ADVANSTAR INC, S-1, 1999-03-19

ADVANSTAR INC
S-1, 1999-03-19
BUSINESS SERVICES, NEC

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<PAGE>

As filed with the Securities and Exchange Commission on March 19, 1999
Registration No. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
Advanstar, Inc.
(Exact name of registrant as specified in its charter)
Delaware 7389 94-3243499
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
---------------
Advanstar, Inc.
545 Boylston Street
Boston, Massachusetts 02116
(617) 267-6500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
---------------
ROBERT L. KRAKOFF
Chairman of the Board and Chief Executive Officer
Advanstar, Inc.
545 Boylston Street
Boston, Massachusetts 02116
(617) 267-6500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copies to:
F. GEORGE DAVITT, ESQ. JONATHAN A. SCHAFFZIN, ESQ.
TESTA, HURWITZ & THIBEAULT, LLP CAHILL GORDON & REINDEL
125 High Street 80 Pine Street
Boston, Massachusetts 02110 New York, New York 10005
(617) 248-7000 (212) 701-3000
---------------
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this registration statement becomes effective.
---------------
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. [_]
---------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed maximum
aggregate Amount of
Title of each class of securities to be registered offering price(1) registration fee
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, $.01 par value....................... $200,000,000.00 $55,600.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933.
---------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

EXPLANATORY NOTE

This registration statement contains two forms of prospectus: one to be
used in connection with an offering in the United States and Canada (the "U.S.
Prospectus") and one to be used in connection with a concurrent offering
outside of the United States and Canada (the "International Prospectus"). The
two prospectuses are identical except for the front and back cover pages and
the section entitled "Underwriting." Each of the alternate pages for the
International Prospectus included herein is labeled "Alternate Page for
International Prospectus."
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting offers to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, dated March 19, 1999

PROSPECTUS

(LOGO)

Advanstar, Inc.

Common Stock

-----------

This is Advanstar, Inc.'s initial public offering of common stock. Of the
shares being offered, Advanstar, Inc. is selling shares of common stock and
certain of our stockholders are selling shares of common stock. We will not
receive any of the proceeds from the sale of shares by the selling
stockholders. The U.S. underwriters will offer shares in the United States
and Canada and the international managers will offer shares outside the
United States and Canada. The initial public offering price and the
underwriting discount per share are identical for both offerings.

We expect the public offering price to be between $ and $ per share.
Currently, no public market exists for the shares. We will apply to list the
common stock on the New York Stock Exchange under the symbol " ."

Investing in the common stock involves risks which are described in the
"Risk Factors" section beginning on page 10 of this prospectus.

-----------

<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Public Offering Price................................. $ $

Underwriting Discount................................. $ $

Proceeds, before expenses, to Advanstar, Inc.......... $ $
Proceeds to Selling Stockholders...................... $ $
</TABLE>

The underwriters may also purchase from the selling stockholders up to an
additional shares at the public offering price, less the underwriting
discount, within 30 days from the date of this prospectus to cover over-
allotments. The international managers may similarly purchase from the selling
stockholders up to an aggregate of an additional shares.

-----------

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

Merrill Lynch & Co. is acting as book-running lead manager for this
offering. Merrill Lynch & Co. and Bear, Stearns & Co. Inc. are acting as joint
lead managers. The shares of common stock will be ready for delivery in New
York, New York on or about , 1999.

-----------

Merrill Lynch & Co. Bear, Stearns & Co. Inc.
Joint Lead Managers

-----------

Lehman Brothers
Morgan Stanley Dean Witter
Salomon Smith Barney

-----------
The date of this prospectus is , 1999
<PAGE>

The names of events, publications and services used in this prospectus
are trademarks, trade names and service marks of Advanstar, Inc., its
subsidiaries or its joint ventures. Names of companies and associations used
herein are trademarks or trade names of the respective organizations.

----------------

MARKET AND INDUSTRY DATA USED THROUGHOUT THIS PROSPECTUS WERE OBTAINED
THROUGH COMPANY RESEARCH, SURVEYS AND STUDIES CONDUCTED BY THIRD PARTIES AND
INDUSTRY AND GENERAL PUBLICATIONS. WHERE WE STATE THE MARKET RANKING OF OUR
TRADE SHOWS, WE HAVE BASED THAT RANKING ON OUR INTERNAL ANALYSIS OF NET SQUARE
FEET OF EXHIBITION SPACE (EXCEPT WHERE AN OUTSIDE SOURCE IS SPECIFICALLY
REFERENCED). WHERE WE STATE THE MARKET RANKING OF OUR PUBLICATIONS, WE HAVE
BASED THAT RANKING ON THE NUMBER OF ADVERTISING PAGES AS DETERMINED BY IMS
LTD., AN INDEPENDENT THIRD PARTY (EXCEPT WHERE ANOTHER SOURCE IS SPECIFICALLY
REFERENCED). FOR THESE PURPOSES, WE HAVE DEFINED OUR MARKETS NARROWLY AS THE
NICHE OF BUSINESSES OR PROFESSIONALS AT WHICH A TRADE SHOW OR PUBLICATION IS
EXCLUSIVELY OR SPECIFICALLY TARGETED. ADVANSTAR, INC. HAS NOT INDEPENDENTLY
VERIFIED MARKET AND INDUSTRY DATA FROM THIRD-PARTY SOURCES. WHILE WE BELIEVE
INTERNAL COMPANY SURVEYS ARE RELIABLE AND MARKET DEFINITIONS ARE APPROPRIATE,
NEITHER THESE INTERNAL SURVEYS NOR THESE DEFINITIONS HAVE BEEN VERIFIED BY ANY
INDEPENDENT SOURCES.
<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary.................................................................. 3
Risk Factors............................................................. 10
Use of Proceeds.......................................................... 16
Dividend Policy.......................................................... 16
Capitalization........................................................... 17
Dilution................................................................. 18
Selected Historical Consolidated Financial Data of Advanstar and the
Predecessor............................................................. 19
Unaudited Pro Forma Combined Financial Information....................... 21
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 25
Business................................................................. 33
Management............................................................... 46
Principal and Selling Stockholders....................................... 52
Description of Capital Stock............................................. 54
Description of Indebtedness.............................................. 58
Shares Eligible for Future Sale.......................................... 61
Certain U.S. Federal Tax Considerations for Non-U.S. Holders of Common
Stock................................................................... 63
Underwriting............................................................. 66
Legal Matters............................................................ 70
Experts.................................................................. 70
Additional Information................................................... 70
Index to Financial Statements............................................ F-1
</TABLE>

We have not authorized any dealer, salesperson or other person to give
any information or to make any representations other than those contained in
this prospectus. If they give you such information or make such
representations, you must not rely upon them as having been authorized by us or
the underwriters. This prospectus is not an offer to sell, or the solicitation
of an offer to buy, any securities other than these registered securities. It
is also not an offer to, or solicitation of, any person in any jurisdiction in
which such offer or solicitation would be unlawful. Neither the delivery of
this prospectus nor any offer or sale shall, under any circumstances, create
any implication that we have had no change in our business since the date of
this prospectus or that the information contained in this prospectus is correct
as of anytime after the date of this prospectus.

Until , 1999, all dealers selling or buying our common stock may be
required to deliver a prospectus even if they are not participating in this
offering. This delivery requirement is in addition to the obligation of dealers
to deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
<PAGE>

FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to risks,
uncertainties and assumptions about Advanstar, Inc., including, among other
things:

. our ability to successfully pursue our identified growth strategies,
. our intention to expand our product and service offerings,
. the performance of our MAGIC trade shows, Travel Agent magazine and other
large events and publications,
. anticipated trends in our businesses,
. the availability of desirable venues and dates for our important trade
shows and
. our ability to continue to control costs.

We undertake no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future events or
otherwise. In light of these risks, uncertainties and assumptions, the forward-
looking events discussed in this prospectus might not occur.
<PAGE>

SUMMARY

This summary contains basic information about the offerings but may not
contain all the information that may be important to you. Except where the
context otherwise requires, the terms "Advanstar," "the Company," "our company"
and "we," as used in this prospectus, refer collectively to "Advanstar, Inc.,"
its direct and indirect subsidiaries and predecessors as a combined entity. In
addition, the "Predecessor" refers to Advanstar prior to the acquisition of
Advanstar on May 31, 1996. Unless otherwise indicated herein, the information
in this prospectus assumes an initial public offering price of $ per share
of common stock, the mid-point of the range set forth on the cover page of this
prospectus. You should read this entire prospectus, including the financial
data and related notes, before making an investment decision. You should
carefully consider the information set forth under "Risk Factors." In addition,
we make forward-looking statements in the prospectus and these statements
involve risks and uncertainties. Please see "Forward-Looking Statements."

The Company

We are a leading worldwide provider of integrated, business-to-business
marketing communications solutions for targeted industry sectors, principally
through trade shows and conferences and through controlled circulation trade,
business and professional magazines. We also provide a broad range of other
marketing services products, including classified advertising, direct mail
services, reprints, database marketing, directories, guides and reference
books. Since May 31, 1996, we have completed 24 acquisitions and joint
ventures. Our total revenue has increased from approximately $151.0 million in
1996 to $306.7 million in 1998 on a pro forma basis. Our pro forma EBITDA in
1998 approximated $72.8 million (after a $3.4 million non-cash charge for stock
option compensation). In 1998, trade shows and conferences represented
approximately 45.5% of our total pro forma revenue and approximately 54.1% of
our total pro forma contribution (gross profit before general and
administrative expenses and amortization). Publications accounted for
approximately 49.2% of our total pro forma revenue and approximately 38.8% of
our total pro forma contribution. Other revenue components, including direct
mail and database products and services, generated approximately 5.3% of our
total pro forma revenue and approximately 7.1% of our total pro forma
contribution. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

We serve a number of industry sectors in North America, Latin America,
Europe, Asia and Australia. We market our broad range of products and services
in certain niche markets of the following industry clusters in which we believe
we have developed scale and expertise:

. Retail, Hospitality & Fashion,

. Healthcare, Science & Pharmaceuticals,

. Information Technology & Communications and

. Manufacturing & Processing.

We believe our industry-focused cluster structure, rather than a product-
focused approach, enables us to better serve our customers' business-to-
business marketing communications needs. In addition, we believe our cluster
structure allows us to cross-sell our products and services effectively and to
capture a larger share of our customers' marketing budgets. In each of our
niche markets, many of the same customers advertise in our publications,
exhibit at our trade shows and use our marketing services to reach their
buyers. We have rapidly expanded our trade show, conference and publication
products within each cluster through new product introductions and strategic
acquisitions. This expansion further enhances our competitive position in each
cluster and leverages our existing marketing and customer service
infrastructure and industry expertise.

3
<PAGE>

Products and Services

Trade shows and conferences. In 1998, we held 107 events (an event is a
stand-alone trade show or conference), most of which we believe are the leading
events in their respective national or regional markets. For example, in our
Retail, Hospitality & Fashion cluster, we produce MAGIC, the world's largest
trade show for the men's apparel industry; WWDMAGIC, the second largest women's
apparel show in the United States; and MAGICKids, a children's apparel show. In
addition, we produce Artexpo New York, the largest mid-market art show in the
United States; IBS New York, the market leading exhibition and educational
event on the East Coast for the beauty salon market; and Dealernews
International Powersports Dealer Expo, the largest motorcycle accessories
aftermarket U.S. trade show. Our leading trade shows and conferences in other
clusters include Telexpo, the leading telecommunications trade show in Latin
America, and Incoming Call Center Management Conference & Exhibition, the
largest U.S. trade show and conference for the call center market.

Publications. In 1998, we published 110 publications. Our largest
magazines include Travel Agent, Video Store, Pharmaceutical Technology, Hotel &
Motel MANAGEMENT and CADALYST. Travel Agent is the second largest non-computer
U.S. trade magazine and the #1 trade periodical for the travel industry (based
on number of advertising pages, according to the October 1998 edition of
Business Marketing). Of our 61 magazines and journals for which competitive
data is available, we believe that over 70% rank either first or second in
their respective markets.

Marketing services. Within each industry-focused cluster, we offer our
customers classified advertising, direct mail services, reprints, database
marketing, directories, guides and reference books to support their business-
to-business marketing communications programs. Our marketing services,
particularly our direct mail services, reinforce our efforts to cross-sell our
events and publications and further provides our customers "one-stop shopping"
for their business-to-business marketing communications needs.

Internet. We operate over 100 web sites which provide an interactive
component to our core products. These web sites promote our trade shows,
conferences and publications as well as our marketing services. Over 80% of our
web sites either enable exhibitors and attendees to register on-line for our
trade shows and conferences or permit prospective readers to subscribe on-line
for our controlled circulation publications. In addition, many of our web sites
provide attendees of our trade shows and conferences and readers of our
publications the opportunity to receive additional product information through
links to our customers' web sites.

4
<PAGE>

The following table summarizes our events, publications, marketing
services and Internet services offered in 1998:

Advanstar, Inc.

----------------------------------------------------

<TABLE>
<CAPTION>
Retail, Hospitality and Healthcare, Science and Information Technology Manufacturing and
Fashion Pharmaceuticals and Communications Processing
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Events 34 Trade Shows 6 Trade Shows 23 Trade Shows 13 Trade Shows
4 Conferences 9 Conferences 12 Conferences 1 Conference
(e.g., MAGIC, (e.g., (e.g., ICCM, (e.g., SCANTECH,
Artexpo New WORLDPHARM, Telexpo and iEC) Plastic
York, IBS New Abilities Expo) Fairs, Sensors)
York)
----------------------------------------------------------------------------------------------------
15 Magazines 23 Magazines 16 Magazines 10 Magazines
Publications 13 Directories 3 Directories 4 Directories 8 Directories
and Other and Other and Other and Other
Publications Publications Publications Publications
(e.g., Travel (e.g., (e.g., CADALYST, (e.g., Automatic
Agent, Pharmaceutical America's ID News, Medical
Video Store, Technology, Network) Device
Hotel and Motel LC.GC, Technology)
Management) Geriatrics)

Marketing Classified Advertising, Direct Mail Services, Reprints, Database Marketing, Directories,
Services Guides and Reference Books

Internet 101 Web Sites
Advertising Sales, Subscriptions and Event Registration
</TABLE>

In addition to the four clusters above, we have grouped the industry
sectors in which we provide products and services but do not have a significant
industry presence into a Market Development cluster. In this cluster, in 1998,
we produced five trade shows, seven magazines and 11 directories and other
publications, provided marketing services and operated four web sites (which
are included in the number above).

5
<PAGE>

Operating Strategy

Advanstar's objective is to be the leading business-to-business marketing
communications company in the niche markets which we choose to serve. To
achieve our objective, we operate our businesses based on the following
strategies:

. Operate Leading Trade Shows and Publish Leading Magazines in
Attractive Niche Markets;

. Maximize Our Share of Customers' Marketing Expenditures;

. Leverage Our Centralized Administrative and Production Facilities;
and

. Attract and Retain Superior Management.

Growth Strategy

Building upon our operating strategies, we continue to pursue the
following growth strategies to expand our business:

. Identify and Consummate Strategic Acquisitions;

. Launch New Products and Services within Existing Clusters; and

. Enter Attractive New Industry Sectors.

Background Information

Advanstar was purchased on May 31, 1996 (the "HFCP III Acquisition") by
Hellman & Friedman Capital Partners III, L.P., H&F Orchard Partners III, L.P.
and H&F International Partners III, L.P. (collectively, "HFCP III"). HFCP III
is a private equity investment fund with committed equity capital of
approximately $1.5 billion. HFCP III, with its predecessor partnerships, is an
experienced investor in the media industry, with current or former investments
in companies including Young & Rubicam Inc., Bronner Slosberg Humphrey Inc.,
Eller Media Company (which was sold to Clear Channel Communications, Inc.) and
Hoyts Cinemas Limited. To date, HFCP III has invested $177.0 million of equity
in Advanstar.

Since May 31, 1996, we have completed 24 acquisitions and joint ventures,
14 of which were completed in 1998. On April 30, 1998, we acquired Men's
Apparel Guild in California, Inc. ("MAGIC") for approximately $231.0 million
(the "MAGIC Acquisition"). MAGIC is a wholly-owned subsidiary of Advanstar and
a core asset of our Retail, Hospitality & Fashion cluster. On August 17, 1998,
we acquired certain travel-related publications and trade show assets ("Travel
Agent") from Universal Media, Inc. for cash consideration of $68.0 million (the
"Travel Agent Acquisition"). In addition, in 1998, we completed 12 other
acquisitions or joint ventures (collectively, the "Other Acquisitions") with
purchase prices ranging from approximately $0.6 million to approximately $20.0
million and aggregating approximately $89.1 million. The MAGIC Acquisition, the
Travel Agent Acquisition and the Other Acquisitions are collectively referred
to in this prospectus as the "Acquisitions."

----------------

Advanstar, Inc. was incorporated in the State of Delaware on April, 11,
1996 as AHI Holding, Inc. AHI Holding, Inc. changed its corporate name to
Advanstar Holdings, Inc. in a merger with its wholly-owned subsidiary Advanstar
Holdings, Inc. on June 10, 1998 and changed its corporate name to Advanstar,
Inc. on March 17, 1999. Advanstar's executive offices are located at 545
Boylston Street, Boston, Massachusetts 02116. Advanstar's telephone number at
such address is (617) 267-6500.

6
<PAGE>

The Offerings

<TABLE>
<C> <S>
Common stock offered(1):
Advanstar......................... shares
Selling stockholders.............. shares
Total......................... shares
Shares outstanding after the U.S. and
international offerings............. shares(2)
Use of proceeds...................... We will use our estimated net proceeds
from the offerings to repay existing
indebtedness, a portion of which may be
reborrowed and used for general
corporate purposes. We will not receive
any proceeds from the sale of shares by
the selling stockholders. See "Use of
Proceeds."
Risk factors......................... See "Risk Factors" for a discussion of
factors you should carefully consider
before deciding to invest in shares of
the common stock.
Proposed NYSE symbol................. " "
</TABLE>
- --------

(1) We will initially offer shares of our common stock in the United States
and Canada and shares of our common stock outside the United States and
Canada. These offerings are collectively referred to as the "offerings."

(2) Excludes shares of common stock reserved for sale or issuance under our
stock option plans.

7
<PAGE>

Summary Financial Data

The summary financial data for the combined year ended December 31, 1996
has been derived from the audited consolidated financial statements of the
Predecessor and Advanstar and is unaudited. The other summary financial data
has been derived from the audited consolidated financial statements of
Advanstar included in this prospectus. The summary pro forma financial data has
been derived from the data contained under the caption "Unaudited Pro Forma
Combined Financial Information." The unaudited pro forma combined information
does not represent what Advanstar's results of operations actually would have
been had the relevant transactions been completed as of the dates indicated.
The information presented below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Selected Historical Consolidated Financial Data of Advanstar and
the Predecessor," "Unaudited Pro Forma Combined Financial Information" and the
consolidated financial statements and notes thereto included elsewhere herein.

<TABLE>
<CAPTION>
Predecessor Advanstar
------------- ------------------------------------------------------------
Seven months Year ended December 31,
Five months ended -----------------------------------------------
ended May 31, December 31, Combined Pro forma
1996 1996 1996(1) 1997 1998 1998(2)
------------- ------------ ----------- -------- --------- -----------
(unaudited) (unaudited)
Statement of Operations (in
Data: thousands) (in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenue............. $68,286 $ 82,720 $151,006 $187,656 $ 259,825 $306,666
Operating expenses...... 56,877 84,059 140,936 181,143 257,249 (3) 291,526 (3)
------- -------- -------- -------- --------- --------
Operating income
(loss)................. 11,409 (1,339) 10,070 6,513 2,576 15,140
Interest expense, net.. (6,963) (7,511) (14,474) (15,117) (27,862) (37,518)
Other income (expense),
net................... 23 (488) (465) 292 (1,886) (37)
Provision for income
taxes................. 13 1,076 1,089 583 1,264 1,264
------- -------- -------- -------- --------- --------
Net income (loss)....... $ 4,456 $(10,414) $ (5,958) $ (8,895) $ (28,436) $(23,679)
======= ======== ======== ======== ========= ========
Net loss per share,
basic and diluted...... $ (0.61) $ (0.82) $ (1.92) $ (1.60)
Weighted average shares
outstanding, basic and
diluted................ 9,700 10,884 14,826 14,826
As adjusted loss per
share, basic and
diluted(4)............. $
As adjusted weighted
average shares
outstanding, basic and
diluted(4).............
Other Financial Data:
EBITDA(5)............... $14,428 $ 13,781 $ 28,209 $ 34,039 $ 53,828(3) $ 72,814 (3)(8)
EBITDA margin(5)........ 21.1% 16.7% 18.7% 18.1% 20.7% 23.7%
Non-cash stock option
compensation........... $ -- $ -- $ -- $ 3,397 $ 3,397
Cash flows provided by
(used in):
Operating activities... $(1,011) 12,616 11,605 12,592 32,653
Investing activities... (274) (18,924) (19,198) (33,323) (358,261)
Financing activities... 2,227 5,944 8,171 25,224 332,600
Depreciation............ 1,431 1,949 3,380 3,200 3,071 3,243
Amortization(6)......... 1,588 13,171 14,759 24,326 48,752 55,222
Capital expenditures.... 365 780 1,145 2,260 4,154 4,272
</TABLE>

<TABLE>
<CAPTION>
At December 31, 1998
------------------------
Actual As adjusted(4)
-------- --------------
(in thousands)
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents.............................. $ 14,016
Working capital (deficit)(7)........................... (33,232)
Total assets........................................... 660,226
Long-term debt, including current maturities........... 426,868
Total stockholders' equity............................. 134,760
</TABLE>
(footnotes appear on following page)

8
<PAGE>

(1) Combines the five months ended May 31, 1996 of the Predecessor with the
seven months ended December 31, 1996 of Advanstar. On May 31, 1996, the
HFCP III Acquisition was consummated. Accordingly, certain information
provided herein for the Predecessor is not comparable to the statement of
operations and other financial data of Advanstar due to the effects of
certain purchase accounting adjustments and the financing of the HFCP III
Acquisition. The statement of operations and other financial data for the
Predecessor for the five months ended May 31, 1996 have been combined for
presentation purposes with the statement of operations and other financial
data of Advanstar for the seven months ended December 31, 1996, without
giving effect to purchase accounting or the impact of the financing of the
HFCP III Acquisition and is not in accordance with GAAP.

(2) The unaudited pro forma statement of operations and other financial data
have been derived from the historical statements of operations of
Advanstar, MAGIC, Travel Agent and the Other Acquisitions.

(3) Operating expenses for the year ended December 31, 1998 include a non-cash
compensation charge of $3.4 million related to the Company's stock option
plan.

(4) As adjusted to give effect to the offerings and the application of our
estimated net offering proceeds to repay debt as described in "Use of
Proceeds."

(5) "EBITDA" is defined as operating income plus amortization and depreciation.
EBITDA does not represent, and should not be considered, an alternative to
net income or cash flow from operations as determined in accordance with
GAAP, and our calculation thereof may not be comparable to that reported by
other companies. We believe that EBITDA provides useful information
regarding our ability to service and/or incur indebtedness and is used by
many other companies. Our lenders have indicated that the amount of
indebtedness we will be permitted to incur will be based, in part, on our
EBITDA. EBITDA does not take into account our working capital requirements,
debt service requirements and other commitments and, accordingly, is not
necessarily indicative of amounts that may be available for discretionary
uses. Set forth below is a reconciliation of Advanstar's operating income,
as reported, to EBITDA for the periods indicated:

<TABLE>
<CAPTION>
Predecessor Advanstar
------------- -----------------------------------------------------
Seven months Year ended December 31,
Five months ended ----------------------------------------
ended May 31, December 31, Combined Pro forma
1996 1996 1996 1997 1998 1998
------------- ------------ ----------- ------- ------- -----------
(unaudited) (unaudited)
(in
thousands) (in thousands)
<S> <C> <C> <C> <C> <C> <C>
Operating income (loss).............................. $11,409 $(1,339) $10,070 $ 6,513 $ 2,576 $15,140
Depreciation and amortization........................ 3,019 15,120 18,139 27,526 51,823 58,465
Minority interest.................................... (571) (791)
------- ------- ------- ------- ------- -------
EBITDA............................................... $14,428 $13,781 $28,209 $34,039 $53,828 $72,814
--------------------------------------------------
======= ======= ======= ======= ======= =======
</TABLE>

(6) Includes identifiable intangibles such as advertiser, exhibitor and
circulation lists, assembled work force and other intangibles as well as
goodwill. Amortization increased for the seven months ended December 31,
1996 and the year ended December 31, 1997 as a result of the HFCP III
Acquisition completed in May 1996. Purchase price in excess of fair market
value of tangible and intangible assets acquired is allocated to goodwill.
Intangibles are being amortized over lives ranging from one to 23 years.

(7) Working capital is comprised of total current assets, excluding cash and
cash equivalents, less total current liabilities and excluding current
maturities of long-term debt. Working capital for Advanstar is negative
due, in part, to the impact of deferred revenue from events which is billed
and collected as deposits up to one year in advance of the respective
event. Consequently, expositions carry little or no accounts receivable.

(8) Excludes a non-recurring compensation expense of $6.5 million related to
the MAGIC Acquisition.

9
<PAGE>

RISK FACTORS

You should carefully consider the risks and uncertainties described below
and the other information in this prospectus before you invest in our common
stock. You may lose all or part of your investment. The risks and uncertainties
described below are not the only risks and uncertainties facing our company.

We have substantial indebtedness that could affect our operations and results

As of December 31, 1998, our outstanding indebtedness equaled
approximately $426.9 million and represented approximately 76.0% of our total
capitalization. After giving effect to our use of the estimated proceeds to
repay outstanding indebtedness, our outstanding indebtedness as of December 31,
1998 would have equaled approximately $ million and represented % of our
total capitalization. In addition, after giving effect to such repayment, our
pro forma EBITDA to interest expense coverage for 1998 would have been
approximately to 1.0.

Our leveraged financial position creates the risks that:

. we will not obtain financing for acquisitions, capital
expenditures, working capital or general corporate purposes when
needed in the future;

. we will divert funds otherwise available for operations or other
purposes to pay our debt service obligations;

. we will be more vulnerable to changing market conditions than many
of our competitors that are less leveraged than we are; and

. our debt service obligations will increase if interest rates
increase because some of our indebtedness bears variable interest
rates.

In the past, we have paid our debt service obligations with cash flow
from operations. In the future, we may not generate cash flow sufficient to pay
our debt service obligations and pursue our present operating and growth
strategies. Our financial and operating performance depends on the economy and
other factors over which we have no control. If we cannot pay our debt service
obligations, we will reconsider our present operating and growth strategies and
may be required to sell material assets or operations to pay our obligations.
In addition, we may sell shares of our capital stock to pay these obligations,
and if we do, our stockholders may experience dilution.

The terms of our indebtedness may restrict our ability to pursue our operating
and growth strategies

The terms of our indebtedness impose operating restrictions on our
ability to borrow, make investments, capital expenditures and distributions and
pursue other corporate objectives. In addition, our credit facility requires us
to satisfy specified financial covenants. Our ability to comply with such
provisions depends in part on factors over which we have no control. These
operating restrictions could adversely affect our ability to pursue our growth
and expansion strategy. If we breach any of our financial covenants, our
creditors could declare all amounts owed to them to be immediately due and
payable. We may not have available funds sufficient to repay the amounts
declared due and payable and may be required to sell assets to repay in full
such amounts. Our credit facility is secured by substantially all of our
assets. If we cannot repay all amounts that we have borrowed under our credit
facility, our senior lenders could proceed against our assets.

We have a history of net losses

We had net losses of approximately $8.9 million for the year ended
December 31, 1997 and $28.4 million for the year ended December 31, 1998. On a
pro forma basis, we would have had a net loss of approximately $23.7 million
for the year ended December 31, 1998. We cannot assure you that we will report
net income in the future.

10
<PAGE>

We depend on our customers' discretionary marketing and advertising budgets

For the year ended December 31, 1998, we derived approximately 45.5% of
our total pro forma revenue from trade shows and conferences and approximately
46.5% of our total pro forma revenue from advertising sales. If a general
economic downturn or a recession occurs in the United States, our customers may
reduce their marketing and advertising budgets. Any material decrease in
marketing budgets could reduce the demand for exhibition space and also reduce
attendance at our trade shows and conferences. Any material decrease in
advertising budgets could reduce the demand for advertising space in our
publications. As a result, our revenue and our cash flow from operations would
decrease significantly. In addition, our integrated marketing strategy could be
materially adversely affected if advertising revenue cannot support one or more
of our important publications or if declines in our customers' marketing and
advertising budgets require us to discontinue one or more of our important
trade shows or conferences.

We depend on securing desirable dates and locations for our trade shows and
conferences

The date and location of a trade show or a conference impact its
profitability and prospects. The market for desirable dates and locations is
highly competitive. If we cannot secure desirable dates and locations for our
trade shows and conferences, their profitability and future prospects would
suffer, and our financial condition and results of operations would be
materially adversely affected. In general, we maintain multi-year reservations
for our trade shows and conferences. Consistent with industry practice, we do
not pay for these reservations, and these reservations are not binding on the
facility owners until we execute a contract with the owner. We typically sign
contracts that guarantee the right to certain venues or dates for only one
year. Therefore, our multi-year reservations may not lead to binding contracts
with facility owners. In addition, because trade shows and conferences are held
on pre-scheduled dates at specific locations, the success of a particular trade
show or conference depends upon events outside of our control, such as natural
catastrophes, labor strikes and transportation shutdowns.

A significant portion of our revenue and EBITDA is generated from the MAGIC
trade shows

For the year ended December 31, 1998, the MAGIC trade shows would have
represented 14.6% of our total pro forma revenue and 35.5% of our total pro
forma EBITDA. We expect that the MAGIC trade shows will continue to represent a
significant portion of our overall revenue and EBITDA in the future. Therefore,
a significant decline in the performance of one or both of the MAGIC trade
shows, typically held in the first and third quarters, could have a material
adverse effect on our financial condition and results of operations.

Any significant increase in paper or postage costs would cause our expenses to
increase significantly and materially adversely affect us

Because of our print products, direct mail solicitations and product
distributions, we incur substantial costs for paper and postage. We do not use
forward contracts to purchase paper, and therefore are not protected against
fluctuations in paper prices. In general, we use the United States Postal
Service to distribute our print products and mailings. United States Postal
Service rates increase periodically. If we cannot pass increased paper and
postage costs through to our customers, our financial condition and results of
operations would be materially adversely affected.

The market for our products and services is intensely competitive

The market for our products and services is intensely competitive. The
competition is highly fragmented, both by product offering and geography. On a
global level, larger international firms operate in many geographic markets and
have broad product offerings in trade shows, conferences, publications and
marketing services. In several industries such as information technology and
healthcare, we compete with large firms with a single-industry focus. Many of
these large international and single-industry firms are better capitalized than
we are and have substantially greater financial and other resources than we
have.

11
<PAGE>

We depend in part on new product introductions

Our success has depended in part upon our ability to monitor rapidly
changing market trends and to adapt our events and publications to meet the
evolving needs of existing and emerging target audiences. Our future success
will depend in part on our ability to continue to adapt our existing events and
publications and to offer new events and publications that gain market
acceptance by addressing the needs of specific audience groups within our
target markets. The process of researching and developing, launching and
establishing profitability for a new event or publication is inherently risky
and costly. We generally incur initial operating losses when we introduce new
events and publications. Our efforts to introduce new events or publications
may not ultimately be successful or profitable. In addition, we have invested
in, and intend to continue to invest in, the development of Internet services,
which are currently generating losses. The Internet is still in the early
stages of development as a commercial medium, and these services may not prove
to be successful or profitable. We expense as incurred costs related to the
development of new events and publications. Therefore, our year to year results
may be adversely affected by the number and timing of new product launches.

Our growth strategy to identify and consummate acquisitions entails certain
risks

We intend to continue to grow in part through strategic acquisitions.
This growth strategy entails risks inherent in identifying desirable
acquisition candidates and in integrating the operations of acquired
businesses. In addition, we may not be able to finance the acquisition of a
desirable candidate or to pay as much as our competitors because of our
leveraged financial condition or general economic conditions. Our management
will continue to devote substantial attention to the identification of
acquisition candidates and the integration of acquired businesses. The
diversion of our management's attention and the difficulties that we may
encounter in integrating the operations of acquired businesses could have a
material adverse impact on our results of operations and financial condition.
Moreover, we may not realize any of the anticipated benefits of an acquisition,
and integration costs may exceed anticipated amounts. In addition, we may issue
additional shares of stock as acquisition consideration, and if we do, our
stockholders may experience dilution.

We depend on our senior management team

We benefit substantially from the leadership and experience of Robert L.
Krakoff, James M. Alic and other members of our senior management team and
depend on their continued services to implement successfully our business
strategy. The loss of any member of our senior management team or other key
employee could materially adversely affect our financial condition and results
of operations. Although we have entered into employment agreements with Mr.
Krakoff and Mr. Alic, we cannot be certain that we will continue to have their
services, or the services of other key personnel, going forward. Moreover, we
may not be able to attract and retain other qualified personnel in the future.
We do not currently maintain key-man life insurance policies on any member of
our senior management team or other key employees.

12
<PAGE>

There are certain risks related to our international operations and
international expansion

Our growth strategy includes expanding our product and service offerings
internationally. We currently maintain offices in Brazil, Canada, France, Hong
Kong, Mexico and the United Kingdom. International operations accounted for
approximately 13.0% of our pro forma revenue in 1998. International operations
and expansion involve numerous risks, such as:

. the uncertainty of product acceptance by different cultures,

. divergent business expectations or cultural incompatibility in
establishing joint ventures with foreign partners,

. difficulties in staffing and managing multinational operations,

. currency fluctuations,

. state-imposed restrictions on the repatriation of funds and

. potentially adverse tax consequences.

The impact of any these risks could materially adversely affect our future
international operations and our financial condition and results of operations.

We have some exposure to fluctuations in the exchange rates of international
currencies

Our consolidated financial statements are prepared in U.S. dollars. A
percentage of the revenues, expenses, assets and liabilities of Advanstar is
denominated in currencies other than the U.S. dollar. Consequently,
fluctuations in exchange rates could result in exchange losses. In 1997 and
1998, there was no material effect on net income due to currency fluctuations.
The impact of future exchange rate fluctuations on our results of operations
cannot be accurately predicted. Moreover, because we intend to continue our
international expansion, the effect of exchange rate fluctuations could be
greater in the future. We may undertake transactions to hedge the risks
associated with fluctuations in exchange rates of other currencies to the
dollar. We do not know if any hedging techniques that we may implement will be
successful or will mitigate the effect, if any, of exchange rate fluctuations
on our financial condition and results of operations.

Our business is seasonal due largely to higher trade show revenue in the first
quarter

Our business is seasonal, with revenue typically reaching its highest
levels during the first and third quarters of each calendar year, largely due
to the timing of the MAGIC trade shows and our other large trade shows and
conferences. In 1998, approximately 30.1% of our pro forma revenue would have
been generated during the first quarter and approximately 25.9% during the
third quarter. The second and fourth quarters would have accounted for
approximately 23.5% and 20.5% of pro forma revenue in 1998, respectively.
Because event revenue is recognized when a particular event is held, we may
also experience fluctuations in quarterly revenue based on the movement of
annual trade show dates from one quarter to another.

Investors in the offerings will suffer substantial and immediate dilution

The initial public offering price is substantially higher than the net
tangible book value of our common stock outstanding after the offerings.
Accordingly, you will incur substantial and immediate dilution of $ per
share in the pro forma net tangible book value of our common stock. In
addition, you will incur further dilution upon the exercise of outstanding
stock options.

13
<PAGE>

We will be controlled by HFCP III

After the offerings, HFCP III will own, directly or indirectly, % of
our outstanding capital stock (assuming the exercise of all currently vested
stock options and no exercise of the underwriters' over-allotment options). As
a result, HFCP III will have the right to elect all of our directors and will
exercise substantial control over matters requiring the vote of our
stockholders. HFCP III's control of Advanstar could prevent a change of
control.

Certain provisions of our certificate of incorporation and debt instruments
could discourage or prevent a takeover

Our certificate of incorporation authorizes our Board of Directors to
issue up to shares of preferred stock and designate the rights and
preferences of our preferred stock, without stockholder approval. If the Board
of Directors elects to issue preferred stock, it could be more difficult for a
third party to acquire us. Certain other provisions of our certificate of
incorporation could make it more difficult for a third party to acquire control
of us, even if such change of control would be beneficial to stockholders. In
addition, the terms of our indebtedness could make it more difficult for a
third party to acquire us. For example, our 9 1/4% Senior Subordinated Notes
due 2008 require that, upon a change of control, we offer to purchase all Notes
at 101% of principal and unpaid accrued interest.

Future sales of our common stock could depress the market price

After the offerings, shares of common stock will be outstanding (as
well as shares of common stock subject to stock options which are vested or
will vest in the next 180 days). Of these shares, the shares to be sold in
the offerings will be freely tradable without restriction under the Securities
Act, except for any shares acquired by an "affiliate" of Advanstar as defined
in Rule 144. In connection with the offerings, we, substantially all of our
existing stockholders and option holders and our officers and directors
(holding shares of common stock after the offerings, including shares of
common stock subject to vested stock options as described above) have agreed
not to sell any shares of common stock for a period of 180 days after the date
of the U.S. purchase agreement without the consent of Merrill Lynch, Pierce,
Fenner & Smith Incorporated. Upon expiration of the lockup period, shares
may be sold at any time subject to compliance with the volume limitations and
other restrictions of Rule 144. Options to purchase a total of shares of
common stock will also be outstanding after the offerings.

