING INCOME.  Operating income increased $2.1 million, or 77.9%, to 
$4.7 million for the six month period ended June 30, 1998 compared to $2.6 
million for the six month period ended June 30, 1997.

     INCOME TAXES.  Prior to the Offering, the Company 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 terminated.  Accordingly, 
the Company has since provided, and will continue to provide, for all income 
taxes at higher statutory rates.  These factors resulted in an effective tax 
rate for 1997 of approximately 40%.  The Company provided for taxes at a rate 
of 41% in the first six months of 1998.

     NET INCOME.  Net income for the six month period ended June 30, 1998 
increased $0.9 million, or 56.4%, to $2.6 million compared to $1.7 million 
for the six month period ended June 30, 1997.



                                      
<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, 1997.

     At June 30, 1998, the Company's cash and cash equivalents aggregated 
$2.5 million.  The Company's operating activities provided cash of $0.5 
million for the six months ended June 30, 1998.

     The Company's investing activities used cash of $18.2 million for the 
six months ended June 30, 1998, including $13.0 million for the acquisition 
of All Post, and $1.5 million for the acquisition of The Dub House.  The 
Company also spent approximately $2.9 million for the addition and 
replacement of capital equipment necessary to accommodate increased customer 
demands for the Company's services, and for investments in management 
information systems.  The Company's business is equipment intensive, 
requiring periodic expenditures of cash or the incurrence of additional debt 
to acquire additional fixed assets in order to increase capacity or replace 
existing equipment. The Company expects to spend approximately $1.5 million 
on capital expenditures during the last two quarters of 1998 to upgrade and 
replace equipment and management information systems.

     The Company's financing activities provided cash of $17.3 million in the 
six months ended June 30, 1998.  Cash flows from financing activities include 
a $16.8 million increase in the Company's revolving credit agreement with 
Union Bank, used primarily to fund the purchases of All Post and The Dub 
House.

     The Company has a $20.0 million revolving credit agreement with Union 
Bank which expires on September 30, 1998.  There was $17.9 million 
outstanding under the Union Bank credit agreement at June 30, 1998. 
Management is currently in the process of negotiating a larger credit 
facility to replace its existing credit agreement. There is no assurance that 
the Company will be successful in obtaining such larger credit facility.

     In June 1998 the Company acquired substantially all of the assets and 
assumed certain liabilities of All Post (the "All Post Acquisition").  The 
purchase price consisted of an initial payment of $13.0 million plus an as 
yet undetermined contingent purchase price.  The contingent purchase price is 
to be earned and paid based on the gross profit (as defined) resulting from 
the financial results of All Post as a separate division of the Company.  The 
contingent purchase price, in total, is limited to $1.5 million.  The excess 
of the initial consideration over the fair value of the assets acquired and 
liabilities assumed of approximately $6.5 million has been allocated to 
goodwill.

     The Company also acquired substantially all of the assets and assumed 
certain liabilities of The Dub House (the "Dub House Acquisition"), located 
in Dallas, Texas, in June 1998.  The purchase price consisted of an initial 
payment of $1.5 million plus an undetermined contingent purchase price.  The 
contingent purchase price is to be earned and paid based on the sales growth 
attained by The Dub House as a separate division of the Company.  The 
contingent purchase price, in total, is limited to $0.2 million.  The excess 
of the initial consideration over the fair value of the assets acquired and 
liabilities assumed of approximately $1.0 million has been allocated to 
goodwill. 

     Goodwill arising from the All Post Acquisition and the Dub House 
Acquisition (the "Acquisitions") will be amortized over 20 years.  The 
contingent purchase price, to the extent earned, will be treated as an 
increase in goodwill.  The Acquisitions were accounted for by the Company 
under the purchase method of accounting.



                                      
<PAGE>

                                  VDI MEDIA
                  MANAGEMENT'S DISCUSSION AND ANALYSIS-(CONTINUED)


     Management believes that cash generated from its revolving credit 
agreement (as proposed to be amended) and its ongoing operations and existing 
working capital will fund necessary capital expenditures and provide adequate 
working capital for at least the next twelve months.

     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.



                                      
<PAGE>

                                  VDI MEDIA
             MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONTINUED)

                          PART II - OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The Company's Annual Meeting of Shareholders was held on June 2, 1998.  
At the meeting, shareholders voted on (i) the election of directors to hold 
office until the next annual meeting of shareholders of the Company or until 
their successors are duly elected and qualified and (ii) approval of the 
appointment of Price Waterhouse LLP as the Company's independent public 
accountants for the fiscal year ending December 31, 1998.

1.  Election of Directors

<TABLE>
<CAPTION>

Name                Votes For      Votes Against     Votes Withheld      Broker Non-Votes
----                ---------      -------------     --------------      ----------------
<S>                 <C>            <C>               <C>                 <C>
R. Luke Stefanko    7,479,745           0                19,100                  0
Donald R. Stine     7,479,745           0                19,100                  0
Thomas J. Ennis     7,479,745           0                19,100                  0
Edward M. Philip    7,479,745           0                19,100                  0
Steven J. Schoch    7,479,745           0                19,100                  0

</TABLE>

2.   The appointment by the Board of Directors of the Company of Price
Waterhouse LLP as the Company's independent auditors for the fiscal year ending
December 31, 1998 was ratified with  7,497,825 for the proposal, 1,020
against the proposal, 0 votes abstaining and 0 broker non-votes.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibit No.    DESCRIPTION
          
             27          Financial Data Schedule

     (b)  Reports on Form 8-K

          A report on Form 8-K was filed with the Securities and Exchange 
          Commission on June 29, 1998 relating to the purchase by the Company
          of certain assets of All Post, Inc.

<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:   August 14, 1998                      BY:  /s/ Donald R. Stine        
     -----------------------                    ---------------------------
                                                      Donald R. Stine
                                                  Chief Financial Officer
                                                       and Treasurer
                                               (duly authorized officer and
                                                principal financial officer)