SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 0-24556
MARKER INTERNATIONAL
(Exact name of registrant as specified in its charter)
Utah 87-0372759
(State or other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification No.)
1070 West 2300 South
Salt Lake City, Utah 84119
(Address of principal executive offices)
(801) 972-2100
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filings
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class of Common Stock Outstanding at February 18, 1999
--------------------- --------------------------------
Common Stock, $0.01 par value 11,140,577
<PAGE>
MARKER INTERNATIONAL
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Part I - Financial Information
Item 1. Financial Statements Page
----
<S> <C>
Condensed Consolidated Balance Sheets
As of December 31, 1998 and March 31, 1998 3
Condensed Consolidated Statements of Operations
For the Three and Nine Months Ended
December 31, 1998 and 1997 5
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended
December 31, 1998 and 1997 7
Notes to Condensed Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 16
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 25
Signatures 26
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
MARKER INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS
December 31, March 31,
1998 1998
----------- ----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 5,746 $ 4,241
Accounts receivable, net of allowance for doubtful
accounts of $2,146 and $1,697, respectively 40,506 31,710
Inventories 32,381 37,223
Prepaid and other current assets 1,378 4,440
---------- ----------
Total current assets 80,011 77,614
---------- ----------
PROPERTY, PLANT AND EQUIPMENT:
Land 386 1,050
Building and improvements 5,969 7,581
Machinery and equipment 21,046 21,222
Furniture, fixtures and office equipment 5,579 4,582
---------- ----------
32,980 34,435
Less accumulated depreciation and amortization (19,909) (16,733)
---------- ----------
Net property, plant and equipment 13,071 17,702
---------- ----------
INTANGIBLE ASSETS, net of accumulated amortization - 7,877
---------- ----------
OTHER ASSETS 1,277 1,927
---------- ----------
$ 94,359 $ 105,120
========== ==========
</TABLE>
The accompanying notes to condensed consolidated financial statements
are an integral part of these condensed consolidated balance sheets.
3
<PAGE>
MARKER INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Dollars in Thousands)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
December 31, March 31,
1998 1998
----------- ----------
<S> <C> <C>
CURRENT LIABILITIES:
Notes payable to banks $ 70,384 $ 48,645
Current maturities of long-term debt 2,635 3,512
Current maturities of Series A Bonds, issued to a
related party 5,373 4,500
Accounts payable 5,911 6,381
Other current liabilities 7,314 7,830
---------- ----------
Total current liabilities 91,617 70,868
---------- ----------
LONG-TERM DEBT, net of current maturities 8,092 14,898
---------- ----------
SERIES A BONDS, net of current maturities, issued to a related party 6,567 5,500
---------- ----------
OTHER LONG-TERM LIABILITIES 1,881 -
--------- ----------
REDEEMABLE SERIES B PREFERRED STOCK 3,000 -
---------- ----------
MINORITY INTEREST - 1,447
---------- ----------
SHAREHOLDERS' (DEFICIT) EQUITY:
Common stock 111 111
Additional paid-in capital 36,299 36,299
Accumulated deficit (51,875) (16,471)
Cumulative foreign currency translation adjustments (1,333) (7,532)
----------- -----------
Total shareholders' (deficit) equity (16,798) 12,407
----------- -----------
$ 94,359 $ 105,120
=========== ===========
</TABLE>
The accompanying notes to condensed consolidated financial statements
are an integral part of these condensed consolidated balance sheets.
4
<PAGE>
MARKER INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended December 31, Ended December 31,
-------------------------- -------------------------
1998 1997 1998 1997
--------- --------- --------- -------
<S> <C> <C> <C> <C>
NET SALES $ 30,302 $ 33,376 $ 56,898 $ 58,504
COST OF SALES 22,090 22,173 39,498 38,512
-------- -------- -------- --------
GROSS PROFIT 8,212 11,203 17,400 19,992
-------- -------- -------- --------
OPERATING EXPENSES:
Selling 4,841 4,092 10,250 9,569
General and administrative 3,901 1,825 10,090 6,330
Research and development 578 540 1,836 1,939
Warehousing and shipping 735 530 1,519 1,229
-------- -------- -------- --------
10,055 6,987 23,695 19,067
-------- -------- -------- --------
OPERATING (LOSS) INCOME (1,843) 4,216 (6,295) 925
-------- -------- -------- --------
OTHER (EXPENSE) INCOME:
Interest expense (2,106) (1,517) (5,332) (4,087)
Other, net 593 156 2,751 654
-------- -------- -------- --------
(1,513) (1,361) (2,581) (3,433)
-------- -------- -------- --------
(LOSS) INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES (3,356) 2,855 (8,876) (2,508)
(PROVISION) BENEFIT FOR INCOME TAXES (522) (1,028) (851) 1,046
-------- -------- -------- =-------
(LOSS) INCOME FROM CONTINUING OPERATIONS
(3,878) 1,827 (9,727) (1,462)
-------- -------- -------- --------
DISCONTINUED OPERATIONS:
Income (Loss) from operations of
discontinued snowboard business, net of - 1,111 (1,484) (1,701)
income taxes
Income (Loss) on disposal of snowboard
business 769 - (24,092) -
------- -------- -------- --------
INCOME (LOSS) FROM DISCONTINUED OPERATIONS
769 1,111 (25,576) (1,701)
-------- -------- -------- ---------
NET (LOSS) INCOME $ (3,109) $ 2,938 $(35,303) $ (3,163)
======== ======== ======== =========
</TABLE>
The accompanying notes to condensed consolidated financial statements
are an integral part of these condensed consolidated balance sheets.