The market price of our common stock could drop due to sales of a large
number of shares of our common stock in the market after the offerings or the
perception that such sales could occur. These factors could also make it more
difficult to raise funds through future offerings of common stock.

We do not anticipate paying dividends on our common stock

We do not currently anticipate paying any cash dividends. In addition,
our ability to pay dividends on our common stock is limited under the terms of
our existing indebtedness. As a holding company, our major assets will
initially be the shares we hold in our subsidiaries. Therefore, our ability to
pay future dividends and distributions, if any, to holders of our common stock
is dependent upon the receipt of dividends or other payments from our
subsidiaries, which are also limited under the terms of our existing
indebtedness.

There has not been a public market for our common stock

We will apply to list our common stock for trading on the New York Stock
Exchange. We do not know the extent to which investor interest in Advanstar
will lead to the development of a trading market for our common stock or how
our common stock will trade in the future. The initial public offering price
was determined by negotiation among us, HFCP III and the underwriters.
Investors may not be able to resell their shares at or above the initial public
offering price.

14
<PAGE>

The market price of our common stock may fluctuate after the offerings

The price at which our common stock will trade depends upon a number of
factors, including our historical and anticipated operating results and general
market and economic conditions, some of which are beyond our ability to
control. Factors such as quarterly fluctuations in our financial and operating
results, developments affecting our products and our customers, the markets in
which we compete or industry developments could also cause the market price of
our common stock to fluctuate substantially. In addition, the stock market has
from time to time experienced extreme price and volume fluctuations. These
broad market fluctuations may adversely affect the market price of our common
stock.

The failure of the computer systems on which we rely to recognize Year 2000
dates could affect our operations

We are highly dependent on our computer software programs and systems in
operating our business. We also depend on the proper functioning of computer
systems of third parties, such as vendors and clients. The failure of any of
these systems to appropriately interpret the upcoming calendar year 2000 could
have a material adverse effect on our financial condition and results of
operations. We have identified our own applications that are not currently Year
2000 compliant and are taking steps to determine whether third parties are
doing the same. In addition, we are implementing a worldwide plan to make our
computer systems Year 2000 compliant by September 1999. We have already spent
as of December 31, 1998 approximately $0.8 million on Year 2000 issues and
estimate that the total cost of implementing our Year 2000 compliance program
will require an additional $3.0 million to $3.5 million.

Our inability to remedy our own Year 2000 problems or the failure of
third parties to do so may cause business interruptions or shutdown, financial
loss, regulatory actions, reputational harm and/or legal liability. We can not
assure you that our Year 2000 program will be effective or that our estimates
about the timing and cost of completing our program will be accurate.

15
<PAGE>

USE OF PROCEEDS

We estimate that we will receive aggregate net proceeds of approximately
$ million after deducting the underwriting discount and other estimated
offering expenses. We will not receive any of the proceeds from the sale of
shares by the selling stockholders. We will use the net proceeds of the
offerings to repay indebtedness under our credit facility.

We will use the net proceeds to repay the outstanding balance under our
revolving credit facility. We may reborrow the amount repaid and use such
reborrowed funds for general corporate purposes, including for any acquisitions
that we may identify. As of February 28, 1999, the outstanding balance under
our revolving credit facility was $22.0 million, and the weighted average
annual interest rate for the two months ended on such date was 7.54%. We had
borrowed such amount under our revolving credit facility to pay in part for the
Travel Agent Acquisition and for certain of the Other Acquisitions. Our
revolving credit facility matures on October 31, 2003. We will also use a
portion of the net proceeds of the offerings to prepay a portion of the term
loans under our term loan facility. We may not reborrow the amount of term
loans prepaid. As of February 28, 1999, the outstanding terms loans aggregated
approximately $248.2 million, and the weighted average annual interest rate for
the two months ended on such date was 7.69%. We had borrowed approximately
$250.0 million in term loans in 1998 to refinance our then outstanding
indebtedness in connection with the MAGIC Acquisition. The term loan facility
amortizes in quarterly installments from 1999 to 2005. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources" and "Description of Indebtedness."

DIVIDEND POLICY

We have never declared or paid dividends on our capital stock, and we do
not anticipate paying any cash dividends in the foreseeable future. Our credit
facility and the indenture under which we issued our 9 1/4% Senior Subordinated
Notes due 2008 restrict our ability to pay dividends to stockholders. In
addition, payments of any future dividends will be at the discretion of our
Board of Directors after taking into account various factors, such as our
financial condition, operating results, current and anticipated cash needs and
plans for expansion.

16
<PAGE>

CAPITALIZATION

The following table sets forth the cash and cash equivalents and
capitalization of Advanstar as of December 31, 1998 on an actual basis and as
adjusted to give effect to the application of the estimated proceeds of the
offerings to repay debt, as described in "Use of Proceeds." This table should
be read in conjunction with the Consolidated Financial Statements and the
related notes thereto appearing elsewhere in this prospectus.

<TABLE>
<CAPTION>
At December 31, 1998
---------------------
Actual As adjusted
-------- -----------
(dollars
in thousands)
(unaudited)
<S> <C> <C>
Cash and cash equivalents................................ $ 14,016
========
Long-term debt (including current portion)
Revolving credit facility(1)........................... 29,000
Term loan facility..................................... 248,229
9 1/4% Senior Subordinated Notes (net of discount)..... 149,639
-------- -------
Total long-term debt................................. $426,868 $
======== =======
Stockholders' equity:
Preferred Stock, $.01 par value; shares authorized;
no shares issued and outstanding actual and as
adjusted..............................................
Common Stock, $.01 par value; shares authorized;
shares issued and outstanding actual and
shares issued and outstanding as adjusted(2).......... $ 167 $
Accumulated other comprehensive income................. (872)
Capital in excess of par value......................... 183,210
Accumulated deficit.................................... (47,745)
-------- -------
Total stockholders' equity............................ 134,760
-------- -------
Total capitalization................................. $561,628 $
======== =======
</TABLE>
- --------

(1) Amounts repaid under the $60.0 million revolving credit facility may be
reborrowed. See "Use of Proceeds."

(2) Excludes of our common stock reserved for issuance upon exercise of
outstanding stock options under our stock option plans as of December 31,
1998.

17
<PAGE>

DILUTION

Our net tangible book value (deficit) at December 31, 1998 was $ per
share. Net tangible book value (deficit) per share represents the amount of our
total tangible assets less total liabilities, divided by the number of shares
of common stock outstanding. See "Capitalization." After giving effect to the
sale of the shares of common stock in the offerings, assuming a public
offering price of $ per share, less estimated underwriting discounts and
commissions and other expenses of the offerings, our pro forma net tangible
book value (deficit) as of December 31, 1998 would have been $ per share.
This represents an immediate increase in net tangible book value per share of
$ to existing stockholders and immediate dilution in net tangible book value
of $ per share to new investors in the offerings. The following table
illustrates the per share dilution:

<TABLE>
<CAPTION>
Assumed initial public offering price per share...................... $
<S> <C> <C>
Net tangible book value (deficit) per share at December 31, 1998... $
Increase per share attributable to new investors...................
----
Pro forma net tangible book value (deficit) per share after the
offerings...........................................................
----
Dilution per share to new investors.................................. $
====
</TABLE>

The following table summarizes the number of shares of common stock
purchased from us, the total consideration paid and the average price per share
paid by the existing stockholders and by new investors in the offerings, before
deduction of estimated underwriting discounts and commissions and other
expenses of the offerings.

<TABLE>
<CAPTION>
Shares Purchased Total Consideration
---------------------- ----------------------
Number Amount Average Price
(in thousands) Percent (in thousands) Percent Per Share
-------------- ------- -------------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders... % $ % $
New investors...........
--- --- --- ---
Totals................ (1) 100% $ 100%
=== === === ===
</TABLE>
- --------
(1) Excludes as of December 31, 1998, shares of our common stock issuable
upon exercise of outstanding stock options with a weighted average exercise
price of $ per share. To the extent these stock options are exercised,
there will be further dilution to the new investors.

18
<PAGE>

SELECTED HISTORICAL CONSOLIDATED FINANCIAL
DATA OF ADVANSTAR AND THE PREDECESSOR

The selected historical consolidated statement of operations and other
financial data for the years ended December 31, 1994 and 1995 and the five
months ended May 31, 1996 are derived from the audited consolidated financial
statements of the Predecessor for such periods. The consolidated statement of
operations and other financial data of Advanstar for the seven months ended
December 31, 1996 and the years ended December 31, 1997 and 1998 are derived
from the audited consolidated financial statements of Advanstar included
elsewhere herein. The statement of operations and other financial data for the
combined year ended December 31, 1996 have been derived from the audited
consolidated financial statements of the Predecessor and Advanstar and are
unaudited and are not necessarily indicative of the results that can be
expected for future periods or the entire year. The information presented below
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the historical consolidated
financial statements and the other financial information appearing elsewhere
herein.

<TABLE>
<CAPTION>
Predecessor Advanstar
--------------------------------- ---------------------------------------------
Year ended
December 31, Five months Seven months Year ended December 31,
------------------- ended ended --------------------------------
May 31, December 31, Combined
1994 1995 1996 1996 1996(1) 1997 1998
-------- -------- ----------- ------------ ----------- -------- --------
(unaudited)
(in thousands) (in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net revenue............. $141,721 $145,300 $68,286 $ 82,720 $151,006 $187,656 $259,825
Operating expenses:
Cost of production,
selling and other
direct................ 107,906 96,942 43,835 53,560 97,395 126,339 169,035
General and
administrative ....... 27,511 27,152 11,454 17,328 28,782 30,478 36,065
Non-cash stock option
compensation.......... -- -- -- 3,397
Amortization(2)........ 42,808 4,801 1,588 13,171 14,759 24,326 48,752
-------- -------- ------- -------- -------- -------- --------
Operating income
(loss)................. (36,504) 16,405 11,409 (1,339) 10,070 6,513 2,576
Interest expense, net.. (18,034) (19,613) (6,963) (7,511) (14,474) (15,117) (27,862)
Other income (expense),
net................... (4,363) 2,230 23 (488) (465) 292 (1,886)
Provision for income
taxes................. 21 16 13 1,076 1,089 583 1,264
-------- -------- ------- -------- -------- -------- --------
Net income (loss)....... $(58,922) $ (994) $ 4,456 $(10,414) $ (5,958) $ (8,895) $(28,436)
======== ======== ======= ======== ======== ======== ========
Net loss per share,
basic and diluted...... $ (0.61) $ (0.82) $ (1.92)
Weighted average shares
outstanding, basic and
diluted................ 9,700 10,884 14,826
Other Financial Data:
EBITDA(3)............... $ 9,573 $ 24,611 $14,428 $ 13,781 $ 28,209 $ 34,039 $ 53,828
EBITDA margin(3)........ 6.7 % 16.9 % 21.1 % 16.7 % 18.7 % 18.1 % 20.7%
Non-cash stock option
compensation........... $ -- $ -- $ -- $ 3,397
Cash flows provided by
(used in):
Operating activities... $ 1,350 $ 3,907 $(1,011) 12,616 11,605 12,592 32,653
Investing activities... (2,694) 4,432 (274) (18,924) (19,198) (33,323) (358,261)
Financing activities... 4,949 (14,658) 2,227 5,944 8,171 25,224 332,600
Depreciation............ 3,269 3,405 1,431 1,949 3,380 3,200 3,071
Amortization(2)......... 42,808 4,801 1,588 13,171 14,759 24,326 48,752
Capital expenditures.... 2,530 1,451 365 780 1,145 2,260 4,154
</TABLE>
(footnotes appear on following page)

19
<PAGE>

(2) Amortized assets include identifiable intangibles such as advertiser,
exhibitor and circulation lists, assembled work force and other intangibles
as well as goodwill. Amortization for 1994 reflects the amortization of
reorganization value in excess of identifiable assets as required as a
result of the Predecessor's emergence on January 23, 1992 from its
prepackaged Chapter 11 filing. The Predecessor recorded $94.4 million of
reorganization value in excess of identifiable tangible and intangible
assets and amortized it over three years. Amortization increased for the
seven months ended December 31, 1996 and the years ended December 31, 1997
and 1998 as a result of the HFCP III Acquisition completed in May 1996.
Purchase price in excess of fair market value of tangible and intangible
assets acquired is allocated to goodwill. Intangibles are being amortized
over lives ranging from one to 23 years.

(3) "EBITDA" is defined as operating income plus amortization and depreciation.
EBITDA does not represent, and should not be considered, an alternative to
net income or cash flow from operations as determined in accordance with
GAAP, and our calculation thereof may not be comparable to that reported by
other companies. We believe that EBITDA provides useful information
regarding our ability to serve and/or incur indebtedness and is used by
many other companies. Our lenders have indicated that the amount of
indebtedness we will be permitted to incur will be based, in part, on the
Company's EBITDA. EBITDA does not take into account our working capital
requirements, debt service requirements and other commitments and,
accordingly, is not necessarily indicative of amounts that may be available
for discretionary uses. Set forth below is a reconciliation of Advanstar's
operating income, as reported, to EBITDA for the periods indicated:

<TABLE>
<CAPTION>
Predecessor Advanstar
----------------------------- ----------------------------------------
Year ended
December 31, Five months Seven months Year ended December 31,
----------------- ended ended ---------------------------
May 31, December 31, Combined
1994 1995 1996 1996 1996(1) 1997 1998
-------- ------- ----------- ------------ ----------- ------- -------
(unaudited)
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating income (loss)............................ $(36,504) $16,405 $11,409 $(1,339) $10,070 $ 6,513 $ 2,576
Depreciation and amortization...................... 46,077 8,206 3,019 15,120 18,139 27,526 51,823
Minority interest.................................. (571)
-------- ------- ------- ------- ------- ------- -------
EBITDA............................................. $ 9,573 $24,611 $14,428 $13,781 $28,209 $34,039 $53,828
- --------------------------------------------------
======== ======= ======= ======= ======= ======= =======
</TABLE>

20
<PAGE>

UNAUDITED PRO FORMA COMBINED
FINANCIAL INFORMATION

The unaudited pro forma combined statement of operations for the fiscal
year ended December 31, 1998 includes the historical operations of Advanstar
and give effect to the Acquisitions and the divestiture of two trade
publications for consideration of approximately $4.3 million, as if they had
occurred on January 1, 1998. The pro forma adjustments relating to the
Acquisitions, together with the elimination of operating results of the
divested trade publications, constitute the "Pro Forma Adjustments."

The unaudited pro forma combined financial information, which has been
prepared by the management of Advanstar, has been derived from the historical
statements of operations and balance sheets of Advanstar, MAGIC, Travel Agent
and the Other Acquisitions. The Acquisitions have been accounted for under the
purchase method of accounting.

The unaudited pro forma combined financial information is not designed to
represent and does not represent what Advanstar's results of operations
actually would have been had the aforementioned transactions been completed as
of the dates indicated, or to project Advanstar's results of operations for any
future period. The Pro Forma Adjustments are based on available historical
financial information and should be read in conjunction with "Capitalization,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the financial statements and notes thereto and other financial
information appearing elsewhere herein.

21
<PAGE>

UNAUDITED PRO FORMA COMBINED

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
Travel Other Pro forma Pro forma
Advanstar(1) MAGIC(2) Agent(3) Acquisitions(4) adjustments Pro forma as adjusted
------------ -------- -------- --------------- ----------- --------- -----------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations:
Net revenue............. $259,825 $20,259 $17,959 $8,323 $ 300 $306,666 $
Gross profit............ 90,790(5) 13,973 5,917 3,084 707 (6) 114,471
General and
administrative
expenses.............. 33,486 2,277 2,653 1,990 (2,445)(7) 37,961
Non-cash stock option
compensation.......... 3,397 -- -- -- -- 3,397
Depreciation and
amortization.......... 51,331 130 42 -- 6,470 (8) 57,973
-------- ------- ------- ------ ------- -------- ----
Operating income
(loss)................. 2,576 11,566 3,222 1,094 (3,318) 15,140
Interest income
(expense), net......... (27,862) 155 (116) -- (9,695)(9) (37,518) (10)
Other income (expense),
net.................... (1,886) -- -- -- 1,849 (11) (37)
-------- ------- ------- ------ ------- -------- ----
Income (loss) before
income taxes........... (27,172) 11,721 3,106 1,094 (11,164) (22,415)
Provision for income
taxes.................. 1,264 4,390 78 -- (4,468)(12) 1,264
-------- ------- ------- ------ ------- -------- ----
Net income (loss)....... $(28,436) $ 7,331 $ 3,028 $1,094 $(6,696) $(23,679) $
======== ======= ======= ====== ======= ======== ====
Net income (loss) per
share, basic and
diluted................ $ (1.92) $ (1.60) $
======== ======== ====
Weighted average shares
outstanding, basic and
diluted................ 14,826 14,826
Other Financial Data:
EBITDA(13).............. $ 53,828 $11,696(14) $ 3,264 $1,094 $ 2,932 $ 72,814 $
EBITDA margin(13)....... 20.7% 57.7% 18.2% 13.1% 23.7% %
Non-cash stock option
compensation........... $ 3,397 $ 3,397 $
Depreciation and
amortization........... 51,823 $ 130 $ 42 -- $ 6,470 58,465
Capital expenditures.... 4,154 65 53 -- 4,272
</TABLE>
(footnotes appear on following page)

22
<PAGE>

Notes to Unaudited Pro Forma Combined Statement of Operations

(1) Represents the results of operations for Advanstar for the year ended
December 31, 1998, which includes the Acquisitions from the date acquired.

(2) Represents the results of operations for MAGIC for the four month period
ended April 30, 1998, the date of the acquisition.

(3) Represents the results of operations for Travel Agent for the seven and
one-half months ended August 17, 1998, the date of the acquisition.

(4) Represents the aggregate results of operations for the Other Acquisitions
prior to their acquisition by Advanstar during the year ended December 31,
1998. Also includes the elimination of operating results of two divested
publications. The entities divested had contributed $0.8 million of revenue
and no net income (loss) for the year ended December 31, 1998.

(5) Net of $492,000 of depreciation expense included in cost of production.

(6) Represents the elimination of $0.3 million of related party pricing
discounts that were granted to certain former MAGIC shareholders/directors
for their purchase of trade show exhibition space. We terminated such
discounts following the MAGIC Acquisition. Also represents the elimination
of $0.4 million of direct costs included in Other Acquisitions, related to
trade show profit sharing payments. We terminated the profit sharing
arrangement following our acquisition of the remaining interest in the
applicable trade show.

(7) Represents the elimination of director fees of $0.2 million for the four
month period ended April 30, 1998 that will not recur following the MAGIC
Acquisition and the elimination, in connection with the Travel Agent
Acquisition, of shareholder/director payments of $1.7 million, to certain
shareholders of Universal Media, Inc. and certain other costs of $0.5
million for the year ended December 31, 1998.

(8) Represents incremental amortization of goodwill and deferred financing
costs arising from the Acquisitions and related financing of Advanstar's
credit facility. The incremental goodwill is being amortized on a straight
line basis over an average of 23 years. The deferred financing costs are
amortized over the lives of the related debt instruments (5.5-10 years).

(9) Represents incremental interest expense arising from the amortization of
original issue discount on the Notes and incremental interest expense on
borrowings under the amended credit facility resulting from the
Acquisitions. Adjustments to interest expense have been calculated using
the following interest rates:

<TABLE>
<S> <C>
Senior Subordinated Notes................................. 9.25%
Amended Credit Facility
Revolving Credit Facility............................... LIBOR plus 2.25%
Tranche A............................................... LIBOR plus 2.25%
Tranche B............................................... LIBOR plus 2.50%
</TABLE>

(10) Represents reduction in interest expense of $ million after giving
effect to the application of the estimated net offering proceeds, as
described in "Use of Proceeds."

(11) Represents the write-off of $4.1 million of certain unamortized
intangibles in connection with the financing of the MAGIC Acquisition,
partially offset by a gain on the disposition of certain publishing assets
of $2.2 million.

(footnotes continued on following page)

23
<PAGE>

(12) No provision for U.S. federal income taxes has been made due to the
Company's net operating loss carryforwards. The remaining income tax
provision represents taxes related to certain state taxes and our U.K. and
Brazil subsidiaries.

(13) "EBITDA" is defined as operating income plus amortization and
depreciation. EBITDA does not represent, and should not be considered, an
alternative to net income or cash flow from operations as determined in
accordance with GAAP, and our calculation thereof may not be comparable to
that reported by other companies. We believe that EBITDA provides useful
information regarding our ability to service and/or incur indebtedness and
is used by many other companies. Our lenders have indicated that the
amount of indebtedness we will be permitted to incur will be based, in
part, on our EBITDA. EBITDA does not take into account our working capital
requirements, debt service requirements and other commitments and,
accordingly, is not necessarily indicative of amounts that may be
available for discretionary uses. Set forth below is a reconciliation of
operating income, as reported, to EBITDA for the periods indicated:

Year ended December 31, 1998

<TABLE>
<CAPTION>
Travel Other Pro forma Pro Pro forma
Advanstar MAGIC Agent Acquisitions adjustments forma as adjusted
--------- ------- ------ ------------ ----------- ------- -----------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating income
(loss)................. $ 2,576 $11,566 $3,222 $1,094 $(3,318) $15,140 $
Depreciation and
amortization........... 51,823 130 42 -- 6,470 58,465
Minority interest....... (571) -- -- -- (220) (791)
------- ------- ------ ------ ------- ------- --------
EBITDA.................. $53,828 $11,696 $3,264 $1,094 $ 2,932 $72,814 $
======= ======= ====== ====== ======= ======= ========
</TABLE>

(14) Excludes a nonrecurring compensation expense of $6.5 million related to
the MAGIC Acquisition.

24
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

This discussion and analysis of Advanstar's financial condition and
results of operations should be read in conjunction with the Combined and
Consolidated Financial Statements, the Unaudited Pro Forma Combined Financial
Information and the related notes thereto included elsewhere in this
prospectus.

The 1996 combined financial data were accumulated from the historical
financial statements of the Predecessor for the period from January 1, 1996 to
May 31, 1996 and of Advanstar for the period from June 1, 1996 to December 31,
1996. See footnote 1 to "Selected Financial Data." The combined financial data
is presented for comparative purposes only, is not in accordance with GAAP and
does not purport to reflect the operating results of Advanstar as if Advanstar
had been controlled by HFCP III for the full year.

Advanstar reports its business in three segments: trade shows and
conferences, which consists primarily of the management of expositions and
seminars held in convention and conference centers; publications, which
consists primarily of the creation and distribution of controlled circulation
trade, business and professional magazines; and marketing services, which
consists primarily of sales of a variety of direct mail and database products,
magazine editorial reprints, and directory and classified advertising.

Sources of Revenue

Trade shows and conferences. The trade shows and conferences segment
derives revenue principally from the sale of exhibit space and conference
attendance fees generated at its events. Events are generally held on an annual
basis in major metropolitan or convention areas such as New York City or Las
Vegas. At many of our trade shows, a portion of exhibit space is reserved and
partial payment is received as much as a year in advance. For example, over 70%
of exhibit space at our MAGIC, Dealernews and Call Center shows is reserved
prior to the end of the preceding show. The sale of exhibit space is affected
by the on-going quality and quantity of attendance, venue selection and
availability, industry life cycle and general market conditions. Revenue and
related direct event expenses are recognized in the month in which the event is
held. Cash is collected in advance of an event and is recorded on our balance
sheet as deferred revenue.

Publications. The publications segment derives revenue principally from
the sale of advertising in its business-to-business magazines. Most
publications are produced monthly with advertising sold both on an annual
schedule and single insertion basis. The sale of advertising is affected by new
product releases, circulation, readership studies and general market
conditions. Advertising revenue is recognized on the publication issue date,
and subscription revenue, if any, is recognized over the subscription period,
typically one year.

Marketing services. The marketing services segment derives its revenue
from the sale of value-added marketing products such as classified advertising,
direct mail services, reprints, database marketing, directories, guides and
reference books. These products complement and, in many cases, utilize the
content or databases generated by our trade shows, conferences and
publications. The sale of these products is affected by the success of the
event or publication from which these products are derived, the quality of the
sales team and general market conditions. Revenue is generally recognized when
the applicable product is shipped.

Components of Expenses

Trade shows and conferences. Costs incurred by the trade shows and
conferences segment include facility rent, outsourced services such as
registration, security and decorator, and attendee and exhibitor promotion.
Exhibitors contract directly with third parties for on-site services such as
electrical, booth set-up and drayage. Staff salaries and related payroll
expenses are treated as monthly period expenses. All other direct costs are
expensed in the month the event occurs. General and administrative costs are
not allocated to the segments.

Publications. Costs incurred by the publications segment include
printing, paper and postage; selling and promotion; editorial and prepress; and
circulation acquisition and fulfillment. Additionally, publisher and sales
staff costs, and production, editorial and circulation staff costs, with
related payroll taxes and benefits, are

25
<PAGE>

charged to the publications. We outsource the actual printing of our
publications. General and administrative costs are not allocated to the
segments.

Marketing services. Costs of the marketing services segment include
printing and distribution costs, database administration fees and staff
salaries and related payroll taxes and benefits. General and administrative
costs are not allocated to the segments.

Selected Financial Data

<TABLE>
<CAPTION>
Year ended December 31,
---------------------------
1996 1997 1998
------- -------- --------
(in thousands)
<S> <C> <C> <C>
Net revenue
Trade shows and conferences..................... $36,418 $ 61,608 $113,066
Publications.................................... 101,774 111,611 130,442
Marketing services and other.................... 12,814 14,437 16,317
------- -------- --------
Total net revenues............................ 151,006 187,656 259,825
Production, selling and other direct expenses
Trade shows and conferences..................... 21,932 41,809 68,538
Publications.................................... 69,362 77,810 92,727
Marketing services and other.................... 6,101 6,720 7,770
------- -------- --------
Total production, selling and other direct
expenses..................................... 97,395 126,339 169,035
General and administrative expenses............... 28,782 30,478 36,065
Non-cash stock option compensation................ -- -- 3,397
Amortization...................................... 14,759 24,326 48,752
------- -------- --------
Operating income.............................. 10,070 6,513 2,576
Other income (expense):
Interest expense (net).......................... (14,474) (15,117) (27,862)
Other income (expense).......................... (465) 292 (1,886)
Provision for income taxes........................ 1,089 583 1,264
------- -------- --------
Net income (loss)................................. $(5,958) $ (8,895) $(28,436)
======= ======== ========
EBITDA(1)......................................... $28,209 $ 34,039 $ 53,828
</TABLE>
- --------
(1) "EBITDA" is defined as operating income plus amortization and depreciation.
For 1998, operating income was adjusted by $0.6 million related to minority
interest to calculate EBITDA. There was no minority interest in 1996 and
1997. EBITDA does not represent, and should not be considered, an
alternative to net income or cash flow from operations as determined in
accordance with GAAP, and our calculation thereof may not be comparable to
that reported by other companies. We believe that EBITDA provides useful
information regarding our ability to service and/or incur indebtedness and
is used by many other companies. Our lenders have indicated that the amount
of indebtedness we will be permitted to incur will be based, in part, on
our EBITDA. EBITDA does not take into account our working capital
requirements, debt service requirements and other commitments and,
accordingly, is not necessarily indicative of amounts that may be available
for discretionary uses.

26
<PAGE>

1998 Compared to 1997

Revenue

Revenue increased $72.2 million or 38.5% from $187.7 million in 1997 to
$259.8 million in 1998.

Revenue from trade shows and conferences increased $51.5 million or
83.5% from $61.6 million to $113.1 million in 1998. The increase in revenue
was attributable to trade shows and conferences acquired in 1998, new launches
such as Healthcare Information Technology, WORLDPHARM and Call Centre
Solutions and the growth of our existing product portfolio (including revenue
generated by our plastics events which were not held in 1997), offset by the
discontinuation in 1998 of certain trade shows and conferences held in 1997.
In 1998 Advanstar acquired MAGIC, TeleCon, Telexpo, SCANTECH and eight other
trade shows and conferences.

Revenue from publications increased $18.8 million or 16.9% from $111.6
million to $130.4 million in 1998. The increase in revenue was attributable
primarily to acquisitions in 1998 and a modest increase in 1998 of advertising
pages and advertising revenue per page, partially offset by the sale or
discontinuation in 1998 of certain magazines published in 1997. In 1998,
Advanstar acquired Travel Agent and six other trade publications, including
TeleProfessional and Post. Advanstar also launched several other publications
in 1998, which increased revenue.

Revenue from marketing services increased $1.9 million or 13.0% from
$14.4 million to $16.3 million in 1998. Growth in revenue from list rentals,
classified advertising and reprints was primarily responsible for the
increase.

Production, selling and other direct expenses

Production, selling and other direct expenses increased $42.7 million or
33.8% from $126.3 million in 1997 to $169.0 million in 1998.

Trade shows and conferences production, selling and other direct
expenses increased $26.7 million or 63.9% from $41.8 million to $68.5 million
in 1998. This increase was primarily due to increases in operation, promotion
and management costs associated with acquisitions completed in 1998 as well as
costs attributable to new launches and growth of existing events.

Publications production, selling and other direct expenses increased
$14.9 million or 19.2% from $77.8 million to $92.7 million in 1998. Direct
costs related to acquisitions of publications in 1998 were primarily
responsible for the increase.

Marketing services production, selling and other direct expenses
increased $1.1 million or 15.6% from $6.7 million to $7.8 million in 1998.
This increase was primarily due to increased selling expenses incurred as a
result of Advanstar's effort to market these products as well as increased
costs of production due to the growth in those respective product lines.

General and administrative expenses

General and administrative expenses increased $9.0 million or 29.5% from
$30.5 million to $39.5 million in 1998. This increase was primarily
attributable to overheads acquired with acquisitions made in 1998 and a $3.4
million non-cash charge related to Advanstar's stock option plan. Advanstar
also incurred incremental expenses relating to the establishment of
Advanstar's Latin American operations and to the expansion of infrastructure
to support the new industry-focused organization.

Amortization

Amortization expense increased $24.4 million from $24.3 million to $48.8
million in 1998 primarily due to increased amortization of intangible assets
related to the acquisitions completed in 1998 and a $12.7 million write-off of
impaired intangible assets related to three discontinued trade shows and two
discontinued publications as well as the replacement of certain software
system applications.

27
<PAGE>

Operating income

Operating income decreased $3.9 million or 60.4% from $6.5 million to
$2.6 million in 1998 due primarily to increased amortization and the
incurrence of a $3.4 million charge for non-cash, stock option-related
compensation expense, partially offset by improved operating performance.

Interest expense

Net interest expense increased $12.7 million or 84.3% from $15.1 million
to $27.9 million in 1998, due to the incurrence of additional indebtedness
necessary to fund acquisitions made in 1998. In April 1998, Advanstar issued
the Notes in the amount of $150.0 million at a fixed rate of 9.25% to fund a
portion of the MAGIC Acquisition. Interest on the Notes is payable semi-
annually with the first payment made on November 1, 1998.

Net loss

Net loss increased $19.5 million from $8.9 million to $28.4 million in
1998. In addition to the changes described above, the increase was due to the
write-off of $4.1 million of certain unamortized intangibles relating to the
refinancing of Advanstar's credit facilities as part of the MAGIC Acquisition,
partially offset by a gain on the disposition of certain publishing assets of
$2.2 million.

EBITDA

EBITDA increased $19.8 million or 58.1% from $34.0 million to $53.8
million in 1998. The increase was due primarily to the increase in revenue and
resulting increase in operating performance as described above.

1997 Compared to Combined 1996

Revenue

Revenue increased $36.7 million or 24.3% from $151.0 million in 1996 to
$187.7 million in 1997.

Revenue from trade shows and conferences increased $25.2 million or
69.2% from $36.4 million to $61.6 million in 1997. The increase in revenue was
primarily attributable to acquisitions as well as growth in our existing
business and specifically in U.S. and European call center trade shows and
conferences, partially offset by the absence of three events for the plastics
industry in 1997. In 1997, Advanstar acquired the Expocon trade shows and the
Hair Color conference.

Revenue from publications increased $9.8 million or 9.7% from $101.8
million to $111.6 million in 1997. The increase in revenue resulted from the
Premier Hotels & Resorts and TelePress acquisitions completed during 1997 and
the improved operating performance of Telecom Asia and other
telecommunications and information technology publications. These increases
were partially offset by the discontinuance of a small publication in late
1996.

Revenue from marketing services increased in $1.6 million or 12.7% from
$12.8 million to $14.4 million in 1997. Growth in revenue from database
product marketing and direct mail was primarily responsible for the increase.

Production, selling and other direct expenses

Production, selling and other direct expenses increased $28.9 million or
29.7% from $97.4 million in 1996 to $126.3 million in 1997.

28
<PAGE>

Trade shows and conferences production, selling and other direct expenses
increased $19.9 million or 90.6% from $21.9 million to $41.8 million in 1997.
This increase was primarily due to operation, promotion and management costs
associated with the 1997 acquisitions and increases in direct costs due to
growth in the size and revenue of existing trade shows and conferences.

Publications production, selling and other direct expenses increased $8.4
million or 12.2% from $69.4 million to $77.8 million in 1997. This increase is
primarily a result of increased expenses relating to the operations of
businesses acquired during late 1996 and 1997, and to a lesser extent,
increased investment in circulation, sales staffing and promotion and
marketing.

Marketing services production, selling and other direct expenses
increased $0.6 million or 10.1% from $6.1 million to $6.7 million in 1997. This
increase was primarily due to increased selling expenses incurred as a result
of the Company's effort to market these products.

General and administrative expenses

General and administrative expenses increased $1.7 million or 5.9% from
$28.8 million to $30.5 million in 1997. Most of this increase was due to
incremental general and administrative expenses relating to the operations of
acquired businesses and related expansion of infrastructure, primarily in
Brazil and Hong Kong.

Amortization

Amortization expense increased $9.6 million or 64.8% from $14.8 million
to $24.3 million in 1997 primarily due to increased amortization of intangible
assets related to the acquisitions made in 1997.

Operating income

Operating income decreased $3.6 million or 35.3% from $10.1 million to
$6.5 million in 1997 primarily due to the $6.8 million increase in non-cash
amortization resulting from the HFCP III Acquisition. Operating income before
amortization increased $6.0 million or 24.2% from $24.8 million to $30.8
million in 1997 due to the revenue and operating performance improvements
discussed above.

Interest expense

Net interest expense increased $0.6 million or 4.4% from $14.5 million to
$15.1 million in 1997 due to the incurrence of additional indebtedness
necessary to partially fund acquisitions completed in late 1996 and early 1997.

Net loss

Net loss increased $2.9 million or 49.3% from $6.0 million to $8.9
million in 1997 primarily due to increased amortization resulting from the HFCP
III Acquisition, partially offset by improvements in operating income before
amortization.

EBITDA

EBITDA increased $5.8 million or 20.7% from $28.2 million to $34.0
million in 1997. This increase was primarily due to a $6.0 million increase in
operating income before amortization, partially offset by a decrease of $0.2
million in depreciation.

29
<PAGE>

Liquidity and Capital Resources

Historically, our financing requirements have been funded through cash
generated by operating activities, the sale of additional shares of common
stock to existing stockholders, revolving and term loan borrowings under
revolving credit facilities and, in 1998, term loan borrowings and the issuance
of $150.0 million of the Notes.

Cash flows from operating activities. Net cash provided by operations
increased $20.1 million or 159.3% from $12.6 million to $32.7 million in 1998.
The increase was due to an increase in net loss of $19.5 million as a result of
higher interest expenses associated with financing the MAGIC Acquisition,
adjusted for the gain on sale of assets of $2.2 million, the increase of $12.8
million of depreciation and amortization, a non-cash charge of $12.7 million
related to impaired assets and a decrease in working capital items of $9.7
million relating primarily to higher deferred revenue balances from MAGIC and
other acquisitions. Additionally, in 1998, a non-cash charge of $3.4 million
was taken as compensation expense to reflect the value of certain stock options
held by senior management.

Cash flows from investing activities. Net cash used in investing
activities increased $324.9 million from $33.3 million to $358.3 million in
1998. The increase is primarily due to cash used for the Acquisitions in 1998,
net of acquired working capital, offset by proceeds of $4.3 million from the
sale of certain publishing properties in 1998, and an increase of $1.9 million
in capital expenditures.

Cash flows from financing activities. Net cash provided by financing
activities increased $307.4 million from $25.2 million to $332.6 million in
1998. The increase is due primarily to the refinancing of Advanstar's credit
facility in April 1998 and August 1998 (consisting of $250.0 million of senior
term loans and a $60.0 million revolving credit facility replacing outstanding
senior term and revolver loans of $187.0 million), issuance of $150.0 million
of the Notes, and the sale of additional shares of common stock for $71.0
million to existing stockholders to finance the Acquisitions in 1998.

Capital expenditures. Capital expenditures increased $1.9 million from
$2.3 million to $4.2 million in 1998. The increase was due primarily to
upgrades and expansion of certain of Advanstar's computer networks and servers
as well as expenditures for additional exposition wall and lighting systems.
Annual capital expenditures have historically included approximately $1.5
million for routine replacement or maintenance level requirements primarily for
expenditures related to the Company's desktop computers and management
information systems. Capital expenditures have been financed by Advanstar's
cash flows from operations. Management believes that Advanstar's operating cash
flows will be sufficient to fund anticipated levels of capital expenditures.

Management expects Advanstar's primary source of liquidity will be cash
flow from operations. Advanstar also has a $60.0 million revolving credit line
under its credit facility available for funding capital expenditures, working
capital needs, acquisitions or for other general corporate purposes. As of
December 31, 1998, Advanstar had $30.4 million of availability under the
revolving credit line. Advanstar generally operates with negative working
capital, excluding cash and current maturities of long-term debt, due to the
impact of deferred revenue from trade shows, which is billed and collected as
deposits up to one year in advance of the respective trade show. Consequently,
our existing operations are expected to maintain very low or negative working
capital balances, excluding cash and current maturities of long-term debt.

