WINDMERE DURABLE HOLDINGS INC, 10-Q, 1999-11-12

WINDMERE DURABLE HOLDINGS INC
10-Q, 1999-11-12
ELECTRIC HOUSEWARES & FANS

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<PAGE> 1
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 SEPTEMBER 30, 1999

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ____________ TO ____________

COMMISSION FILE NUMBER 1-10177

WINDMERE-DURABLE HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

FLORIDA 59-1028301
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)

5980 MIAMI LAKES DRIVE, MIAMI LAKES, FLORIDA 33014
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

(305) 362-2611
(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 report(s), and (2) has been subject to
such filing requirement 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:

NUMBER OF SHARES OUTSTANDING
CLASS ON OCTOBER 28, 1999
----- -------------------
Common Stock, $.10 Par Value 22,592,016

<PAGE> 2

WINDMERE-DURABLE HOLDINGS, INC.

INDEX

<S> <C>
PART I. FINANCIAL INFORMATION

ITEM 1. Consolidated Statements of Operations for the
Three Months Ended September 30, 1999 and 1998............................ 3

Consolidated Statements of Operations for the
Nine Months Ended September 30, 1999 and 1998............................. 4

Consolidated Balance Sheets as of
September 30, 1999, and December 31, 1998................................. 5-6

Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 1999 and 1998..................... 7

Notes to Consolidated Financial Statements......................................... 8-14

ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations............................. 15-22
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.......................... 23

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings ................................................................. 24

ITEM 6. Exhibits and Reports on Form 8-K................................................... 24

SIGNATURES........................................................................................... 25

</TABLE>

2
<PAGE> 3

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

WINDMERE-DURABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE INFORMATION)

THREE MONTHS ENDED SEPTEMBER 30,
----------------------------------------------------------------
1999 1998
------------------------------ --------------------------------
<S> <C> <C> <C> <C>

Sales and Other Revenues ............. $ 204,229 100.0% $ 160,453 100.0%
Cost of Goods Sold ................... 139,137 68.1 105,439 65.7
--------- ----- --------- -----
Gross Profit .................... 65,092 31.9 55,014 34.3
Selling, General and
Administrative Expenses ......... 39,853 19.6 39,026 24.3
--------- ----- --------- -----
Operating Profit ................ 25,239 12.3 15,988 10.0
Other (Income) Expense
Interest Expense ................ 7,212 3.5 8,104 5.1
Interest and Other Income ....... (580) (.3) (464) (.3)
Gain on sale of equity interest -- -- (42,651) (26.6)
--------- ----- --------- -----
6,632 3.2 (35,011) (21.8)
--------- ----- --------- -----
Earnings before Equity
in Net Earnings of Joint
Ventures and Income Taxes ....... 18,607 9.1 50,999 31.8
Equity in Net Earnings
of Joint Ventures ............... -- -- 362 .2
--------- ----- --------- -----
Earnings Before
Income Taxes .................... 18,607 9.1 51,361 32.0
Provision for
Income Taxes .................... 4,634 2.3 16,401 10.2
========= ===== ========= =====
Net Earnings ......................... $ 13,973 6.8% $ 34,960 21.8%
========= ===== ========= =====
Earnings Per Share - basic ........... $ .62 $ 1.65
========= =========
Earnings Per Share - diluted ......... $ .59 $ 1.58
========= ==========
</TABLE>

The accompanying notes are an integral part of these statements.

3
<PAGE> 4

WINDMERE-DURABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE INFORMATION)

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
---------------------------------------------------------------
1999 1998
----------------------------- -------------------------------
<S> <C> <C> <C> <C>
Sales and Other Revenues ............. $ 472,250 100.0% $ 278,415 100.0%
Cost of Goods Sold ................... 330,493 70.0 202,168 72.6
------- ---- ------- ----
Gross Profit .................... 141,757 30.0 76,247 27.4
Selling, General and
Administrative Expenses ......... 116,008 24.6 63,558 22.8
Repositioning charge ............ -- -- 9,914 3.6
------- ---- ------- ----
Operating Profit ................ 25,749 5.4 2,775 1.0