5
<PAGE>
MARKER INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended December 31, Ended December 31,
---------------------=----- ------------------------
1998 1997 1998 1997
--------- --------- --------- --------
<S> <C> <C> <C> <C>
(LOSS) INCOME PER COMMON SHARE (Both Basic and
Diluted):
(Loss) income from continuing operations $ (0.35) $ 0.16 $ (0.87) $ (0.13)
----------- ---------- ---------- ----------
Income (loss) from operations of discontinued
snowboard business - 0.10 (0.13) (0.15)
Income (loss) on disposal of snowboard
business 0.07 - (2.17) -
----------- ---------- ---------- ----------
Income (loss) from discontinued operations 0.07 0.10 (2.30) (0.15)
----------- ---------- ---------- ----------
Net (loss) income $ (0.28) $ 0.26 $ (3.17) $ (0.28)
=========== ========== ========== ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (both basic
and diluted) 11,140,577 11,130,577 11,134,504 11,129,694
=========== =========== ========== ==========
</TABLE>
The accompanying notes to condensed consolidated financial statements
are an integral part of these condensed consolidated balance sheets.
6
<PAGE>
MARKER INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Nine Months
Ended December 31,
--------------------------
1998 1997
------ ------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (35,303) $(3,163)
Adjustments to reconcile net loss to net cash
used in operating activities:
Minority interest - (65)
Gain (loss) on sale of property, plant and equipment 680 (89)
Depreciation and amortization 2,344 3,841
Loss on write-off of goodwill and intangibles 8,487 -
Change in assets and liabilities:
Increase in accounts receivable, net (7,575) (20,646)
Decrease (increase) in inventories 6,481 (7,042)
Decrease (increase) in prepaid and other assets 3,983 (3,767)
Increase in accounts payable 690 605
Decrease in other current liabilities (1,567) (2,735)
Increase in other liabilities 2,154 -
-------- -------
NET CASH USED IN OPERATING ACTIVITIES (19,626) (33,061)
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (2,856) (5,694)
Proceeds from disposition of equipment 4,434 3,768
-------- -------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 1,578 (1,926)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on notes payable to banks 18,456 27,729
Proceeds from issuance of preferred stock 3,000 -
Proceeds from issuance of common stock - 6
Proceeds from issuance of long-term debt 710 3,173
Principal payments on long-term debt (9,376) (3,072)
-------- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES 12,790 27,836
-------- -------
Effect of foreign exchange rate changes on cash and cash equivalents 6,763 (1,161)
-------- -------
Net increase (decrease) in cash and cash equivalents 1,505 (8,312)
Cash and cash equivalents at beginning of period 4,241 13,532
-------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,746 $ 5,220
======== ========
</TABLE>
The accompanying notes to condensed consolidated financial statements
are an integral part of these condensed consolidated balance sheets.
7
<PAGE>
MARKER INTERNATIONAL AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Note 1. Interim Financial Statements
The accompanying condensed consolidated financial statements include
the accounts of Marker International and its subsidiaries (the "Company"). The
condensed consolidated financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission (the "SEC").
Certain information and footnote disclosures normally required in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted pursuant to such rules and regulations. The financial
statements reflect all normal recurring adjustments which, in the opinion of
management, are necessary to fairly present the financial position, results of
operations and cash flows for the periods presented.
The Company's financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and settlement of
liabilities and commitments in the normal course of business. The Company has
continued to experience financial difficulties through the third quarter of
fiscal 1999 and thereafter. As discussed in Note 2, the Company has renegotiated
certain bank credit agreements to increase the borrowing limits and extend the
maturity to March 31, 1999 of loans made pursuant to such agreements. However,
significant risks exist that these credit agreements will not provide the
Company with the necessary working capital beyond March 31, 1999 or that the
Company will be unable to borrow amounts under these agreements sufficient to
fund operations during the remaining terms of these agreements. As a result,
there is a substantial risk that the Company will not be able to continue as a
going concern.
The results of operations for the three and nine months ended December
31, 1998 are not necessarily indicative of the results for the full fiscal year.
It is suggested that these condensed consolidated financial statements be read
in conjunction with the financial statements and notes thereto included in the
Company's latest Annual Report on Form 10-K as filed with the SEC.
Note 2. Recent Events
Credit Agreements
- -----------------
In August 1998, the Company's maximum borrowing limit on its line of
credit with a U.S. bank (the "U.S. Credit Line") was increased by approximately
$4.0 million to $33.6 million. On November 12, 1998, the Company entered into a
restated credit agreement with the U.S. bank which, among other things, extended
8
<PAGE>
MARKER INTERNATIONAL AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
the maturity of the credit facility until March 31, 1999, increased the interest
rate thereon to the bank's prime rate plus 0.5 percent and waived the Company's
non-compliance with certain covenants.
Under the restated credit agreement, the Company agreed to pledge
additional collateral, including certain real property owned by the Company. In
addition, the Company entered into a lockbox agreement with the U.S. bank, which
requires that all payments from debtors be remitted to a lockbox account from
which amounts are applied to reduce amounts outstanding under the credit
agreement. The bank advances funds under the agreement to the Company on a daily
basis in accordance with the borrowing base limits established under the
agreement.
On August 19, 1998, HypoVereinsbank and Deutsche Bank AG agreed in
principle to extend their existing lines of credit through March 31, 1999 and to
provide a temporary increase in available credit of DM 10.0 million through
November 30, 1998. On October 13, 1998, the Company entered into a final
agreement with HypoVereinsbank providing a credit line of DM 56.4 million (U.S.