Interest payments on the Notes and interest and principal payments under
Advanstar's credit facility will represent significant liquidity requirements
for Advanstar. The senior term debt under the credit facility consists of two
tranches, (i) $100.0 million of tranche A term loans amortizing over 5.5 years
and maturing October 31, 2003 and (ii) $150.0 million of tranche B term loans
with modest amortization over the initial 5.5 years of its term maturing with
balloon payments in 2004 and 2005. After giving effect to the use of proceeds
from the offerings, as of December 31, 1998, we would have $ outstanding
under our term loans

30
<PAGE>

(maturing as more fully described under "Description of Certain Indebtedness")
and no outstanding revolving credit loans (but the ability to borrow up to
$60.0 million). The $60.0 million revolving credit facility matures on October
31, 2003. The interest rates under our revolving credit facility fluctuate and
significant increases in LIBOR could adversely impact Advanstar's liquidity. To
mitigate such risk, Advanstar has capped its interest rate exposure by fixing
interest rates on approximately $225.0 million of its total long-term debt by
the issuance of the Notes and the purchase of interest rate cap agreements
setting caps ranging from 8.0% to 8.5%.

Management believes that cash flow from operations and borrowings under
the revolving credit facility will provide adequate funds for its working
capital needs, planned capital expenditures, debt service obligations
(including the Notes) and other needs. Management believes such liquidity also
will enable Advanstar to make selective acquisitions to the extent of available
free cash flow and remaining availability under the revolving credit facility.
There can be no assurance that Advanstar's business will generate sufficient
revenue growth, or that future borrowings will be available to enable Advanstar
to service its indebtedness and, or to fund its other liquidity needs. See
"Risk Factors."

Year 2000

Advanstar has conducted a review of its computer systems and software
infrastructure to identify risks related to processing Year 2000 information,
and has begun implementing its plan to correct any failures to be Year 2000
compliant. Advanstar believes that the implementation will be completed by
September 1999 and that the total cost to implement its plan should be no more
than $4.0 million, of which approximately $0.8 million had been incurred as of
December 31, 1998. Because most of these costs relate to the purchase of
capital equipment, most of these costs will be capitalized. Management believes
that, with modifications or upgrades to existing software, Year 2000 compliance
will not pose significant operational issues. Advanstar is also conducting a
review of its key vendors' and suppliers' Year 2000 compliance. Based on its
review and assessment, management does not believe that any Year 2000 issues
will have a material adverse effect on its business, financial condition or
results of operations. If Advanstar is not able to resolve any unforeseen Year
2000 issues, there could be a delay in providing services to subscribers of the
Company's publications, and certain trade show operations could be hindered.
The outcome of Advanstar's Year 2000 readiness review is subject to a number of
risks and uncertainties, some of which are beyond our control.

Market Risk

Advanstar is exposed to various market risks, including changes in
foreign currency exchange rates and interest rates. Market risk is the
potential loss arising from adverse changes in market rates and prices, such as
foreign currency exchange and interest rates. Advanstar does not enter into
derivatives or other financial instruments for trading or speculative purposes.

Interest. Advanstar relies significantly on long-term variable and
fixed-rate debt in its capital structure. Advanstar uses interest rate caps to
manage a portion of the floating-rate balance of its interest sensitive
liabilities. Advanstar's outstanding interest-sensitive financial instruments
as of December 31, 1998, are reflected in note 4 of the notes to the
Consolidated Financial Statements. In addition, Advanstar has $150.0 million,
face value, of 9 1/4% Senior Subordinated Notes due 2008.

At December 31, 1998, the carrying value of Advanstar's fixed-rate long-
term debt approximated its fair value. Market risk related to Advanstar's
fixed-rate debt is estimated as the potential increase in fair value resulting
from a hypothetical one-half percent decrease in interest rates, and amounts to
approximately $4.9 million. Market risk related to Advanstar's variable-rate
debt is estimated as the potential decrease in pre-tax earnings resulting from
a hypothetical one-half percent increase in interest rates. If interest rates
rise immediately by one-half percent, pre-tax earnings will decrease by $1.4
million in 1999.

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<PAGE>

Currencies. Advanstar maintains assets and operations in Europe, South
America and Asia. As a result, exposure to foreign currency gains and losses
exists. The subsidiaries and affiliates of Advanstar also purchase and sell
products and services in various currencies. As a result, Advanstar may be
exposed to cost increases relative to the local currencies in the markets in
which it sells. For 1998, a hypothetical 10% strengthening of the U.S. dollar
relative to the currencies of foreign countries in which Advanstar operates was
not material.

Seasonality and Fluctuations in Quarterly Results of Operations

On a relative basis, our revenue reaches its highest levels during the
first and third quarters of the year largely due to the timing of the MAGIC
trade shows and our other large trade shows and conferences. Because trade
shows and conferences revenue is recognized when a particular event is held, we
may experience fluctuations in quarterly revenue based on the movement of
annual trade show dates from one quarter to another.

The following table sets forth unaudited pro forma quarterly revenue for
the quarters in the year ended December 31, 1998. The unaudited pro forma
revenue for the year ended December 31, 1998 include the historical operations
of Advanstar and gives effect to the Acquisitions and two divestitures. See
"Unaudited Pro Forma Combined Financial Information." Our operating results for
any quarter do not necessarily indicate what our operating results for any
future period may be.

<TABLE>
<CAPTION>
1998 Quarters Ended
------------------------------------
March 31 June 30 Sept. 30 Dec. 31
-------- ------- -------- -------
(in thousands)
<S> <C> <C> <C> <C>
Pro forma revenue....................... $92,364 $72,139 $79,369 $62,794
Percent of total annual pro forma
revenue................................ 30.1% 23.5% 25.9% 20.5%
</TABLE>

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<PAGE>

BUSINESS

The Company

We are a leading worldwide provider of integrated, business-to-business
marketing communications solutions for targeted industry sectors, principally
through trade shows and conferences and through controlled circulation trade,
business and professional magazines. We also provide a broad range of other
marketing services products, including classified advertising, direct mail
services, reprints, database marketing, directories, guides and reference
books. We operate over 100 web sites which provide an interactive component to
our core products. We currently own and manage 81 trade shows, most of which we
believe are the leading events in their respective national or regional
markets, and 26 conferences for business, professional and consumer audiences
worldwide. We currently publish 71 specialized business magazines and
professional journals and 39 directories and other publications. Of our 61
magazines and journals for which competitive data is available, we believe that
over 70% rank either first or second in their respective markets. Since May 31,
1996, we have completed 24 acquisitions and joint ventures. Our total revenue
has increased from approximately $151.0 million in 1996 to $306.7 million in
1998 on a pro forma basis.

. Retail, Hospitality & Fashion,

. Healthcare, Science & Pharmaceuticals,

. Information Technology & Communications and

. Manufacturing & Processing.

Within each of these clusters, we operate leading trade shows and
publications targeted at businesses or professionals in specific or niche
market segments. We believe our industry-focused cluster structure, rather than
a product-focused approach, allows us to cross-sell our products and services
effectively and to capture a larger share of our customers' marketing budgets.
In each of our niche markets, many of the same customers advertise in our
publications, exhibit at our trade shows and use our marketing services to
reach their buyers. We have rapidly expanded our trade show, conference and
publication products within each cluster through new product introductions and
strategic acquisitions. This expansion further enhances our competitive
position in each cluster and leverages our existing marketing and customer
service infrastructure and industry expertise.

Trade shows and conferences. In 1998, we held 107 events (an event is a
stand-alone trade show or conference). For example, in our Retail, Hospitality
& Fashion cluster, we produce MAGIC, the world's largest trade show for the
men's apparel industry; WWDMAGIC, the second largest women's apparel show in
the United States; and MAGICKids, a children's apparel show. In addition, we
produce Artexpo New York, the largest mid-market art show in the United States;
IBS New York, the market-leading exhibition and educational event on the East
Coast for the beauty salon market; and Dealernews International Powersports
Dealer Expo, the largest U.S. motorcycle accessories aftermarket trade show.
Our leading trade shows and conferences in other clusters include Telexpo, the
leading telecommunications trade show in Latin America, and Incoming Call
Center Management Conference & Exhibition, the largest U.S. trade show and
conference for the call center market.
Publications. In 1998, we published 110 publications (a publication is a
magazine, newsletter, directory or other publication). Our largest magazines
include Travel Agent, Video Store, Pharmaceutical Technology, Hotel & Motel
MANAGEMENT and CADALYST. Travel Agent is the second largest non-computer U.S.
trade magazine and the #1 trade periodical for the travel industry (based on
number of advertising pages, according to the October 1998 edition of Business
Marketing).

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<PAGE>

Marketing services. Within each cluster, we offer our customers
classified advertising, direct mail services, reprints, database marketing,
directories, guides and reference books to support their business-to-business
marketing communications programs. Our marketing services, particularly our
direct mail services and directories, reinforce our efforts to cross-sell our
events and publications and, we believe, further our goal of providing our
customers "one-stop shopping" for their business-to-business marketing
communications products.

Internet. We operate over 100 web sites which provide an interactive
component of our core products. These web sites promote our trade shows,
conferences and publications as well as our marketing services. Over 80% of our
web sites either enable exhibitors and attendees to register on-line for our
trade shows and conferences or permit prospective readers to subscribe on-line
to our controlled circulation publications. In addition, many of our web sites
provide attendees of our trade shows and conferences and readers of our
publications the opportunity to receive additional product information through
links to our customer's web sites.

In 1998, after giving effect to the Pro Forma Adjustments, we would have
generated total revenue of approximately $306.7 million and EBITDA of
approximately $72.8 million. Our total pro forma revenue was derived primarily
from sale of exhibition space at trade shows and from sales of advertising in
our publications. In 1998, trade shows and conferences represented
approximately 45.5% of our total pro forma revenue and approximately 54.1% of
our total pro forma contribution (gross profit before general and
administrative expenses and amortization). Publications accounted for
approximately 49.2% of our total pro forma revenue and approximately 38.8% of
our total pro forma contribution. Other revenue components, including direct
mail and database products and services, generated approximately 5.3% of our
total pro forma revenue and approximately 7.1% of our total pro forma
contribution. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

Operating Strategy

Advanstar's objective is to be the leading business-to-business marketing
communications company in the niche market segments which we choose to serve.
Our strong market position serves as a platform to launch new products and
services and to extend our existing products and services on a cost-effective
basis. To achieve our objective, we operate our businesses based on the
following strategies.

. Operate Leading Trade Shows and Publish Leading Magazines in
Attractive Niche Markets. We will continue to focus on owning and
managing businesses that are the leading sources of information
for businesses and professionals in specific niches. We believe
that leading publications or trade shows serve as unique forums
for business-to-business communication and provide substantial
value to industry participants resulting in an attractive, high
margin business for Advanstar. Niche markets (narrowly defined to
include markets such as call centers or power sports) are often
attractive publishing and trade show opportunities because of the
difficulty in reaching industry leaders through general interest
publications or at general expositions. We believe over 70% of our
magazines and most of our trade shows are ranked either first or
second in their respective niche markets. We intend to continue to
focus on operating leading properties and may from time to time
divest properties that do not meet this standard.

. Maximize Our Share of Customers' Marketing Expenditures. We will
continue to employ our integrated, solution-driven marketing
approach to create cross-selling opportunities across existing and
newly-launched or acquired products and services. We believe our
industry-focused cluster structure enables us to better serve our
customers' business-to-business marketing communications needs. In
addition, we believe this approach facilitates the development of
deeper relationships with our customers. We offer our customers a
range of

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<PAGE>

communications methods to attain their specific business-to-
business marketing goals. For example, our customers can choose to
benefit from face-to-face meetings at trade shows and conferences,
achieve cost effective advertising through controlled circulation
trade publications and seek to diversify and expand revenues
through customized marketing services, including Internet links
from our World Wide Web sites.

. Leverage Our Centralized Administrative and Production
Facilities. We believe that our organizational structure creates
opportunities (1) to launch new events and publications by
building upon our existing products and services, (2) to generate
attractive margins through centralized functional cost management
and (3) to integrate and improve the profitability of acquired
events and titles. To enhance operating flexibility and to deliver
trade show and conference services cost effectively, we
established a centrally-managed event operations structure in both
the U.S. and Europe in 1997. In addition, we have an efficient and
centralized publishing infrastructure in both the United States
and Europe. We focus on continually improving our systems and
processes to provide effective, low cost operations in
circulation, fulfillment, production and print and paper vendor
management. Centralized support also exists in finance and
accounting, information technology and communications, human
resources and strategic planning.

. Attract and Retain Superior Management. We will continue to
reinforce our management team with experienced, talented
individuals. Our senior managers have on average over 15 years of
industry experience and an established record of growing revenue
and EBITDA, developing new products, penetrating new markets and
integrating acquisitions. Advanstar is led by Robert L. Krakoff,
our Chairman and Chief Executive Officer, and James M. Alic, our
Vice Chairman. Messrs. Krakoff and Alic joined Advanstar in July
1996. Prior to joining Advanstar, Mr. Krakoff was Chief Executive
Officer of Reed Publishing USA and a director of its parent
company, Reed-Elsevier plc. During Mr. Krakoff's 23-year tenure,
he managed a trade show business, which became one of the largest
worldwide event management companies. Prior to joining Advanstar,
Mr. Alic served as Vice President and Controller of IBM
Corporation, and prior thereto was the Chairman of Reed Exhibition
Companies. Messrs. Krakoff and Alic and other members of
Advanstar's management collectively own or, subject to vesting,
have options to acquire approximately % (giving effect to the
offerings) of Advanstar's common stock on a fully-diluted basis.

Growth Strategy

Building upon our operating strategies, we continue to pursue the
following growth strategies to expand our business.

. Identify and Consummate Strategic Acquisitions. We intend to
expand further in our existing industry sectors through strategic
acquisitions and joint ventures designed to maintain and achieve
market leading positions in particular niche markets. In addition,
building upon our existing international infrastructure, we intend
to make strategic acquisitions internationally and enter into
joint ventures with local operating partners. We believe that we
can enhance the value of acquired businesses by (1) integrating
acquisitions and joint ventures into our efficient infrastructure,
(2) applying our industry experience and (3) cross-selling new
products and services. Since May 31, 1996, we have completed 24
acquisitions and joint ventures.

. Launch New Products and Services Within Existing Clusters. We will
continue to introduce new products and services to extend our
market position and add fill-in products within our existing
industry clusters. Also, we plan to expand internationally by
introducing country-specific versions of our trade shows,
conferences and publications. We believe that we can

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<PAGE>

enhance our position in international markets by leveraging our
widely recognized brands, our experience in international
operations and our existing customers' demand for increased global
marketing. We have a successful track record of developing new
products and services within our existing industry clusters. In
1998, we launched eight expositions and conferences and four
magazines in existing industry sectors to supplement our existing
products and services. For example, in our call center sector, we
have launched two trade shows since May 31, 1996, and we currently
plan to launch two additional trade shows and one publication in
1999.

. Enter Attractive New Industry Sectors. We will selectively enter
new industry sectors in which we believe we can establish a strong
market position and operate profitably. In identifying potential
new sectors, we consider the size of the market, potential growth
rates and the competitive environment. For example, through the
MAGIC Acquisition, we became a leading player in the U.S. men's
apparel business-to-business market and increased revenue and
improved margins by applying our extensive trade show experience.

Industry Overview

Market-focused, business-to-business communications products and
services are designed to enable companies to:

. increase sales;

. build brand loyalty;

. market new products and services to select target audiences; and

. learn about recent industry developments.

According to the October 1998 Veronis Suhler & Associates Communications
Industry Forecast, business-to-business communications was the fifth fastest
growing segment of the overall communications industry for the period from
1992 to 1997, with total spending growing at a compound annual growth rate
("CAGR") of 8.0% during that period. Total spending in business-to-business
communications was $17.1 billion in 1997, according to the Veronis, Suhler &
Associates report. The report forecasts a 10.1% CAGR for trade shows and
exhibitions from 1997 to 2002, and a 8.0% CAGR for business magazines (which
includes both general circulation magazines and controlled circulation
magazines) over the same period.

The business-to-business communications industry remains highly
fragmented. In the United States and Canada, there are approximately 4,500
trade shows each year. Of these trade shows, approximately 55% are operated by
media companies and independent event operators, and the remainder are
operated by trade associations. According to Tradeshow Week, the top ten trade
show producers will operate an aggregate of 629 trade shows in 1999,
approximately 14% of the total number of trade shows expected to be held that
year. In addition, the business-to-business communications industry currently
includes approximately 4,800 trade magazine publishing companies that publish
approximately 9,400 titles.

Trade shows and conferences. A trade show or conference is an
opportunity for industry participants to conduct direct selling efforts,
transact business and receive product information in the form of exhibits,
conferences, workshops and other face-to-face forums. Trade show attendees
include executives, manufacturers and developers, sales and marketing
personnel, industry analysts, middle-level managers and other industry
professionals. According to the Veronis, Suhler & Associates report, spending
on exhibition space in trade shows and conferences amounted to $7.2 billion in
1997, a 10.8% increase from 1996. Trade show attendance grew by 6.4% in 1997.

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<PAGE>

We believe that the increase in trade show spending and attendance
reflects a growing awareness among companies of the numerous benefits of trade
shows. As new products and services proliferate, both suppliers and their
customers need efficient forums to interact and transact business with one
another. For attendees, trade shows and conferences provide the opportunity to
survey market trends, network with industry professionals and create
relationships with new vendors. For exhibitors, trade shows and conferences
represent cost effective means to position their company, products and services
within the industry, introduce new products and cultivate relationships with
new and existing customers. According to The Center for Exhibition Industry
Research, in 1996, the cost of making a sales call at a trade show was 39% of
the cost of making a field sales call. Moreover, the percentage of time spent
actually selling in a given day equaled 67% at a trade show versus 32% on a
field call. In addition, trade shows and conferences enable exhibitors to
measure directly the return on their marketing investment based on actual sales
and sales leads gathered at the event.

Publications. Trade publications are generally published monthly and
provide information about a specific industry or market segment within an
industry. Business magazines have become one of the most dynamic advertising
media in recent years, with advertising revenues expanding at a 9.5% CAGR for
the period between 1994-1997, according to the Veronis, Suhler & Associates
report. In general, trade publications are circulated free-of-charge to readers
and generate revenues primarily from the sale of advertising.

We believe that the increase in the advertising revenues of trade
publications reflects a growing awareness among companies of the numerous
benefits of advertising in specialized or controlled circulation publications.
For readers, trade publications provide relevant and up-to-date industry
specific information. For advertisers, trade publications generally provide
highly focused and targeted audiences of qualified, interested readers and a
cost-effective means to disseminate information about their products.

Marketing services. In recent years, many companies have sought
complementary ways to reach their customers in addition to trade shows and
trade publications. We believe that these companies are increasingly utilizing
highly targeted marketing services such as classified advertising, direct mail,
list rentals, reprints, database marketing, directories, guides and reference
books.

Internet. The rapidly growing number of users of the World Wide Web makes
the Internet an increasingly effective advertising and brand-building vehicle.
The Internet enables marketers to deliver product information and advertising
to a targeted audience, track user behavior and process transactions on-line.

Products and Services

We provide integrated solutions to our consumers' business-to-business
marketing communications needs. Within each cluster, we provide a comprehensive
set of industry-focused marketing communications products, services and
support, which include trade shows, conferences, publications and marketing
services, to facilitate our customers' business-to-business marketing and
communications programs. Our comprehensive set of trade shows, conferences,
publications and marketing services positions Advanstar to better serve our
customers' business-to-business marketing communications needs and to capture a
larger share of their marketing expenditures.

Trade Shows and Conferences. Our leading trade shows and conferences are
an essential part of our overall portfolio of products and services. In 1998,
we held 107 events. Our trade shows typically include an extensive conference
program, which provides a forum for the exchange and dissemination of
information relevant to a particular event niche. Our conferences typically
have one or more keynote speakers drawn from industry leaders.

The sales cycle for a future trade show typically begins shortly before
the current show, with pricing, preliminary floor plans and exhibitor promotion
mailed in advance of the current show so that selling for the future show can
begin at the current show. Typically, this "upfront" selling includes floor
space reservations

37
<PAGE>

with exhibitors executing a contract and making deposits for the future show.
At many of our trade shows, a commitment for a large portion of exhibit space
for the next event is reserved by the end of the current event. For example, at
each of the MAGIC, Dealernews and Call Center trade shows, over 70% of the
exhibit space for the future show is reserved by the end of the current show,
and a portion of the fees is collected shortly thereafter. The sales cycle
continues with selling to new exhibitors and collecting the balance of payments
due. In general, we require exhibitor payments in full prior to a trade show as
a condition to participation.

In addition to the sale of exhibit space, we market to exhibitors a wide
range of promotional opportunities to raise their visibility at an event,
including directory and preview advertising, banners, sponsorships of various
functions and a wide variety of other products or services. We also produce
related conferences and workshops, which play a crucial strategic role in trade
show development. Conferences, workshops and other ancillary forums all
stimulate interest in the industry and drive attendance at the trade show.
While show attendance is typically free for qualified attendees, participation
in conferences at these shows can be a significant revenue source.

Event promotion is undertaken through direct mail, using both in-house,
exhibitor-provided and rented lists of pre-qualified industry participants. In
those industry sectors for which we also have complementary publications, our
publications play a key role in event promotion by providing lists from
circulation files and editorial coverage for the upcoming show. Other industry
magazines may also be involved, as the goal of any event is to represent the
entire industry or market. The "show issue" of an industry magazine for a
related event is often the biggest issue of the year, as the advertisers want
to reinforce their show presence.

In operating trade shows and conferences, we function in a capacity
similar to a general contractor. Through our central trade show and conference
operations, we select and manage venues, hotels, and vendors for decorating,
registration, travel and housing, audio-visual services and other services. In
many cases, venue and hotel reservations are made several years in advance,
particularly for primary markets such as New York, Chicago, Las Vegas, Los
Angeles and San Francisco. While the production of a show may involve hundreds
of workers, we employ very few of the workers on-site. We therefore are able to
have increased control over our overhead and permanent staffing costs.

Publications. Our publications generally are controlled circulation,
business-to-business trade magazines which are distributed free-of-charge to
qualified recipients. We build readership and maintain the quality and quantity
of our circulation based on delivering high quality, professional coverage of
relevant industry information. Because we offer our advertisers access to a
highly-targeted, industry-specific subscriber base, our advertisers are willing
to pay higher rates per reader than they would typically pay in the case of
general circulation magazines.

Recipients of our publications are targeted through market research
designed to determine the market coverage and purchasing authority desired by
prospective advertisers. Based on existing and acquired mail lists, the
targeted recipient is then solicited through promotions offering free
subscriptions to the relevant publications. High-quality circulation is
achieved when a high percentage of the circulation list is recently qualified
(within one or two years) and the publication is delivered at the direct
request of the recipient. Recipients are qualified and re-qualified on a
regular basis through direct mail, qualification cards included in the
publication and, increasingly, the Internet. We attract recipients and improve
the effectiveness of our advertising by maintaining and continuously improving
the quality of the editorial content of our publications.

Our advertising sales and editorial functions are dispersed throughout
North America, Asia, Europe and Brazil Advertising sales are predominantly
conducted by our dedicated sales force. Editorial content for our publications
is primarily staff-written, with some editorial contribution by freelance
writers and industry or professional participants in selected markets.

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<PAGE>

Our advertising materials and editorial content are integrated in our
Duluth, Minnesota and Chester, United Kingdom production facilities, where
layout, ad insertion and output to film is completed. All printing is
outsourced to vendors in various regions, but printing contracts are negotiated
and managed centrally. We purchase paper centrally through a relationship with
one of the industry's largest paper brokers. This broker ships paper directly
from the mills to the printers at our request. We maintain our own central U.S.
fulfillment operations in Duluth to generate mailing labels and mailing
instructions for the printers. Our production workforce is highly experienced
and is based in relatively low-cost locations in Duluth and Chester.

Marketing services. As a value-added supplement to our trade shows,
conferences and publications, we offer our customers a variety of marketing
services to support their business-to-business marketing communications
programs. We believe that our marketing services highlight our commitment to be
a "one-stop" provider of business-to-business marketing communications
solutions. Within each cluster, we provide classified advertising, direct mail
services, reprints, database marketing, directories, guides and reference
books. Our marketing services, particularly our direct mail services, support
our efforts to cross-sell events and publications and customize our integrated
products and services, thus enabling us to capture a larger share of our
customers' marketing budgets. Our marketing services business enjoys attractive
operating margins because of the low incremental product cost of reusing our
existing data content and utilizing our centralized telephone sales approach.

Internet. In addition to our trade shows, conferences, publications and
marketing services, we are increasingly using the World Wide Web to deliver our
integrated business-to-business marketing communications solutions to our
customers. We operate a centralized web site that serves as a portal to our
event- and publication-related web sites. We also believe that the Internet can
be utilized on a customized basis to serve our customers' business-to-business
marketing communication needs more efficiently and effectively by offering
information 24 hours a day, seven days a week. For example, we are completing
development on a web site, Travel Agent University, to serve as an on-line
information and education resource for travel agents.

Our Markets

Our comprehensive business-to-business marketing communications solutions
for our four industry-related clusters--Retail, Hospitality & Fashion,
Healthcare, Science & Pharmaceuticals, Information Technology & Communications
and Manufacturing & Processing--and our Market Development cluster are
set forth below.

Retail, Hospitality & Fashion

Our Retail, Hospitality & Fashion cluster serves the fashion, art,
beauty, travel and hospitality, entertainment and marketing, and motor vehicle
industry sectors. In 1998, we delivered our business-to-business marketing
communications solutions to our customers in these industry sectors through 34
trade shows, four conferences, 15 magazines, 13 directories and other
publications, 46 marketing services products and 25 related web sites. Our
leading trade shows and publications include:

. MAGIC (the world's largest trade shows for the men's apparel
industry), WWDMAGIC (the second largest trade show for the women's
apparel industry in the United States) and MAGICKids (a trade show
for the children's apparel industry);

. Artexpo New York (the largest mid-market art show in the United
States);

. IBS New York (the largest trade show and educational event on the
East Coast for the beauty salon market) and American Salon (the #2
publication for the professional beauty and hair care industry);

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<PAGE>

.
. Travel Agent (the second largest non-computer U.S. trade magazine
and #1 trade periodical for the travel industry, according to the
October 1998 edition of Business Marketing) and Hotel & Motel
MANAGEMENT (the #2 publication for the hospitality management
market);

. Licensing International (the largest trade show for the
merchandise licensing industry); and

. Dealernews International Powersports Dealer Expo (the largest
aftermarket accessories trade shows in the United States targeted
at motorcycle dealers) and Dealernews (the #1 magazine targeted at
retailers in the powersports market--motorcycles, snowmobiles and
personal watercraft).

The following table sets forth pro forma information relating to trade
shows, conferences and publications in our Retail, Hospitality & Fashion
cluster in 1998.

<TABLE>
<CAPTION>
Events Magazines
----------------------------------- -------------------------------
Net square Number of Number of our
footage our events ranked 1998 ad magazines ranked
Sector Number (1) #1 or #2 (2)(3) Number pages #1 or #2 (2)(3)
- ------------------------- ------ ---------- ----------------- ------ ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Fashion.................. 7 1,729,000 6 of 7 1 281 1 of 1
Art...................... 3 186,000 2 of 2 1 703 0 of 1
Beauty................... 9 455,000 3 of 3 2 906 1 of 2
Travel/Hospitality....... 3 38,000 0 of 1 4 7,011 3 of 3
Entertainment/Marketing.. 5 280,000 4 of 4 5 2,235 3 of 4
Motor Vehicle............ 11 666,000 11 of 11 2 1,278 2 of 2
--- --------- -------- --- ------ --------
Total.................. 38 3,354,000 26 of 28 15 12,414 10 of 13
</TABLE>
- --------

(1) Rounded to the nearest thousand.
(2) Of those for which data is available. For example, in the Fashion industry
sector, there is competitive data available for six of our seven trade
shows and conferences and four of those six are either #1 or #2 in the
market segment served. Data is generally available only for U.S. and major
European markets.
(3) For purposes of these rankings, we have defined our markets narrowly as the
niche of businesses or professionals at which a trade show, conference or
publication is exclusively or specifically targeted. In addition, the
markets for our trade shows and conferences are further defined by the
geographic region from where attendees are drawn. Except where otherwise
specifically referenced, we have based the rankings of our trade shows on
our internal analysis of net square feet of exhibition space and of our
publications on the number of advertising pages determined by IMS Ltd., an
independent third party. While we believe our internal analyses are
reliable and our market definitions are appropriate, no independent source
has verified them.

We have identified numerous opportunities to grow our Retail, Hospitality
& Fashion cluster by using our market leading trade shows, conferences and
publications as platforms to expand geographically and launch related products
and services. We expect to launch four new events and two new publications in
1999. In addition, we believe that our leading MAGIC trade shows create
opportunities to expand our strong market position into new segments of the
fashion sector and, as in the case of MAGICEast, into new geographic regions.
Similarly, our leading publications for the travel and hospitality sector,
including Travel Agent, provide a strong foundation to launch related trade
shows and services as well as to develop custom-publishing products and
establish a stronger Internet presence, as with Travel Agent University.

Healthcare, Science & Pharmaceuticals

Our Healthcare, Science & Pharmaceuticals cluster serves the healthcare,
science and pharmaceuticals industry sectors. In 1998, we delivered our
business-to-business marketing communications solutions to our customers in
these industry sectors through six trade shows, nine conferences, 23 magazines,
three directories and other publications, 58 marketing services products and 22
related web sites. We serve the healthcare sector in areas such as geriatrics,
dermatology, ophthalmology and veterinary medicine, the science sector in areas

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<PAGE>

such as spectroscopy and liquid and gas chromatography and the pharmaceutical
sector in areas such as research and development, manufacturing, packaging and
marketing. Our leading trade shows, conferences and publications include:

. Abilities Expo (the largest consumer--oriented trade show
targeting individuals with disabilities);

. Geriatrics (the #1 magazine for the geriatrics segment of the
primary care market),Formulary (the #1 magazine for the drug
selection market) and dvm THE NEWSMAGAZINE OF VETERINARY MEDICINE
(the #1 magazine for veterinarians); and

. Pharmaceutical Technology (the #1 publication targeted at
pharmaceutical scientists, engineers and operation managers) and
PHARMACEUTICAL EXECUTIVE (the #1 magazine for pharmaceutical
company product managers and marketing professionals).

The following table sets forth pro forma information relating to our
trade shows, conferences and publications in our Healthcare, Science &
Pharmaceuticals cluster in 1998:

<TABLE>
<CAPTION>
Events Magazines
------------------------------------- ---------------------------------
Net Number of 1998 Number of
square our events ranked ad our magazines ranked
Sector Number footage (1) #1 or #2 (2)(3) Number pages #1 or #2 (2)(3)
- ------------------------ ------ ----------- ----------------- ------ ----- --------------------
<S> <C> <C> <C> <C> <C> <C>
Healthcare.............. 5 131,000 5 of 5 11 4,080 5 of 9
Science................. 3 N/A(4) N/A 5 1,432 3 of 3
Pharmaceuticals......... 7 40,000(4) 0 of 1 7 3,262 5 of 6
--- ------- ------ --- ----- --------
Total................. 15 171,000 5 of 6 23 8,774 13 of 18
</TABLE>
- --------
(1) Rounded to the nearest thousand.
(2) Of those for which data is available. For example, in the Healthcare
sector, there is competitive data available for all five of our trade shows
and conferences and all five are either #1 or #2 in the market segment
served. Data is generally available only for U.S. and major European
markets.
(3) For the purposes of these rankings, we have defined our markets narrowly as
the niche of businesses or professionals at which a trade show, conference
or publication is exclusively or specifically targeted. In addition, the
markets for our trade shows and conferences are further defined by the
geographic region from where attendees are drawn. Except where otherwise
specifically referenced, we have based the rankings of our trade shows on
our internal analysis of net square feet of exhibition space and of our
publications on the number of advertising pages determined by IMS Ltd., an
independent third party. While we believe our internal analyses are
reliable and our market definitions are appropriate, no independent source
has verified them.
(4) The three science events and six of the seven pharmaceutical events are
conferences. At a conference, there is no exhibition space.

Our publication portfolio for our Healthcare, Science & Pharmaceuticals
cluster positions us to expand geographically and launch related products as
well as demonstrates an opportunity to develop related trade shows,
conferences, sponsored projects and Internet services. We expect to launch four
new conferences in 1999. We have begun to leverage the success of
Pharmaceutical Technology (the leading publication in its niche market segment)
through Pharmaceutical Technology Europe, Pharmaceutical Technology Asia and a
series of U.S. and European conferences. In addition to expanding our trade
shows and conferences, we plan to extend our leading publications to the
Internet and to expand special projects.

Moreover, as government regulation of marketing by pharmaceutical
companies becomes more permissive, product managers and marketing professionals
are increasingly targeting advertising and promotions directly to consumers.
According to Competitive Media Reporting, pharmaceutical companies spent
approximately $1.2 billion in 1998 on direct to consumer marketing efforts. We
believe this trend towards consumer advertising and marketing presents another
opportunity to serve our customers' needs for education, research and
information. We have launched DTC Times, a supplement to PHARMACEUTICAL
EXECUTIVE, to provide education, research and information and, if demand
warrants, we may launch a stand-alone publication.

41
<PAGE>

Information Technology & Communications

Our Information Technology & Communications cluster serves the
information technology, telecommunications and call center and computer
telephony industry sectors. In 1998, we operated in these industry sectors
through 23 trade shows, 12 conferences, 16 magazines, four directories and
other publications, 31 marketing services products and 32 related web sites. In
the information technology sector, we are a highly targeted niche exhibition
organizer and publisher. The rapidly evolving, newly competitive
telecommunications sector is one of our most important and fastest growing
targeted markets. Through its global reach and rapid growth, our call center
and computer telephony sector serves as a primary example of our successful
market-focused expansion strategy. Our leading trade shows, conferences and
publications include:

. On Demand Digital Printing & Publishing Conference and Expo (the
second largest trade show and conference for the digital print and
publishing market) and CADALYST (the #2 publication targeted at
end users, managers and executives in the computer-aided design
and visualization market);

. the TeleCon shows (the largest trade shows in the United States
and Europe for the video conferencing and long distance learning
markets);

. Incoming Call Center Management Conference & Exhibition (the
largest U.S. trade show and conference for the call center market)
and Call Center Conference & Exposition. (a leading U.S. trade
show and conference for the computer telephony market); and

. iEC, Internet and Electronic Commerce Conference and Exposition
(one of the leading U.S. trade shows and conferences serving the
rapidly growing market for electronic commerce through the
Internet, produced in partnership with The Gartner Group, Inc.).

The following table sets forth pro forma information relating to trade
shows, conferences and publications in our Information Technology and
Communications cluster in 1998:

<TABLE>
<CAPTION>
Events Magazines
----------------------------------- --------------------------------
Number of Number of
our events our magazines
Net Square ranked Number 1998 ad ranked
Sector Number footage (1) #1 or #2 (2)(3) per year pages #1 or #2 (2)(3)
- ------------------------ ------ ----------- --------------- -------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Information Technology.. 7 231,000 2 of 5 5 2,137 2 of 3
Telecommunications...... 10 235,000(4) 1 of 1 7 2,451 6 of 6
Call Center/Computer
Technology............. 18 427,000 11 of 12 4 1,434 2 of 4
--- ------- -------- --- ----- --------
Total................. 35 893,000 14 of 18 16 6,022 10 of 13
</TABLE>
- --------
(1) Rounded to the nearest thousand.
(2) Of those for which data is available. For example, in the Information
Technology sector, there is competitive data available for five of our
seven trade shows and conferences and two of those five are either #1 or #2
in the market segment served. Data is generally available for U.S. and
major European markets.
(3) For the purposes of these rankings, we have defined our markets narrowly as
the niche of businesses or professionals at which a trade show, conference
or publication is exclusively or specifically targeted. In addition, the
markets for our trade shows and conferences are further defined by the
geographic region from where attendees are drawn. Except where otherwise
specifically referenced, we have based the rankings of our trade shows on
our internal analysis of net square feet of exhibition space and of our
publications on the number of advertising pages determined by IMS Ltd., an
independent third party. While we believe our internal analyses are
reliable and our market definitions are appropriate, no independent source
has verified them.
(4) Nine of the ten events are conferences. There is no exhibition space at a
conference.

Our Information Technology & Communications cluster serves some of our
fastest growing and most exciting industry sectors. We believe that we enjoy
many opportunities to grow this cluster by building on our leading trade shows
to expand geographically and into new market segments and to launch new
products. For

42
<PAGE>

example, we believe that our strong market position in the call center industry
provides an opportunity to extend and serve the customer relationship
management market segment. In addition, we believe that we are well positioned
to serve the needs of the rapidly growing digital media and professional
content creation market. We enhanced our position in this market in 1998 by
acquiring POST, a publication focused on film and video post-production,
repositioning PC Graphics & Video, formerly a monthly magazine covering PC
applications involving digital graphics and video, as Digital Content Creation,
a magazine targeted at computer software developers engaged in digital graphics
creation and video capture and manipulation, and launching Digital Content
Creation Expo, a directly related trade show and conference. In the
telecommunications sector, we are focused on international expansion and
increasing coverage of international markets as most major vendors in this
sector operate globally. We believe that our leading TeleCon trade shows will
serve as a platform for developing a more comprehensive set of business-to-
business marketing communications products and services, including
publications, for the video conferencing and long distance learning markets.