Other (Income) Expense
Interest Expense ................ 19,947 4.2 10,575 3.8
Interest and Other Income ....... (1,604) (.3) (2,662) (.9)
Gain on sale of equity interest -- -- (42,651) (15.3)
------- ---- ------- ----
18,343 3.9 (34,738) (12.4)
------- ---- ------- ----
Earnings before Equity
in Net Earnings (Loss) of Joint
Ventures and Income Taxes ....... 7,406 1.5 37,513 13.4
Equity in Net Earnings (Loss)
of Joint Ventures ............... (12,894) (2.7) 1,558 .6
------- ---- ------- ----
Earnings (Loss) Before
Income Taxes .................... (5,488) (1.2) 39,071 14.0
Provision (Benefit) for
Income Taxes .................... (2,366) (.5) 10,838 3.9
------- ---- ------- ----
Net Earnings (Loss) .................. $ (3,122) (.7)% $ 28,233 10.1%
======= ==== ======= ====

Earnings (Loss) Per Share -
basic ........................... $ (.14) $ 1.45
======= =======

Earnings (Loss) Per Share -
diluted ......................... $ (.14) $ 1.34
======= =======

</TABLE>

The accompanying notes are an integral part of these statements.

4
<PAGE> 5

WINDMERE-DURABLE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
9/30/99 12/31/98
------- --------
<S> <C> <C>
ASSETS

CURRENT ASSETS

Cash & Cash Equivalents ............................................... $ 5,529 $ 20,415
Accounts and Other Receivables,
less allowances of $7,970 and
$7,367, respectively ............................................. 204,016 165,837
Receivables from Affiliates (Note 2) .................................. 3,244 5,589
Inventories
Raw Materials .................................................... 10,107 12,648
Work-in-process .................................................. 22,422 28,727
Finished Goods ................................................... 152,951 124,090
-------- --------
Total Inventories ............................................ 185,480 165,465
Prepaid Expenses ...................................................... 9,895 16,709
Refundable Income Taxes ............................................... 7,927 6,555
Future Income Tax Benefits ............................................ 23,503 18,277
-------- --------
Total Current Assets ............................................. 439,594 398,847

INVESTMENTS IN JOINT VENTURES
(NOTE 2) ......................................................... 2,763 15,708

PROPERTY, PLANT & EQUIPMENT -
AT COST, less accumulated
depreciation of $68,697 and
$59,524, respectively ............................................ 77,866 76,077
Notes Receivable from Affiliate (Note 7)............................... -- 7,891
OTHER ASSETS .......................................................... 251,191 244,214
-------- --------

TOTAL ASSETS ........................................................ $771,414 $742,737
======== ========

</TABLE>

5
<PAGE> 6

WINDMERE-DURABLE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)

9/30/99 12/31/98
------- --------
<S> <C> <C>
LIABILITIES

CURRENT LIABILITIES

Current Maturities of Long-Term Debt ................................ $ 10,342 $ 8,630
Accounts Payable and Accrued Expenses ............................... 135,628 119,611
Income taxes payable ................................................ 1,096 2,693
Deferred Income, current portion .................................... 689 479
--------- ---------
Total Current Liabilities ............................. 147,755 131,413

LONG-TERM DEBT ...................................................... 289,645 272,370

DEFERRED INCOME TAXES ............................................... 10,865 12,132

DEFERRED INCOME, less current Portion ............................... 1,052 2,804

SHAREHOLDERS' EQUITY (Note 3)

Special Preferred Stock -
Authorized 40,000,000 shares of
$.01 par value; none issued

Common Stock - authorized 40,000,000 shares of $.10 par value; shares
outstanding:
22,512 and 22,091, respectively ................................ 2,251 2,209
Paid-in Capital ..................................................... 148,160 145,161
Retained Earnings ................................................... 174,717 177,839
Accumulated Other Comprehensive Income .............................. (1,480) (1,191)
Note receivable from affiliate ...................................... (1,551) --
--------- ---------
Total Shareholders' Equity .......................................... 322,097 324,018
--------- ---------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY ................... $ 771,414 $ 742,737
========= =========

</TABLE>

The accompanying notes are an integral part of these statements.