$33.7 million) through March 31, 1999. On November 5, 1998, the Company entered
into a final agreement with Deutsche Bank AG providing a credit line of DM 14.8
million (U.S. $8.9 million) through March 31, 1999. Marker Germany agreed to
pledge additional collateral to HypoVereinsbank and Deutsche Bank AG consisting
of certain intellectual property rights owned by Marker Germany. On November 25,
1998, BFG Bank agreed to extend its DM 5.0 million (U.S. $3.0 million) line of
credit through March 31, 1999. In the event that the banks do not extend the
terms of the Company's U.S. Credit Line and German credit lines to provide the
Company with necessary working capital beyond March 31, 1999, or the Company is
unable to borrow amounts under existing credit lines sufficient to fund
operations, there is a substantial risk that the Company will not be able to
continue as a going concern.
As of January 31, 1999, the Company was not in compliance with a
minimum tangible net worth covenant under a $3.0 million Canadian Dollar (U.S.
$2.0) line of credit agreement with the Royal Bank of Canada. The Company is in
discussions with the bank to obtain a waiver from the bank for the period of
time of its non-compliance with the covenant. In the event that non-compliance
is not cured or waived, the bank may exercise its rights to demand payment of
all amounts outstanding under the credit agreement and/or foreclose on the
Company's assets which are pledged as collateral under the agreement which could
also lead to cross-defaults under the Company's other credit arrangements. In
that event, there can be no assurance that the Company will be able to continue
as a going concern.
As part of the overall restructuring of the Company's capital
structure, the Company and its banks are continuing to discuss alternatives to
9
<PAGE>
MARKER INTERNATIONAL AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
mitigate the Company's financial difficulties and the reinstatement or renewal
of the credit lines after March 31, 1999. There can be no assurance that
satisfactory agreements will be reached between the Company and current or
prospective providers of long term debt or equity financing.
Discontinued Operations
- -----------------------
The Company is in the process of exiting the snowboard business through
dissolution and sale of its snowboard subsidiaries and related assets. On
September 10, 1998, the Board of Directors authorized the disposition of the
entire snowboard operations of the Company. On December 14, 1998, the Company
sold its 80% interest in DNR Sportsystem Ltd. for nominal consideration and the
elimination of all outstanding intercompany balances. On December 31, 1998, the
Company sold the building and land that housed the Company's snowboard
manufacturing operations for $3.1 million. On January 14, 1999, the leased
snowboard manufacturing equipment was disposed of through an auction and the net
proceeds of the auction were paid to the equipment lessor. The Company has a
remaining obligation of $2.2 million to the lessor, which is included in the
liabilities of continuing operations. The Company is currently in the process of
winding down its remaining snowboard distribution operations.
The components of net assets (liabilities) of discontinued operations
included in the condensed consolidated balance sheets at December 31, 1998 and
March 31, 1998 were as follows:
<TABLE>
<CAPTION>
December 31, March 31,
1998 1998
-------- --------
(in thousands)
<S> <C> <C>
Accounts receivable, net $ 1,146 $ 3,468
Inventories 1,094 4,995
Prepaid and other current assets 309 1,611
Current portion of long-term debt (1,016) (751)
Accounts payable (1,827) (2,276)
Other current liabilities (1,501) (1,650)
-------- ---------
Net current (liabilities) assets $(1,795) $ 5,397
======== =========
Net property, plant and equipment $ - $ 4,538
Intangible assets, net - 7,909
Other assets - 273
Long-term liabilities - (2,320)
Minority interest - (1,447)
-------- ---------
Net long-term assets $ - $ 8,953
======== =========
</TABLE>
10
<PAGE>
MARKER INTERNATIONAL AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
As of December 31, 1998, the liabilities of the discontinued operations
exceeded the assets by approximately $1.8 million. The net losses of these
operations prior to September 1998 are included in the condensed consolidated
statements of operations under "income (loss) from operations of discontinued
snowboard business." Revenues from the discontinued operations were
approximately $1.3 million and $6.0 million for the three months ended December
31, 1998 and 1997, respectively, and $3.9 million and $12.1 million for the nine
months ended December 31, 1998 and 1997, respectively. The income (loss) from
operations of discontinued snowboard operations for the three and nine months
ended December 31, 1997, net of income taxes, were approximately $1.1 million
and $(1.7) million, respectively. The income (loss) on disposal of the snowboard
business reflected in the condensed consolidated statements of operations
includes the write-down of assets and the estimated and revised costs of
disposing of these operations. For the nine months ended December 31, 1998, the
significant components of this loss include: the write-off of intangible assets,
the write-down of the Company's investment in DNR Sportsystem Ltd., the
realization of foreign currency translation losses, the write-down of
inventories and receivables, reserves for losses on terminating noncancelable
operating leases and the write-down of property and equipment. For the three
months ended December 31, 1998, the income on the disposal of the snowboard
business relates to actual disposition results being more favorable than
previous estimates and revisions to management's estimate of future losses
attributable to the disposal of the snowboard business. The disposal estimates
represent management's current best estimates of the potential loss based upon
available information. However, actual results could differ from those
estimates.
Series B Preferred Stock
- ------------------------
On August 24, 1998, the Company issued and sold 1,000,000 shares of its
Series B Preferred Stock, $0.01 par value (the "Series B Preferred Stock"), for
an aggregate purchase price of $3,000,000 to Henry E. Tauber, the then President
of Marker International.