Manufacturing & Processing

Our Manufacturing & Processing cluster serves certain niche market
segments of the applications technology industry sector and the OEM and
processing sector. In 1998, we delivered our business-to-business marketing
communications solutions to our customers in these industries through 13 trade
shows, one conference, ten magazines, eight directories and other publications,
28 marketing services products and 17 related web sites. In the application
technology sector, we focus on the automatic data capture, identification and
tracking systems (bar coding, magnetic stripe, smart cards, biometrics and the
associated systems) market and geospacial market (global positioning systems
and geographic information systems). For the OEM and processing sector, we
offer exhibitions and conferences and publications focused on equipment,
materials and intermediate products used in the manufacturing and processing of
a wide range of products. Our leading trade shows, conferences and publications
include:

. SCANTECH and SCANTECH EXPO Europe (the largest U.S. and European
trade show and conference, respectively, for the automatic data
capture, identification and tracking systems market) and AUTOMATIC
ID NEWS (the #2 publication in the U.S. and Europe for the
automatic data capture, identification and tracking systems
market); and

. Medical Device Technology Trade Show & Conference (the largest
European trade show and conference for the medical device
equipment market).

The following table sets forth pro forma information relating to trade
shows, conferences and publications in our Manufacturing and Processing cluster
in 1998:

<TABLE>
<CAPTION>
Events Magazines
------------------------------------ -------------------------------
Number of Number of our
Net Square our events ranked 1998 ad magazines ranked
Sector Number Footage (1) #1 or #2 (2)(3) Number pages #1 or #2 (2)(3)
- ------------------------ ------ ----------- ----------------- ------ ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Application Technology.. 4 162,000 2 of 2 7 1,352 5 of 6
OEM/Processing.......... 10 251,000 8 of 10 3 1,084 2 of 3
--- ------- -------- --- ----- ------
Total................. 14 413,000 10 of 12 10 2,436 7 of 9
</TABLE>
- --------
(1) Rounded to the nearest thousand.
(2) Of those for which data is available. For example, in the Application
Technology sector, there is competitive data available for two of our four
trade shows and conferences and both of those two are either #1 or #2 in
the market segment served. Data is generally available for U.S. and major
European markets.
(3) For the purposes of these rankings, we have defined our markets narrowly as
the niche of businesses or professionals at which a trade show, conference
or publication is exclusively or specifically targeted. In addition, the
markets for our trade shows and conferences are further defined by the
geographic region from where attendees are drawn. Except where otherwise
specifically referenced, we have based the rankings of our trade shows on
our internal analysis of net square feet of exhibition space and of our
publications on the number of advertising pages determined by IMS Ltd., an
independent third party. While we believe our internal analyses are
reliable and our market definitions are appropriate, no independent source
has verified them.

43
<PAGE>

Our Manufacturing & Processing cluster currently focuses on basic
products and technologies in the application technology and OEM and processing
sectors. We believe that these sectors will grow because of the introduction of
new technologies and applications. Therefore, we plan to grow the Manufacturing
& Processing cluster by leveraging our market leading trade shows and
publications and widening our focus from basic products and technologies to
applications and systems. For example, our worldwide presence in the data
capture market, through our SCANTECH trade shows and conference and AUTOMATIC
I.D. NEWS publications, allows us to serve the data capture market and
positions us to provide business-to-business marketing communications solutions
to developers of integrated applications such as supply-chain management. In
addition, we believe that many of our products and services for the OEM and
processing sector, particularly Global Cosmetic Industry and Medical Device
TECHNOLOGY, focus on markets that are global and provide natural opportunities
for international expansion.

Market Development

We have grouped the balance of our products and services into a Market
Development cluster to focus on growing these products and services through
internal development or acquisitions. The Market Development cluster addresses
large and attractive market sectors in which we provide products and services
but do not have a significant presence. For example, prior to the MAGIC
Acquisition, our only participation in the fashion sector and specifically in
the apparel industry was in the intimate apparel market through the market
leading magazine BFiA (body fashion/intimate apparel). We are in the process of
integrating this magazine and its related products into the Retail, Hospitality
& Fashion cluster. Our Market Development cluster serves the energy, landscape,
pest control, paper and building industry sectors. In 1999, we expect to launch
one new publication in our Market Development cluster. In 1998, we delivered
our business-to-business marketing communications solutions to our customers in
these industry sectors through five trade shows, seven magazines, 11
directories and other publications, 27 marketing services products and four
related web sites.

Competition

Within each particular industry sector, we also compete with a large
number of small to medium-sized firms. While most small to medium-sized firms
operate in a single geographic market, in some cases, our competitors operate
in several geographic markets. In the trade show and conference segment, we
compete with trade associations and, in several international markets, with
exposition hall owners and operators. Trade show and conference competition in
each market and country occurs on many levels. The venues and dates of trade
shows drive competition. Historically, successful shows have been held at
desirable locations and on desirable dates. Given the availability of
alternative venues and the ability to define events for particular market
segments, the range of competition for exhibitor dollars, sponsorships,
attendees and conferees is extensive. In the publications segment, we typically
have between two and five direct competitors which target the same industry
sector and many indirect competitors which define industry segments differently
than we do and thus may be alternatives for either readers or advertisers.

Intellectual Property

We have developed strong brand awareness for our principal products and
services. Accordingly, we consider our trademarks, service marks, copyrights,
trade secrets and similar intellectual property as important to our success,
and we rely on trademark, servicemark, copyright and trade secret laws, as well
as licensing and

44
<PAGE>

confidentiality agreements, to protect our intellectual property rights. We
generally register our material trademarks and service marks in the United
States and in certain other key countries in which these trademarks and service
marks are used. Effective trademark, service mark and trade secret protection
may not be available in every country in which our products and services are
available.

Employees

As of December 31, 1998, we had approximately 1,300 full-time equivalent
employees. None of our U.S. employees is represented by a labor union. We
consider our relationships with our employees to be good.

Facilities

Our finance and administration, circulation, fulfillment, production and
other necessary operational support facilities are located in Duluth (MN). We
have executive marketing, sales and editorial offices in other cities in the
United States, including Boston (MA), Chicago (IL), Cleveland (OH), Coral
Gables (FL), Edison (NJ), Eugene (OR), Honolulu (HI), Los Angeles (CA),
Marrietta (GA), Milford (CT), New York (NY), Orlando (FL), Santa Ana (CA),
Sherman Oaks (CA), Washington (DC), Waterloo (IA) and Woodland Hills (CA). In
addition, we have offices in Sao Paulo and Rio de Janiero, Brazil; Toronto,
Canada; Hong Kong, China; Paris, France; Mexico City, Mexico; and Chester and
London, United Kingdom.

We generally lease our offices from third parties. In addition, we own
our operations offices in Duluth and Cleveland. We believe that our properties
are in good operating condition and that suitable additional or alternative
space will be available on commercially reasonable terms for future expansion.

Legal Proceedings

We are not a party to any legal proceedings other than ordinary course,
routine litigation which is not material to our business, financial condition
or results of operations.

45
<PAGE>

MANAGEMENT

Directors, Executive Officers and Key Employees

The following table sets forth certain information as of February 28,
1999 regarding our directors, executive officers and key employees.

<TABLE>
<CAPTION>
Name Age Title
- ------------------------ --- --------------------------------------------------------------
<S> <C> <C>
Robert L. Krakoff....... 63 Chairman of the Board and Chief Executive Officer

James M. Alic........... 56 Vice Chairman and Director

Martin C. ("Skip")
Farber................. 46 Executive Vice President--Business Development

David W. Montgomery..... 41 Vice President--Finance, Chief Financial Officer and Secretary

Eric I. Lisman.......... 42 Vice President and General Counsel

William J. Cooke........ 47 Executive Vice President

Alexander S. DeBarr..... 39 Executive Vice President

Morris R. Levitt........ 58 Executive Vice President

Joseph Loggia........... 39 President--MAGIC

Kenneth T. Berliner..... 39 Director

Mitchell R. Cohen....... 35 Director

John M. Pasquesi........ 39 Director
</TABLE>

Executive Officers

Robert L. Krakoff has served as our Chairman and Chief Executive Officer
since he joined Advanstar in July 1996. From January 1993 to June 1996, he was
the Chairman and Chief Executive Officer of Reed Publishing USA, a division of
Reed Elsevier Inc. which included Cahners Publishing Company, a trade
publications business, and Reed Exhibition Companies, an exposition and
conference business. From January 1993 to June 1996, he was also a member of
the board of directors of Reed Elsevier PLC.

James M. Alic has served as our Vice Chairman since he joined Advanstar
in July 1996. From June 1995 to June 1996, he was Vice President and Controller
of IBM Corporation, a computer hardware and software manufacturer. From
September 1994 to May 1995, he was Chairman of Reed Exhibition Companies. From
August 1991 to August 1994, he was President of Reed Exhibitions North America.

Martin C. ("Skip") Farber has served as our Executive Vice President--
Business Development since he joined Advanstar in October 1996. From February
1993 to September 1996, he was Vice President for Business Development of Reed
Publishing USA., which included Cahners Publishing Company and Reed Exhibition
Companies. From July 1995 to September 1996, Mr. Farber also had responsibility
for Cahners Direct Marketing Services, a division of Reed Elsevier Inc.

David W. Montgomery has served as our Vice President--Finance and Chief
Financial Officer since January 1994. From July 1989 to December 1993, he was
our Director of Corporate Finance. In July 1992, he became our Secretary. From
January 1981 to June 1989, he was a practicing CPA with McGladrey & Pullen in
Minneapolis, St. Paul, Minnesota.

46
<PAGE>

Eric I. Lisman has served as our Vice President and General Counsel since
September 1998. From November 1997 to August 1998, he engaged in a private
legal practice. From August 1996 to July 1997, he was a Senior Vice President
and General Counsel of Cahners Publishing Company. From July 1993 to July 1996,
he was a Vice President and General Counsel of Reed Publishing USA.

Key Employees

William J. Cooke has served as our Executive Vice President since June
1997 and is responsible for the OEM industry sector, the Market Development
cluster and marketing services. In addition, Mr. Cooke is responsible for
corporate marketing and corporate training. From July 1995 to May 1997, he was
Group Vice President of Advanstar. From July 1993 to June 1995, he was our
President of the Marketing Services Division. From 1988 until June 1993, Mr.
Cooke was Vice President of Strategic Planning and Marketing for Dun &
Bradstreet Corporation.

Alexander S. DeBarr has served as our Executive Vice President since June
1997 and is responsible for the art, beauty, travel and hospitality, motor
vehicle and application technology sectors. From February 1995 to May 1997, he
was a Group Vice President of Advanstar. Mr. DeBarr also served as a Group
Publisher of Advanstar from February 1993 until January 1995.

Morris R. Levitt joined us in March 1999 as our Executive Vice President
with responsibility for the Healthcare, Science and Pharmaceutical cluster.
From October 1991 to February 1999, Dr. Levitt headed the Advanced Technology
Division of PennWell Publishing Company, a publisher of trade publications and
an operator of trade shows.

Joseph Loggia has served as MAGIC's President and Chief Executive Officer
since May 1997, President from August 1996 and Chief Operating Officer
beginning in 1995. From January 1993 to August 1996, he was Chief Financial
Officer of MAGIC. Prior to joining MAGIC, Mr. Loggia, who is a certified public
accountant, was a manager at the accounting firm of Coopers & Lybrand
responsible for Fraud & Financial Investigations.

Directors

Kenneth T. Berliner has served as a director of Advanstar since the HFCP
III Acquisition. Since 1992, Mr. Berliner has been employed by Peter J. Solomon
Company Limited ("PJSC"), an investment banking firm. He is currently a
managing director at PJSC.

Mitchell R. Cohen has served as a director of Advanstar since the HFCP
III Acquisition. Since January 1998, Mr. Cohen has been a Managing Director of
Hellman & Friedman LLC, a private equity investment firm. From January 1993 to
December 1997, Mr. Cohen was a General Partner of Hellman & Friedman. Mr. Cohen
is also a director of Western Wireless Corporation and MobileMedia Corporation.

John M. Pasquesi has served as a director of Advanstar since the HFCP III
Acquisition. Since January 1998, Mr. Pasquesi has been a Managing Director of
Hellman & Friedman LLC, a private equity investment firm. From January 1989 to
December 1997, Mr. Pasquesi was a General Partner of Hellman & Friedman. Mr.
Pasquesi is also a director of The Covenant Group Inc.

Board of Directors

Additional Directors. We anticipate that the size of our Board of
Directors will be increased from five to seven directors, and that two
additional directors who are not affiliates or present or former employees of
Advanstar will be elected to our Board of Directors. Each member of the Board
of Directors holds office until the next annual meeting of stockholders or
until his or her successor has been duly elected and qualified.

47
<PAGE>

Committees. We have a Compensation Committee currently composed of
Messrs. and . The Compensation Committee reviews and acts on matters
relating to compensation levels and benefit plans for our executive officers
and key employees, including salary and stock options. The Compensation
Committee is also responsible for granting stock awards, stock options and
stock appreciation rights and other awards to be made under our existing
incentive compensation plans. After the consummation of the offerings, we will
establish an Audit Committee to be responsible for reviewing the activities of
the Company's independent accounts and internal audit department. The Audit
Committee's members will not be affiliated with the Company or HFCP III, in
accordance with applicable New York Stock Exchange requirements.

Director Compensation

We do not compensate our directors for serving on the Board of Directors
or for their participation on any committee of the Board of Directors. Our
directors are reimbursed for out-of-pocket expenses incurred in attending
meetings of the Board of Directors. In the future, we will make grants of stock
options under the 1999 Plan (as defined) to outside directors.

We indemnify our directors in accordance with our certificate of
incorporation and by-laws to the fullest extent permitted under Delaware law.

Executive Compensation

The compensation of executive officers is determined by our Board of
Directors, except for the salary and bonus of Mr. Krakoff and Mr. Alic, each of
whom has an employment agreement with the Company. See "--Certain Plans and
Employment Agreements". The following table sets forth certain information
concerning compensation received by the Chief Executive Officer and the other
executive officers (the "Named Executive Officers") for services rendered to
Advanstar for the years ended December 31, 1998 and 1997.

Summary Compensation Table

<TABLE>
<CAPTION>
Annual Compensation
----------------------------- All Other Total
Name and Principal Position Year Salary ($) Bonus ($) (1) Compensation ($) Compensation ($)
- --------------------------- ---- ---------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Robert L. Krakoff......... 1998 $415,385 $150,000 $18,138(3) $583,523
Chairman of the Board 1997 400,000 150,000 12,449(2) 562,449
and Chief Executive
Officer
James M. Alic............. 1998 $311,538 $115,000 $ 8,310(3) $434,848
Vice Chairman 1997 300,000 112,500 7,260(3) 419,760
Martin C. ("Skip")
Farber................... 1998 $284,615 $120,000 $ 6,436(3) $411,051
Executive Vice 1997 250,000 87,000 2,713(3) 339,713
President--Business
Development
David W. Montgomery....... 1998 $186,538 $ 74,000 $ 5,918(3) $266,456
Vice President--Finance, 1997 170,000 60,000 5,860(3) 235,860
Chief Financial Officer
and Secretary
Eric I. Lisman(4)......... 1998 $ 72,692 $ 25,012 $ 199(2) $ 97,903
Vice President and
General Counsel
</TABLE>
- --------
(1) Bonuses are reported in the year earned, even though they were actually
paid in the subsequent year.
(2) Constitutes value of group term life insurance benefits paid for by the
Company.
(3) Constitutes value of group term life insurance benefits paid for by the
Company and contributions made by the Company to a defined contribution
plan.
(4) Mr. Lisman commenced employment on September 8, 1998.

48
<PAGE>

Option Grants in Last Fiscal Year

The following table sets forth each grant of stock options made by
Advanstar during the year ended December 31, 1998 pursuant to the 1996 Plan (as
defined) to each of the Named Executive Officers. We have not granted any stock
appreciation rights.

<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------- Potential Realizable
Number of Value at Assumed
Securities % of Total Annual Rates of
Underlying Options Granted Exercise Stock Price
Options to Employees In Price Expiration Appreciation
Name Granted Fiscal Year ($/Share)(1) Date for Option Term
---- ---------- --------------- ------------ ---------- ---------------------- --- ---
5% (2) 10%
--------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert L. Krakoff....... -- -- -- -- -- --
James M. Alic........... -- -- -- -- -- --
Martin C. ("Skip") Far-
ber.................... 70,162 19.5% $ 2008 -- $ 1,279,335
David W. Montgomery..... 10,000 2.8 2008 -- 182,340
Eric I. Lisman(3)....... 50,000 13.9 2008 -- 881,872
</TABLE>
- --------
(1) The options granted are subject to a five-year vesting schedule pursuant to
which the options vest in 20% increments on each anniversary of the date of
grant. On May 31 of each year, the exercise price per option increases by
10% over the previous year's exercise price. The exercise price per option
increases by a pro rated amount of such 10% increase in the case of
exercises which do not occur after May 31.
(2) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compounded rates of appreciation of the Common
Stock over the term of the options. The exercise prices of the options
increases 10% per year over the life of the option. These numbers are
calculated based on rules promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
growth. Actual gains, if any, on stock option exercises and Common Stock
holders are dependent on the timing of such exercises and the future
performance of our common stock. There can be no assurance that the rates
of appreciation assumed in this table can be achieved or that the amounts
reflected will be received by the individuals.
(3) On September 8, 1998, Mr. Lisman was granted a stock option to purchase
50,000 shares of our common stock.

49
<PAGE>

Option Exercises and Holdings

The following table sets forth, for each of the officers named in the
Summary Compensation Table, certain information concerning stock options
exercised during 1998, and the number of shares subject to both exercisable and
unexercisable stock options as of December 31, 1998. Also reported are values
for "in-the-money" options that represent the positive spread between the
respective exercise prices of outstanding stock options and the fair market
value of our common stock as of December 31, 1998.

Aggregated Option Exercises In 1998
and December 31, 1998 Option Values

<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money
Number of at Fiscal Options at Fiscal
Shares Year-End Year-End (1)
Acquired on Value ------------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------------ ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Krakoff....... -- -- -- -- -- --
James M. Alic........... -- -- -- -- -- --
Martin C. ("Skip") Far-
ber.................... -- -- 49,820 153,242 $318,848 $980,748
David W. Montgomery..... -- -- 34,000 66,000 217,600 422,400
Eric I. Lisman.......... -- -- 50,000 320,000
</TABLE>
- --------
(1) Amount based on the fair market value of our common stock on December 31,
1998 as determined by our Board of Directors, less the exercise payable for
such shares.
(2) On September 8, 1998, Mr. Lisman was granted a stock option to purchase
50,000 shares of our common stock.

Certain Plans and Employment Agreements

Amended and Restated 1996 Stock Option Plan. Our Amended and Restated
1996 Stock Option Plan (the "1996 Plan") provides for the issuance of a maximum
of shares of our common stock pursuant to the grant of non-qualified stock
options to employees and other individuals who render services to Advanstar.
The 1996 Plan does not permit grants of incentive stock options as defined
under the Code. The 1996 Plan prohibits the regrant of any previously granted
stock options which have been surrendered or canceled.

The 1996 Plan is administered by the Compensation Committee. Subject to
the provisions of the 1996 Plan, the Compensation Committee selects the
individuals to whom options will be granted and determines the option exercise
price and other terms of each award.

With the exception of the stock options granted to Mr. Loggia, each stock
option is subject to a five-year vesting schedule pursuant to which the options
vest in increments of approximately 20% on each of the first five anniversaries
of the date of grant. Each outstanding stock option shall become fully
exercisable in the event of a "change of control." A "change of control" means
the acquisition by any person or group of persons (other than an affiliate or
affiliates of HFCP III) of more than 50% of the outstanding shares of Advanstar
common stock or shares of capital stock constituting more than 50% of our
voting capital stock, or of all or substantially all of our assets. The
Compensation Committee may, in its discretion and in accordance with the
provisions of the 1996 Plan, accelerate the vesting of any stock option.

As of December 31, 1998, options to purchase shares of our common stock
at an average exercise price of $ were outstanding under the 1996 Plan, and
no options had been exercised.

50
<PAGE>

1999 Stock Option and Incentive Plan. Our Board of Directors is expected
to adopt, and our stockholders are expected to approve, the 1999 Stock Option
and Incentive Plan (the "1999 Plan") prior to the commencement of the
offerings. A total of shares of common stock have been initially been
authorized and reserved for issuance under the 1999 Plan. Under the terms of
the 1999 Plan, our Board of Directors is authorized to grant incentive stock
options as defined under the Code, non-qualified stock options, stock awards or
opportunities to make direct purchases of common stock to employees, officers,
directors, consultants and advisors of Advanstar.

The 1999 Plan is administered by the Compensation Committee. The
Compensation Committee selects the individuals to whom stock options or awards
will be granted and determines the option exercise price and other terms of
each award, subject to the provisions of the 1999 Plan. A stock option is not
transferable by the recipient except by will or by the laws of descent and
distribution, or in the case of non-qualified stock options, only to the extent
set forth in the agreement relating to the non-qualified stock option or
pursuant to a valid domestic relations order. No stock options may be exercised
following termination of employment for cause. The term of the 1999 Plan is ten
years, unless sooner terminated by vote of the Board of Directors. To date, no
options have been granted under the 1999 Plan.

401(k) Plan. We have an Employees' 401(k) Plan and Trust (the "401(k)
Plan"). All current and future employees who have completed one year of service
with Advanstar or any other domestic subsidiary of Advanstar and are at least
21 years-of-age are eligible to participate in the Plan. Participants in the
401(k) Plan may not contribute more than the lesser of a specified statutory
amount ($10,000 in 1998) or 15% of his or her pre-tax total compensation. We
are required to make a matching contribution to the 401(k) Plan, which vests in
equal installments over five years, in accordance with the following schedule:

. with respect to the employee's elective contribution in an amount
up to two percent (2%) of the employee's gross compensation, the
matching contribution is required to be equal to 100% of the
employee's contribution;

. with respect to the employee's elective contribution in excess of
2% and not in excess of 6% of gross compensation, the matching
contribution is required to be equal to 25% of such employee's
contribution; and

. with respect to the employee's elective contribution in excess of
six percent (6%) of gross compensation, there shall be no matching
contribution.

Employment Agreements. Mr. Krakoff and Mr. Alic entered into employment
agreements with Advanstar dated as of July 1, 1996. Each agreement provides for
a four year term. Pursuant to the agreements, Mr. Krakoff and Mr. Alic are
entitled to annual base salaries of not less than $400,000 and $300,000,
respectively. Mr. Krakoff and Mr. Alic are entitled to annual bonuses based on
our EBITDA for any year, up to a maximum bonus in any one year of 100% of base
salary. The agreements provide for indemnification of the executives to the
extent permissible under Delaware law. The agreements provide for severance
benefits equal to one year's base salary and benefits (and a pro rated bonus)
upon termination of employment by Advanstar without "cause" or by the executive
for "good reason" (which includes a change of control). Mr. Krakoff and Mr.
Alic also entered into noncompetition and confidentiality agreements with us.
The noncompete period is one year after termination of employment unless
employment is terminated by Advanstar without cause or by the executive for
good reason, in which case the noncompetition period is six months. During the
noncompetition period, the executives may not hire any Advanstar employee or
solicit any trade show or publishing business from a third party which has a
relationship or contract with Advanstar.

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding beneficial
ownership of our common stock as of February 28, 1999, and as adjusted to
reflect the shares of common stock to be issued and sold in the offerings by
Advanstar and the selling stockholders, by:

. each person known to us to be the beneficial owner of more than 5%
of the outstanding shares of our common stock,

. our Named Executive Officers,

. our directors and

. all executive officers and directors as a group.

Unless otherwise noted below, the address of each person listed on the
table is c/o Advanstar, Inc., 545 Boylston Street, Boston, Massachusetts 02116.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. For the purposes of calculating the number
of shares and the percentage beneficially owned by a person or entity, shares
of common stock issuable by Advanstar to that person or entity pursuant to
options which may be exercised within 60 days after February 28, 1999 are
deemed to be beneficially owned and outstanding. Except as otherwise indicated,
each stockholder named in the following table has sole voting and investment
power with respect to the shares set forth opposite that stockholder's name.

<TABLE>
<CAPTION>
Shares Percentage of Shares
Beneficially Owned Beneficially Owned
------------------------- -------------------------
Before After Before After
Name and Address of Beneficial Owner Offering Offering Offering Offering
- ------------------------------------ --------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Hellman & Friedman
Capital Partners III,
L.P. (1)................ % %
c/o Hellman & Friedman
LLC
One Maritime Plaza
San Francisco, CA 94111
H&F Orchard Partners III,
L.P. (1)................ % %
c/o Hellman & Friedman
LLC
One Maritime Plaza
San Francisco, CA 94111
H&F International
Partners III, L.P. (1).. % %
c/o Hellman & Friedman
LLC
One Maritime Plaza
San Francisco, CA 94111

Robert L. Krakoff........ % %

James M. Alic............ % *

Martin C. ("Skip")
Farber.................. (2) (2) * *

David W. Montgomery...... (3) (3) * *

Eric I. Lisman........... -- -- -- --

Kenneth T. Berliner (4).. -- -- -- --

Mitchell R. Cohen
(1)(5).................. -- -- -- --
John M. Pasquesi (1)(6).. -- -- -- --
All directors and
executive officers as a
group (8 persons)....... (7) (7)
</TABLE>
- --------
* Represents less than 1% of the outstanding shares of our common stock.

(footnotes appear on following page)

52
<PAGE>

(1) H&F Investors III, a California general partnership ("Investors III"), is
the sole general partner of Hellman & Friedman Capital Partners III, L.P.,
a California limited partnership ("HFCP"), H&F Orchard Partners III, L.P.,
a California limited partnership ("HFOP III"), and H&F International
Partners III, L.P., a California limited partnership ("HFIP III"). Messrs.
Pasquesi and Cohen are Managing Directors of Hellman & Friedman LLC, an
affiliate of Investors III. The managing general partner of Investors III
is Hellman & Friedman Associates III, L.P., a California limited
partnership ("Associates III"), and the general partners of Associates III
are H&F Management III, L.L.C., a California limited liability company
("Management III LLC"), and H&F Investors III, Inc., a California
corporation ("H&F Inc."). The sole shareholder of H&F Inc. is the Hellman
Family Revocable Trust (the "Trust"). The investment decisions of H&F Inc.
and Management III LLC are made by an executive committee, of which Mr.
Pasquesi is a member. The executive committee indirectly exercises voting
and investment power with respect to the shares of Advanstar common stock
held by HFCP, HFOP III and HFIP III and could be deemed to beneficially own
such shares, but disclaims such beneficial ownership except to the extent
of its indirect pecuniary interest in such shares.

(2) Consists of 49,820 shares of Advanstar common stock issuable pursuant to
presently exercisable stock options.

(3) Consists of 34,000 shares of Advanstar common stock issuable pursuant to
presently exercisable stock options.

(4) Consists of shares of Advanstar common stock held by PJSC. Mr. Berliner is
a Managing Director of PJSC. Mr. Berliner is the beneficial owner of 40% of
the shares of Advanstar common stock held by PJSC and disclaims beneficial
ownership of the balance of such shares.

(5) Mr. Cohen disclaims beneficial ownership of all shares of Advanstar common
stock held by HFCP, HFOP III and HFIP III except to the extent of his
indirect pecuniary interest in such shares.

(6) Mr. Pasquesi disclaims beneficial ownership of all shares of Advanstar
common stock held by HFCP, HFOP III and HFIP III except to the extent of
his indirect pecuniary interest in such shares.

(7) Consists of 83,820 shares of our common stock issuable pursuant to
presently exercisable stock options.

Certain Transactions

On May 15, 1997, Advanstar, AHI Advanstar LLC, Robert L. Krakoff, James
M. Alic, Peter J. Solomon, Co., Ltd., and HFCP III entered into a stockholders
agreement. The terms of such stockholders agreement will terminate upon the
closing of the offerings, except for certain restrictions on transfers of our
common stock by Messrs. Krakoff and Alic and Peter J. Solomon Co., Ltd. and
certain rights to cause our common stock to be registered for sale under the
Securities Act of 1933. See "Description of Capital Stock--Registration
Rights."

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<PAGE>

DESCRIPTION OF CAPITAL STOCK

The following description of our certificate of incorporation, by-laws,
outstanding capital stock and existing registration rights reflects (1) the
dissolution, immediately prior to the closing of the offerings, of AHI
Advanstar LLC and the distribution to its members of all shares of common stock
held of record thereby and (2) the effectiveness, upon the closing of the
offerings, of an Amended and Restated Certificate of Incorporation and Amended
and Restated By-Laws of Advanstar, Inc.

In accordance with Advanstar's certificate of incorporation (the
"Charter"), Advanstar's authorized capital stock consists of shares of
common stock, with a par value of $.01 per share, and shares of preferred
stock, with a par value of $.01 per share.

Common Stock

As of February 28, 1999, there were shares of common stock
outstanding and held of record by six stockholders. Based upon the number of
shares outstanding as of February 28, 1999 and giving effect to the issuance of
the shares of common stock offered by Advanstar hereby, there will be
shares of common stock outstanding upon the closing of the offerings. In
addition, as of February 28, 1999, there were outstanding stock options for the
purchase of a total of shares of common stock.

Holders of common stock are entitled to one vote per share for each share
held of record on all matters submitted to a vote of stockholders. The holders
of common stock are entitled to receive ratably such lawful dividends as may be
declared by our Board of Directors (the "Board of Directors" or the "Board").
Such dividends, however, are subject to preferences that may be applicable to
the holders of any outstanding shares of preferred stock. In the event of a
liquidation, dissolution or winding up of the affairs of Advanstar, whether
voluntary or involuntary, the holders of common stock will be entitled to
receive pro rata all of the remaining assets of Advanstar available for
distribution to its stockholders. Any such pro rata distribution would be
subject to the rights of the holders of any outstanding shares of preferred
stock. The common stock has no preemptive, redemption, conversion or
subscription rights. All outstanding shares of common stock are fully paid and
non-assessable. The shares of common stock to be issued by Advanstar in this
offering will be fully paid and non-assessable. The rights, powers, preferences
and privileges of holders of common stock are subject to, and may be adversely
affected by, the rights of the holders of shares of any Series of preferred
stock which Advanstar may designate and issue in the future.

Preferred Stock

The Board of Directors is authorized, subject to any limitations
prescribed by Delaware law, without further stockholder approval, to issue from
time to time shares of preferred stock, in one or more series. The Board of
Directors is also authorized, subject to the limitations prescribed by Delaware
law, to establish the number of shares to be included in each series and to fix
the voting powers, preferences, qualifications and special or relative rights
or privileges of each series. The Board of Directors is authorized to issue
preferred stock with voting, conversion and other rights and preferences that
could adversely affect the voting power or other rights of the holders of
common stock.

Advanstar has no current plans to issue any preferred stock. The issuance
of preferred stock or of rights to purchase preferred stock, however, could
have the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, a majority of the
outstanding voting stock of Advanstar.

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<PAGE>

Registration Rights

Pursuant to the terms of a Stockholders Agreement dated May 15, 1997 by
and among Advanstar, AHI Advanstar LLC, Robert L. Krakoff, James Alic, Peter J.
Solomon, Co., Ltd., and HFCP III, Messrs. Krakoff and Alic, Peter J. Solomon,
Co., Ltd., and HFCP III, the holders of an aggregate of shares of our
common stock, are entitled to certain rights to cause the registration of such
shares under the Securities Act of 1933, as amended (the "Securities Act").

If, at any time after the offerings, we propose to register any of our
securities under the Securities Act, either for our own account or for the
account of any of our security holders, Messrs. Krakoff and Alic, Peter J.
Solomon, Co., Ltd., and HFCP III are each entitled to notice of such
registration and to include their shares of our common stock in such
registration. In the event of a registration pursuant to an underwritten public
offering of our common stock, however, the underwriters shall have the right,
subject to certain conditions, to limit the number of shares included in such
registration.

Once we have qualified to use a registration statement on Form S-3 to
register securities under the Securities Act, Messrs. Krakoff and Alic, Peter
J. Solomon, Co., Ltd., and HFCP III have the right to request that we file a
registration statement on Form S-3 or any successor thereto for a public
offering of all or any portion of their shares of our common stock, provided
that the reasonably anticipated aggregate price to the public of such offering
would not be less than $2,500,000.

In general, we will bear all fees, costs and expenses of such
registrations (other than applicable underwriting discounts and selling
commissions). In addition, we have agreed to indemnify Messrs. Krakoff and
Alic, Peter J. Solomon, Co., Ltd., and HFCP III against, and provide
contribution with respect to, certain liabilities relating to any registration
in which any their shares of our common stock are sold under the Securities
Act.

Anti-Takeover Effects of Provisions of Advanstar's Amended and Restated
Certificate of Incorporation, Amended and Restated By-Laws and Delaware Law

The Charter, Advanstar's by-laws (the "By-Laws") and Delaware law contain
certain provisions that could be deemed to have anti-takeover effects. These
provisions could discourage, delay or prevent a change in control of Advanstar
or an acquisition of Advanstar at a price which many stockholders may find
attractive. The existence of these provisions could limit the price that
investors might be willing to pay in the future for shares of our common stock.

Certificate of Incorporation and By-Laws

The By-Laws provide that only the Board may increase the number of
directors constituting the whole Board. The By-Laws further provide that,
except as otherwise provided by law or the Charter, newly created directorships
resulting from an increase in the authorized number of directors or vacancies
on the Board may be filled by:

. a majority of stockholders,

. the Board, provided that a quorum is then in office and present,

. a majority of the directors then in office, if less than a quorum
is then in office or

. the sole remaining director.

These provisions prevent a stockholder from enlarging the Board and
filling the new directorships with such stockholder's own nominees without
Board approval.

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<PAGE>

These provisions of the By-Laws may have the effect of discouraging a
third party from initiating a proxy contest, making a tender offer or otherwise
attempting to gain control of Advanstar, or of attempting to change the
composition or policies of the Board, even though such attempts might be
beneficial to Advanstar or its stockholders.

The Charter and the By-Laws provide that, unless otherwise prescribed by
law or the Charter, only a majority of the Board, the Chairman of the Board or
the President is able to call a special meeting of stockholders. The Charter
and the By-Laws also provide that, unless otherwise prescribed by law or the
Charter, stockholder action may be taken only at a duly called and convened
annual or special meeting of stockholders and may not be taken by written
consent. These provisions, taken together, prevent stockholders from forcing
consideration by the stockholders of stockholder proposals over the opposition
of the Board, except at an annual meeting.

The By-Laws also establish an advance notice procedure for stockholders
to make nominations of candidates for election as director, or to bring other
business before an annual meeting of stockholders of Advanstar (the "Notice
Procedure"). Under the Notice Procedure, notice of stockholder nominations or
proposals to be made at an annual or special meeting in lieu of an annual
meeting generally must be received by Advanstar not less than 60 days nor more
than 90 days prior to the scheduled date of the meeting. If less than 70 days
notice or prior public disclosure of the date of the meeting is given, however,
then notice must be received not later than the 10th day following the earlier
of the day such notice was mailed or the day such public disclosure was made.
Notice of stockholder nominations or proposals to be made at a special meeting
(other than a special meeting in lieu of an annual meeting), not later than the
10th day following the earlier of the day such notice was mailed or the day
such public disclosure was made. These notices must contain certain prescribed
information.

The Notice Procedure affords the Board an opportunity to consider the
qualifications of proposed director nominees or the merit of stockholder
proposals, and, to the extent deemed appropriate by the Board, to inform
stockholders about such matters. The Notice Procedure also provides a more
orderly procedure for conducting annual meetings of stockholders. The By-Laws
do not give the Board any power to approve or disapprove stockholder
nominations for the election of directors or proposals for action. The Notice
Procedure, however, may prevent a contest for the election of directors or the
consideration of stockholder proposals. This could deter a third party from
conducting a solicitation of proxies to elect its own slate of directors or to
approve its own proposal if the proper advance notice procedures are not
followed, without regard to whether consideration of such nominees or proposals
might be harmful or beneficial to Advanstar and its stockholders.

Delaware Law

Advanstar is subject to Section 203 of the Delaware General Corporation
Law which, subject to certain exceptions, prohibits a Delaware corporation from
engaging in any business combination with any interested stockholder for a
period of three years following the date that such stockholder became an
interested stockholder.

Section 203 does not apply if:

. prior to such date, the board of directors of the corporation
approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder;

. upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced,
excluding for purposes of determining the number of shares
outstanding those shares owned by persons who are directors and
also officers and by employee stock plans in which employee
participants do not

56
<PAGE>

have the right to determine confidentially whether shares held
subject to the plan will be tendered in a tender or exchange
offer; or

. on or subsequent to such date, the business combination is
approved by the board of directors and authorized at an annual or
special meeting of stockholders, and not by written consent, by
the affirmative vote of at least two-thirds of the outstanding
voting stock which is not owned by the interested stockholder.

The application of Section 203 may limit the ability of stockholders to
approve a transaction that they may deem to be in their best interests.

Section 203 defines "business combination" to include:

. any merger or consolidation involving the corporation and the
interested stockholder;

. any sale, transfer, pledge or other disposition of 10% or more of
the assets of the corporation to or with the interested
stockholder;

. subject to certain exceptions, any transaction which results in
the issuance or transfer by the corporation of any stock of the
corporation to the interested stockholder;

. any transaction involving the corporation which has the effect of
increasing the proportionate share of the stock of any class or
series of the corporation beneficially owned by the interested
stockholder; or

. the receipt by the interested stockholder of the benefit of any
loans, advances, guarantees, pledges or other financial benefits
provided by or through the corporation.