6
<PAGE> 7

WINDMERE-DURABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)

NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net earnings (Loss) .......................................................... $ (3,122) $ 28,233
Adjustments to reconcile net earnings (loss)
to net cash used in operating activities:
Depreciation of property, plant and equipment ................................ 13,108 7,712
Amortization of intangible assets ............................................ 12,627 3,626
Amortization of deferred income .............................................. -- (248)
Repositioning charge ......................................................... -- 17,600
Loss on disposal of fixed assets ............................................. 2,204 617
Writedown of investment in joint venture ..................................... 12,574 --
Net change in allowance for losses on accounts receivable .................... 603 3,797
Equity in net earnings (loss) of joint ventures .............................. 371 (1,588)
Gain on sale of equity interest ......................................... 0 (42,651)
Changes in assets and liabilities
Increase in accounts and other receivables ............................... (32,700) (63,877)
Increase in inventories .................................................. (10,409) (10,632)
Decrease (increase) in prepaid expenses .................................. 6,814 (12,171)
Decrease (increase) in other assets ...................................... 5,894 (29,956)
(Decrease) increase in accounts payable and accrued expenses ............. (2,219) 39,424
Current and deferred income taxes ........................................ (9,462) 11,634
(Decrease) increase in deferred income ................................... (1,541) 14,970
(Decrease) increase in other accounts .................................... (289) 128
-------- ---------
Net cash used in
operating activities .............................................. (5,547) (33,382)

Cash flows from investing activities:
Additions to property, plant and equipment - net ............................. (17,101) (13,887)
Purchase of net assets - Household Products Group ............................ -- (319,626)
Purchase of net assets from Newtech .......................................... (15,059) --
Proceeds from sale of equity interest in Salton - net ................... -- 72,279
Decrease (increase) in receivable accounts
and notes from affiliates ................................................ 2,344 (8,165)
-------- ---------
Net cash used in investing activities ............................... (29,816) (269,399)

Cash flows from financing activities:
Net borrowings under lines of credit ......................................... $ 28,949 $ --
Notes and acceptances ........................................................ 0 (41,984)
Long-term debt - net ......................................................... 0 507,000
Payments of long-term debt ................................................... (9,962) (255,885)
Exercise of stock options and warrants ....................................... 1,490 2,962
Proceeds from sale of common stock - net ..................................... 0 97,636
Payment of withholding tax on
Stock option exercises ................................................... -- (2,346)
-------- ---------
Net cash provided by financing activities ........................... 20,477 307,383
-------- ---------
(Decrease) increase in cash
and cash equivalents .............................................. (14,886) 4,602
Cash and cash equivalents at beginning of year .................................... 20,415 8,224
-------- ---------
Cash and cash equivalents at end of quarter ....................................... $ 5,529 $ 12,826
======== =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for:
Interest ..................................................................... $ 24,470 $ 5,060
Income taxes ................................................................. $ 5,621 $ 0
Non-cash investing and financing activities:
In April 1999, the Company sold 210,000 shares of common stock to its
Chief Executive Officer in exchange for a promissory note totaling
$1,496,250

</TABLE>

The accompanying notes are an integral part of these statements.

7
<PAGE> 8

WINDMERE-DURABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF ACCOUNTING POLICIES

INTERIM REPORTING

In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all normal recurring adjustments
necessary to present fairly the Company's financial position as of
September 30, 1999 and the results of its operations and changes in
financial position for the interim periods. Results for interim
periods should not be considered indicative of results for a full
year. Reference should be made to the financial statements contained
in the registrant's Annual Report on Form 10-K for the year ended
December 31, 1998.

RECLASSIFICATIONS

Certain prior period amounts have been reclassified for comparability.

RECEIVABLES FROM AFFILIATES

Receivables from Affiliates include accounts receivable which arise in
the ordinary course of business and are settled as trade obligations,
as well as the current portion of notes receivable due from certain of
the Company's joint venture partners and other affiliates
("Affiliates"). Notes receivable from these Affiliates bear interest
at prevailing market interest rates.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses forward exchange contracts to reduce fluctuations in
foreign currency cash flows related to third party raw material and
other operating purchases. The terms of the currency instruments used
are generally consistent with the timing of the committed or
anticipated transactions being hedged. Outstanding at September 30,
1999 is $29,000,000, in contracts to purchase Hong Kong dollars,
forward. Also outstanding are option contracts to sell and buy
$18,800,000 in Canadian dollars, forward. There is no significant
unrealized gain or loss on these contracts. All contracts have terms
of six months or less.

The Company uses interest rate swaps of one to four years in duration
primarily to reduce the impact of changes in interest rates on its
floating rate debt. The notional amounts of the swap agreements are
used to measure interest to be paid or received and do not represent
the amount of exposure to credit loss. The differential paid or
received on the agreements is recognized as an adjustment of interest
expense.