Each share of Series B Preferred Stock is convertible, at the option of
the holder, at any time, into shares of Common Stock of the Company at a rate of
one and one-third shares of Common Stock for each share of Series B Preferred
Stock. Holders of the Series B Preferred Stock have the right to one vote for
each share of Common Stock into which such Series B Preferred Stock is
convertible. Holders of the Series B Preferred Stock are entitled to receive
annual dividends payable either in cash, at the rate of $0.27 per share, or by
the issuance of 9/100 of a share of Series B Preferred Stock, at the election of
the Company. Such dividends are cumulative; however, accrued and unpaid
dividends do not bear interest.
11
<PAGE>
MARKER INTERNATIONAL AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
At the election of a majority of the holders of the Series B Preferred
Stock, the Company shall be required to redeem each year, beginning September 1,
2003, and on each September 1 thereafter, 25% of the total number of outstanding
shares at a price per share equal to $3.00 (subject to certain adjustments) plus
all accrued and unpaid cumulative dividends. Election of the holder to have such
stock redeemed shall be made by giving the Company written notice not less than
45 days prior to the first redemption date and each redemption date thereafter.
Series A Bonds - Issued to a Related Party
- ------------------------------------------
Pursuant to an extension agreement dated September 3, 1998, between the
Company and the holder of the Series A Bonds, payment terms of the Series A
Bonds issued by the Company were extended as follows:
<TABLE>
<CAPTION>
December 31, 1998
-----------------
Bonds Payable Bonds Payable Bond Payment Date Bond Payment Date
Japanese Yen U.S. Dollars Prior to Extension As Extended
------------ ------------ ------------------ -----------
(In 000's) (In 000's)
<S> <C> <C> <C> <C>
Series A-1 Bonds
Certificate #5 270,947 $ 2,388 October 1, 1998 October 1, 1999
Certificate #6 270,947 2,388 October 1, 1999 October 1, 2000
------- -----
Total Series A-1 Bonds 541,894 4,776
------- -----
Series A-2 Bonds
Certificate #3 338,683 2,985 December 16, 1998 December 15, 1999
Certificate #4 338,683 2,985 December 16, 1999 December 15, 2000
------- -----
Total Series A-2 Bonds 677,366 5,970
------- -----
Series A-3 Bonds
Certificate #1 135,473 1,194 December 16, 1999 December 16, 2001
------- -----
Total Series A Bonds 1,354,733 $11,940
========= =======
</TABLE>
The holder of the Series A Bonds elected, under the terms of the
extension agreement, to convert the bonds from United States dollar denominated
bonds to Japanese yen denominated bonds. The conversion of the Bonds from $10.0
million U.S. Dollars to 1,354,733,330 Japanese Yen was made effective on
September 30, 1998. This Yen denominated obligation currently remains unhedged
and any gains or losses resulting from fluctuations in exchange rates are
recorded in income. As of December 31, 1998, the Company recorded an unrealized
loss of approximately $1.9 million.
12
<PAGE>
MARKER INTERNATIONAL AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Appointment of Peter C. Weaver
- ------------------------------
In October 1998, Peter Weaver was appointed President and Chief
Executive Officer of Marker International. In this position, Mr. Weaver is
responsible for the Company's world-wide operations. At the time of Mr. Weaver's
appointment, Robert Sind, the Company's then acting Chief Operating Officer
since June 23, 1998, completed his service with the Company.
The Company has entered into a five year employment agreement, dated as
of October 8, 1998, with Mr. Weaver providing for an annual base salary of
$300,000. In addition, on October 23, 1998, Mr. Weaver received options to
purchase 900,000 shares of common stock of the Company at an exercise price of
$0.50 per share, the per share fair market value of the Company's common stock
on that date. Options to purchase 600,000 shares become exercisable on April 23,
1999. Of the remaining 300,000 options, 200,000 shares become exercisable after
one year of service and 100,000 shares after two years of service.
Note 3. Cash and Cash Equivalents
Cash and cash equivalents include investments in certificates of
deposit with original maturities of less than 30 days and restricted cash. The
Company has granted a security interest in a $2.0 million time deposit held in
the Company's name at a United States branch of a German bank. This deposit is
restricted for use as collateral on borrowings from such bank.
Note 4. Inventories
Inventories include direct materials, direct labor and manufacturing
overhead costs and are recorded at the lower of cost (using the first-in,
first-out method) or market. The major classes of inventories, including
inventories of the discontinued operations, are as follows (in thousands):
December 31, 1998 March 31, 1998
------------------- --------------
Raw materials $ 231 $ 1,411
Work in process 2,932 2,306
Finished goods 29,218 33,506
---------- ----------
$ 32,381 $ 37,223
========== ==========
13
<PAGE>
MARKER INTERNATIONAL AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Note 5. Earnings per Share
For the three and nine months ended December 31, 1998, options and
warrants to purchase 1,556,800 shares of common stock were not included in the
computation of diluted net income (loss) per common share because the exercise
prices of such options and warrants were greater than the average market price
of common shares or because the Company incurred a net loss. Net income (loss)
has been adjusted for accrued dividends on Series B Preferred Stock of $101,250
for the three and nine months ended December 31, 1998.
Note 6. Recent Accounting Pronouncements
Comprehensive Income
- --------------------
As of April 1, 1998, the Company adopted SFAS No. 130 "Reporting
Comprehensive Income." The following table displays components of the Company's
comprehensive income for the three and nine month periods ended December 31,
1998 and 1997:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
------------------------ -------------------------
(In Thousands) (In Thousands)
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net (loss) income $(3,109) $2,938 $(35,303) $(3,163)
Other Comprehensive Income Items:
Foreign Currency Translation Adjustments (463) (495) 380 (970)
------- ------ -------- -------
Comprehensive Loss $(3,572) $2,443 $(34,923) $(4,133)
======= ====== ======== =======
</TABLE>
Segment Reporting
- -----------------
Effective for fiscal year 1999, the Company has adopted SFAS No. 131
"Disclosures about Segments of an Enterprise and Related Information." SFAS 131
establishes new standards for public companies to report information about their
operating segments, products and services, geographic areas and major customers.