In general, Section 203 defines an "interested stockholder" as any entity
or person beneficially owning 15% or more of the outstanding voting stock of
the corporation and any entity or person associated with, affiliated with or
controlling or controlled by such entity or person.

Limitation of Liability

The Charter provides that no director of Advanstar shall be personally
liable to Advanstar or to its stockholders for monetary damages for breach of
fiduciary duty as a director, except that the limitation shall not eliminate or
limit liability to the extent that the elimination or limitation of such
liability is not permitted by the Delaware General Corporation Law as the same
exists or may hereafter be amended.

The Charter further provides for the indemnification of Advanstar's
directors and officers to the fullest extent permitted by Section 145 of the
Delaware General Corporation Law, including circumstances in which
indemnification is otherwise discretionary. A principal effect of these
provisions is to limit or eliminate the potential liability of Advanstar's
directors for monetary damages arising from breaches of their duty of care,
subject to certain exceptions. These provisions may also shield directors from
liability under federal and state securities laws.

Stock Transfer Agent

The transfer agent and registrar for the common stock is the Bank of New
York.

57
<PAGE>

DESCRIPTION OF INDEBTEDNESS

The summary of the Credit Facility and the Notes set forth below does not
purport to be complete and is qualified in its entirety by reference to all the
provisions of the Credit Facility and the Indenture, copies of which are filed
as an exhibit to the Registration Statement of which this prospectus is a part.

Credit Facility

General. The Credit Facility consists of three components: a tranche A
term loan facility in the aggregate principal amount of $100 million; a tranche
B term loan facility in the aggregate principal amount of $150 million; and a
revolving credit facility in the maximum aggregate amount of $60 million.
Subject to compliance with customary conditions precedent, the revolving credit
facility (which includes sublimits for the issuances of letters of credit) is
available to be drawn from time to time by our wholly-owned subsidiary,
Advanstar Communications Inc. ("Communications"), for working capital and
general corporate purposes, including permitted acquisitions.

Guarantees and Security. The obligations of Communications under the
Credit Facility and any related interest rate protection agreements are
guaranteed by Advanstar and substantially all of the domestic subsidiaries of
Advanstar (including MAGIC). Communications' obligations in connection with the
Credit Facility and the obligations of the guarantors are secured by liens on
substantially all of their respective tangible and intangible assets.

Maturity. After giving effect to the use of proceeds from this offering:
approximately $175.3 million in term loans will be outstanding and the term
loans will amortize in quarterly installments totaling approximately $0.0
million in 1999, $4.7 million in 2000, $9.8 million in 2001, $11.3 million in
2002, $18.6 million in 2003, $59.2 million in 2004 and $71.7 million in 2005.
Principal amounts outstanding under the revolving credit facility will be due
and payable in full on October 31, 2003.

Interest. Interest on outstanding borrowings accrues, at the option of
Communications, at the customary Alternate Base Rate of The Chase Manhattan
Bank ("Chase") or at a reserve adjusted Eurodollar Rate plus, in each case, a
margin. The margin is a percentage that varies in accordance with a pricing
matrix based upon a leverage ratio. The maximum margin for Revolving Loans and
Tranche A Term Loans will equal 1.25% for loans based on the Alternate Base
Rate and 2.25% for loans based on the Eurodollar Rate; and for Tranche B Term
Loans, 1.50% in the case of loans based on the Alternate Base Rate and 2.50% in
the case of loans based on the Eurodollar Rate.

Prepayments. Subject to certain exceptions, the following amounts are
required to be applied, as mandatory prepayments, to prepay the term loans: (i)
50% of the net cash proceeds of certain issuances of equity by Advanstar or its
subsidiaries; (ii) 100% of the net cash proceeds of the incurrence of certain
indebtedness by Advanstar (or any successor corporation) or any of its
subsidiaries; (iii) 100% of the net cash proceeds of any sale or other
disposition by Communications or any of its subsidiaries of any assets
(excluding sales in the ordinary course of business, and subject to a limited
exception for reinvestment of such proceeds within 270 days); and (iv) 50% of
excess cash flow for each fiscal year. Mandatory prepayments will be applied
pro rata to the unpaid installments of the tranche A term loans and the tranche
B term loans, provided, that as long as any tranche A term loans remain
outstanding, each holder of a tranche B term loan will have the right to refuse
any such mandatory prepayment otherwise allocable to it, in which case the
amount so refused will be applied as an additional prepayment of the tranche A
term loans. Communications also has the right at its option to prepay loans
under the Credit Facility, without premium, in whole or in part. Amounts
applied as prepayments of the revolving credit facility may be reborrowed;
amounts prepaid in respect of the term loans may not.

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<PAGE>

Covenants. Subject to customary exceptions, covenants include (but are
not limited to) restrictions on fundamental changes; liens; indebtedness;
investments; dividend payments; lines of business; transactions with
affiliates; use of proceeds; certain matters respecting ownership of
subsidiaries; negative pledge clauses and clauses restricting subsidiary
distributions; modifications of certain documents (including the Indenture);
prepayments of the Notes; and activities of holding companies. Financial
covenants include a minimum fixed charge coverage ratio and a maximum leverage
ratio.

Events of Default. Events of default include nonpayment of principal when
due; nonpayment of interest, fees or other amounts after a three-day grace
period; material inaccuracy of representations and warranties; violation of
covenants (subject, in the case of certain covenants, to a 30-day grace period
after notice); cross-default to other material indebtedness; bankruptcy events;
certain ERISA events; material judgments; material environmental claims; actual
or asserted invalidity of any guarantee, security interest or subordination
provisions; and a change of control.

9 1/4% Senior Subordinated Notes Due 2008

General. Communications issued $150.0 million of 9 1/4% Senior
Subordinated Notes Due 2008 (the "Notes") in connection with the MAGIC
Acquisition pursuant to an Indenture (the "Indenture") among Communications, as
issuer, Advanstar and its wholly-owned domestic subsidiaries, including MAGIC,
as guarantors, and The Bank of New York, as trustee. On October 30, 1998,
Communications consummated an offer to exchange such notes for the Notes
registered under the Securities Act.

Principal, Maturity and Interest. The Indenture is limited in aggregate
principal amount to $250.0 million of which $150.0 million in aggregate
principal amount is represented by the Notes. The Notes will mature on May 1,
2008. Interest on the Notes accrues at 9 1/4% per annum and is payable
semiannually in arrears on May 1 and November 1 of each year.

Note Guarantees. The Notes are unsecured senior subordinated general
obligations of Communications and are unconditionally guaranteed on a senior
subordinated and unsecured basis by Advanstar and each existing and future
domestic subsidiary of Communications that is not designated an "Unrestricted
Subsidiary" in accordance with the Indenture, including MAGIC (Advanstar and
existing and future domestic subsidiaries of Communications are referred to
collectively as the "Guarantors").

Redemption and Repurchase Upon Change of Control. Except under limited
circumstances (described below), the Notes are not redeemable at
Communications' option prior to May 1, 2003. Thereafter the Notes are subject
to redemption at the option of Communications, in whole or in part, at premiums
declining in par in May 2006. In addition, at any time on or before May 1,
2001, Communications may redeem up to 35% of the original aggregate principal
amount of the Notes with the net proceeds of a public equity offering at a
redemption price equal to 109.250% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to the date of redemption.
Advanstar does not intend to use any portion of the net proceeds of the
offerings to Advanstar to redeem Notes. See "Use of Proceeds."

At any time prior to May 1, 2003, upon the occurrence of a change of
control, Communications has the option to redeem the Notes, in whole but not in
part, at a make-whole premium, together with accrued and unpaid interest, if
any, to the date of redemption.

Unless Communications exercises its right to redeem the Notes, upon a
change of control of Communications or Advanstar, each holder of Notes has the
right to require Communications to repurchase all or any part of such holder's
Notes at a purchase price in cash equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest thereon. After consummation of
the offerings, a change of control for this purpose means:

. a person or group has become the beneficial owner of 50% or more
of the voting stock of Communications or Advanstar;

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<PAGE>

. during any period of two consecutive calendar years, individuals,
who at the beginning of the period constituted the Board of
Directors of Communications or Advanstar, cease to be a majority
of the directors of Communications or Advanstar then in office;

. the sale of all or substantially all of the assets of
Communications and its subsidiaries; or

. the adoption by the stockholders of Communications of a plan of
liquidation or dissolution.

Covenants. The Indenture restricts, among other things, Communications'
ability to incur additional indebtedness; pay dividends or make certain other
restricted payments; incur liens to secure pari passu or subordinated
indebtedness; engage in any sale and leaseback transaction; sell stock of
subsidiaries; sell assets; merge or consolidate with any other person; sell,
assign, transfer, lease, convey or otherwise dispose of substantially all of
the assets of the Company; or enter into certain transactions with affiliates.

Events of Default. The Indenture contains standard events of default,
including: defaults in the payment of principal, premium or interest, defaults
in the compliance with covenants contained in the Indenture, cross defaults on
more than $5.0 million of other indebtedness, failure to pay more than $5.0
million of judgments, and certain events of bankruptcy with respect to
Communications and certain of its subsidiaries.

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<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the offerings, there will be shares of our common
stock outstanding. There were also approximately shares covered by vested
options outstanding at February 28, 1999, which are not considered to be
outstanding shares. Of the outstanding shares, the shares of common stock
sold in the offerings will be freely tradable without restriction under the
Securities Act, except that any shares purchased in this offering by our
affiliates, as that term is defined in Rule 144 under the Securities Act ("Rule
144"), may generally only be resold in compliance with applicable provisions of
Rule 144.

The remaining shares of our common stock outstanding will be
"restricted securities" as that term is defined in Rule 144 (the "Restricted
Shares"). The Restricted Shares may be sold in the public market only if
registered or if they qualify for an exemption from registration under Rules
144, 144(k) or 701 promulgated under the Securities Act. These rules are
summarized below. Of the Restricted Shares,

. no shares will be available for immediate sale in the public
market on the date of this prospectus pursuant to Rule 144(k); and

. or all of such shares will be eligible for sale in the public
market 90 days after the date of this prospectus, subject to
volume restrictions and other conditions, pursuant to Rule 144.
All of these shares are held by our affiliates and are subject to
the lock-up agreements described below.

Our executive officers and directors and substantially all of our
security holders, have agreed pursuant to certain lock-up agreements that they
will not, without the prior written consent of Merrill Lynch, Pierce, Fenner &
Smith Incorporated, offer, sell or otherwise dispose of the shares of common
stock beneficially owned by them for a period of 180 days from the date of this
prospectus.

Under Rule 144, a stockholder, including an affiliate, who has
beneficially owned his or her restricted securities for at least one year from
the later of the date such securities were acquired from us or (if applicable)
the date they were acquired from an affiliate, is entitled to sell, within any
three-month period, a number of such shares that does not exceed the greater of
1% of the then outstanding shares of common stock (approximately immediately
after the offerings) or the average weekly trading volume in the common stock
during the four calendar weeks preceding the date on which notice of such sale
was filed under Rule 144, provided certain requirements concerning availability
of public information, manner of sale and notice of sale are satisfied. In
addition, under Rule 144(k), if a period of at least two years has elapsed
between the later of the date restricted securities were acquired from us or
(if applicable) the date they were acquired from one of our affiliates, a
stockholder who is not an affiliate of Advanstar at the time of sale and has
not been our affiliate for at least three months prior to the sale is entitled
to sell his or her shares of common stock immediately without compliance with
the foregoing requirements under Rule 144.

Securities issued in reliance on Rule 701 (such as shares of common stock
acquired pursuant to the exercise of certain options prior to the offerings)
are also restricted securities. These restricted securities may be sold by
stockholders other than our affiliates, beginning 90 days after the date of
this prospectus, subject only to the manner of sale provisions of Rule 144 and
by our affiliates, beginning 90 days after the date of this prospectus, subject
to all provisions of Rule 144 except the one-year holding period requirement.

Prior to the offerings, there has been no public market for our common
stock. No prediction can be made as to the effect, if any, that market sales of
shares or the availability of shares for sale will have on the market price of
our common stock prevailing from time to time. We are unable to estimate the
number of shares that may be sold in the public market pursuant to Rule 144,
since this will depend on the market price of the common stock, the personal
circumstances of the sellers and other factors. Nevertheless, sales of
significant amounts of our common stock in the public market could adversely
affect the market price of the common stock and could impair our ability to
raise capital through an offering of our equity securities.

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<PAGE>

In addition, we intend to register as soon as practicable after the
effective date of the offerings a total of shares of common stock subject
to outstanding options or reserved for issuance under our stock incentive
plans. All shares of our common stock reserved for issuance upon exercise of
outstanding stock options are subject to the lockup agreements described above.

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<PAGE>

CERTAIN U.S. FEDERAL TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF COMMON STOCK

The following is a general discussion of certain U.S. federal income and
estate tax consequences of the ownership and disposition of our common stock
applicable to Non-U.S. Holders. In general, a "Non-U.S. Holder" is any holder
other than:

. a citizen or resident of the United States,

. a corporation or partnership created or organized in the United
States or under the laws of the United States or of any state,

. an estate, the income of which is includable in gross income for
U.S. federal income tax purposes regardless of its source or

. a trust if (a) a court within the United States is able to
exercise primary supervision over the administration of the trust,
and (b) one or more U.S. persons have the authority to control all
substantial decisions of the trust.

This discussion is based on current law and is for general information
only. This discussion does not address aspects of U.S. federal taxation other
than income and estate taxation and does not address all aspects of income and
estate taxation, nor does it consider any specific facts or circumstances that
may apply to a particular Non-U.S. Holder (including certain U.S. expatriates).
ACCORDINGLY, PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS
REGARDING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. INCOME AND OTHER TAX
CONSEQUENCES OF HOLDING AND DISPOSING OF SHARES OF OUR COMMON STOCK.

An individual may, subject to certain exceptions, be deemed to be a
resident alien (as opposed to a non-resident alien) by virtue of being present
in the United States for at least 31 days in the calendar year and for an
aggregate of at least 183 days during a three year period ending in the current
calendar year (counting for such purposes all of the days present in the
current year, one-third of the days present in the immediately preceding year,
and one-sixth of the days present in the second preceding year). In addition to
the "substantial presence test" described in the immediately preceding
sentence, an alien may be treated as a resident alien if he (a) meets a lawful
permanent residence test (a so-called "green card" test) or (b) elects to be
treated as a U.S. resident and meets the "substantial presence test" in the
immediately following year. Resident aliens are subject to U.S. federal income
tax as if they were U.S. citizens.

Dividends

In general, dividends paid to a Non-U.S. Holder will be subject to U.S.
withholding tax at a 30% rate (or a lower rate prescribed by an applicable tax
treaty) unless the dividends are either (a) effectively connected with a trade
or business carried on by the Non-U.S. Holder within the United States, or (b)
if certain income tax treaties apply, attributable to a permanent establishment
in the United States maintained by the Non-U.S. Holder. Dividends effectively
connected with such a U.S. trade or business or attributable to such a U.S.
permanent establishment generally will not be subject to U.S. withholding tax
(if the Non-U.S. Holder files certain forms, including Internal Revenue Service
Form 4224, with the payor of the dividend) and generally will be subject to
U.S. federal income tax on a net income basis, in the same manner as if the
Non-U.S. Holder were a resident of the United States. A Non-U.S. Holder that is
a corporation may be subject to an additional branch profits tax at a rate of
30% (or such lower rate as may be specified by an applicable treaty) on the
repatriation from the United States of its "effectively connected earnings and
profits," subject to certain adjustments. To determine the applicability of a
tax treaty providing for a lower rate of withholding, dividends paid to an
address in a foreign country are presumed under current Treasury regulations to
be paid to a resident of that country absent knowledge to the contrary. Under
recently finalized Treasury regulations that will generally be effective for
distributions in taxable years after December 31, 1999, the "address rule"
described

63
<PAGE>

above will no longer apply. Instead, Non-U.S. Holders who wish to claim the
benefits of applicable tax treaties will be required to certify that they are
eligible for treaty benefits. These final Treasury regulations describe in
detail how particular Non-U.S. Holders, including partnerships or other
fiscally transparent entities, should state their eligibility for treaty
benefits. Non-U.S. Holders who wish to claim the benefits of applicable tax
treaties should consult their tax advisors concerning the applicability of
these rules to their particular circumstances. A Non-U.S. Holder that is
eligible for a reduced rate of U.S. withholding tax pursuant to a tax treaty
may obtain a refund of any excess amounts withheld by filing an appropriate
claim for refund with the Internal Revenue Service.

Sale of Our Common Stock

In general, a Non-U.S. Holder will not be subject to U.S. federal income
tax on any gain realized upon the disposition of that holder's shares of our
common stock unless:

. the gain either is (a) effectively connected with a trade or
business carried on by the Non-U.S. Holder within the United
States or (b) if certain tax treaties apply, is attributable to a
permanent establishment in the United States maintained by the
Non-U.S. Holder (and, in either case, the branch profits tax
discussed above may also apply if the Non-U.S. Holder is a
corporation);

. the Non-U.S. Holder is an individual who holds shares of our
common stock as a capital asset and is present in the United
States for 183 days more in the taxable year of disposition, and
either (a) that individual has a "tax home" (as defined for U.S.
federal income tax purposes) in the United States (unless the gain
from the disposition is attributable to an office or other fixed
place of business maintained by such Non-U.S. Holder in a foreign
country and such gain has been subject to a foreign income tax
equal to at least 10% of the gain derived from such disposition),
or (b) the gain is attributable to an office or other fixed place
of business maintained by that individual in the United States; or

. Advanstar is or has been a U.S. real property holding corporation
(a "USRPHC") for U.S. federal income tax purposes at any time
within the shorter of (a) the five-year period preceding the
disposition of our common stock and (b) that Non-U.S. Holder's
holding period.

If a Non-U.S. Holder who is an individual is subject to the rules
described in the first bullet point above, he or she will, unless an applicable
tax treaty provides otherwise, be taxed on the net gain derived from the sale
at regular graduated U.S. federal income tax rates. If an individual Non-U.S.
Holder falls under the second bullet point above, he or she will be subject to
a flat 30% tax on the gain derived from the sale. If a Non-U.S. Holder that is
a corporation falls under the first bullet point above, it will be taxed on the
net gain from the sale at regular graduated U.S. federal income tax rates and
may be subject to an additional branch profits tax at a rate of 30% (or such
lower rate as may be specified by an applicable tax treaty) on the repatriation
from the United States of its "effectively connected earnings and profits,"
subject to certain adjustments.

If Advanstar were or were to become a USRPHC at any time during this
period, gains realized upon a disposition of our common stock by a Non-U.S.
Holder who or which did not directly or indirectly own more than 5% of our
common stock during this period generally would not be subject to U.S. federal
income tax, provided that our common stock is regularly traded on an
established securities market. Advanstar is not, and does not anticipate
becoming, a USRPHC.

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<PAGE>

Estate Tax

Any shares of our common stock owned or treated as owned by an individual
who is not a citizen or resident (as defined for U.S. federal estate tax
purposes) of the United States at the time of death will be includable in the
individual's gross estate for U.S. federal estate tax purposes (unless an
applicable estate tax treaty provides otherwise), and therefore may be subject
to U.S. federal estate tax.

Backup Withholding, Information Reporting and Other Reporting Requirements

Advanstar must report annually to the Internal Revenue Service and to
each Non-U.S. Holder the amount of dividends paid to, and the tax withheld with
respect to, each Non-U.S. Holder. These reporting requirements apply regardless
of whether withholding was reduced or eliminated by an applicable tax treaty.
Copies of this information also may be made available under the provisions of a
specific treaty or agreement with the tax authorities in the country in which
the Non-U.S. Holder resides or is established.

U.S. backup withholding tax (which generally is imposed at the rate of
31% on certain payments to persons that fail to furnish the information
required under the U.S. information reporting requirements) and information
reporting requirements (other than those discussed above under "Dividends")
generally will not apply to dividends paid on our common stock to a Non-U.S.
Holder at an address outside the United States. Backup withholding and
information reporting generally will apply, however, to dividends paid on
shares of our common stock to a Non-U.S. Holder at an address in the United
States, if such holder fails to establish an exemption or to provide certain
other information to the payor. However, under recently finalized Treasury
regulations, dividend payments generally will be subject to information
reporting and backup withholding unless applicable certification requirements
are satisfied.

The payment of proceeds from the disposition of our common stock or
through a U.S. office of a broker will be subject to information reporting and
backup withholding unless the owner, under penalties of perjury, certifies,
among other things, its status as a Non-U.S. Holder or otherwise establishes an
exemption. The payment of proceeds from the disposition of our common stock to
or through a non-U.S. office of a non-U.S. broker generally will not be subject
to backup withholding and information reporting except as noted below. Unless
the broker has documentary evidence in its files that the owner of our common
stock is a Non-U.S. Holder (and has no actual knowledge to the contrary), the
non-U.S. broker will be subject to information reporting (but not backup
withholding) if those proceeds are paid to or through a non-U.S. office and
that broker is:

. a U.S. person,

. a "controlled foreign corporation" for U.S. federal income tax
purposes,

. a foreign person 50% or more of whose gross income from certain
periods is effectively connected with a U.S. trade or business or

. in the case of payments made after December 31, 1999, a foreign
partnership with certain connections to the United States, a U.S.
branch of a foreign bank or a foreign insurance company, as more
completely described in the recently finalized Treasury
regulations.

Backup withholding is not an additional tax. Any amounts withheld under
the backup withholding rules from a payment to a Non-U.S. Holder will be
refunded or credited against the Non-U.S. Holder's U.S. federal income tax
liability, if any, provided that the required information is furnished to the
Internal Revenue Service.

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<PAGE>

UNDERWRITING

We intend to offer our common stock in the United States and Canada
through a number of U.S. underwriters as well as outside the United States and
Canada through international managers. Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Bear, Stearns & Co. Inc. are acting as U.S. representatives
for each of the U.S. underwriters named below. Subject to the terms and
conditions set forth in a U.S. purchase agreement among us, the selling
stockholders and the U.S. underwriters, and currently with the sale of shares
of common stock to the international managers, we and the selling stockholders
have agreed to sell to the U.S. underwriters, and each of the U.S. underwriters
severally and not jointly has agreed to purchase from us and the selling
stockholders, the number of shares of common stock set forth opposite its name
below.

<TABLE>
<CAPTION>
Number
U.S. Underwriters of Shares
----------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................
Bear, Stearns & Co. Inc...................
Lehman Brothers Inc.......................
Morgan Stanley & Co. Incorporated.........
Salomon Smith Barney Inc..................
-----
Total................................
=====
</TABLE>

We and the selling stockholders have also entered into an international
purchase agreement with certain underwriters outside the United States, which
collectively we call the international managers, for whom Merrill Lynch
International and Bear, Stearns International Limited are acting as lead
managers. Subject to the terms and conditions set forth in the international
purchase agreement, and concurrently with the sale of shares of common stock
to the U.S. underwriters pursuant to the U.S. purchase agreement, we and the
selling stockholders have agreed to sell to the international managers, and the
international managers have severally agreed to purchase from the selling
stockholders and us, an aggregate of shares of common stock. The initial
public offering price per share of common stock and the underwriting discount
per share of common stock are identical under the U.S. purchase agreement and
the international purchase agreement.

In the U.S. purchase agreement and the international purchase agreement,
the several U.S. underwriters and the several international managers,
collectively, the underwriters, have agreed, subject to the terms and
conditions set forth in the respective purchase agreements, to purchase all of
the shares of common stock being sold pursuant to each such purchase agreement
if any of the shares of common stock being sold pursuant to each such purchase
agreement are purchased. Under certain circumstances, the commitments of non-
defaulting U.S. underwriters or international managers (as the case may be) may
be increased. The purchase of common stock by the U.S. underwriters is
conditioned upon the purchase of common stock by the international managers and
vice versa.

The U.S. representatives have advised the selling stockholders and us
that the U.S. underwriters propose initially to offer the shares of our common
stock to the public at the initial public offering price set forth on the cover
page of this prospectus, and to certain dealers at such price less a concession
not in excess of $ per share of common stock. The U.S. underwriters may
allow, and such dealers may reallow, a discount not in excess of $ per share
of our common stock on sales to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.

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<PAGE>

The following table shows the per share and total underwriting discounts
to be paid by us and the selling stockholders to the U.S. underwriters and the
international managers and the proceeds before expenses to us and the selling
stockholders. This information is presented assuming either no exercise or full
exercise by the underwriters of the overallotment option.

<TABLE>
<CAPTION>
Per Without With
share option option
----- ------- ------
<S> <C> <C> <C>
Public Offering Price......................................
Underwriting Discount......................................
Proceeds, before expenses, to Advanstar....................
Proceeds to Selling Stockholders...........................
</TABLE>

We will not receive any of the proceeds from the sale of shares of our
common stock by the selling stockholders. The expenses of the offerings are
estimated at $ and are payable by us.

The selling stockholders have granted an option to the U.S. underwriters,
exercisable for 30 days after the date of this prospectus, to purchase up to an
aggregate of additional shares of our common stock at the initial public
offering price set forth on the cover page of this prospectus, less the
underwriting discount. The U.S. underwriters may exercise this option solely to
cover over-allotments, if any, made on the sale of common stock offered hereby.
To the extent that the U.S. underwriters exercise this option, each U.S.
underwriter will be obligated, subject to certain conditions, to purchase a
number of additional shares of common stock proportionate to such U.S.
underwriter's initial amount reflected in the foregoing table. The selling
stockholders have also granted an option to the international managers,
exercisable for 30 days after the date of this prospectus, to purchase up to an
aggregate of additional shares of our common stock to cover over-
allotments, if any, on terms similar to those granted to the U.S. underwriters.

At our request, the underwriters have reserved for sale, at the initial
public offering price, up to of the shares of our common stock offered
hereby to be sold to certain of our employees and certain other persons. The
number of shares of common stock available for sale to the general public will
be reduced to the extent such persons purchase such reserved shares. Any
reserved shares which are not orally confirmed for purchase within one day of
the pricing of the offerings will be offered by the underwriters to the general
public on the same terms as the other shares offered hereby.

We, our executive officers and directors and substantially all of our
existing securityholders have agreed not to directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of Advanstar common
stock or any securities convertible into or exchangeable or exercisable for
Advanstar common stock, whether now owned or hereafter acquired by the person
executing the agreement or with respect to which the person executing the
agreement thereafter acquires the power of disposition, or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of
Advanstar common stock, whether any such swap or transaction is to be settled
by delivery of common stock or other securities, in cash or otherwise, without
the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated
for a period of 180 days after the date of the U.S. purchase agreement.

The U.S. underwriters and the international managers have entered into an
intersyndicate agreement that provides for the coordination of their
activities. Pursuant to the intersyndicate agreement, the U.S. underwriters and
the international managers are permitted to sell shares of our common stock to
each other for purposes of resale at the initial public offering price, less an
amount not greater than the selling concession. Under the terms of the
intersyndicate agreement, the U.S. underwriters and any dealer to whom they
sell shares of common stock will not offer to sell or resell shares of common
stock to persons who are non-U.S. or non-Canadian persons or to persons they
believe intend to resell to persons who are non-U.S. or non-Canadian

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<PAGE>

persons, and the international managers and any dealer to whom they sell shares
of common stock will not offer to sell or resell shares of common stock to U.S.
or Canadian persons or to persons they believe intend to resell to U.S. or
Canadian persons, except in the case of transactions pursuant to the
intersyndicate agreement.

Prior to the offerings, there has been no public market for our common
stock. Consequently, the initial public offering price for the shares of common
stock included in the offering has been determined by negotiations between us
and the U.S. representatives. Among the factors considered in determining such
price were the history of and prospects for our business and the industry in
which we compete, an assessment of our management and the present state of our
development, our past and present revenues and earnings, the prospects for
growth of our revenues and earnings, the current state of the economy in the
United States, the current level of economic activity in the industry in which
we compete and in related or comparable industries, and currently prevailing
conditions in the securities markets, including current market valuations of
publicly traded companies which are comparable to us. There can be no assurance
that an active trading market will develop for our common stock or that our
common stock will trade in the public market subsequent to the offerings at or
above the initial public offering price.

We intend to apply for a listing of the common stock on the New York
Stock Exchange under the symbol " ." To meet the requirements for listing of
our common stock on that exchange, the U.S. underwriters and the international
managers have undertaken to sell lots of 100 or more shares to a minimum of
2,000 beneficial owners.

We and the selling stockholders have agreed to indemnify the U.S.
underwriters and international managers against certain liabilities, including
liabilities under the Securities Act, or to contribute to payments the U.S.
underwriters or international managers may be required to make in respect
thereof.

Until the distribution of common stock is completed, certain rules of the
Securities and Exchange Commission may limit the ability of the U.S.
representatives and lead managers to bid for and purchase shares of common
stock. As an exception to these rules, the U.S. representatives are permitted
to engage in certain transactions that stabilize the price of the common stock.
Such transactions consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of the common stock.

If the U.S. underwriters or the international managers create a short
position in the stock in connection with the offerings (i.e., if they sell more
shares of common stock than are set forth on the cover page of this
prospectus), the U.S. representatives may reduce the short position by
purchasing shares in the open market. The U.S. representatives may also elect
to reduce any short position through the exercise of all or part of the over-
allotment option described above.

The U.S. representatives may also impose a penalty bid on certain U.S.
underwriters and selling group members. This means that if the U.S.
representatives purchase shares in the open market to reduce the U.S.
underwriters' short position or to stabilize the price of the common stock,
they may reclaim the amount of the selling concession from the U.S.
underwriters and selling group members who sold those shares as part of the
offering.

In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid may also have an effect on the price of the common stock to the extent that
it discourages resales of the shares.

Neither we nor any of the selling stockholders nor any of the U.S.
underwriters makes any representation or prediction as to the direction or
magnitude of any effect that the transactions described above may have on the
price of our common stock. In addition, neither we nor any of the selling
stockholders nor any

68
<PAGE>

of the underwriters makes any representation that the U.S. representatives will
engage in such transactions or that such transactions, once commenced, will not
be discontinued without notice.

Affiliates of certain underwriters are lenders under our credit facility.
Certain of the U.S. underwriters have from time to time provided investment
banking financial advisory services to us and our affiliates, for which they
have received customary compensation, and may continue to do so in the future.

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<PAGE>

LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for
Advanstar by Testa, Hurwitz & Thibeault, LLP, Boston, Massachusetts. Certain
legal matters will be passed upon for the underwriters by Cahill Gordon &
Reindel (a partnership including a professional corporation), New York, New
York.

EXPERTS

The audited financial statements included in this prospectus and
elsewhere in the Registration Statement, to the extent and for the periods
indicated in their reports, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.

The consolidated balance sheets of MAGIC as of May 31, 1996 and 1997 and
the consolidated statements of income, stockholders' equity and cash flows for
each of the years in the three year period ended May 31, 1997 included in this
prospectus have been audited by PricewaterhouseCoopers LLP, independent
accountants, as indicated in their reports thereon, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing.

The financial statements of Universal Media, Inc., as of December 31,
1997 and for the year then ended, included in this prospectus and elsewhere in
the Registration Statement, have been audited by Mahoney Cohen & Company, CPA,
P.C., independent certified public accountants, as indicated in their report
with respect thereto and are included herein in reliance upon the authority of
said firm as experts in accounting and auditing in giving said report.

ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the
Securities Act with respect to the common stock. This prospectus does not
contain all of the information contained in the registration statement, and the
exhibits and schedules to the registration statement. For further information
with respect to us and our common stock, we refer you to the registration
statement, and the exhibits and schedules filed as part of the registration
statement. Statements in this prospectus concerning the contents of any
contract or any other document are not necessarily complete. If a contract or
document has been filed as an exhibit to the registration statement, we refer
you to that exhibit. Each statement in this prospectus relating to a contract
or document filed as an exhibit to the registration statement is qualified by
the filed exhibits.

In addition, we file reports, proxy statements and other information with
the SEC. You may read and copy any document we file, including the registration
statement, at the SEC's public reference rooms in Washington, D.C., New York,
New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public on the SEC's website at http://www.sec.gov.

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<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
ADVANSTAR, INC. AND SUBSIDIARIES (AND PREDECESSOR)
<S> <C>
Report of Independent Public Accountants.................................. F-2
Consolidated Balance Sheets as of December 31, 1997 and 1998.............. F-3
Consolidated Statements of Operations for the five months ended May 31,
1996, seven months ended December 31, 1996 and years ended December 31,
1997 and 1998............................................................ F-4
Consolidated Statements of Stockholder's Equity for the five months ended
May 31, 1996, seven month ended December 31, 1996 and years ended
December 31, 1997 and 1998............................................... F-5
Consolidated Statements of Cash Flows for the year ended five months ended
May 31, 1996, seven months ended December 31, 1996 and years ended
December 31, 1997 and 1998............................................... F-6
Notes to Consolidated Financial Statements................................ F-7
MEN'S APPAREL GUILD IN CALIFORNIA, INC.
Report of Independent Public Accountants.................................. F-22
Report of Independent Accountants......................................... F-23
Consolidated Balance Sheets as of May 31, 1996 and 1997 and February 28,
1998..................................................................... F-24
Consolidated Statements of Income for the fiscal years ended May 31, 1995,
1996 and 1997 and the nine months ended February 28, 1998................ F-25
Consolidated Statements of Cash Flows for the fiscal years ended May 31,
1995, 1996 and 1997 and the nine months ended February 28, 1998.......... F-26
Consolidated Statements of Shareholders' Equity for the fiscal years ended
May 31, 1995, 1996 and 1997 and the nine months ended February 28, 1998.. F-27
Notes to Consolidated Financial Statements................................ F-28
UNIVERSAL MEDIA, INC.
Report of Independent Auditors............................................ F-34
Balance Sheet as of December 31, 1997..................................... F-35
Statement of Operations for the year ended December 31, 1997.............. F-36
Statement of Stockholder's Deficiency for the year ended December 31,
1997..................................................................... F-37
Statement of Cash Flows for the year ended December 31, 1997.............. F-38
Notes to Financial Statements............................................. F-39
Condensed Balance Sheet as of June 30, 1998 (unaudited)................... F-44
Condensed Statement of Income for the six month periods ended June 30,
1997 and 1998 (unaudited)................................................ F-45
Condensed Statement of Cash Flows for the six month periods ended June 30,
1997 and 1998 (unaudited)................................................ F-46
Notes to Condensed Financial Statements (unaudited)....................... F-47
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of Advanstar, Inc.:

We have audited the accompanying consolidated balance sheets as of
December 31, 1997 and 1998 and the consolidated statements of operations,
stockholder's equity and cash flows of Advanstar, Inc. (formerly Advanstar
Holdings, Inc.) (a Delaware corporation) and subsidiaries and its predecessor
for the five-month period ended May 31, 1996, the seven-month period ended
December 31, 1996, and the years ended December 31, 1997 and 1998. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Advanstar,
Inc. and subsidiaries and its predecessor as of December 31, 1997 and 1998 and
the results of their operations and their cash flows for the five-month period
ended May 31, 1996 and the seven-month period ended December 31, 1996, and the
years ended December 31, 1997 and 1998, in conformity with generally accepted
accounting principles.

Arthur Andersen LLP

Minneapolis, Minnesota,
February 5, 1999

F-2
<PAGE>

ADVANSTAR, INC.

CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)

<TABLE>
<CAPTION>
December 31,
------------------
1997 1998
-------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents................................ $ 7,024 $ 14,016
Accounts receivable, net of allowance of $553 and $574 at
December 31, 1997 and 1998, respectively................ 18,819 27,976
Prepaid expenses......................................... 9,607 14,784
Other.................................................... 2,256 2,097
-------- --------
Total current assets................................... 37,706 58,873
-------- --------
PROPERTY, PLANT AND EQUIPMENT
Land and improvements.................................... 2,514 2,526
Buildings................................................ 5,041 5,110
Furniture, machinery and equipment....................... 9,229 13,706
Leasehold improvements................................... 517 973
-------- --------
17,301 22,315
Accumulated depreciation and amortization................ (5,155) (8,190)
-------- --------
Net property, plant and equipment...................... 12,146 14,125
-------- --------
INTANGIBLE ASSETS, net
Goodwill................................................. 176,103 495,144
Other intangibles........................................ 72,542 92,084
-------- --------
Total intangible assets................................ 248,645 587,228
-------- --------
$298,497 $660,226
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt..................... $ 15,350 $ 8,253
Accounts payable......................................... 10,938 13,311
Accrued compensation..................................... 6,809 6,146
Income taxes payable..................................... 1,552 1,329
Other accrued liabilities................................ 2,312 11,660
Deferred revenue......................................... 21,105 45,643
-------- --------
Total current liabilities.............................. 58,066 86,342
-------- --------
LONG-TERM DEBT, net of current maturities.................. 148,873 418,615
OTHER LONG-TERM LIABILITIES................................ 1,824 3,227
MINORITY INTEREST.......................................... -- 17,282
COMMITMENTS AND CONTINGENCIES (Notes 4, 6 and 8)
STOCKHOLDER'S EQUITY
Common stock, $.01 par value; 20,000 shares authorized;
10,900 and 16,733 shares issued and outstanding at
December 31, 1997 and 1998, respectively................ 109 167
Capital in excess of par................................. 108,891 183,210
Accumulated deficit...................................... (19,309) (47,745)
Accumulated other comprehensive income (loss)............ 43 (872)
-------- --------
Total stockholder's equity............................. 89,734 134,760
-------- --------
$298,497 $660,226
======== ========
</TABLE>

The accompanying notes to financial statements
are an integral part of these consolidated statements.