As of September 30, 1999, the Company had purchased swaps on
$120,000,000 notional principal amount with a market value of
approximately ($98,000). The market value represents the amount the
Company would have to pay to exit the contracts at September 30, 1999.
The Company does not intend to exit such contracts at this time.

2. INVESTMENTS IN JOINT VENTURES

Investments in Joint Ventures consist of the Company's interests in
joint ventures, accounted for under the equity method. Included are
the Company's 50-percent interests in Newtech Electronics Industries,
Inc. ("Newtech"), Breakroom of Tennessee, Inc. and Anasazi Partners,
L.P. ("Anasazi").

8
<PAGE> 9

In June 1999, the Company entered into a definitive asset purchase
agreement to purchase substantially all of Newtech's assets, including
inventory, accounts receivable, certain trademarks and other
intangibles, as well as the assumption of certain liabilities relating
to the business. Net assets acquired totaled approximately
$15,000,000. In connection with the acquisition, the Company wrote
down its remaining investment in Newtech resulting in a one-time
non-cash charge of $12,574,400 ($8,300,000 after tax). The charge has
been recorded as equity in net loss of joint ventures in the Company's
Statement of Operations.

Under the terms of the agreement, the Company acquired the exclusive
right and license to use the White-Westinghouse Trademark in North
America for the design, manufacture, and sale of certain consumer
electronic products and has been assigned Newtech's rights under the
long-term supply contracts with the Kmart Corporation in the United
States and Zellers in Canada. According to the terms of the contracts,
the Company will supply Kmart and Zellers consumer electronics under
the White-Westinghouse brand. The remaining term under the Kmart
contract can be extended up to 2011 upon mutual consent. The Zellers
contract expires in 2004.

Notes receivable from Affiliates at September 30, 1999 includes $13.9
million from the sale of the Company's equity interest in Salton. The
$13.9 million note has been recorded net of related deferred income
for anticipated future purchases by Salton from the Company.

Note: Profits earned by the Company's manufacturing subsidiary on
sales to joint ventures are included in the consolidated earnings
results.

3. SHAREHOLDERS' EQUITY

EARNINGS PER SHARE

Basic shares for the three month periods ended September 30, 1999 and
1998 were 22,478,303 and 21,132,969, respectively. Basic shares for the
nine month periods ended September 30, 1999 and 1998 were 22,290,429
and 19,437,363, respectively. Included in diluted shares are common
stock equivalents relating to options, warrants and convertible debt of
1,327,338 and 997,061 for the three month periods ended September 30,
1999 and 1998, respectively and 1,561,771 for the nine month period
ended September 30, 1998.

All common stock equivalents have been excluded from the per share
calculation in the nine month period ended September 30, 1999, as the
Company incurred a loss in the period and their inclusion would have
been anti-dilutive.

4. COMMITMENTS AND CONTINGENCIES

The Company is a defendant in SHERLEIGH ASSOCIATES LLC AND SHERLEIGH
ASSOCIATES INC. PROFIT SHARING PLAN, ON THEIR OWN BEHALF AND ON BEHALF
OF ALL OTHERS SIMILARLY SITUATED V. WINDMERE-DURABLE HOLDINGS, INC.,
DAVID M. FRIEDSON, HARRY D. SCHULMAN AND NATIONSBANC MONTGOMERY
SECURITIES LLC, 98-2273-CIV-LENARD which was filed in the United
States District Court, Southern District of Florida on October 8,
1998.

This matter is a class action complaint, which is the consolidation of
eight separate class action complaints with substantially similar
allegations. On June 30, 1999, a consolidated amended class action
complaint was filed. The consolidated amended class action complaint
was purportedly filed on behalf of those security holders of the
Company who purchased such securities during a certain period in the
second and third quarters of 1998, alleging violations of the federal
securities laws (including Rule 10b-5 promulgated pursuant to the
Securities Exchange Act of 1934, as amended) in connection with the
acquisition by the Company of certain product categories of the
Household Products Group of the Black & Decker Corporation. Among
other things, the plaintiffs allege that the Company and certain of
its directors and officers, along with NationsBanc Montgomery
Securities LLC, provided false information in connection with a public
offering of debt and equity securities. The plaintiffs seek, among
other relief, to be declared a class, to be awarded compensatory
damages, rescission rights, unspecified damages and attorneys' fees
and costs. The defendants have moved to dismiss the consolidated class
action complaint. The motion is pending consideration by the Court.