SFAS 131, though effective for the Company in fiscal 1999, is not applied to
interim financial statements in the initial year of its application. The
adoption of SFAS 131 will have no effect on the Company's consolidated results
of operations, financial positions or cash flows.
14
<PAGE>
MARKER INTERNATIONAL AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Derivative Instruments and Hedging Activities
- ---------------------------------------------
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No.
133 establishes accounting and reporting standards requiring that derivative
instruments be recorded on the balance sheet as either an asset or liability
measured at its fair market value and that changes in the derivative's fair
value be recognized currently in earnings unless specific hedge accounting
criteria are met. SFAS No. 133 is effective for fiscal years beginning after
June 15, 1999, which in the case of the Company shall be its fiscal year 2001.
The effect of SFAS No. 133 on the Company's consolidated financial statements is
uncertain.
Derivative financial instruments held by the Company are generally used
to manage well-defined foreign exchange and interest rate risks which occur in
the normal course of business. From time to time, the Company has entered into
transactions involving derivative instruments that require speculative
accounting treatment. Forward foreign exchange contracts are used by the Company
to reduce the potential impact of unfavorable fluctuations in foreign exchange
rates. The Company has off balance sheet commitments to buy and sell foreign
currencies relating to foreign exchange contracts in order to hedge against
future currency fluctuations.
Gains and losses on foreign currency contracts not intended to be used
to hedge operating requirements are reported currently in other income. Gains
and losses on foreign currency contracts intended to meet firm commitments are
deferred and recognized as part of the cost of the underlying transaction being
hedged. As of December 31, 1998, the Company held foreign currency contracts
that were not being used to hedge operating requirements. In addition, during
the nine month period ended December 31, 1998, the Company sold contracts that
were previously designated as hedges. For the nine months ended December 31,
1998, the Company recorded aggregate net gains (including realized and
unrealized) of approximately $2.8 million.
Counterparties to the foreign exchange contracts are typically major
international financial institutions. The Company's theoretical risk in these
transactions is the cost of replacing, at current market rates, these contracts
in the event of default by the counterparty. Management believes the risk of
incurring such losses is remote.
15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this report.
General
The Company has experienced financial difficulties through the third
quarter of fiscal 1999 and thereafter. As a result of such difficulties, there
is a substantial risk that the Company will not be able to continue as a going
concern. See "Liquidity and Capital Resources."
Marker International is a designer, developer, manufacturer and
marketer of alpine ski bindings in the United States, Europe and Asia. Marker
International ("Marker" or the "Company") is a holding company which operates
through its subsidiaries, Marker Deutschland GmbH ("Marker Germany"), Marker
USA, Marker Japan Co., Ltd. ("Marker Japan"), Marker Austria GmbH ("Marker
Austria") and Marker Canada, Ltd. ("Marker Canada"). Substantially all of the
Company's ski bindings are manufactured by Marker Germany, which also
distributes bindings in Germany, to subsidiaries of the Company and to
independent distributors in countries where the Company does not have a
distribution subsidiary. Marker Ltd., also a subsidiary of the Company, designs,
distributes and sells to retailers the Company's clothing, gloves and luggage
products for skiing and other recreational activities. The principal markets for
the Company's clothing, gloves and luggage products are North America, Europe
and Asia.
The Company is in the process of exiting the snowboard business through
dissolution and sale of its snowboard subsidiaries and related assets. On
September 10, 1998, the Board of Directors authorized the disposition of the
entire snowboard operations of the Company. On December 14, 1998, the Company
sold its 80% interest in DNR Sportsystem for nominal consideration and the
elimination of all outstanding intercompany balances. On December 31, 1998, the
Company sold the building and land that housed the Company's snowboard
manufacturing operations for $3.1 million. On January 14, 1999, the leased
snowboard manufacturing equipment was disposed of through an auction and the net
proceeds of the auction were paid to the equipment lessor. The Company has a
remaining obligation of $2.2 million to the lessor, which is included in the
liabilities of continuing operations. The Company is currently in the process of
winding down its remaining snowboard distribution operations. For the nine
months ended December 31, 1998, the Company recorded a loss from discontinued
operations of approximately $25.6 million. This loss is based upon management's
current estimates regarding the ultimate realization from the sale of remaining
assets and the settlement of liabilities on disposal of the snowboard
operations. However, actual results could differ from those estimates.
16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
The Company temporarily ceased binding production at its ski binding
manufacturing facility as of November 16, 1998. The Company plans to resume
binding production in April 1999. This temporary production shutdown was
scheduled in order to decrease inventory levels. The Company's manufacturing
facility, which is located in Germany, receives financial assistance from the
German government which partially offsets expenses that are incurred during the
period that the production assembly line is closed. In connection with a German
government program, the German government compensates employees who are affected
by the shutdown of the assembly line while the Company pays employee taxes and
all other fixed costs associated with the factory during this time period.