F-3
<PAGE>

ADVANSTAR, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>

<CAPTION>
Predecessor
------------
Seven
Months Year Ended
Five Months Ended December 31,
Ended December 31, ------------------
May 31, 1996 1996 1997 1998
------------ ------------ -------- --------
<S> <C> <C> <C> <C>
Net revenue..................... $68,286 $ 82,720 $187,656 $259,825
------- -------- -------- --------
Operating expenses:
Cost of production............ 15,764 18,394 39,096 54,330
Selling, editorial and
circulation.................. 28,071 35,166 87,243 114,705
General and administrative.... 10,031 15,446 27,514 36,883
Amortization of goodwill and
other intangible assets...... 1,588 13,171 24,326 48,752
Depreciation.................. 1,423 1,882 2,964 2,579
------- -------- -------- --------
Total operating expenses.... 56,877 84,059 181,143 257,249
------- -------- -------- --------
Operating income (loss)......... 11,409 (1,339) 6,513 2,576
Other income (expense)
Interest expense, net......... (6,963) (7,511) (15,117) (27,862)
Other income (expense), net... 23 (488) 292 (1,926)
------- -------- -------- --------
Income (loss) before income
taxes and minority interest.... 4,469 (9,338) (8,312) (27,212)
Provision for income taxes...... 13 1,076 583 1,264
Minority interest in earnings of
subsidiary..................... -- -- -- 40
------- -------- -------- --------
Net income (loss)............... $ 4,456 $(10,414) $ (8,895) $(28,436)
======= ======== ======== ========
Earnings (loss) per share--basic
and diluted.................... $ 3.86 $ (1.07) $ (0.82) $ (1.92)
Weighted average shares
outstanding
Basic and diluted............. 1,154 9,700 10,884 14,826
</TABLE>

The accompanying notes to financial statements
are an integral part of these consolidated statements.

F-4
<PAGE>

ADVANSTAR, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
(Dollars in thousands)

<TABLE>
<CAPTION>
Accumulated
Common Capital in Other
----------------- Excess of Comprehensive Accumulated
Shares Amount Par Value Income Deficit Total
---------- ------ ---------- ------------- ----------- --------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1996
(Predecessor).......... 1,154,444 $ 11 $ 53,214 $ 105 $(181,633) $(128,304)
Comprehensive income:
Net Income........... -- -- -- -- 4,456
Translation
adjustment.......... -- -- -- (105) --
Total comprehensive
income.............. -- -- -- -- -- 4,351
---------- ----- -------- ------ --------- ---------
Balance, May 31, 1996
(Predecessor).......... 1,154,444 $ 11 $ 53,214 $ -- $(177,177) $(123,953)
========== ===== ======== ====== ========= =========
Balance, May 31, 1996
(Successor)............ 9,700,000 $ 97 $ 96,903 $ -- $ -- $ 97,000
Comprehensive income:
Net loss............. -- -- -- -- (10,414)
Translation
adjustment.......... -- -- -- 253 --
Total comprehensive
loss................ -- -- -- -- -- (10,161)
---------- ----- -------- ------ --------- ---------
Balance, December 31,
1996
(Successor)............ 9,700,000 97 96,903 253 (10,414) 86,839
Comprehensive income:
Net loss............. -- -- -- -- (8,895)
Translation
adjustment.......... -- -- -- (210) --
Total comprehensive
loss................ -- -- -- -- -- (9,105)
Issuance of common
stock................. 1,200,000 12 11,988 -- -- 12,000
---------- ----- -------- ------ --------- ---------
Balance, December 31,
1997
(Successor)............ 10,900,000 109 108,891 43 (19,309) 89,734
Comprehensive income:
Net loss............. -- -- -- -- (28,436)
Translation
adjustment.......... -- -- -- (915) --
Total comprehensive
loss................ -- -- -- -- -- (29,351)
Stock option
compensation.......... -- -- 3,397 -- -- 3,397
Issuance of common
stock................. 5,833,333 58 70,922 -- -- 70,980
---------- ----- -------- ------ --------- ---------
Balance, December 31,
1998................... 16,733,333 $ 167 $183,210 $ (872) $ (47,745) $ 134,760
========== ===== ======== ====== ========= =========
</TABLE>

The accompanying notes to financial statements
are an integral part of these consolidated statements.

F-5
<PAGE>

ADVANSTAR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)

<TABLE>
<CAPTION>
Year Ended
Predecessor Seven December 31,
------------ Months -----------------
Five Months Ended
Ended December 31,
May 31, 1996 1996 1997 1998
------------ ------------ ------- --------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss).............................................................. $4,456 $(10,414) $(8,895) $(28,436)
Adjustments to reconcile net income (loss) to net cash provided by operating
activities
Depreciation and amortization................................................. 3,019 15,120 26,371 39,158
Non-cash interest............................................................. 963 (4) 934 960
Asset impairment writedowns................................................... -- -- 1,155 12,665
Non-cash stock compensation................................................... -- -- -- 3,397
(Gain) loss on sales of assets and other...................................... (28) 8 (228) 1,968
Changes in operating assets and liabilities...................................
Accounts receivable, net..................................................... (422) (2,010) (2,098) (6,064)
Inventories.................................................................. 257 (45) (317) 657
Prepaid expenses............................................................. 2,055 (2,206) (2,001) (670)
Accounts payable and accrued liabilities..................................... (5,820) 6,169 (2,591) 7,338
Deferred revenue............................................................. (5,320) 5,745 290 3,674
Other........................................................................ (171) 253 (28) (1,994)
------ -------- ------- --------
Net cash provided by (used in) operating activities......................... (1,011) 12,616 12,592 32,653
------ -------- ------- --------
INVESTING ACTIVITIES
Additions to property, plant and equipment..................................... (365) (780) (2,260) (4,154)
Change in notes receivable..................................................... 34 235 (235) (124)
Acquisition of publications and trade shows, net............................... -- (18,379) (31,871) (358,315)
Proceeds from sale of publishing and other assets.............................. 57 -- 1,043 4,332
------ -------- ------- --------
Net cash used in investing activities....................................... (274) (18,924) (33,323) (358,261)
------ -------- ------- --------
FINANCING ACTIVITIES
Acquisition-related financing transactions
Redemption of common stock, options and warrants.............................. -- (57,002) -- --
Repayment of long-term debt................................................... -- (171,162) -- --
Repayment of revolving credit loan............................................ -- (6,898) -- --
Proceeds from capital contributions........................................... -- 97,000 -- --
Proceeds from long-term debt.................................................. -- 140,000 -- --
Proceeds from revolving credit loan........................................... -- 4,000 -- --
Transaction costs and loan origination fees................................... -- (5,699) -- --
Net proceeds from (payments on) revolving credit loan.......................... 4,332 13,000 (15,000) 27,000
Proceeds from long-term debt................................................... 245 -- 40,000 399,613
Payments of long-term debt..................................................... (2,500) (6,000) (11,776) (163,993)
Proceeds from sale of common stock, capital contributions and other............ 150 -- 12,000 70,980
Dividends paid to minority interest holders.................................... -- -- -- (1,000)
Purchase of interest rate cap agreements and origination/underwriters fees..... -- (1,295) -- --
------ -------- ------- --------
Net cash provided by financing activities................................... 2,227 5,944 25,224 332,600
------ -------- ------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............................ 942 (364) 4,493 6,992
CASH AND CASH EQUIVALENTS, beginning of period.................................. 1,953 2,895 2,531 7,024
------ -------- ------- --------
CASH AND CASH EQUIVALENTS, end of period........................................ $2,895 $ 2,531 $ 7,024 $ 14,016
- --------------------------------------------------
====== ======== ======= ========
</TABLE>

The accompanying notes to financial statements are an integral part of these
consolidated statements.

F-6
<PAGE>

ADVANSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Business

The accompanying consolidated financial statements include the accounts
of Advanstar, Inc., formerly Advanstar Holdings, Inc. (Holdings), and its
wholly-owned subsidiary Advanstar Communications Inc. (Communications) and
Communications' majority-owned subsidiaries (collectively, Advanstar or the
Company). All intercompany accounts and transactions between consolidated
entities have been eliminated.

The Company operates and manages trade shows and conferences; publishes
controlled circulation trade and professional periodicals; and markets a broad
range of marketing, direct mail and database products and services.

On May 31, 1996, Holdings acquired for cash all of the outstanding stock
of Communications. Holdings was established expressly for the purpose of
effecting the acquisition of Communications (the HFCP III Acquisition). The
aggregate purchase price for Communications was approximately $267.0 million,
consisting of $97.0 million cash equity, $144.0 million debt and approximately
$26.0 million of assumed liabilities and transaction costs.

Due to the effects of the HFCP III Acquisition on the recorded bases of
goodwill, intangibles, property and shareholders' equity, as discussed below
and in Note 5, the financial statements prior to and subsequent to the HFCP III
Acquisition are not comparable. Periods prior to June 1, 1996 represent the
accounts of the Predecessor.

On June 10, 1998, Holdings merged into its parent holding company, AHI
Holdings Corp. (AHI). AHI had no operations independent of Holdings. In
connection with the merger, AHI Holdings Corp. changed its name to Advanstar
Holdings, Inc. All references to the number of common shares and per share
amounts have been adjusted to reflect the capitalization of the merged entity.
On March 17, 1999, Advanstar Holdings, Inc. changed its name to Advanstar, Inc.

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents

Cash and cash equivalents include cash on deposit and highly liquid
investments with original maturities of three months or less. Cash equivalents
are stated at cost, which approximates their fair market value. The effect of
foreign currency translation on cash held by foreign operations is immaterial.

Prepaid Expenses and Other Current Assets

Prepaid expenses consist primarily of prepaid trade show and conference
expenses, prepaid publication production costs and miscellaneous deposits.
Event and publication expenses are charged to operations at the time of the
occurrence of the related event and at the time of publication issuance. Other
current assets consist of paper inventories and notes receivable.

Property, Plant and Equipment

Property, plant and equipment additions are recorded at cost. For
financial reporting purposes, depreciation is provided on a straight-line basis
over the following estimated useful lives:

F-7
<PAGE>

ADVANSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Estimated Useful Lives
----------------------
<S> <C>
Land improvements.................................... 10-15 years
Buildings............................................ 20-40 years
Furniture, machinery and equipment................... 3-10 years
Leasehold improvements............................... Life of lease
</TABLE>

For tax reporting purposes, certain assets have different estimated useful
lives.

Goodwill

All acquisitions have been accounted for using the purchase method of
accounting, with the purchase price in excess of the fair values of specific
identifiable tangible and intangible assets acquired allocated to goodwill.

Goodwill, which is being amortized on a straight-line basis over an
average of 23 years, is recorded in the accompanying consolidated balance sheet
net of accumulated amortization of $11.9 million and $29.4 million at December
31, 1997 and 1998, respectively.

Intangible Assets

Intangible assets related to the HFCP III Acquisition consist primarily
of advertiser, paid subscriber and trade show exhibitor lists, computer
software, the value assigned to Advanstar's assembled workforce and fulfillment
agreements. Such intangibles are being amortized on a straight-line basis over
1 to 20 years. Intangible assets associated with acquired businesses consist
primarily of identifiable intangibles and are being amortized on a straight-
line basis over one to eight years. Accumulated amortization was $25.6 million
and $41.1 million at December 31, 1997 and 1998, respectively.

Impairment of Long-Lived Assets

The Company evaluates the carrying value of long-lived assets, including
identifiable intangibles and goodwill, for impairment when events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. If impairment indicators are present and the estimated future non-
discounted cash flows are less than the carrying value of the assets and any
related goodwill, the carrying value is reduced to the estimated fair value as
measured by the discounted cash flows.

During 1998, the Company identified certain properties which, due to
changes in market conditions and portfolio management direction, the Company
elected to discontinue. As a result, a total non-cash charge of $12.7 million
was recorded to write down the carrying value of the related operating assets
and intangibles, and is included in amortization of goodwill and other
intangible assets on the consolidated statements of operations.

Revenue Recognition

Trade show and conference revenue is recognized in the accounting period
in which the event is conducted. Subscription revenue is recognized on a pro
rata basis as publications are issued to fulfill the subscription obligations.
Advertising revenue is recognized as the publication with the respective
advertisement is published. Deferred revenue is recorded when cash is received
in advance of providing the related service.

F-8
<PAGE>

ADVANSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred revenue consisted of the following at December 31:

<TABLE>
<CAPTION>
1997 1998
------- -------
(In thousands)
<S> <C> <C>
Deferred trade show and conference revenue................. $16,529 $41,468
Deferred advertising and subscription revenue.............. 4,576 4,175
------- -------
Total deferred revenue..................................... $21,105 $45,643
======= =======
</TABLE>

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Ultimate results could differ from these estimates. On an
ongoing basis, management reviews its estimates, including those affecting
doubtful accounts, valuation of goodwill and intangible assets, compensation
related to stock options, and income taxes. Changes in facts and circumstances
may result in revised estimates.

Foreign Currency Translation

The Company accounts for translation investments in foreign entities in
accordance with Statement of Financial Accounting Standards (SFAS) No. 52,
"Foreign Currency Translation."

Stock-Based Compensation

The Company accounts for stock-based compensation using the intrinsic
value method prescribed in Accounting Principles Board Opinion (APB) No. 25,
"Accounting for Stock Issued to Employees," and related Interpretations.
Accordingly, due to the variable features of option grants under the Company's
stock option plan, the Company measures compensation cost as the difference
between the exercise price of the options and the fair value of the shares
under option at the end of each period, and recognizes compensation expense to
provide for such difference.

Comprehensive Income

Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." This statement established rules for the reporting of
comprehensive income and its components. Comprehensive income reflects the
change in equity of a business enterprise during a period from transactions and
other events and circumstances from non-owner sources. Comprehensive income
consists of net income and foreign currency translation adjustments and is
presented in the consolidated statement of stockholder's equity. The adoption
of SFAS No. 130 had no impact on total shareholder's equity. Prior year
financial statements have been reclassified to conform to the SFAS No. 130
requirements.

Segments

Effective January 1, 1998, the Company adopted SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information". The Statement
establishes standards for the reporting of information about operating segments
in annual financials statements and requires that those businesses report
selected information about operating segments in interim financial reports.
SFAS No. 131 also establishes standards for

F-9
<PAGE>

ADVANSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

related disclosures about products and services, geographic areas, and major
customers. The adoption of SFAS No. 131 did not affect results of operations or
financial position, but did require additional disclosure.

Reclassifications

Certain reclassifications have been made to amounts reported in prior
years in order to conform to the current year presentation

Recently Issued Accounting Standards

SFAS No. 133 "Accounting for Derivative Instruments and Hedging
Activities" is effective for fiscal years beginning after June 15, 1999.
Because of the Company's minimal use of derivatives, management does not
anticipate that the adoption of the new Statement will have a significant
effect on earnings or the financial position of the Company.

In March 1998, the AICPA issued Statement of Position (SOP) 98-1,
"Accounting For the Costs of Computer Software Developed For or Obtained For
Internal use." The SOP, which was adopted as of the beginning of 1998, requires
capitalization of certain costs incurred in connection with developing or
obtaining internal use software. In the prior year, the Company expensed such
costs as incurred. The effect of adopting the SOP was not material to the
Company's 1998 net income.

3. Acquisitions

On April 30, 1998, the Company acquired Men's Apparel Guild in
California, Inc. (MAGIC), which operates apparel trade shows (the MAGIC
Acquisition). The acquisition was accounted for as a purchase. The purchase
price was approximately $234.3 million in cash and assumed liabilities.
Concurrent with the MAGIC Acquisition, the Company renegotiated its credit
agreement (the Original Credit Facility) to provide additional borrowing
capacity (as so amended, the First Amended Credit Facility) and issued $150.0
million of senior subordinated notes (Notes). The Company also received an
additional equity contribution of approximately $71.0 million.

On August 17, 1998, the Company acquired certain travel-related
publication and trade show assets of Universal Media Inc. (the Travel Agent
Acquisition), including Travel Agent (collectively, Travel Agent). The
acquisition was accounted for as a purchase. The purchase price was
approximately $68.0 million in cash plus approximately $1.0 million in assumed
liabilities. Concurrent with the Travel Agent Acquisition, the Company
undertook an additional amendment to its credit agreement to further increase
its borrowing capacity thereunder by $40.0 million (as so amended, the Second
Amended Credit Facility, and together with the Original Credit Facility and the
First Amended Credit Facility, the Amended Credit Facility), and financed the
balance of the cash purchase price with its available cash and revolving credit
facility.

From January 1, 1998 through December 31, 1998, the Company completed 11
other acquisitions of trade shows, conferences and publishing properties, with
a cumulative purchase price totaling approximately $89.1 million. Certain
entities acquired in 1998 have minority ownership interests.

F-10
<PAGE>

ADVANSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following are unaudited pro forma operating results as if the
acquisitions had taken place at January 1, 1997 (in thousands, except per share
amounts):

<TABLE>
<CAPTION>
Year ended December
31
--------------------
1997 1998
--------- ---------
<S> <C> <C>
Total revenues...................................... $ 270,039 $ 306,666
========= =========
Operating income.................................... $ 14,242 $ 15,140
========= =========
Net loss............................................ $ (17,314) $ (23,679)
========= =========
Loss per share--basic and diluted................... $ (1.59) $ (1.60)
========= =========
</TABLE>

The unaudited pro forma financial information is provided for
informational purposes only. It is based on historical information and does not
purport to be indicative of the results that would have occurred had the
acquisitions been made at January 1, 1998, or of future results.

During 1996 and 1997, the Company purchased certain trade shows and
publishing properties for an aggregate purchase price of $18.3 million and
$39.7 million, respectively. The cost of these acquired entities in excess of
the fair market value of net assets acquired has been recorded as goodwill and
intangibles. Due to the timing of these acquisitions the incremental pro forma
affect on the results of operations was not material.

4. Debt

Amended Credit Facility

In August 1998, the Company amended its credit facility. The Amended
Credit Facility consists of three components: Tranche A, a 5 1/2-year term loan
in an aggregate principal amount equal to $100.0 million; Tranche B, a 7-year
term loan in an aggregate principal amount equal to $150.0 million; and a 5
1/2-year revolving credit facility in the maximum amount of $60.0 million. In
addition, the Company has purchased interest rate cap agreements for a notional
amount of $75.0 million to fix its interest rate exposure at 8.0-8.5%.

The obligations of the Company under the Amended Credit Facility are
guaranteed by the domestic wholly-owned subsidiaries of the Company and are
collateralized by substantially all tangible and intangible assets of the
Company and pledges of the Company and substantially all of its subsidiaries'
capital stock.

The Amended Credit Facility requires the Company to apply certain amounts
to prepay the term loans, including (i) proceeds from certain issuances of
equity or indebtedness by the Company; (ii) the net cash proceeds of certain
sales or other dispositions by the Company of any assets; and (iii) 50% of
excess cash flow (as defined) for each fiscal year starting on January 1, 2000.
The Company will also have the right to optionally prepay the loans, without
premium, in whole or in part. Amounts applied as prepayments of the revolving
credit facility may be reborrowed; amounts prepaid in respect of the term loans
may not.

The Amended Credit Facility contains certain restrictive financial
covenants, including a minimum fixed charge coverage ratio and a maximum
leverage ratio. The Company was in compliance with all covenants as of December
31, 1998.

Senior Subordinated Notes

The senior subordinated notes (Notes) issued in conjunction with the
MAGIC acquisition are unsecured obligations of Communications, limited to
$150.0 million aggregate principal amount, and will

F-11
<PAGE>

ADVANSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

mature on May 1, 2008. Each Note bears interest at 9 1/4%, payable
semiannually. The Notes are redeemable at Communications' option after May 1,
2003 through April 30, 2006 at specified premiums, and at par thereafter. A
portion of the Notes may be redeemed at a premium prior to May 1, 2001 with
proceeds of certain equity offerings made by the Company, and the Notes may
also be redeemed at a premium prior to May 1, 2003 upon a qualifying change of
control of Advanstar.

Restrictive financial covenants under the Notes include a minimum fixed
charge coverage ratio and limitations on certain asset dispositions and
dividend, distribution, and other restricted payments. The Company was in
compliance with all covenants as of December 31, 1998.

Long-term debt consists of the following:

<TABLE>
<CAPTION>
At December 31
------------------
1997 1998
-------- --------
(in thousands)
<S> <C> <C>
Tranche A term loan, interest at LIBOR plus 2.25%,
7.88% at
December 31, 1998, due October 31, 2003.............. $ 51,500 $ 98,529
Tranche A2 term loan, interest at LIBOR plus 2.75%.... 38,850 --
Tranche B term loan, interest at LIBOR plus 2.50%,
8.13% at
December 31, 1998, due April 30, 2005................ 71,873 149,700
Revolving credit loan, interest at LIBOR plus 2.25%,
7.88% at
December 31, 1998, due October 31, 2003.............. 2,000 29,000
Senior subordinated notes at 9.25%, due May 31, 2008,
Net of discount....................................... -- 149,639
-------- --------
164,223 426,868
Less--Current maturities.............................. (15,350) (8,253)
-------- --------
$148,873 $418,615
======== ========
</TABLE>

Based on the borrowing rates currently available to the Company for bank
loans with similar terms and average maturities, the fair value of long-term
debt was substantially the same as its carrying value at December 31, 1997 and
1998. Cash paid during 1996, 1997 and 1998 for interest was $16.2 million,
$15.4 million and $25.3 million, respectively.

Annual maturities of long-term debt for the next five years are as
follows (in thousands):

5. Stockholder's Equity

Stock Option Plan

In November 1996, the Company implemented a nonqualified stock option
plan (the Plan) in which certain members of the Company's management are
eligible to participate. The term of the options runs for ten years, with
options vesting 20% in each of the first five years of the option term. The
exercise price for these

F-12
<PAGE>

ADVANSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

options increases at a 10% annually compounded rate. Options become immediately
exercisable upon a change of control of the Company, or at the discretion of
the Company's Board of Directors. If the Company does not complete an initial
public offering by January 1, 2001, option holders may agree with the Company
to sell the shares under option to the Company at a fair market value price to
be determined by the Board of Directors. However, the Company is not obligated
to agree to any such repurchase under the terms of the Plan. In addition, the
Company has certain repurchase rights under the Plan. Under the Plan, up to
1,500,000 options may be granted at the discretion of the the Company's Board
of Directors.

The Company accounts for the options using the intrinsic value method
outlined in APB Opinion No. 25, "Acounting for Stock Issued to Employees."
Accordingly, and because of the variable features of the Plan, the Company
measures compensation cost as the difference between the exercise price of the
options and the fair value of the shares under option at the end of each
period, and recognizes compensation expense to provide for such difference. No
compensation expense was recognized during 1996 or 1997 because the fair value
of Holdings' shares was less than the exercise price of the related options. As
of December 31, 1998, compensation expense of $3.4 million was recognized under
the Plan. The Company's net income (loss) on a pro forma basis would have been
unchanged from historical amounts for fiscal years 1996 and 1997. If the
Company had elected to recognize compensation cost based on the fair value of
the options granted as prescribed by SFAS No. 123, a net loss on a pro forma
basis would have been increased to $28.5 million or $1.93 loss per diluted
share for fiscal year 1998.

For purposes of computing compensation cost of stock options granted, the
fair value of each stock option grant was estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted-average
assumptions:

<TABLE>
<CAPTION>
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
Expected dividend yield......................... -- -- --
Expected stock price volatility................. 34.2% 32.4% 30.6%
Risk-free interest rate......................... 6.0% 5.8% 5.6%
Expected life of options........................ 5 years 5 years 5 years
</TABLE>

A summary of stock option activity under the Plan is as follows:

<TABLE>
<CAPTION>
Options Weighted Average
Outstanding Exercise Price
----------- ----------------
<S> <C> <C>
Outstanding at January 1, 1996................ -- --
Granted..................................... 623,700 $10.00
Exercised................................... -- --
Cancelled................................... -- --
Outstanding at December 31, 1996.............. 623,700 10.00
Granted..................................... 111,700 11.00
Exercised................................... -- --
Cancelled................................... -- --
Outstanding at December 31, 1997.............. 735,400 11.64
Granted..................................... 360,162 12.18
Exercised................................... -- --
Cancelled................................... (190,000) 11.73
Outstanding at December 31, 1998.............. 905,562 12.83
</TABLE>

F-13
<PAGE>

ADVANSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 1998, the outstanding stock options had a weighted-
average exercise price of $12.83 and a weighted-average remaining contractual
life of 8.7 years. 304,820 options were exercisable with a weighted-average
exercise price of $12.83. The weighted average fair value of grants during 1998
was $2.40 per option.

6. Postretirement and Other Employee Benefits

Postretirement Benefits

Prior to June 1, 1995, the Company maintained a plan whereby employees
retiring from the Company on or after attaining age 62 who had rendered at
least 20 years of service were entitled to postretirement medical coverage and
life insurance. On June 1, 1995, as permitted by the provisions of the plan,
the Company terminated the plan for all employees, except current retirees and
active employees who were at least 57 years of age and will have 20 years of
service upon reaching age 62. The accumulated postretirement benefit obligation
for the unfunded plan is not material.

401(k) Plan

The Company has an Employees' 401(k) Plan and Trust (the "Plan")
available to employees of the Company and its domestic subsidiaries. All
current and future domestic employees who have completed one year of service
and are at least 21 years of age are eligible to participate in the Plan. The
Company is required to make a matching contribution to the Plan and may, at its
discretion, make discretionary contributions to the Plan. Eligible employees
are vested 100% in their own contributions. Contributions made by the Company
vest in equal installments over five years. Total contribution expense was $0.4
million, $0.9 million and $1.0 million for the 7 months ended December 31,
1996, and the years ended December 31, 1997, 1998, respectively.

7. Income Taxes

The Company utilizes the liability method for calculating deferred income
taxes, and deferred tax assets and liabilities are determined based on the
estimated future tax effects of differences between the financial statement and
tax bases of assets and liabilities pursuant to the provisions of enacted tax
laws. Significant components of the Company's deferred tax assets were as
follows (in thousands):

<TABLE>
<CAPTION>
Year ended
December 31,
----------------
1997 1998
------- -------
(in thousands)
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards....................... $ 4,900 $ 8,510
Foreign tax credit carryforwards....................... 1,042 1,159
Charitable contribution carryover...................... 9 24
Amortization of intangible assets...................... 305 4,620
Postretirement benefits other than pension............. 467 307
Depreciation........................................... 572 508
Stock option compensation.............................. -- 1,290
Other, primarily accrued expenses...................... 823 666
------- -------
Gross deferred tax assets............................ 8,118 17,084
Deferred tax liabilities:
Prepaid expenses....................................... (1,736) (1,674)
------- -------
Valuation allowance...................................... (6,382) (15,410)
------- -------
Deferred income taxes.................................... $ -- $ --
======= =======
</TABLE>

F-14
<PAGE>

ADVANSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A valuation allowance has been provided because of the Company's history
of operating losses. Net operating loss carry-forwards total $22.4 million at
December 31, 1998, of which $1.2 million is subject to certain limitations. Net
operating loss carry-forwards expire through 2012. The foreign tax credit
carry-forwards substantially expire in 2001.

8. Commitments and Contingencies

Leases

The Company has long-term operating leases for office space and office
equipment. The leases generally require the Company to pay maintenance,
insurance, taxes and other expenses in addition to minimum annual rentals.
Building and equipment rent expense was $2.6, $3.0 and $3.4 million for 1996,
1997 and 1998, respectively. Future minimum lease commitments under operating
leases with initial terms of one year or more are as follows (in thousands):

<TABLE>
<S> <C>
1999............................................................... $ 4,490
2000............................................................... 3,674
2001............................................................... 2,845
2002............................................................... 2,281
2003............................................................... 1,710
Thereafter......................................................... 18,510
</TABLE>

Employment Agreements

Two senior executives of the Company entered into four-year employment
agreements with Holdings dated as of July 1, 1996. Pursuant to the agreements,
the executives are entitled to annual base salaries and annual bonuses based on
the Company's EBITDA for any year. The agreements also provide for severance
benefits equal to one year's base salary and benefits (and a pro rated bonus)
upon termination of employment by Holdings without "cause" or by the executive
for "good reason". The executives also entered into non-competition and
confidentiality agreements with the Company. The non-compete period is one year
after termination of employment unless employment is terminated by the Company
without cause or by the executive for good reason, in which case the non-
competition period is six months. During the non-competition period, the
executives may not hire any employee of the Company or solicit any trade show
or publishing business from a third party who has a relationship or contract
with the Company. Compensation expense for these executives is included in
general and administrative expense of the Company.

Litigation

The Company is a defendant in legal proceedings arising in the ordinary
course of business. Although the outcome of these proceedings cannot presently
be determined, in the opinion of management, disposition of these proceedings
will not have a material effect on the results of operations or financial
position of the Company.

9. Segments

The Company has three reportable segments: trade shows and conferences,
trade publications, and marketing services. The trade show and conference
segment allows exhibitors a cost effective means to showcase and sell products
and services while developing business relationships with many potential
customers

F-15
<PAGE>

ADVANSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

in a short time period. The Company's trade publications segment provides key
new product and educational information to readers and allows advertisers to
reach highly targeted and select business audiences. The marketing services
segment offers customers mailing lists from the Company's subscriber and
attendee databases; editorial and advertising reprints; direct mail postcards;
and classified, recruitment and industry directory advertising.

The Company evaluates performance and allocates resources based on gross
profit. The accounting policies of the reportable segments are the same as
those described in the summary of significant accounting policies. There are no
intersegment sales or transfers. Segment assets are primarily prepaid expenses
and accounts receivables.

F-16
<PAGE>

ADVANSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Trade Shows Corporate
Trade and Marketing and
Publications Conferences Services Other Totals
------------ ----------- --------- --------- -------
(in thousands)
<S> <C> <C> <C> <C> <C>
Seven months ended December 31, 1996
Revenues................... $60,636 $13,929 $7,929 $ 226 $82,720
Gross profit............... 19,649 4,954 4,331 226 29,160
Segment assets............. 18,827 3,055 1,625 253,666 277,173
------- ------- ------ -------- -------
Year ended December 31, 1997
Revenues................... 111,611 61,608 13,900 537 187,656
Gross profit............... 33,801 19,799 7,180 537 61,317
Segment assets............. 21,337 7,761 1,832 267,567 298,497
------- ------- ------ -------- -------
Year ended December 31, 1998
Revenues................... 130,442 113,066 15,647 670 259,825
Gross profit............... 37,715 44,528 8,102 445 90,790
Segment assets............. 30,119 10,962 2,254 616,891 660,226
------- ------- ------ -------- -------
</TABLE>

The reconciliation of total segment gross profit to consolidated pre-tax
income for the seven months ended December 31, 1996, and for the years ended
December 31, 1997 and 1998 are as follows:

<TABLE>
<CAPTION>
1996 1997 1998
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total segment gross profit....................... $ 29,160 $ 61,317 $ 90,790
General and administrative expense............... (15,446) (27,514) (36,883)
Depreciation and amortization.................... (15,053) (27,290) (51,331)
Other expense.................................... (7,999) (14,825) (29,748)
-------- -------- --------
Consolidated pre-tax loss........................ $ (9,338) $ (8,312) $(27,172)
======== ======== ========

Financial information relating to the Company's operations by geographic
area for the seven months ended December 31, 1996, and for the years ended
December 31, 1997 and 1998 was as follows:

Revenues

<CAPTION>
1996 1997 1998
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
United States.................................... $ 72,066 $164,197 $225,104
International.................................... 10,654 23,459 34,721
-------- -------- --------
$82,720 $187,656 $259,825
======== ======== ========

Revenues are primarily attributed to countries based on the location of
customers.

Long-Lived Assets

<CAPTION>
At December 31,
----------------------------
1996 1997 1998
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
United States.................................... $249,589 $257,057 $573,734
International.................................... 381 3,734 27,619
-------- -------- --------
$249,970 $260,791 $601,353
======== ======== ========
</TABLE>

F-17
<PAGE>

ADVANSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. Supplemental Guarantor Condensed Consolidating Financial Statements

Basis of presentation

The Notes are fully and unconditionally guaranteed on a senior
subordinated basis, jointly and severally, by Communications' wholly-owned
domestic subsidiaries and by Holdings. The subsidiary guarantors are Art
Expositions International, Inc.; MAGIC; Magic Kids, Inc.; Applied Business
TeleCommunications; and Expocon Management Associates, Inc. As of December 31,
1998, On Demand Marketing, Inc. and Technology Events Company, LLC, two former
guarantor subsidiaries, were merged with and into Communications. The condensed
consolidating financial statements of the guarantors are presented below and
should be read in connection with the Consolidated Financial Statements of the
Company. Separate financial statements of the guarantors are not presented
because the guarantors are jointly, severally and unconditionally liable under
the guarantees and the Company believes the condensed consolidating financial
statements presented are more meaningful in understanding the financial
position of the guarantors.

There are no significant restrictions on the ability of the Subsidiary
Guarantors to make distributions to the Company. Condensed consolidating
financial information has not been presented for 1996 and 1997 because the
Company had no non-guarantor subsidiaries in 1996 and 1997.

F-18
<PAGE>

ADVANSTAR, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
At December 31, 1998
(in thousands)

<TABLE>
<CAPTION>
Guarantor Non-Guarantor
Holdings Communications Magic MagicKids ABC Expocon Subsidiaries Subsidiaries Elimination
-------- -------------- -------- --------- ------- ------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents..... $ -- $ 8,270 $ (108) $ 4 $ 8 $ (372) $ (468) $ 6,214 $ --
Accounts
receivable,
net............. -- 22,620 597 -- 430 1,138 2,165 3,191 --
Prepaid
expenses........ -- 7,818 3,600 54 190 451 4,295 2,671 --
Intercompany
receivable
(payable)....... 124 (22,330) 31,811 3,493 (1,189) (2,181) 31,934 (9,604) (124)
Other........... -- 1,556 -- -- -- -- -- 541 --
-------- -------- -------- ------ ------- ------- -------- ------- ---------
Total current
assets.......... 124 17,934 35,900 3,551 (561) (964) 37,926 3,013 (124)
-------- -------- -------- ------ ------- ------- -------- ------- ---------
Property, plant
and equipment,
net.............. -- 12,173 396 10 84 513 1,003 949
Investments in
subsidiaries..... 134,760 298,689 -- -- -- -- -- -- (433,449)
Net intangible
assets, net...... -- 293,146 209,613 -- 19,009 11,492 240,114 53,968 --
-------- -------- -------- ------ ------- ------- -------- ------- ---------
$134,884 $621,942 $245,909 $3,561 $18,532 $11,041 $279,043 $57,930 $(433,573)
======== ======== ======== ====== ======= ======= ======== ======= =========
LIABILITIES AND
SHAREHOLDER'S
EQUITY
Current
liabilities:
Current portion
of long-term
debt............ $ -- $ 8,253 $ -- $ -- $ -- $ -- $ -- $ -- $ --
Accounts
payable......... 124 9,109 1,439 27 48 17 1,531 2,671 (124)
Deferred
revenue......... -- 17,672 16,713 805 2,189 1,911 21,618 6,353 --
Accrued
liabilities..... -- 13,024 2,854 182 641 96 3,773 2,338 --
-------- -------- -------- ------ ------- ------- -------- ------- ---------
Total current
liabilities..... 124 48,058 21,006 1,014 2,878 2,024 26,922 11,362 (124)
-------- -------- -------- ------ ------- ------- -------- ------- ---------
Long term debt,
net of current
maturities....... -- 418,615 -- -- -- -- -- -- --
Other long term
liabilities...... -- 3,227 -- -- -- -- -- -- --
Minority
interest......... -- 17,282 -- -- -- -- -- -- --
Shareholder
interest
Common stock.... 167 10 1 -- 2 1 4 332 (346)
Capital in
excess of par
value........... 183,210 183,367 220,627 1,430 15,739 9,593 247,389 44,924 (475,680)
Retained
earnings
(deficit)....... (47,745) (47,745) 4,275 1,117 (87) (577) 4,728 1,312 41,705
Translation
adjustment...... (872) (872) -- -- -- -- -- -- 872
-------- -------- -------- ------ ------- ------- -------- ------- ---------
Total
shareholders'
equity.......... 134,760 134,760 224,903 2,547 15,654 9,017 252,121 46,568 (433,449)
-------- -------- -------- ------ ------- ------- -------- ------- ---------
$134,884 $621,942 $245,909 $3,561 $18,532 $11,041 $279,043 $57,930 $(433,573)
======== ======== ======== ====== ======= ======= ======== ======= =========
<CAPTION>
Consolidated
Total
------------
<S> <C>
ASSETS
Current assets:
Cash and cash
equivalents..... $ 14,016
Accounts
receivable,
net............. 27,976
Prepaid
expenses........ 14,784
Intercompany
receivable
(payable)....... --
Other........... 2,097
------------
Total current
assets.......... 58,873
------------
Property, plant
and equipment,
net.............. 14,125
Investments in
subsidiaries..... --
Net intangible
assets, net...... 587,228
------------
$660,226
============
LIABILITIES AND
SHAREHOLDER'S
EQUITY
Current
liabilities:
Current portion
of long-term
debt............ $ 8,253
Accounts
payable......... 13,311
Deferred
revenue......... 45,643
Accrued
liabilities..... 19,135
------------
Total current
liabilities..... 86,342
------------
Long term debt,
net of current
maturities....... 418,615
Other long term
liabilities...... 3,227
Minority
interest......... 17,282
Shareholder
interest
Common stock.... 167
Capital in
excess of par
value........... 183,210
Retained
earnings
(deficit)....... (47,745)
Translation
adjustment...... (872)
------------
Total
shareholders'
equity.......... 134,760
------------
$660,226
============
</TABLE>

F-19
<PAGE>

ADVANSTAR, INC.