9
<PAGE> 10

By Order dated March 9, 1999, in addition to consolidating the
above-referenced cases, the Court provisionally certified the class of
plaintiffs who purchased Windmere stock between May 12, 1998 and
September 22, 1998, and provisionally certified Sherleigh Associates
LLC and Sherleigh Associates, Inc. Profit Sharing Plan as lead
plaintiff. By Order dated June 3, 1999, the Court, among other things,
appointed lead counsel and directed the filing of a joint scheduling
order. On June 23, 1999, the parties submitted a Joint Scheduling
Report and a proposed scheduling order, which is still under
consideration by the Court.

The Company is currently advancing the legal expenses of the directors
and officers who were named as defendants. Such defendants have agreed
to repay the Company for all or any portion of such advances to which
they are ultimately found not to be entitled pursuant to applicable
law. Based on the information currently available to the Company,
management does not believe that the indemnification of the officers
and directors named as defendants in the above-listed matters will
have a material adverse effect on the financial condition, results of
operations or liquidity of the Company. However, the actual effects of
such indemnification on the Company cannot be finally determined until
the amount of such indemnification, if any, is fixed.

The Company is subject to other legal proceedings and claims which
arise in the ordinary course of its business. In the opinion of
management, the amount of ultimate liability, if any, in excess of
applicable insurance coverage, is not likely to have a material effect
on the financial position of the Company. However, as the outcome of
litigation or other claims is difficult to predict, significant
changes in the estimated exposures could occur.

5. BUSINESS SEGMENT INFORMATION

Summarized financial information concerning the Company's reportable
segments is shown in the following table. Corporate related items,
results of insignificant operations and, as it relates to segment
profit (loss), income and expense not allocated to reportable segments
are included in the reconciliations to consolidated results.

Segment information for the three month periods ended September 30,
are as follows: (In Thousands)

<TABLE>
<CAPTION>
HOUSEHOLD
WINDMERE PRODUCTS DURABLE
GROUP GROUP MANUFACTURING TOTAL
----- ---------- ------------- -----

<S> <C> <C> <C> <C>
1999
Net Sales .................................... $ 53,573 $ 126,472 $54,061 $234,106
Intersegment net sales ....................... -- -- 46,413 46,413
Operating earnings ........................... 940 17,374 9,502 27,816

1998
Net Sales .................................... 47,546 100,262 39,384 187,192
Intersegment net sales ....................... -- -- 27,064 27,064
Operating earnings ........................... 2,154 7,595 8,875 18,624

Reconciliation to consolidated amounts:

1999 1998
------- --------
Revenues

Total revenues for reportable segments ......................................... $ 234,106 $ 187,192
Other revenues ................................................................. 16,536 325
Eliminations of intersegment revenues .......................................... (46,413) (27,064)
------- --------
Total consolidated revenues ............................................... $ 204,229 $ 160,453
======= ========

</TABLE>

10
<PAGE> 11

<TABLE>
<CAPTION>
<S> <C> <C>
Operating earnings
Total earnings for reportable segments .. $ 27,816 $ 18,624
Other earnings (loss) ................... 1,221 52
Corporate headquarters expense .......... (3,218) (2,224)
Interest expense ........................ (7,212) (8,104)
Equity in net earnings of joint ventures -- 362
Gain on sale of equity interest ......... -- 42,651
-------- --------
Consolidated earnings before income taxes $ 18,607 $ 51,361
======== ========
</TABLE>

Segment information for the nine month periods ended September 30, are
as follows: (In Thousands)

<TABLE>
<CAPTION>
HOUSEHOLD
WINDMERE PRODUCTS DURABLE
GROUP GROUP MANUFACTURING TOTAL
----------- ----------- -------------- ------
<S> <C> <C> <C> <C>
1999
Net Sales ......................... $ 148,498 $269,664 $117,017 $535,179
Intersegment net sales ............ -- -- 87,193 87,193
Operating earnings (loss) ......... (3,955) 13,508 19,821 29,374

1998
Net Sales ......................... 139,369 100,797 99,111 339,277
Intersegment net sales ............ -- -- 61,508 61,508
Operating earnings (loss) ......... (268) 7,649 17,069 24,450

</TABLE>

11
<PAGE> 12

Reconciliation to consolidated amounts:

<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Revenues
Total revenues for reportable segments....................... $ 535,179 $ 339,277
Other revenues............................................... 24,264 646
Eliminations of intersegment revenues........................ (87,193) (61,508)
------------- --------------
Total consolidated revenues.............................. $ 472,250 $ 278,415
============= ==============