Marker Germany receives payment primarily in German marks ("Marks") for
ski bindings sold. For subsidiaries of the Company (principally Marker USA and
Marker Japan), Marker Germany may allow payment for ski bindings sold to be made
in the functional currency of the subsidiary. Marker Germany or the distribution
subsidiary, as applicable, routinely enters into forward foreign exchange
contracts with financial institutions in order to fix the cost of converting the
functional currency to Marks. Sales prices for the ski bindings offered to the
subsidiaries and ultimately the price the subsidiaries offer for the sale of the
ski bindings to their customers is based upon, among other things, the rate
afforded by the forward foreign exchange contracts and market conditions.
Accordingly, the relationship of the exchange rate between the functional
currency of the subsidiary and the Mark has a direct impact on the cost of the
products sold by the distribution subsidiary. As of December 31, 1998, the
Company believes it had sufficient forward foreign currency contracts in place
to hedge obligations between Marker USA and Marker Germany; and Marker Japan and
Marker Germany through fiscal 2000. However, at December 31, 1998, the Company
did not have sufficient contracts in place to hedge Marker Canada's obligations
to Marker Germany. Although such hedging contracts were previously in place, the
Company decided to sell those contracts and realize a net cash gain. The Company
is currently in the process of securing new hedging contracts. There can be no
assurance that the Company will be successful in securing hedging contracts in
amounts and at rates at least as favorable as the previous contracts. In
addition, in the event the Company cannot secure such contracts, the Company's
earnings will include unrealized gains or losses from remeasuring the foreign
currency obligations each period at spot rates.
Each of the Company's distribution subsidiaries operates and maintains
its accounting records in the functional currency of the country in which it
operates. In accordance with United States generally accepted accounting
principles, upon consolidation of the Company's consolidated financial
statements, the assets, liabilities, revenues and expenses of each of the
Company's foreign subsidiaries are translated at the appropriate exchange rate
prevailing during the period. Therefore, the Company's assets, liabilities and
17
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
results of operations are subject to fluctuations in forward foreign exchange
contract rates and translation effects which can vary as a result of
fluctuations in the exchange rates between the functional currencies of such
foreign subsidiaries and the United States dollar ("Dollar").
For the three months ended December 31, 1998, average exchange rates
between the Dollar and the Mark, the Dollar and the Japanese yen ("Yen") and the
Dollar and the Canadian dollar ("Canadian") resulted in an effective increase in
the value of the Mark against the Dollar and the Yen against the dollar of
approximately 5.2% and 4.9%, respectively, and a decrease in the Canadian
against the Dollar of approximately 9.5%, compared to the corresponding period
of the prior year. Such currency exchange activity resulted in corresponding
fluctuations in the value of the revenues and expenses of Marker Germany, Marker
Japan and Marker Canada, when converted to Dollars, compared to the
corresponding period of the prior fiscal year.
For the nine months ended December 31, 1998, average exchange rates
between the Dollar and the Mark, the Dollar and the Yen, and the Dollar and the
Canadian, resulted in an effective increase in the value of the Mark against the
Dollar of approximately 1.1%, and a decrease in the Yen against the Dollar and
the Canadian against the Dollar of approximately 8.8% and 7.8%, respectively,
compared to the corresponding period of the prior year. Such currency exchange
activity resulted in corresponding fluctuations in the value of the revenues and
expenses of Marker Germany, Marker Japan and Marker Canada, when converted to
Dollars, compared to the corresponding period of the prior fiscal year.
The Company's business is seasonal in nature. Consistent with this
seasonal nature and the ski industry in general, the Company has historically
recorded a relatively small percentage of its annual net sales during its first
fiscal quarter. The Company historically records a majority of its sales during
its second and third fiscal quarters and to a lesser extent during its fourth
fiscal quarter.
Results of Operations
Comparison of the three months ended December 31, 1998 with the three months
ended December 31, 1997 (continuing operations)
- --------------------------------------------------------------------------------
Net sales from continuing operations for the quarter ended December 31,
1998 decreased to $30.3 million, compared to $33.4 million for the corresponding
quarter of the prior fiscal year. The decrease in sales is primarily
attributable to unseasonably warm weather in the United States during the
quarter and to lower sales to independent distributors in Asia and Europe due to
an overall market decline.
18
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Gross profit for the quarter ended December 31, 1998 was $8.2 million,
or 27.1% of net sales, compared to $11.2 million, or 33.5% of net sales, for the
corresponding period of the prior fiscal year. The decrease in gross profit
percentage primarily resulted from unabsorbed fixed costs related to the
temporary shutdown of the production line and to an increase in inventory
reserves for closeout inventory.
Operating expenses for the three months ended December 31, 1998
increased to $10.1 million, compared to $7.0 million for the same period of the
prior fiscal year. The increase resulted primarily from (i) legal and advisory
fees paid to assist the Company in developing and implementing restructuring
plans and negotiating with lenders, and (ii) to the operations of a new
distribution subsidiary in Canada which began operations in January 1998.
Interest expense for the three months ended December 31, 1998 increased
to $2.1 million, compared to $1.5 million for the corresponding period of the
prior fiscal year. This increase was attributable to increased average borrowing
levels required to satisfy higher working capital requirements due to losses in
the snowboard business and a higher interest rate applied on the U.S. credit
line.
Other income for the three months ended December 31, 1998 increased to
$0.6 million, compared to $0.2 million for the corresponding period of the prior
fiscal year. The increase in other income is primarily the result of realized
and unrealized net gains on forward foreign currency contracts.
Comparison of the nine months ended December 31, 1998 with the nine months ended
December 31, 1997 (continuing operations)
- --------------------------------------------------------------------------------
Net sales from continuing operations for the nine months ended December
31, 1998 decreased to $56.9 million, compared to $58.5 million for the
corresponding period of the prior fiscal year. The decrease in sales is
primarily attributable to unseasonably warm weather in the United States during
the fall and early winter months and lower sales to distributors in Asia and
Europe due to an overall market decline.