CONDENSED STATEMENTS OF OPERATIONS
Year ended December 31, 1998
(in thousands)

<TABLE>
<CAPTION>
Art Guarantor Non-Guarantor
Holdings Communications Expo Magic MagicKids ABC Expocon Subsidiaries Subsidiaries Elimination
-------- -------------- ---- ------- --------- ------ ------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenue...... $ -- $181,709 $-- $22,232 $1,999 $3,304 $8,165 $35,700 $42,416 $ --
Operating
expenses
Cost of sales
and selling,
editorial and
circulation.... -- 123,426 -- 8,162 852 2,395 5,672 17,081 28,528 --
General and
administrative.. -- 27,818 -- 1,520 27 346 865 2,758 6,307 --
Depreciation and
amortization... -- 38,713 -- 8,335 3 641 1,262 10,241 2,377 --
-------- -------- ---- ------- ------ ------ ------ ------- ------- -------
Total operating
expenses....... -- 189,957 -- 18,017 882 3,382 7,799 30,080 37,212 --
Operating income
(loss).......... -- (8,248) -- 4,215 1,117 (78) 366 5,620 5,204 --
Other income
(expense):
Interest income
(expense),
net............ -- (27,602) -- 60 -- -- 60 (320) --
Other income
(expense),
net............ -- 2,812 -- -- 4 (888) (884) (3,854) --
-------- -------- ---- ------- ------ ------ ------ ------- ------- -------
Income (loss)
before income
taxes........... -- (33,038) -- 4,275 1,117 (74) (522) 4,796 1,030 --
Provision for
income tax...... -- 288 -- -- -- 13 13 963 --
Minority interest
in earnings..... -- 40 -- -- -- -- -- -- -- --
Equity in (loss)
of
subsidiaries.... (28,436) 4,850 -- -- -- -- -- -- -- 23,586
-------- -------- ---- ------- ------ ------ ------ ------- ------- -------
Net income
(loss).......... $(28,436) $(28,436) $-- $ 4,275 $1,117 $ (87) $ (522) $ 4,783 $ 67 $23,586
======== ======== ==== ======= ====== ====== ====== ======= ======= =======
<CAPTION>
Consolidated
Total
------------
<S> <C>
Net revenue...... $259,825
Operating
expenses
Cost of sales
and selling,
editorial and
circulation.... 169,035
General and
administrative.. 36,883
Depreciation and
amortization... 51,331
------------
Total operating
expenses....... 257,249
Operating income
(loss).......... 2,576
Other income
(expense):
Interest income
(expense),
net............ (27,862)
Other income
(expense),
net............ (1,926)
------------
Income (loss)
before income
taxes........... (27,212)
Provision for
income tax...... 1,264
Minority interest
in earnings..... 40
Equity in (loss)
of
subsidiaries.... --
------------
Net income
(loss).......... $(28,436)
============
</TABLE>

F-20
<PAGE>

ADVANSTAR, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended December 31, 1998
(in thousands)

<TABLE>
<CAPTION>
Guarantor Non-Guarantor
Holdings Communications Art Expo Magic MagicKids ABC Expocon Subsidiaries Subsidiaries
-------- -------------- -------- --------- --------- -------- ------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating
Activities:
Net income
(loss)........... $(28,436) $(28,436) $ -- $ 4,275 $1,117 $ (87) $ (522) $ 4,783 $ 67
Adjustments to
reconcile net
income (loss) to
net cash provided
by operating
activities:
Depreciation and
amortization..... -- 39,205 -- 8,335 3 641 1,262 10,241 2,377
Non cash Items... -- 6,305 -- -- -- -- 20 20 --
Change in working
capital items.... -- (248,081) -- 194,992 (1,784) 17,884 3,469 214,561 31,611
-------- -------- ----- --------- ------ -------- ------- --------- --------
Net cash
provided by
(used in)
operating
activities...... (28,436) (231,007) 207,602 (664) 18,438 4,229 229,605 34,055
-------- -------- ----- --------- ------ -------- ------- --------- --------
Investment
Activities:
Net loss in
investment in
subsidiaries..... 28,436 -- -- -- -- -- -- -- --
Additions to
property, plant
and equipment,
net.............. -- 1,367 -- (171) (5) (49) (446) (671) (518)
Acquisitions of
publications and
trade shows...... -- (99,093) -- (207,539) 673 (18,381) (3,838) (229,085) (30,261)
-------- -------- ----- --------- ------ -------- ------- --------- --------
Net cash provided
by (used in)
investing
activities....... 28,436 (97,726) -- (207,710) 668 (18,430) (4,284) (229,756) (30,779)
-------- -------- ----- --------- ------ -------- ------- --------- --------
Financing
Activities:
Proceeds from
sale of common
stock and capital
contributions and
other............ -- 70,980 -- -- -- -- -- -- --
Dividends paid to
minority interest
holders.......... -- -- -- -- -- -- -- -- (1,000)
Borrowings of
long-term debt,
net.............. -- 262,620 -- -- -- -- -- -- --
-------- -------- ----- --------- ------ -------- ------- --------- --------
Net cash provided
by (used in)
financing
activities....... -- 333,600 -- -- -- -- -- -- (1,000)
-------- -------- ----- --------- ------ -------- ------- --------- --------
NET INCREASE
(DECREASE) IN CASH
AND CASH
EQUIVALENTS:...... -- 4,867 -- (108) 4 8 (55) (151) 2,276
CASH AND CASH
EQUIVALENTS,
beginning of
period:........... -- 3,403 -- -- -- -- (317) (317) 3,938
-------- -------- ----- --------- ------ -------- ------- --------- --------
CASH AND CASH
EQUIVALENTS, end
of period:........ $ -- $ 8,270 $ -- $ (108) $ 4 $ 8 $ (372) $ (468) $ 6,214
======== ======== ===== ========= ====== ======== ======= ========= ========
<CAPTION>
Consolidated
Elimination Total
----------- ------------
<S> <C> <C>
Operating
Activities:
Net income
(loss)........... $23,586 $ (28,436)
Adjustments to
reconcile net
income (loss) to
net cash provided
by operating
activities:
Depreciation and
amortization..... -- 51,823
Non cash Items... -- 6,325
Change in working
capital items.... 4,850 2,941
----------- ------------
Net cash
provided by
(used in)
operating
activities...... 28,436 32,653
----------- ------------
Investment
Activities:
Net loss in
investment in
subsidiaries..... (28,436) --
Additions to
property, plant
and equipment,
net.............. -- 178
Acquisitions of
publications and
trade shows...... -- (358,439)
----------- ------------
Net cash provided
by (used in)
investing
activities....... (28,436) (358,261)
----------- ------------
Financing
Activities:
Proceeds from
sale of common
stock and capital
contributions and
other............ -- 70,980
Dividends paid to
minority interest
holders.......... -- (1,000)
Borrowings of
long-term debt,
net.............. -- 262,620
----------- ------------
Net cash provided
by (used in)
financing
activities....... -- 332,600
----------- ------------
NET INCREASE
(DECREASE) IN CASH
AND CASH
EQUIVALENTS:...... -- 6,992
CASH AND CASH
EQUIVALENTS,
beginning of
period:........... -- 7,024
----------- ------------
CASH AND CASH
EQUIVALENTS, end
of period:........ $ -- $ 14,016
=========== ============
</TABLE>

F-21
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Men's Apparel Guild in California, Inc.:

We have audited the accompanying consolidated balance sheet of Men's
Apparel Guild in California, Inc. and subsidiary as of February 28, 1998, and
the related consolidated statement of income, shareholders' equity and cash
flows for the nine-month period ended February 28, 1998. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Men's Apparel Guild in California, Inc. and subsidiary as of February 28,
1998, and the consolidated results of their operations and their cash flows for
the nine-month period ended February 28, 1998 in conformity with generally
accepted accounting principles.

Arthur Andersen LLP

Minneapolis, Minnesota,
March 20, 1998

F-22
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
Men's Apparel Guild in California, Inc.:

We have audited the accompanying consolidated balance sheets of Men's
Apparel Guild in California, Inc. and subsidiary as of May 31, 1997 and 1996,
and the related consolidated statements of income, shareholders' equity and
cash flows for each of the years in the three year period ended May 31, 1997.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Men's Apparel Guild in California, Inc. and subsidiary as of May 31, 1997
and 1996, and the consolidated results of their operations and their cash flows
for each of the years in the three year period ended May 31, 1997 in conformity
with generally accepted accounting principles.

Coopers & Lybrand L.L.P.

Los Angeles, California
June 24, 1997

F-23
<PAGE>

MEN'S APPAREL GUILD IN CALIFORNIA, INC.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
May 31, February 28,
------------------------ ------------
1996 1997 1998
----------- ----------- ------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............. $ 8,773,384 $ 9,386,181 $19,707,338
Short-term investments................ 6,830,325 9,743,512 --
Other current assets.................. 1,691,956 1,688,580 3,370,926
----------- ----------- -----------
Total current assets................ 17,295,665 20,818,273 23,078,264
Property and equipment, net............. 201,768 343,788 292,336
Long-term investments................... 7,502,131 7,909,644 --
Intangible and other assets............. 14,098 911,243 989,963
----------- ----------- -----------
Total assets........................ $25,013,662 $29,982,948 $24,360,563
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses............................. $ 3,572,234 $ 1,648,838 $ 8,687,916
Deferred revenue...................... 8,140,750 8,064,014 890,025
Exhibitors' security deposits......... 1,875,576 1,909,760 1,909,497
----------- ----------- -----------
Total current liabilities........... 13,588,560 11,622,612 11,487,438
Commitments and contingencies (Notes 7,
8)
Shareholders' equity:
Common stock (no par value; 100,000
shares authorized 42,000, 40,000 and
33,523 shares issued and outstanding
at May 31, 1996 and 1997 and February
28, 1998, respectively).............. 161,204 153,528 128,668
Retained earnings..................... 11,342,077 18,241,367 12,744,457
Shareholders' note receivable......... (16,211) -- --
Unrealized loss on investments........ (61,968) (34,559) --
----------- ----------- -----------
Total shareholders' equity.......... 11,425,102 18,360,336 12,873,125
----------- ----------- -----------
Total liabilities and shareholders'
equity............................. $25,013,662 $29,982,948 $24,360,563
=========== =========== ===========
</TABLE>

The accompanying notes to consolidated financial statements are an integral
part of these balance sheets.

F-24
<PAGE>

MEN'S APPAREL GUILD IN CALIFORNIA, INC.

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
Nine Months
Ended
Years Ended May 31, February 28,
----------------------------------- ------------
1995 1996 1997 1998
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Booth revenue................. $19,802,379 $24,716,709 $28,460,935 $35,692,946
Other operating revenue....... 1,931,848 1,890,940 2,691,582 3,001,601
----------- ----------- ----------- -----------
Total revenue............... 21,734,227 26,607,649 31,152,517 38,694,547
Direct costs.................. 10,067,269 13,036,535 14,491,101 14,562,032
----------- ----------- ----------- -----------
Gross profit................ 11,666,958 13,571,114 16,661,416 24,132,515
General and administrative
expenses..................... 3,423,456 3,109,448 4,303,749 3,262,179
Profit participation.......... 289,123 574,279 354,624 364,640
----------- ----------- ----------- -----------
Income from operations...... 7,954,379 9,887,387 12,003,043 20,505,696
Interest and investment
income....................... 677,381 986,603 1,194,568 653,738
----------- ----------- ----------- -----------
Income before provision for
income taxes............... 8,631,760 10,873,990 13,197,611 21,159,434
Provision for income taxes.... 3,089,209 3,965,213 4,805,997 7,696,565
----------- ----------- ----------- -----------
Net income.................. $ 5,542,551 $ 6,908,777 $ 8,391,614 $13,462,869
=========== =========== =========== ===========
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

F-25
<PAGE>

MEN'S APPAREL GUILD IN CALIFORNIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Nine Months
Ended
Years Ended May 31, February 28,
------------------------------------- ------------
1995 1996 1997 1998
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income............... $ 5,542,551 $ 6,908,777 $ 8,391,614 $ 13,462,869
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization........... 459,391 282,778 243,905 211,974
Deferred income taxes... (85,791) 121,395 (91,401) 166,781
Loss on disposal of
fixed assets........... 65,635 -- -- --
Realized loss on sale of
investments............ -- -- -- 34,559
Changes in operating
assets and liabilities:
Prepaid expenses and
other current assets... (342,175) (138,448) (223,593) (844,945)
Prepaid income taxes.... (8,397) (509,194) 318,364 (1,132,002)
Other assets............ (100,000) 112,087 2,855 16,159
Accounts payable and
accrued expenses....... 468,185 (534,205) 911,604 7,039,078
Deferred revenue........ 1,366,910 924,116 (76,736) (7,173,989)
Exhibitors' security
deposits............... 266,715 370,861 34,184 (263)
Accrued loss on
leasehold.............. 250,470 (455,949) -- --
----------- ----------- ----------- ------------
Net cash provided by
operating activities.. 7,883,494 7,082,218 9,510,796 11,780,221
----------- ----------- ----------- ------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net change in short-term
investments............. (4,023,766) (2,806,559) (2,913,187) 9,743,512
Proceeds from sale of
long-term investments... 3,416,011 4,150,613 3,596,778 7,875,085
Purchases of
investments............. (3,592,471) (4,575,474) (3,976,902) --
Investment in
subsidiary.............. -- -- (900,000) --
Purchases of fixed
assets.................. (335,932) (119,962) (385,899) (93,022)
----------- ----------- ----------- ------------
Net cash used in
investing activities.. (4,536,158) (3,351,382) (4,579,210) 17,525,575
----------- ----------- ----------- ------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Payment of dividends..... -- (2,835,000) (2,835,000) (2,835,000)
Repayments of
shareholders' notes
receivable.............. 85,660 60,933 16,211 --
Repurchases of common
stock................... (2,000) -- (1,500,000) (16,149,639)
----------- ----------- ----------- ------------
Net cash used in
financing activities.. 83,660 (2,774,067) (4,318,789) (18,984,639)
----------- ----------- ----------- ------------
Net increase in cash
and cash equivalents.. 3,430,996 956,769 612,797 10,321,157
CASH AND CASH EQUIVALENTS,
beginning of year........ 4,385,619 7,816,615 8,773,384 9,386,181
----------- ----------- ----------- ------------
CASH AND CASH EQUIVALENTS,
end of year.............. $ 7,816,615 $ 8,773,384 $ 9,386,181 $ 19,707,338
=========== =========== =========== ============
SUPPLEMENTARY INFORMATION:
Cash paid for income
taxes................... $ 3,138,397 $ 4,353,500 $ 4,583,000 $ 4,305,000
=========== =========== =========== ============
NONCASH INVESTING AND
FINANCING ACTIVITIES:
</TABLE>

The Company's Board of Directors declared a dividend of $67.50 per common
share on May 31, 1996. Payment of these dividends, totaling $2,835,000 was made
on June 14, 1996.

The accompanying notes to consolidated financial statements
are an integral part of these statements.

F-26
<PAGE>

MEN'S APPAREL GUILD IN CALIFORNIA, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEARS ENDED MAY 31, 1995, 1996 AND 1997
AND FOR THE NINE MONTHS ENDED FEBRUARY 28, 1998

<TABLE>
<CAPTION>
Unrealized
Common Stock Shareholders Gain (Loss)
---------------- Retained Notes on
Shares Amount Earnings Receivable Investments Total
------ -------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, May 31, 1994... 43,000 $163,204 $ 4,560,749 $(162,804) $ (58,897) $ 4,502,252
Change in unrealized
gain (loss) on
investments........... -- -- -- -- 113,868 113,868
Dividends declared on
common stock ($67.50
per share)............ -- -- (2,835,000) -- -- (2,835,000)
Repurchase of common
stock................. (1,000) (2,000) -- -- -- (2,000)
Repayments of notes
receivable from
shareholders.......... -- -- -- 85,660 -- 85,660
Net income............. -- -- 5,542,551 -- -- 5,542,551
------ -------- ----------- --------- --------- -----------
Balance, May 31, 1995... 42,000 161,204 7,268,300 (77,144) 54,971 7,407,331
Change in unrealized
gain (loss) on
investments........... -- -- -- -- (116,939) (116,939)
Dividends declared on
common stock ($67.50
per share)............ -- -- (2,835,000) -- -- (2,835,000)
Repayments of notes
receivable from
shareholders.......... -- -- -- 60,933 -- 60,933
Net income............. -- -- 6,908,777 -- -- 6,908,777
------ -------- ----------- --------- --------- -----------
Balance, May 31, 1996... 42,000 161,204 11,342,077 (16,211) (61,968) 11,425,102
Change in unrealized
gain (loss) on
investments........... -- -- -- -- 27,409 27,409
Repurchase of common
stock................. (2,000) (7,676) (1,492,324) -- -- (1,500,000)
Repayments of notes
receivable from
shareholders.......... -- -- -- 16,211 -- 16,211
Net income............. -- -- 8,391,614 -- -- 8,391,614
------ -------- ----------- --------- --------- -----------
Balance, May 31, 1997... 40,000 153,528 18,241,367 -- (34,559) 18,360,336
Change in unrealized
gain (loss) on
investments........... -- -- -- -- 34,559 34,559
Dividends declared on
common stock ($84.57
per share)............ -- -- (2,835,000) -- -- (2,835,000)
Repurchase of common
stock................. (6,477) (24,860) (16,124,779) -- -- (16,149,639)
Net income............. -- -- 13,462,869 -- -- 13,462,869
------ -------- ----------- --------- --------- -----------
Balance, February 28,
1998................... 33,523 $128,668 $12,744,457 $ -- $ -- $12,873,125
====== ======== =========== ========= ========= ===========
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

F-27
<PAGE>

MEN'S APPAREL GUILD IN CALIFORNIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 1995, 1996 AND 1997
AND FOR THE NINE MONTHS ENDED FEBRUARY 28, 1998

1. Description of Business and Basis of Presentation:

The accompanying consolidated financial statements include the accounts
of Men's Apparel Guild in California (MAGIC) and its wholly owned subsidiary,
MAGIC KIDS, INC. (MAGIC Kids), collectively referred to as the Company. All
intercompany transactions have been eliminated in consolidation.

Nature of Operations

The Company has produced trade shows for the men's apparel industry for
over sixty years. For each of the periods presented in the accompanying
statements of operations, including the nine months ended February 28, 1998,
two trade shows have occurred (in February and August).

Basis of Presentation

During fiscal 1994, as a result of a private placement offering circular,
the Company converted from a nonprofit mutual benefit corporation to a for-
profit corporation status and issued common stock to its "charter" members. In
addition, the Company issued common stock to four individuals for notes
receivable (Note 6).

Joint Participation Agreement

During fiscal 1995, the Company entered into a joint participation
agreement to co-sponsor a women's apparel trade show with Fairchild
Publications under the name "WWD/Magic." In accordance with the cosponsor
agreement, 30% of show net income and 50% of publication net income related to
the WWD/Magic show has been allocated to the cosponsor of the show as profit
participation.

2. Summary of Significant Accounting Policies:

Cash Equivalents and Short-Term Investments

The Company considers all highly liquid investments with an initial
maturity of three months or less to be cash equivalents and are stated at cost,
which approximates their fair market value. Short-term investments principally
include United States Treasury bills with original maturities greater than
three months and are stated at fair value. The Company places its cash, cash
equivalents and short-term investments with high-credit quality financial
institutions. At times, bank balances may be in excess of the federally insured
limit. Bank balances were in excess of federally insured limits in the amounts
of $11,395,338 for the nine-month period ended February 28, 1998 and $5,813,723
and $7,055,031 at May 31, 1997 and 1996, respectively.

Other Current Assets

Other current assets consist primarily of prepaid expenses, which
consists of prepaid show costs and prepaid taxes.

F-28
<PAGE>

MEN'S APPAREL GUILD IN CALIFORNIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Property and Equipment

The Company's property and equipment are recorded at cost. For financial
reporting purposes depreciation and amortization of property and equipment are
provided on the straight-line method based on the estimated useful lives of the
respective assets. Leasehold improvements are amortized over the lesser of the
useful life or the term of the lease. Maintenance and repair costs are expensed
as incurred; renewals and betterments are capitalized. Upon the sale or
retirement of fixed assets, any resulting profit or loss is included in
operations. Estimated useful lives are as follows:

<TABLE>
<CAPTION>
Estimated
Useful Lives
------------
<S> <C>
Show equipment................................................. 2-5 years
Computer equipment............................................. 5 years
Office furniture, fixtures and equipment....................... 5 years
Leasehold improvements......................................... 3-10 years
</TABLE>

Intangible Assets and Other Assets

Intangible assets, consisting primarily of goodwill, are stated at cost
less accumulated amortization, and are amortized on a straight-line basis over
their estimated useful lives of approximately 10 years.

The Company periodically evaluates the realizability of its long-lived
and intangible assets. Based on its most recent analysis, no impairment exists
at May 31, 1997 or February 28, 1998.

Revenue Recognition

Revenue is recorded in the period in which the applicable shows are held.
Deferred revenue is recorded when cash is received in advance of the applicable
show.

Income Taxes

The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes," which requires recognition of deferred tax
liabilities and assets for the expected future tax consequences of events that
have been included in the financial statements or tax returns. Under this
method, deferred tax liabilities and assets are determined based on the
difference between the financial statement and the tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. If required, valuation allowances would be
established to reduce deferred tax assets to the amount expected to be
realized.

Long-Term Investments

The Company accounts for its long-term investments in accordance with
SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." For the years ended May 31, 1996 and 1997, all of the Company's
investments have been classified as available-for-sale. The Company utilizes
specific identification in computing realized and unrealized gains and losses
on investments. At May 31, 1996 and 1997, the Company had unrealized losses on
investments of $61,968 and $34,559, respectively, which is included as a
separate component of equity. The long-term investments had a fair market value
of $7,502,131 and a cost basis of $7,564,099 as of May 31, 1996 and a fair
market value of $7,909,644 and a cost basis of $7,944,203 as

F-29
<PAGE>

MEN'S APPAREL GUILD IN CALIFORNIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

of May 31, 1997. The Company's available-for-sale investments at May 31, 1997
consist primarily of tax advantaged municipal bonds (54%), United States
Treasury Notes (36%), money market funds (6%) and corporate bonds (4%). Of the
investments, other than money market funds, 23% will mature in one year or
less, 38% in two years, 30% in three years and 9% mature in four or more years.

During February 1998, the Company liquidated its investment portfolio
which approximated book value. At February 28, 1998, the Company is invested in
highly liquid investments with maturities of less than 60 days.

Use of Estimates

Recently Issued Accounting Standard

In March 1997, the Financial Accounting Standards Board issued SFAS No.
129, "Disclosure of Information About Capital Structure." The accounting or
disclosure requirements of this statement are effective for the Company's
fiscal year 1998. The Company is reviewing the potential impact of adopting the
new accounting standard.

During June 1997, the Financial Accounting Standards Board released
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income," effective for fiscal years beginning after December 15,
1997. SFAS No. 130 establishes standards for the reporting and display in the
financial statements of total net income and the components of all other
nonowner changes in equity, referred to as comprehensive income. The Company
will adopt SFAS No. 130 in 1998 and has not yet determined the impact it will
have on the disclosures in its financial statements.

During June 1997, the Financial Accounting Standards Board released
Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures about
Segments of an Enterprise and Related Information," effective for fiscal years
beginning after December 15, 1997. SFAS No. 131 requires disclosure of business
and geographic segments in the consolidated financial statements of the
Company. The Company will adopt SFAS No. 131 in 1998 and is currently analyzing
the impact it will have on the disclosures in its financial statements.

F-30
<PAGE>

MEN'S APPAREL GUILD IN CALIFORNIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

3. Income Taxes:

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
Nine
Months
Years Ended May 31, Ended
--------------------------------- February 28,
1995 1996 1997 1998
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Federal:
Current................... $2,920,000 $3,641,859 $4,722,243 $7,045,407
Deferred.................. (78,928) 121,395 (91,401) 157,766
---------- ---------- ---------- ----------
2,841,072 3,763,254 4,630,842 7,203,173
---------- ---------- ---------- ----------
State:
Current................... 255,000 201,959 175,155 484,377
Deferred.................. (6,863) -- -- 9,015
---------- ---------- ---------- ----------
248,137 201,959 175,155 493,392
---------- ---------- ---------- ----------
$3,089,209 $3,965,213 $4,805,997 $7,696,565
========== ========== ========== ==========
</TABLE>

The provision for income taxes differs from the amount obtained by
applying the federal statutory income tax rate primarily due to tax-exempt
interest and state income taxes.

The tax effected amounts of temporary differences which give rise to the
Company's net deferred tax asset are as follows:

<TABLE>
<CAPTION>
Nine
Months
Years Ended May 31, Ended
---------------------------- February 28,
1995 1996 1997 1998
-------- -------- -------- ------------
<S> <C> <C> <C> <C>
Accrued loss on contingency
and other.................... $ -- $111,099 $ 99,106 $ 96,498
Accrued loss on leasehold..... 168,593 -- -- --
Accrued compensation.......... 63,045 29,689 129,900 76,535
Accrued pension liability..... 38,973 -- -- --
Depreciation.................. (14,611) (6,183) (3,000) (26,813)
-------- -------- -------- --------
Net deferred tax asset........ $256,000 $134,605 $226,006 $146,220
======== ======== ======== ========
</TABLE>

No valuation allowance has been established since net deferred tax assets
are expected to be realized through either expected future taxable income or
taxable income in prior carryback years. At February 28, 1998, approximately
$4.2 million is included in accrued liabilities for income taxes payable.

4. Benefit Plans:

During fiscal 1994, the Company implemented a defined contribution plan
covering all full-time employees. The Company's contributions to this plan for
the years ended May 31, 1995, 1996 and 1997 and for the nine-month period ended
February 28, 1998 were $55,988, $40,365, $97,531 and $63,800, respectively.

F-31
<PAGE>

MEN'S APPAREL GUILD IN CALIFORNIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

In addition, the Company had a noncontributory defined benefit pension
plan (the Plan) which covered all full-time employees through May 31, 1993.
Effective May 31, 1993, the Company terminated this Plan. Upon formal approval
from the Internal Revenue Service, the Company distributed the assets of the
Plan during the year ended May 31, 1996.

5. Shareholders' Equity:

In July 1997, the Company's Board of Directors approved a stock
redemption plan under which a total amount not to exceed $50.0 million may be
repurchased. These repurchases are made through a "dutch auction" program at a
price range of $2,080 to $2,500 per share subject to certain restrictions.
Total shares repurchased during the nine month period ended February 28, 1998
were 6,477 for approximately $16.1 million including certain transaction costs.

6. Related-Party Transactions:

During fiscal year 1994, the Company issued 2,000 shares of common stock
to four board members who were not charter members in exchange for notes
receivable which were due in three equal annual installments. Payments made
during fiscal years 1995, 1996 and 1997 on these notes receivable totaled
$85,660, $60,933 and $16,211, respectively.

7. Executive Employment Agreement:

On July 16, 1996, the Company entered into an Executive Employment
Agreement (the Agreement) with an officer of the Company that effectively
granted the officer stock appreciation rights (SARs) with respect to 1,000
shares of the Company's common stock. The SARs granted by the Agreement become
vested in and exercisable by the officer in five equal installments each May 31
beginning May 31, 1996. The SARs become fully vested and exercisable by the
officer only in the event of a change of control or if the officer's employment
is terminated. The Agreement was amended in July 1997 to provide for additional
grants of SARs based on the Company's future performance. The future
compensation expense related to this Agreement (assuming change in control at
May 31, 1998) is estimated at $6.5 million. Due to the contingent nature of the
SARs, no compensation expense was recognized as of May 31, 1996 and 1997 or
February 28, 1998. No SARs have been exercised as of February 28, 1998.

8. Commitments and Contingencies:

Lease Commitments:

The Company leases facilities and various equipment under operating
leases. Leases that expire are expected to be renewed or replaced by leases on
other properties.

F-32
<PAGE>

MEN'S APPAREL GUILD IN CALIFORNIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Future minimum rental payments as of May 31, 1997 for operating leases
having initial or remaining noncancellable lease terms in excess of one year
are as follows:

<TABLE>
<S> <C>
1998............................................................. $154,477
1999............................................................. 139,777
2000............................................................. 10,566
2001............................................................. 5,728
2002............................................................. 5,728
Thereafter....................................................... --
</TABLE>

Rent expense amounted to $112,244, $114,896, $244,403 and $217,856 for
the nine months ended February 28, 1998 and for the years ended May 31, 1997,
1996 and 1995, respectively.

The Company was obligated under a noncancellable operating lease for its
premises which would have expired on August 31, 2000. On April 11, 1996, the
Company entered into a lease termination agreement with its landlord to vacate
its premises prior to the scheduled expiration date of August 31, 2000. The
Company paid $275,000 to relinquish it from all obligations under the lease
after September 30, 1996. Rental payments with respect to this lease were made
through September 30, 1996.

9. Acquisition by Advanstar Communications Inc.:

On March 6, 1998, Advanstar Communications Inc. signed a merger agreement
to acquire the Company. The aggregate purchase price will consist of
approximately $230.2 million in cash subject to adjustment based on the
shareholders' equity of the Company on the closing date.

F-33
<PAGE>

INDEPENDENT AUDITORS' REPORT

Advanstar Communications Inc.

We have audited the accompanying balance sheet of Universal Media, Inc.
as of December 31, 1997, and the related statements of operations,
stockholder's deficiency and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and preform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Universal Media,
Inc. as of December 31, 1997 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.

Mahoney Cohen & Company, CPA, P.C.

New York, New York
March 6, 1998, except for
Note 13, as to which the
date is August 17, 1998

F-34
<PAGE>

UNIVERSAL MEDIA, INC.

Balance Sheet
December 31, 1997

<TABLE>
<S> <C>
ASSETS (Note 5)
Current assets:
Cash............................................................ $ 515,734
Cash--restricted (Note 5)....................................... 50,000
Accounts receivable, net of allowance for doubtful accounts of
$270,000 (Notes 5 and 9)....................................... 3,330,255
Inventory (Note 5).............................................. 208,023
Prepaid expenses and other current assets....................... 286,386
-----------
Total current assets........................................ 4,390,398
Property and equipment, net (Note 3).............................. 206,500
Other assets:
Intangible assets, net (Note 4)................................. 493,468
Security deposits and other..................................... 64,141
-----------
Total other assets.......................................... 557,609
-----------
$ 5,154,507
===========
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
Current liabilities:
Note payable--bank (Note 5)..................................... $ 505,000
Deferred subscription income.................................... 15,440
Current portion of long-term debt (Note 6)...................... 158,532
Accounts payable................................................ 704,825
Due to affiliates (Note 8)...................................... 2,988,061
Accrued expenses and other current liabilities (Note 12)........ 1,055,599
-----------
Total current liabilities................................... 5,427,457
Long-term debt (Note 6)........................................... 1,350,682
Subordinated notes payable--related party (Notes 6 and 7)......... 819,317
Deferred lease obligations........................................ 51,425
Commitments and contingencies (Note 11)
Stockholder's deficiency:
Common stock, no par value:
Authorized--1,500 shares
Issued and outstanding--100 shares............................ 600,000
Accumulated deficit............................................... (1,192,027)
Net advances to Affiliate (Note 8)................................ (1,902,347)
-----------
Total stockholder's deficiency.............................. (2,494,374)
-----------
$ 5,154,507
===========
</TABLE>

See accompanying notes.

F-35
<PAGE>

UNIVERSAL MEDIA, INC.

Statement of Operations
For the Year Ended December 31, 1997

<TABLE>
<S> <C>
Net revenues...................................................... $24,152,162
Operating expenses:
Production and mechanical....................................... 6,723,817
Selling, editorial and circulation.............................. 10,171,958
General and administrative...................................... 6,918,664
Depreciation expense............................................ 74,830
Amortization of intangible assets............................... 524,725
-----------
Total operating expenses...................................... 24,413,994
-----------
Loss from operations.............................................. (261,832)
Interest expense, net............................................. 206,021
-----------
Loss before income taxes.......................................... (467,853)
Income taxes...................................................... 59,883
-----------
Net loss.......................................................... $ (527,736)
===========
</TABLE>

See accompanying notes.

F-36
<PAGE>

UNIVERSAL MEDIA, INC.

STATEMENT OF STOCKHOLDER'S DEFICIENCY
For the Year Ended December 31, 1997

<TABLE>
<CAPTION>
Number Net advances Total
of Common Accumulated to Stockholder's
Shares Stock Deficit Affiliate Deficiency
------ -------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance, January 1,
1997................... 100 $600,000 $ (664,291) $(2,468,612) $(2,532,903)
Net change in advances
to Affiliate........... -- -- -- 566,265 566,265
Net loss................ -- -- (527,736) -- (527,736)
--- -------- ----------- ----------- -----------
Balance, December 31,
1997................... 100 $600,000 $(1,192,027) $(1,902,347) $(2,494,374)
=== ======== =========== =========== ===========
</TABLE>

See accompanying notes.

F-37
<PAGE>

UNIVERSAL MEDIA, INC.

STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1997

<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss......................................................... $(527,736)
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation of property and equipment.......................... 74,830
Amortization of intangible assets............................... 524,725
Deferred lease obligations...................................... 3,075
Bad debt expense................................................ 95,671
Change in assets and liabilities:
Accounts receivable............................................ (425,259)
Inventory...................................................... 12,882
Prepaid expenses and other current assets...................... 5,923
Deferred subscription income................................... 629
Accounts payable............................................... (165,186)
Accrued expenses and other current liabilities................. 345,340
---------
Net cash used in operating activities......................... (55,106)
---------
Cash flows from investing activities:
Purchase of property and equipment............................... (105,406)
Security deposits and other assets............................... 263
---------
Net cash used in investing activities......................... (105,143)
---------
Cash flows from financing activities:
Repayment of revolver loan....................................... (700,000)
Proceeds from revolver loan...................................... 505,000
Increase in advances from affiliates............................. 90,655
Repayment of advances to Affiliate............................... 566,265
Repayment of severance agreement................................. (47,991)
Repayment of restrictive covenant................................ (95,982)
---------
Net cash provided by financing activities..................... 317,947
---------
Net increase in cash.............................................. 157,698
Cash, beginning of year........................................... 408,036
---------
Cash, end of year................................................. $ 565,734
=========
Supplemental Disclosures of Cash Flow Information
Cash paid during the year for:
Interest......................................................... $ 211,157
Taxes............................................................ $ 110,947
</TABLE>

See accompanying notes.

F-38
<PAGE>

UNIVERSAL MEDIA, INC.

NOTES TO FINANCIAL STATEMENTS

Note 1--The Company

Universal Media, Inc. (the "Company") publishes and distributes
primarily Travel Agent, a trade national newsweekly magazine serving travel
agencies and the travel services industry. The Company is related by common
ownership with several uncombined entities with which it has significant
transactions and financial relationships. See Note 8 for further discussion.

Note 2--Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

Advertising and subscription revenue, net of estimated returns and
allowances, are recorded as magazines are shipped. Reprint income is recorded
when the reprints are mailed.

Inventory

Inventory is stated at the lower of cost (first-in, first-out method) or
market and consists of paper stock.

Property and Equipment

Property and equipment is recorded at cost. Expenditures for major
additions and betterments are capitalized. Maintenance and repairs are charged
to operations as incurred. Depreciation of property and equipment is computed
by both straight-line and accelerated methods over the assets' estimated lives
ranging from five to seven years. Leasehold improvements are amortized over
the lesser of the lease terms or the assets' useful lives. Upon sale or
retirement of property and equipment, the related cost and accumulated
depreciation are removed from the accounts and any gain or loss is reflected
in operations.

Intangible Assets

Intangible assets are being amortized by the straight-line method over
the following useful lives:

<TABLE>
<S> <C>
Subscriber list.................................................. 8 years
Trademarks....................................................... 40 years
Goodwill......................................................... 40 years
</TABLE>

Loan acquisition costs and related legal fees are deferred and amortized
using the straight-line method over the term of the related debt.

F-39
<PAGE>

UNIVERSAL MEDIA, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Deferred Subscription Income

The Company's magazine is sold on a subscription basis for periods up to
one year. Subscription funds received in advance of magazines being shipped is
recorded as deferred subscription income. Costs in connection with the
procurement of subscriptions are charged to expense as incurred.

Income Taxes

The Company elected treatment as a small business corporation under
Subchapter S of the Internal Revenue Code and the related provisions of the New
York State Franchise Tax law. Under the aforementioned provisions, corporate
income or loss and any tax credits earned are included in the stockholder's
individual federal and state income tax returns. Accordingly, no provision has
been made for federal income taxes for in the accompanying financial
statements. The Company is subject to New York State S corporation and New York
City corporate income taxes.

Note 3--Property and Equipment

Property and equipment consists of:

<TABLE>
<S> <C>
Computer equipment.............................................. $305,546
Furniture and equipment....................................... 239,152
Leasehold improvements........................................ 64,232
--------
608,930
Less: Accumulated depreciation and amortization............... 402,430
--------
$206,500
========
</TABLE>

Note 4--Intangible Assets

Intangible assets consist of:

<TABLE>
<S> <C>
Restrictive covenant.......................................... $3,299,372
Subscriber list............................................... 1,600,000
Trademarks and copyrights..................................... 450,000
Goodwill...................................................... 82,542
Loan acquisition and sundry................................... 97,607
----------
5,529,521
Less: Accumulated amortization................................ 5,036,053
----------
$ 493,468
==========
</TABLE>

Note 5--Note Payable Bank

On June 18, 1997, the Company and an affiliated company under common
control ("Affiliate") entered into a $2,000,000 secured revolving line of
credit which expires on April 30, 1998. Interest is payable monthly at 1% above
the bank's prime rate (9.5% at December 31, 1997).

F-40
<PAGE>

UNIVERSAL MEDIA, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

The revolving credit note is collateralized by a first priority lien and
security interest in the accounts receivable and inventory of the Company and
Affiliate. The loan agreement contains covenants which, among other matters,
require the Company and Affiliate to maintain certain levels of combined
operating income and compensating balances. At December 31, 1997, the Company
and Affiliate were in compliance with these covenants on a combined basis. The
principal stockholder has personally guaranteed the revolving credit note.

The Company and Affiliate, which are affiliated through common ownership,
each guarantee the bank indebtedness of the other. At December 31, 1997,
Affiliate had outstanding bank indebtedness of $50,000.

Note 6--Long-Term Debt

Long-term debt consists of:

<TABLE>
<S> <C>
Deferred compensation payable to a former employee in forty
quarterly installments of $25,000 without interest through
October 2004(a).............................................. $ 503,071
Non-compete agreement payable to a former employee in forty
quarterly installments of $50,000 without interest through
October 2004(a).............................................. 1,006,143
----------
1,509,214
Less: Current portion of long-term debt....................... 158,532
----------
$1,350,682
==========
</TABLE>

(a) The financial statements include the present value of all future
payments at an imputed interest rate of 9.75% per annum.

At December 31, 1997, long-term debt matures as follows:

<TABLE>
<CAPTION>
For the Year Ending December 31,
--------------------------------
<S> <C>
1998........................................................ $ 158,532
1999........................................................ 174,563
2000........................................................ 192,215
2001........................................................ 211,653
2002........................................................ 233,056
Thereafter.................................................. 539,195
----------
$1,509,214
==========
</TABLE>

Note 7--Subordinated Note Payable--Related Party

Subordinated debt at December 31, 1997 consists of a note payable to an
entity related through common ownership in the amount of $819,317. The note is
subordinated to bank borrowings (see Notes 5 and 6) and is non-interest
bearing.

F-41
<PAGE>

UNIVERSAL MEDIA, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Note 8--Related Party Transactions

Management Advisory and General and Administrative Services

Certain management advisory and general and administrative services
including certain accounting, marketing, information systems support and other
services are received from entities under common ownership and control. For the
year ended December 31, 1997, $978,500 has been reflected as general and
administrative expenses in the statement of operations. This amount was
determined based on an estimate of time and related costs to perform such
services. Management believes that the allocation is reasonable.

Due to affiliates

The Company has received advances (in the form of cash or as liquidation
of Company obligations) from entities affiliated with the Company by common
ownership. Such advances are non-interest bearing and are due on demand.

Net Advances to Affiliate

The Company has advanced funds to Affiliate and has received repayment of
certain amounts advanced. Such transactions, which do not have any effect on
the accompanying statement of income, have been treated as equity transactions
since ultimate repayment of the net advances to Affiliate is not assured.

Note 9--Concentration of Credit Risk

The Company performs ongoing credit evaluations of its customers'
financial condition and generally does not require collateral. Credit losses
have been within management's expectations.

The Company maintains cash balances at several banks. Accounts at each
institution are insured by the Federal Deposit Insurance Corporation up to
$100,000.

Note 10--401(k) Plan

The Company maintains a 401(k) plan for the benefit of its eligible
employees. Contributions to the plan are accrued and funded on a current basis
at amounts determined by the board of directors. 401(k) matching contributions
amounted to approximately $60,100 for the year ended December 31, 1997.

Note 11--Commitments and Contingencies

Leases

The Company leases office space under operating leases expiring in
various years through December 31, 2005.

F-42
<PAGE>

UNIVERSAL MEDIA, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Minimum annual rentals under non-cancellable operating leases, excluding
escalations based upon increases in real estate taxes and operating expenses,
are due as follows:

<TABLE>
<CAPTION>
For the Year Ending December 31,
--------------------------------
<S> <C>
1998.......................................................... $367,873
1999.......................................................... 345,971
2000.......................................................... 345,924
2001.......................................................... 252,833
2002.......................................................... 193,452
Thereafter.................................................... 580,356
</TABLE>

Rent expense charged to operations for the year ended December 31, 1997
amounted to approximately $404,000.

Note 12--Accrued Expenses and other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

<TABLE>
<S> <C>
Accrued salaries............................................... $ 264,065
Accrued commissions............................................ 365,079
Other.......................................................... 426,455
----------
$1,055,599
==========
</TABLE>

Note 13--Subsequent Event

On August 17, 1998, the Company entered into an Asset Purchase Agreement
with Advanstar Communications Inc. (the "Buyer"), wherein the Company sold its
primary business, Travel Agent, and certain other of its assets to the Buyer
for total consideration of approximately $69,000,000.

F-43
<PAGE>

UNIVERSAL MEDIA, INC.

Balance Sheet

<TABLE>
<CAPTION>
June 30,
1998
-----------
(unaudited)
<S> <C>
ASSETS (Note 6)
Current assets:
Cash............................................................ $ 374,706
Cash--restricted (Note 6)....................................... 50,000
Accounts receivables, net of allowance for doubtful accounts of
$270,000 (Notes 6 and 10)...................................... 3,871,302
Inventory (Note 6).............................................. 312,159
Prepaid expenses and other current assets....................... 154,703
-----------
Total current assets........................................ 4,762,870
Property and equipment, net (Note 4).............................. 219,236
Other assets:
Intangible assets, net (Note 5)................................. 457,537
Security deposits and other..................................... 61,510
-----------
Total other assets.......................................... 519,047
-----------
$ 5,501,153
===========
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
Current liabilities:
Note payable--bank (Note 6)..................................... $ 655,000
Deferred subscription income.................................... 23,396
Current portion of long-term debt (Note 7)...................... 166,354
Accounts payable................................................ 742,532
Due to affiliates............................................... 1,502,793
Accrued expenses and other current liabilities.................. 606,851
-----------
Total current liabilities................................... 3,696,926
Long-term debt (Note 7)........................................... 1,265,502
Subordinated notes payable--related party (Notes 8 and 9)......... 819,317
Deferred lease obligations........................................ 52,962
Commitments and contingencies (Note 11)
Stockholder's deficiency:
Common stock, no par value:
Authorized--1,500 shares......................................
Issued and outstanding 100 shares............................. 600,000
Retained earnings............................................... 1,074,523
Net advances to Affiliate....................................... (2,008,077)
-----------
Total stockholder's deficiency.............................. (333,554)
-----------
$ 5,501,153
===========
</TABLE>

See accompanying notes.

F-44
<PAGE>

UNIVERSAL MEDIA, INC.

Statement of Income
For the Six Months Ended

<TABLE>
<CAPTION>
June 30, 1997 June 30, 1998
------------- -------------
(unaudited)
<S> <C> <C>
Revenues............................................ $12,506,068 $14,507,139
Operating expenses:
Production and mechanical......................... 3,486,668 3,949,622
Selling, editorial and circulation................ 4,973,211 5,395,945
General and administrative........................ 1,454,888 2,636,246
Depreciation expense.............................. 32,439 42,192
Amortization of intangible assets................. 262,364 36,931
----------- -----------
Total operating expenses........................ 10,209,570 12,060,936
----------- -----------
Income from operations.............................. 2,296,498 2,446,203
Interest expenses, net.............................. 110,407 101,996
----------- -----------
Income before income taxes.......................... 2,186,091 2,344,207
Income taxes........................................ 63,300 77,657
----------- -----------
Net income.......................................... $ 2,122,791 $ 2,266,550
=========== ===========
</TABLE>

See accompanying notes.

F-45
<PAGE>

UNIVERSAL MEDIA, INC.

STATEMENT OF CASH FLOWS
For the Six Months Ended June 30,

<TABLE>
<CAPTION>
1997 1998
----------- -----------
(unaudited)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income...................................... $ 2,122,791 $ 2,266,550
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation of property and equipment......... 32,439 42,192
Amortization of intangible assets.............. 262,364 36,931
Deferred lease obligations..................... 1,536 1,537
Bad debt expense............................... 89,952 104,360
Change in assets and liabilities:
Accounts receivable........................... (671,227) (645,407)
Inventory..................................... (36,819) (104,136)
Prepaid expenses and other current assets..... 54,693 131,683
Deferred subscription income.................. 6,102 7,956
Accounts payable.............................. (231,126) 36,707
Accrued expenses and other current
liabilities.................................. 1,646 (448,748)
----------- -----------
Net cash provided by operating activities.... 1,632,351 1,429,625
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment.............. (19,760) (54,928)
Security deposits and other assets.............. 1,732 2,631
----------- -----------
Net cash used in investing activities........ (18,028) (52,297)
----------- -----------
Cash flows from financing activities:
Net proceeds/(repayment) of revolver loan....... 180,000 150,000
Decrease in advances from affiliates............ (1,606,952) (1,485,268)
Repayment of advances to (proceeds to)
Affiliate...................................... 158,121 (105,730)
Net repayment of long-term debt................. (70,253) (77,358)
----------- -----------
Net cash used in financing activities........ (1,339,084) (1,518,356)
----------- -----------
Net increase (decrease) in cash.................. 275,239 (141,028)
Cash, beginning of period........................ 408,036 565,734
----------- -----------
Cash, end of period.............................. $ 683,275 $ 424,706
=========== ===========
Supplemental Disclosures of Cash Flow
Information
Cash paid during the period for:
Interest........................................ $ 109,806 $ 103,751
Taxes........................................... $ 54,083 $ 22,725
</TABLE>

See accompanying notes.

F-46
<PAGE>

UNIVERSAL MEDIA, INC.

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

Note 1--Basis of Presentation

The accompanying condensed financial statements have been prepared by
management, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. The information furnished in the condensed
consolidated financial statements includes normal recurring adjustments and
reflects all adjustments which are, in the opinion of management, necessary for
a fair presentation of such financial statements. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. Although management believes
that the disclosures are adequate to make the information presented not
misleading, it is suggested that these condensed consolidated financial
statements be read in conjunction with the audited financial statements and the
notes thereto included elsewhere in the Advanstar Communications Inc.
(Advanstar) Registration Statement on Form S-4, relating to Advanstar's
exchange offer for its outstanding 9 1/4% Senior Subordinated Notes.

Revenues and operating results for the six months ended June 30, 1998 and
1997 are not necessarily indicative of the results to be expected for the full
year.

Note 2--The Company

Universal Media, Inc. (the "Company") publishes and distributes primarily
Travel Agent, a trade national newsweekly magazine serving travel agencies and
the travel services industry. The Company is related by Common ownership with
several uncombined entities with which it has significant transactions and
financial relationships. See Notes 6 and 9. On August 17, 1998, the Company
sold Travel Agent to Advanstar for total consideration of approximately
$69,000,000.

Note 3--Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

Advertising and subscription revenue, net of estimated returns and
allowances, are recorded as magazines are shipped. Reprint income is recorded
when the reprints are mailed.

Inventory

Inventory is stated at the lower of cost (first-in, first-out method) or
market and consists of paper stock.

F-47
<PAGE>

UNIVERSAL MEDIA, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)
(Unaudited)

Property and Equipment

Intangible Assets

Intangible assets are being amortized by the straight-line method over
the following useful lives:

<TABLE>
<S> <C>
Subscriber list................................................... 8 years
Trademarks........................................................ 40 years
Goodwill.......................................................... 40 years
</TABLE>

Loan acquisition costs and related legal fees are deferred and amortized
using the straight-line method over the term of the related debt.

Deferred Subscription Income

The Company's magazine is sold on a subscription basis for periods up to
one year. Subscription funds received in advance of shipment of the magazine
is recorded as deferred subscription income. Costs in connection with the
procurement of subscriptions are charged to expense as incurred.

Income Taxes

The Company elected treatment as a small business corporation under
Subchapter S of the Internal Revenue Code and the related provisions of the
New York State Franchise Tax law. Under the aforementioned provision,
corporate income or loss and any tax credits earned are included in the
stockholder's individual federal and state income tax returns. Accordingly, no
provision has been made for federal income taxes for in the accompanying
financial statements. The Company is subject to New York State S corporation
and New York City corporate income taxes.

Note 4--Property and Equipment

Property and equipment consists of:

<TABLE>
<S> <C>
Computer equipment............................................... $349,505
Furniture and equipment.......................................... 242,667
Leasehold improvements........................................... 71,667
--------
663,859
Less: Accumulated depreciation and amortization.................. 444,623
--------
$219,236
========
</TABLE>

F-48
<PAGE>

UNIVERSAL MEDIA, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)
(Unaudited)

Note 5--Intangible Assets

Intangible assets consist of:

<TABLE>
<S> <C>
Restrictive covenant........................................... $3,299,372
Subscriber list................................................ 1,600,000
Trademarks..................................................... 450,000
Goodwill....................................................... 82,542
Loan acquisition and sundry.................................... 97,607
----------
5,529,521
Less: Accumulated amortization................................. 5,071,984
----------
$ 457,537
==========
</TABLE>

Note 6--Note Payable--Bank

The revolving credit note is collateralized by a first priority lien and
security interest in the accounts receivable and inventory of the Company and
Affiliate. The loan agreement contains covenants which, among other matters,
require the Company and Affiliate to maintain certain levels of operating
income and compensating balances. At June 30, 1998, the Company and Affiliate
were in compliance with these covenants. The principal stockholder has
personally guaranteed the revolving credit note.

The Company and Affiliate, which are affiliated through common ownership,
each guarantee the indebtedness of the other. At June 30, 1998, Affiliate had
outstanding bank indebtedness of $50,000.

Note 7--Long-Term Debt

Long-term debt consists of:

<TABLE>
<S> <C>
Deferred compensation payable to a former employee in forty
quarterly installments of $25,000 without interest through
October 2004(a)............................................. $ 477,285
Non-compete agreement payable to a former employee in forty
quarterly installments of $50,000 without interest through
October 2004(a)............................................. 954,571
----------
1,431,856
Less: Current portion of long-term debt...................... 166,354
----------
$1,265,502
==========
</TABLE>
- --------
(a) The financial statements include the present value of all future payments
at an imputed interest rate of 9.75% per annum.

F-49
<PAGE>

UNIVERSAL MEDIA, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)
(Unaudited)

At June 30, 1998, long-term debt matures as follows:

<TABLE>
<CAPTION>
For the Year Ending December 31,
--------------------------------
<S> <C>
1998-Remainder................................................. $ 81,174
1999........................................................... 174,563
2000........................................................... 192,215
2001........................................................... 211,653
2002........................................................... 233,056
2003........................................................... 256,623
2004........................................................... 282,572
----------
$1,431,856
</TABLE>

Note 8--Subordinated Note Payable--Related Party

Subordinated debt at June 30, 1998 consists of a note payable to an
entity related through common ownership in the amount of $819,317. The note is
subordinated to bank borrowings (see Note 5 and 6) and is non-interest bearing.

Note 9--Related Party Transactions

Management advisory and general and administrative services, including
certain accounting, marketing, information systems support and other services,
are received from entities under common ownership and control. The value of
such services for the six months ended June 30, 1997 and 1998 was $475,000 and
$489,250, respectively and are included in general and administrative expenses
in the statement of income. These amounts were determined based on an estimate
of time and related costs to perform such services. Management believes the
allocations are reasonable.

Note 10--Concentration of Credit Risk

The Company performs ongoing credit evaluations of its customers'
financial condition and generally does not require collateral. Credit losses
have been within management's expectations.

The Company maintains cash balances at several banks. Accounts at each
institution are insured by the Federal Deposit Insurance Corporation up to
$100,000.

Note 11--Commitments and Contingencies

Leases

The Company leases office space under operating leases expiring in
various years through December 31, 2005.

F-50
<PAGE>

UNIVERSAL MEDIA, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)
(Unaudited)

Minimum annual rentals under non-cancellable operating leases, excluding
calculations based upon increases in real estate taxes and operating expenses,
are payable as follows:

<TABLE>
<CAPTION>
For the Year Ending December 31,
--------------------------------
<S> <C>
1998-Remainder................................................... $183,900
1999............................................................. 345,971
2000............................................................. 345,924
2001............................................................. 252,833
2002............................................................. 193,452
2003............................................................. 193,452
Thereafter....................................................... 386,904
</TABLE>

Rent expenses charged to operations for each of the six months ended June
30, 1997 and 1998 amounted to approximately $205,000.

Note 12--Net Advances to Affiliate

The Company has advanced funds to Affiliate and has received repayment of
certain amounts advanced. Such transactions have been treated as a reduction of
stockholder's equity since ultimate repayment of such net amount is not
assured.

F-51
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Through and including , 1999 (the 25th day after the date of
this prospectus), all dealers effecting transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.

ADVANSTAR, INC.

Common Stock

----------------

PROSPECTUS

----------------

Merrill Lynch & Co.

Bear, Stearns & Co. Inc.

Lehman Brothers

Morgan Stanley Dean Witter

Salomon Smith Barney

, 1999

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

Subject to Completion, dated March 19, 1999

PROSPECTUS

(LOGO)

Advanstar, Inc.

Common Stock

------------

Investing in the common stock involves risks which are described in the
"Risk Factors" section beginning on page of this prospectus.

------------

<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Public Offering Price................................. $ $

Underwriting Discount................................. $ $

Proceeds, before expenses, to Advanstar, Inc.......... $ $
Proceeds to Selling Stockholders...................... $ $
</TABLE>

Merrill Lynch International is acting as book-running lead manager for this
offering. Merrill Lynch International and Bear, Stearns International Limited
are acting as joint lead managers. The shares of common stock will be ready for
delivery in New York, New York on or about , 1999.

------------

Merrill Lynch International Bear, Stearns International Limited

Joint Lead Managers

------------

Lehman Brothers International

Morgan Stanley Dean Witter

Salomon Smith Barney International

------------
The date of this prospectus is , 1999
<PAGE>

INTERNATIONAL PROSPECTUS--ALTERNATE PAGE--(continued)

UNDERWRITING

Subject to the terms and conditions set forth in an international
purchase agreement among us, the selling stockholders and the international
managers and concurrently with the sale of shares of our common stock to
the U.S. underwriters, we and the selling stockholders have agreed to sell to
the international managers, and each of the international managers, for whom
Merrill Lynch International and Bear, Stearns International Limited are acting
as lead managers, severally and not jointly has agreed to purchase from us and
the selling stockholders, the number of shares of our common stock set forth
opposite its name below.

<TABLE>
<CAPTION>
Number
of
International Managers Shares
---------------------- -------
<S> <C>
Merrill Lynch International.....................................
Bear, Stearns International Limited.............................
Lehman Brothers International...................................
Morgan Stanley & Co. International Limited......................
Salomon Brothers International Limited..........................
-------
Total......................................................
=======
</TABLE>

We and the selling stockholders have also entered into a U.S. purchase
agreement with certain underwriters in the United States and Canada, which
collectively, we call the U.S. underwriters, for whom Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Bear, Stearns & Co. Inc. are acting as the U.S.
representatives. Subject to the terms and conditions set forth in the U.S.
purchase agreement, and concurrently with the sale of shares of our
common stock to the international managers pursuant to the international
purchase agreement, the selling stockholders and us have agreed to sell to the
U.S. underwriters, and the U.S. underwriters have agreed to purchase form the
selling stockholders and us, an aggregate of shares of our common stock.
The initial public offering price per share of our common stock and the
underwriting discount per share of our common stock are identical under the
U.S. purchase agreement and the international purchase agreement.

In the U.S. purchase agreement and the international purchase agreement,
the several U.S. underwriters and the several international managers which,
collectively, we call the underwriters, have agreed, subject to the terms and
conditions set forth in the respective purchase agreements, to purchase all of
the shares of the common stock being sold pursuant to each such purchase
agreement if any of the shares of common stock being sold pursuant to each such
purchase agreement are purchased. Under certain circumstances, the commitments
of non-defaulting international managers or U.S. underwriters (as the case may
be) may be increased. The purchase of our common stock by the international
managers is conditioned upon the purchase of common stock by the U.S.
underwriters, and vice versa.

The lead managers have advised us and the selling stockholders that the
international managers propose initially to offer the shares of common stock to
the public at the initial public offering price set forth on the cover page of
this prospectus, and to certain dealers at such price less a concession not in
excess of $ per share of common stock. The international managers may allow,
and such dealers may reallow, a discount not in excess of $ per share of
common stock on sales to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.
<PAGE>

INTERNATIONAL PROSPECTUS--ALTERNATE PAGE--(continued)
The following table shows the per share and total underwriting discounts
to be paid by us and the selling stockholders to the U.S. underwriters and the
international managers, and the proceeds before expenses to us and the selling
stockholders. This information is presented while assuming either no exercise
or full exercise by the underwriters of the over-allotment option.

<TABLE>
<CAPTION>
Without With
Per share option option
--------- ------- ------
<S> <C> <C> <C>
Public Offering Price...........................
Underwriting Discount...........................
Proceeds, before expenses, to Advanstar.........
Proceeds to selling stockholders................
</TABLE>

We will not receive any of the proceeds from the sale of our common stock
by the selling stockholders. The expenses of the offerings are estimated at
$ and are payable by us.

The selling stockholders have granted an option to the international
managers, exercisable for 30 days after the date of this Prospectus, to
purchase up to an aggregate of additional shares of common stock at the
initial public offering price set forth on the cover page of this Prospectus,
less the underwriting discount. The international managers may exercise this
option solely to cover over-allotments, if any, made on the sale of the common
stock offered hereby. To the extent that the international managers exercise
this option, each international manager will be obligated, subject to certain
conditions, to purchase a number of additional shares of common stock
proportionate to such initial manager's initial amount reflected in the
foregoing table. The selling stockholders have also granted an option to the
international managers, exercisable for 30 days after the date of this
prospectus, to purchase up to an aggregate of additional shares of our
common stock to cover over-allotments, if any, on terms similar to those
granted to the international managers.

At our request, the underwriters have reserved for sale, at the initial
public offering price, up to of the shares offered hereby to be sold to
certain of our employees and certain other persons. The number of shares of our
common stock available for sale to the general public will be reduced to the
extent such persons purchase such reserved shares. Any reserved shares which
are not orally confirmed for purchase within one day of the pricing of the
offerings will be offered by the underwriters to the general public on the same
terms as the other shares offered hereby.

We, our executive officers and directors and substantially all of our
existing stockholders, have agreed not to directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of our common stock
or any securities convertible into or exchangeable or exercisable for our
common stock, whether now owned or hereafter acquired by the person executing
the agreement or with respect to which the person executing the agreement
thereafter acquires the power of disposition or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of our common
stock, whether any such swap or transaction is to be settled by delivery of
common stock or other securities, in cash or otherwise, without the prior
written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated for a
period of 180 days after the date of the U.S. purchase agreement.

The U.S. underwriters and the international managers have entered into an
intersyndicate agreement that provides for the coordination of their
activities. Pursuant to the intersyndicate agreement, the U.S. underwriters and
the international managers are permitted to sell shares of common stock to each
other for purposes of resale at the initial public offering price, less an
amount not greater than the selling concession. Under the terms of the
intersyndicate agreement, the U.S. underwriters and any dealer to whom they
sell shares
<PAGE>

INTERNATIONAL PROSPECTUS--ALTERNATE PAGE--(continued)
of common stock will not offer to sell or sell shares of common stock to
persons who are non-U.S. or non-Canadian persons, or to persons whom they
believe intend to resell to persons who are non-U.S. or non-Canadian persons,
and the international managers and any dealer to whom they sell shares of our
common stock will not offer to sell or sell shares of our common stock to U.S.
persons or to Canadian persons, or to persons whom they believe intend to
resell to U.S. persons or to Canadian persons, except in the case of
transactions pursuant to the intersyndicate agreement.

Prior to the offerings, there has been no public market for our common
stock. Consequently, the initial public offering prices for the shares of
common stock included in the offering has been determined by negotiations
between us and the U.S. representatives. Among the factors considered in
determining such price were the history of an prospects for our business and
the industry in which we compete, an assessment of our management and the
present state of our development, our past and present revenues and earnings,
the prospects for growth of our revenues and earnings, the current state of the
economy in the United States, the current level of economic activity in the
industry in which we compete and in related or comparable industries, and
currently prevailing conditions in the securities markets, including current
market valuations of publicly traded companies which are comparable to us.
There can be no assurance that an active trading market will develop for our
common stock or that our common stock will trade in the public market
subsequent to the offerings at or above the initial public offering price.

Until the distribution of common stock is completed, certain rules of the
Securities and Exchange Commission may limit the ability of the U.S.
representatives and lead managers to bid for and purchase shares of common
stock. As an exception to these rules, the U.S. representatives are permitted
to engage in certain transactions that stabilize the price of our common stock.
Such transactions consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of our common stock.

The U.S. representatives may also impose a penalty bid on certain U.S.
underwriters and selling group members. This means that if the U.S.
representatives purchase shares in the open market to reduce the U.S.
underwriters' short position or to stabilize the price of the common stock,
they may reclaim the amount of the selling concession from the underwriters and
selling group members who sold those shares as part of the offerings.

INTERNATIONAL PROSPECTUS--ALTERNATE PAGE--(continued)

Neither we nor any of the selling stockholders or U.S. underwriters makes
any representation or prediction as to the direction or magnitude of any effect
that the transactions described above may have on the price of our common
stock. In addition, neither we nor any of the selling stockholders or
underwriters makes any representation that the U.S. representatives will engage
in such transactions or that such transactions, once commenced, will not be
discontinued without notice.

Affiliates of certain underwriters are lenders under our credit facility.
Certain of the underwriters have from time to time provided investment banking
financial advisory services to us and our affiliates, for which they have
received customary compensation, and may continue to do so in the future.
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INTERNATIONAL PROSPECTUS--ALTERNATE PAGE

Through and including , 1999 (the 25th day after the
date of this prospectus), all dealers effecting transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.

ADVANSTAR, INC.

Common Stock

----------------

PROSPECTUS

----------------

Merrill Lynch International

Bear, Stearns International Limited

Lehman Brothers International

Morgan Stanley Dean Witter

Salomon Smith Barney International

, 1999

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

Estimated expenses (other than underwriting discounts and commissions)
payable in connection with the sale of the Common Stock offered hereby are as
follows:

<TABLE>
<S> <C>
SEC registration fee............................................. $55,600
NASD filing fee.................................................. $20,500
New York Stock Exchange listing fee.............................. *
Printing and engraving expenses.................................. *
Legal fees and expenses.......................................... *
Accounting fees and expenses..................................... *
Blue Sky fees and expenses (including legal fees)................ *
Transfer agent and registrar fees and expenses................... *
Miscellaneous.................................................... *
-------
Total........................................................ $ *
=======
</TABLE>
- --------
* To be filed by Amendment.

The Company will bear all expenses shown above.

Item 14. Indemnification of Directors and Officers.

The Delaware General Corporation law and the Company's certificate of
incorporation and by-laws provide for indemnification of the Company's
directors and officers for liabilities and expenses that they may incur in such
capacities. In general directors and officers are indemnified with respect to
actions taken in good faith in a manner reasonably believed to be in, or not
opposed to, the best interests of the Company and, with respect to any criminal
action or proceeding, actions that the indemnitee had no reasonable cause to
believe were unlawful. Reference is made to the Company's charter and by-laws
filed as Exhibits 3.1, 3.2, 3.3 and 3.4 hereto, respectively.

The Underwriting Agreement provides that the Underwriters are obligated,
under certain circumstances, to indemnify directors, officers and controlling
persons of Advanstar against certain liabilities, including liabilities under
the Securities Act of 1933, as amended (the "Securities Act"). Reference is
made to the form of purchase agreements filed as Exhibits 1.1 and 1.2 hereto.

In addition, the Company has an existing directors and officers liability
insurance policy.

Item 15. Recent Sales of Unregistered Securities

In the three years preceding the filing of this registration statement,
the Company has issued the following securities (after giving effect to a 100-
for-one stock split on May 23, 1997) that were not registered under the Act:

On May 31, 1996, the Company issued 9,700,000 shares of its common stock,
par value $.01 per share, to AHI Advanstar, LLC for a total consideration of
$97,000,100;

On January 17, 1997, the Company issued 1,000,000 shares of its common
stock, par value $.01 per share, to AHI Advanstar LLC for a total consideration
of $10,000,000;

II-1
<PAGE>

On May 15, 1997, the Company issued 200,000 shares of its common stock,
par value $.01 per share, to AHI Advanstar LLC for a total consideration of
$2,000,000; and

On April 27, 1998, the Company issued 5,833,333 shares of its common
stock, par value $.01 per share, to AHI Advanstar LLC for a total consideration
of $70,000,000.

On March 15, 1999, the Company issued 81,667 shares of its common stock,
par value $.01 per share, to AHI Advanstar LLC for a total consideration of
$980,000.

In addition, the Company has issued options to purchase an aggregate of
1,095,562 shares of the Company's common stock under the 1996 Stock Option Plan
at a weighted average exercise price of $13.08 (calculated as of March 19,
1999). No shares have been issued by the Company pursuant to the exercise of
previously granted stock options.

No underwriters were involved in the foregoing sales of securities. Such
sales were made in reliance upon an exemption from the registration provisions
of the Act set forth in Section 4(2) thereof relative to sales by an issuer not
involving any public offering or the rules and regulations thereunder, or, in
the case of options to purchase common stock, Rule 701 of the Act. All of the
foregoing securities are deemed restricted securities for the purposes of the
Act.

Item 16. Exhibits and Financial Statements

(a) Exhibits:

<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
1.1** Form of U.S. Purchase Agreement
1.2** Form of International Purchase Agreement
3.1** Certificate of Incorporation, as amended, of Registrant
3.2* By-Laws of Registrant
3.3** Form of Amended and Restated Certificate of Incorporation of the
Registrant to become effective upon the closing of the offerings under
this Registration Statement
3.4** Form of Amended and Restated By-Laws of the Registrant to become
effective upon the closing of the offerings under this Registration
Statement
4.1** Specimen certificate representing the Registrant's Common Stock
4.2* Indenture, dated as of April 30, 1998, among the Company, the
Guarantors (as defined therein) and the Bank of New York
4.3* Supplemental Indenture, dated as of May 19, 1998, among the Company,
Applied Business teleCommunications and the Bank of New York
4.4* Form of Exchange Note
5.1* Opinion of Testa, Hurwitz & Thibeault, LLP regarding the legality of
the common stock being issued
10.1* 1996 Stock Option Plan
10.2** Amended and Restated 1996 Stock Option Plan
10.3** 1999 Stock Option and Incentive Plan
10.4R Amended Credit Agreement (the "Credit Agreement"), dated as of May 31,
1996, as amended and restated as of August 26, 1998, among the
Company, the Guarantors (as defined in the Credit Agreement), the
Lenders (as defined in the Credit Agreement) and the Chase Manhattan
Bank
10.5* Employment Agreement, dated July 1, 1996, between Advanstar, Inc. and
Robert Krakoff
10.6* Employment Agreement, dated July 1, 1996, between Advanstar, Inc. and
James M. Alic
10.7** Employment Agreement between Advanstar, Inc. and Martin C. ("Skip")
Farber
10.8* Employees' 401(k) Plan and Trust, as amended
10.9* Agreement, dated July 31, 1997, between the Company and Banta
Publications
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
10.10* Lease Agreement, dated February 2, 1996, between the Las Vegas
Convention and Visitors Authority and Men's Apparel Guild in
California, Inc.
10.11* Lease Agreement dated December 24, 1996, between the Las Vegas
Convention and Visitor's Authority and Men's Apparel Guild in
California, Inc.
10.12* Lease Agreement, dated September 25, 1996, between the Interface
Group--Nevada, Inc. and Men's Apparel Guild in California, Inc.
10.13* Lease Agreement, dated September 5, 1997, between the Interface
Group--Nevada, Inc. and Men's Apparel Guild in California, Inc.
10.14* Lease Agreement, dated September 5, 1997, between the Interface
Group--Nevada, Inc. and Men's Apparel Guild in California, Inc.
10.15* Lease Agreement, dated September 5, 1997, between the Interface
Group--Nevada, Inc. and Men's Apparel Guild in California, Inc.
10.16* Lease Agreement, dated September 5, 1997, between the Interface
Group--Nevada, Inc. and Men's Apparel Guild in California, Inc.
10.17* Convention Agreement, dated March 19, 1998, between Las Vegas Hilton
Corporation and Men's Apparel Guild in California, Inc.
10.18** Exhibit A (setting forth the registration rights provisions) to the
Stockholders Agreement dated May 15, 1997 by and among Advanstar,
Inc., AHI Advanstar, LLC, Robert L. Krakoff, James Alic, Peter J.
Solomon, Co., Ltd., Hellman & Friedman Capital Partners III, L.P., H&F
Orchard Partners III, L.P. and H&F International Partners III, L.P.
11.1** Statement re: Computation of Per Share Earnings
21.1+ Subsidiaries of the Registrant
23.1+ Consent of Arthur Andersen LLP
23.2+ Consent of PricewaterhouseCoopers LLP
23.3+ Consent of Mahoney Cohen & Company, CPA, P.C.
23.4** Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5.1)
24.1+ Power of Attorney (included on signature pages of Registration
Statement)
27.1* Financial Data Schedule (EDGAR version only)
</TABLE>
- --------
* Previously filed as an exhibit to Registration Statement on Form S-4 (File
No. 333-57201) and incorporated herein by reference.
R Previously filed as Exhibit 10.1 to Advanstar, Inc.'s Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 1998 and filed with
the Securities and Exchange Commission on November 16, 1998, and
incorporated herein by reference.
** To be filed by amendment.
+ Filed herewith.

(b) Financial Statements Schedules:

All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore have
been omitted.

Item 17. Undertakings

Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to provisions described in Item 14 above, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses

II-3
<PAGE>

incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

The undersigned registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting agreement
certificates in such denominations and registered in such names as required by
the underwriters to permit prompt delivery to each purchaser.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Boston, Massachusetts,
on the 19th day of March, 1999.

ADVANSTAR, INC.

/s/ Robert L. Krakoff
By: _________________________________
Robert L. Krakoff
Chairman of the Board and
Chief Executive Officer

We, the undersigned officers and directors of Advanstar, Inc. hereby
severally constitute and appoint Robert L. Krakoff, James M. Alic and David W.
Montgomery, and each of them singly, our true and lawful attorneys, with full
power to them and each of them singly, to sign for us in our names in the
capacities indicated below, all pre-effective and post-effective amendments to
this registration statement and any related subsequent registration statement
pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and
generally to do all things in our names and on our behalf in such capacities to
enable Advanstar, Inc. to comply with the provisions of the Securities Act of
1933, as amended, and all requirements of the Securities and Exchange
Commission.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Titles Date
--------- ------ ----

<S> <C> <C>
/s/ Robert L. Krakoff Chairman of the Board and March 19, 1999
______________________________________ Chief Executive Officer
Robert L. Krakoff (Principal Executive
Officer)

/s/ David W. Montgomery Vice President--Finance, March 19, 1999
______________________________________ Chief Financial Officer
David W. Montgomery and Secretary (Principal
Financial and Accounting
Officer)

/s/ James M. Alic Director March 19, 1999
______________________________________
James M. Alic
/s/ Kenneth T. Berliner Director March 19, 1999
______________________________________
Kenneth T. Berliner

/s/ Mitchell R. Cohen Director March 19, 1999
______________________________________
Mitchell R. Cohen

/s/ John M. Pasquesi Director March 19, 1999
______________________________________
John M. Pasquesi
</TABLE>

II-5
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number Description Page
------- ----------- ----
<C> <S> <C>
21.1 Subsidiaries of Advanstar, Inc. 1
23.1 Consent of Arthur Andersen LLP 2
23.2 Consent of PricewaterhouseCoopers LLP 3
23.3 Consent of Mahoney Cohen & Company, CPA, P.C. 4
</TABLE>

<PAGE>

EXHIBIT 21.1

<TABLE>
<CAPTION>
Name of Subsidiary
- ------------------ Jurisdiction of Incorporation or Organization
<S> <C>
Advanstar Communications
Inc. New York
Applied Business
teleCommunications,
Inc. California
Men's Apparel Guild in
California, Inc. California
Expocon Management
Associates, Inc. Connecticut
Art Expositions
International, Inc. Delaware
Home Entertainment
Events Partnership Delaware
Advanstar Wideband
Partnership New York
Advanstar Editora E
Communicados Ltda. Brazil
Advanstar Expositions
Canada Limited Canada
SeCA France, a French societe anonyme
Advanstar Communications Hong Kong
Asia Pacific
Partnership
Telecom Asia Limited Hong Kong
Advanstar Communications
(UK) Limited United Kingdoms, under the laws of England and Wales
Telebusiness Exhibitions United Kingdoms, under the laws of England and Wales
Limited (aka Starform)
</TABLE>

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report (and to all references to our firm) included in or made a part of this
Registration Statement on Form S-1.

/s/ Arthur Andersen LLP

Minneapolis, Minnesota
March 19, 1999

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion in this Registration Statement on Form S-1 of
our report dated June 24, 1997 on our audits of the consolidated balance sheets
of Men's Apparel Guild in California, Inc. and subsidiary as of May 31, 1997
and 1996, and the related consolidated statements of income, shareholders'
equity and cash flows for each of the years in the three year period ended May
31, 1997. We also consent to the reference to our firm under the caption
"Experts."

/s/ PricewaterhouseCoopers LLP

Los Angeles, California
March 17, 1999

<PAGE>

EXHIBIT 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion in this Registration Statement on Form S-1 of
our report dated March 6, 1998, except for Note 13 as to which the date is
August 17, 1998, on our audit of the financial statements of Universal Media,
Inc. We also consent to the reference to our firm under the caption "Experts"
in the Prospectus.

/s/ Mahoney Cohen & Company, CPA, P.C.

New York, New York
March 18, 1999