Gross profit for the nine months ended December 31, 1998 was $17.4
million, or 30.6% of net sales, compared to $20.0 million, or 34.2% of net
sales, for the corresponding period of the prior fiscal year. The decrease in
gross profit resulted primarily from (i) unabsorbed fixed costs related to the
temporary shutdown of the production line, (ii) increased inventory reserves for
closeout inventory, and (iii) lower margins from the sale of the Company's
clothing and soft goods products. The decrease in clothing and soft goods
margins resulted from an increase in close-out product sales, which typically
are at lower margins.
19
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Operating expenses for the nine months ended December 31, 1998
increased to $23.7 million, compared to $19.1 million for the same period of the
prior fiscal year. The increase resulted primarily from (i) legal and advisory
fees paid to assist the Company in developing and implementing restructuring
plans and negotiating with lenders, and (ii) the operations of a new
distribution subsidiary in Canada which began operations in January 1998.
Interest expense for the nine months ended December 31, 1998 increased
to $5.3 million, compared to $4.1 million for the corresponding period of the
prior fiscal year. This increase was attributable to increased average borrowing
levels required to satisfy higher working capital requirements due to losses in
the snowboard business and a higher interest rate applied on the U.S. credit
line.
Other income for the nine months ended December 31, 1998 increased to
$2.8 million, compared to $0.7 million for the corresponding period of the prior
fiscal year. The increase in other income is primarily the result of realized
and unrealized net gains on forward foreign currency contracts.
Liquidity and Capital Resources
The Company's primary cash requirements are for raw materials for
inventory production, finished goods inventory, funding of accounts receivable,
and capital expenditures. Historically, the Company's primary sources of cash
for its business activities have been cash flows from operations and borrowings
under its lines of credit and term loans.
At December 31, 1998, the Company had a working capital deficit of
$11.6 million, compared to working capital of $6.7 million at March 31, 1998.
This decrease in working capital is due to higher borrowing levels due to losses
in the snowboard business.
As of December 31, 1998, the Company had approximately $70.4 million of
outstanding borrowings under its short-term credit facilities. All of such
borrowings are secured by inventory and receivables.
On November 12, 1998, the Company entered into a restated credit
agreement with the U.S. bank which, among other things, extended the maturity of
the credit facility until March 31, 1999, increased the interest rate thereon to
the bank's prime rate plus 0.5 percent and waived the Company's non-compliance
with certain covenants.
20
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Under the restated credit agreement, the Company agreed to pledge
additional collateral, including certain real property owned by the Company. In
addition, the Company entered into a lockbox agreement with the U.S. bank, which
requires that all payments from debtors be remitted to a lockbox account from
which amounts are applied to reduce amounts outstanding under the credit
agreement. The bank advances funds under the agreement to the Company on a daily
basis in accordance with the borrowing base limits established in the agreement.
On August 19, 1998, HypoVereinsbank and Deutsche Bank AG agreed in
principle to extend their existing lines of credit through March 31, 1999 and to
provide a temporary increase in available credit of DM 10.0 million through
November 30, 1998. On October 13, 1998, the Company entered into a final
agreement with HypoVereinsbank providing a credit line of DM 56.4 million (U.S.
$33.7 million) through March 31, 1999. On November 5, 1998, the Company entered
into a final agreement with Deutsche Bank AG providing a credit line of DM 14.8
million (U.S. $8.9 million) through March 31, 1999. Marker Germany agreed to
pledge additional collateral to HypoVereinsbank and Deutsche Bank AG consisting
of certain intellectual property rights owned by Marker Germany. On November 25,
1998, BFG Bank agreed to extend its DM 5.0 million (U.S. $3.0 million) line of
credit through March 31, 1999. In the event that the banks do not extend the
terms of the Company's U.S. Credit Line and German credit lines to provide the
Company with necessary working capital beyond March 31, 1999, or the Company is
unable to borrow amounts under existing credit lines sufficient to fund
operations, there is a substantial risk that the Company will not be able to
continue as a going concern.
As of January 31, 1999, the Company was not in compliance with a
minimum tangible net worth covenant under a $3.0 million Canadian Dollar (U.S.
$2.0) line of credit agreement with the Royal Bank of Canada. The Company is in
discussions with the bank to obtain a waiver from the bank for the period of
time of its non-compliance with the covenant. In the event that non-compliance
is not cured or waived, the bank may exercise its rights to demand payment of
all amounts and/or foreclose on the Company's assets which are pledged as
collateral under the agreement which could also lead to cross-defaults under the
Company's other credit arrangements. In that event, there can be no assurance
that the Company will be able to continue as a going concern.
As part of the overall restructuring of the Company's capital
structure, the Company and its banks are continuing to discuss alternatives to
mitigate the Company's financial difficulties and the reinstatement or renewal
of the credit lines after March 31, 1999. There can be no assurance that
satisfactory agreements will be reached between the Company and current or
prospective providers of long term debt or equity financing.
21
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Year 2000 Computer Issue
Many currently installed computer systems and software are coded to
accept only two digit entries in the date code field. Beginning the year 2000,
these date code fields will need to accept four digit entries to distinguish
twenty-first century dates from twentieth century dates. As a result, within the
next ten months, computer systems and/or software used by many companies may
need to be upgraded to comply with such "Year 2000" requirements. The Company is
currently assessing the potential impact of Year 2000 on the processing of
date-sensitive information by the Company's information systems, manufacturing
systems and other ancillary systems. While there can be no assurance that Year
2000 matters will be satisfactorily identified and resolved, the Company
currently believes, based on preliminary discussions with its information
systems vendors, that Year 2000 issues will not have a material adverse effect
on the Company.
The Company's comprehensive Year 2000 initiative is being managed by a
team of internal staff and is designed to ensure that there are no adverse
effects on the Company's ability to conduct business. The initiative covers the
corporate office network and financial systems, payroll processing, corporate
computers, manufacturing systems and telephone systems. In addition, the project
includes a review of the Year 2000 compliance efforts of the Company's key
suppliers and other principal business partners and, as appropriate, the
development of joint business support and continuity plans for Year 2000 issues.
The Company has brought a number of its systems into Year 2000
compliance, and has established a target date of July 15, 1999 for remediation
of all of those systems which are not yet compliant, subject to additional Year
2000 testing and responsive actions. The Company's accounting system is expected
to be compliant by July 1999. The Company's ability to meet the target dates is
dependent upon the timely provision of necessary upgrades and modifications by
its suppliers and contractors. The Company has established a supplier compliance
program and is working with its key suppliers to minimize such risks. The
Company currently estimates that it will incur expenses of approximately
$300,000 through 1999 in connection with its anticipated Year 2000 efforts. The
timing and amount of the Company's expenses may vary and are not necessarily
indicative of readiness efforts or progress to date.
As part of its Year 2000 initiative, the Company is evaluating
scenarios that may occur as a result of the century change and is in the process
of developing contingency and business continuity plans tailored for Year
2000-related occurrences. The Company believes that some of its significant
22
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
hardware and software systems are Year 2000 compliant. The Company believes that
the most reasonably likely worst case scenario of failure by the Company or its
suppliers to adequately resolve Year 2000 issues would arise from a failure of
its order entry and accounts receivable system. Such a failure would require the
company to resort to "non-computerized" means to undertake such sales and
distribution functions as placing customer orders and ordering inventory. While
the Company believes that it is equipped to operate in such a "non-computerized"
mode to address such a failure, there can be no assurance that the Company would
not, as a result of such or any other unanticipated Year 2000 failure, suffer
from lost revenues, increased operating costs, loss of customers or other
business interruptions of a material nature.
The above information is based on the Company's current best estimates,
which were derived using numerous assumptions of future events, including the
availability and future costs of certain technological and other resources,
third party modification actions and other factors. Given the complexity of
these issues and possible as yet unidentified risks, actual results may vary
materially from those anticipated and discussed above. Specific factors that
might cause such differences include, among others, the availability and costs
of personnel trained in this area, the ability to locate and correct all
affected computer code, the timing and success of remedial efforts of the
Company's third party suppliers and similar uncertainties.
Other Matters
In August 1998, the Nasdaq Stock Market, Inc. notified the Company of
its failure to meet certain minimum financial qualifications required to
maintain its listing on the Nasdaq National Market ("Nasdaq"). Nasdaq's
continued listing standards require, among other things, net tangible assets of
$4.0 million and a minimum bid price of one dollar. As a result of the Company's
inability to meet Nasdaq's requirements, shares of the Company's stock ceased to
trade on Nasdaq at the close of business on October 28, 1998. The Company's
stock currently trades on the OTC Bulletin Board.
In October 1998, Peter Weaver was appointed President and Chief
Executive Officer of Marker International. In this position, Mr. Weaver is
responsible for the Company's world-wide operations. At the time of Mr. Weaver's
appointment, Robert Sind, the Company's then acting Chief Operating Officer
since June 23, 1998, completed his service with the Company.
The Company has entered into a five year employment agreement, dated as
of October 8, 1998, with Mr. Weaver providing for an annual base salary of
$300,000. In addition, on October 23, 1998, Mr. Weaver received options to
purchase 900,000 shares of common stock at an exercise price of $0.50 per share,
23
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
the per share fair market value of the Company's common stock on that date.
Options to purchase 600,000 shares become exercisable on April 23, 1999. Of the
remaining 300,000 options, 200,000 shares become exercisable after one year of
service and 100,000 shares after two years of service.
Effective December 10, 1998, the Company repriced 656,800 of its
outstanding options to the closing price for that date of $0.5625.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of
1995
With the exception of historical information (information relating to
the Company's financial condition and results of operations at historical dates
or for historical periods), the matters discussed in this Management's
Discussion and Analysis of Financial Condition and Results of Operations are
forward-looking statements that necessarily are based on certain assumptions and
are subject to certain risks and uncertainties. These forward-looking statements
are based on management's expectations as of the date hereof, and the Company
does not undertake any responsibility to update any of these statements in the
future. Actual future performance and results could differ from that contained
in or suggested by these forward-looking statements as a result of the factors
set forth in this Management's Discussion and Analysis of Financial Condition
and Results of Operations and the Business Risks described in the Company's
Report on Form 10-K for the year ended March 31, 1998 and elsewhere in the
Company's filings with the Securities and Exchange Commission.
24
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits:
---------
27 Financial Data Schedule. *
b) Reports filed on Form 8-K:
Current Report on Form 8-K filed on December 14, 1998
reporting under Item 2 the sale of its 80% interest in DNR
Sportsystem Ltd.
- ----------------------
* Filed herewith.
25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MARKER INTERNATIONAL
--------------------
Registrant
Dated: February 18, 1998 /s/ Peter C. Weaver
--------------------
Peter C. Weaver
President and Chief Executive Officer
Dated: February 18, 1998 /s/ Kevin Hardy
----------------
Kevin Hardy
Chief Financial Officer
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