Operating earnings (loss)
Total earnings (loss) for reportable segments................ $ 29,374 $ 24,450
Other earnings............................................... 5,640 (4,413)
Corporate headquarters expense............................... (7,661) (4,686)
Interest expense............................................. (19,947) (10,575)
Equity in net earnings (loss) of joint ventures.............. (12,894) 1,558
Gain on sale of equity interest.............................. -- 42,651
Repositioning charge......................................... -- (9,914)
------------- --------------
Consolidated earnings (loss) before income taxes............. $ (5,488) 39,071
============= ==============
</TABLE>

6. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The following condensed consolidating financial information presents
the results of operations, financial position and cash flows of the
Company (on a stand alone basis), the guarantor subsidiaries of the
Company's Senior Subordinated Notes ("Notes") (on a combined basis),
the non-guarantor subsidiaries (on a combined basis) and the
eliminations necessary to arrive at the consolidated results of the
Company. The results of operations and cash flows presented below
assume as if the guarantor subsidiaries were in place for all periods
presented. The Company and subsidiary guarantors have accounted for
investments in their respective subsidiaries on an unconsolidated
basis using the equity method of accounting. The Subsidiary Guarantors
are wholly-owned subsidiaries of the Company and have fully and
unconditionally guaranteed the Notes on a joint and several basis. The
guarantors include the following: Windmere Corporation, Windmere
Holdings Corporation, Windmere Holdings Corporation II, Jerdon
Products, Inc., Fortune Products, Inc., Bay Books & Tapes, Inc.,
Consumer Products Americas, Inc., Windmere Innovative Pet Products,
Inc., EDI Masters, Inc., Windmere Fan Products, Inc., Household
Products, Inc., HP Delaware, Inc., HP Americas, Inc., HPG LLC, HP
Intellectual Corp., WD Delaware, Inc. and WD Delaware II, Inc. The
Notes contain certain covenants which, among other things, will
restrict the ability of the Subsidiary Guarantors to make
distributions to Windmere-Durable Holdings, Inc. The Company has not
presented separate financial statements and other disclosures
concerning the guarantors and non-guarantor subsidiaries because it
has determined they would not be material to investors.

12
<PAGE> 13

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1999
---------------------------------------------------------------------------
(In thousands)
WINDMERE DURABLE NON
HOLDINGS, INC. GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED
----------------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
Net Sales ................................ 0 293,786 271,186 (92,722) 472,250
Cost of goods sold............................ 0 194,909 226,347 (90,763) 330,493
---------- ----------- ---------- ----------- ----------
Gross Profit ................................ 0 98,877 44,839 (1,959) 141,757
Operating Expenses............................ (521) 98,968 17,290 271 116,008
---------- ----------- ---------- ----------- ----------
Operating Profit (Loss)....................... 521 (91) 27,549 (2,230) 25,749
Other (income) expense, net................... 18,670 (1,691) 271 1,093 18,343
---------- ----------- ---------- ----------- ----------
Earnings (loss) before income taxes and
equity in earnings (loss) of joint
ventures ................................ (18,149) 1,600 27,278 (3,323) 7,406
Provision (Benefit) for income taxes.......... 0 (3,562) 3,766 (2,570) (2,366)
Equity in net earnings (loss)
of joint ventures........................ 593 (13,487) 0 0 (12,894)
---------- ----------- ---------- ----------- ----------
Net earnings (loss)........................... (17,556) (8,325) 23,512 (753) (3,122)
========== =========== ========== ============ ===========

BALANCE SHEET
Cash ................................ 6 (3,954) 9,477 0 5,529
Accounts and other receivables................ 0 158,404 51,141 (5,529) 204,016
Receivables from affiliates................... 21,390 (39,600) 30,301 (8,847) 3,244
Inventories ................................ 0 105,281 69,278 10,921 185,480
Other current assets.......................... 0 23,281 6,508 11,536 41,325
---------- ----------- ---------- ----------- ----------
Total current assets..................... 21,396 243,412 166,705 8,081 439,594
Investments in joint ventures................. 426,413 9,248 70,585 (503,483) 2,763
Property, plant and equipment, net............ 0 12,856 65,010 0 77,866
Other assets ................................ 0 534,254 11,885 (294,948) 251,191
---------- ----------- ---------- ----------- ----------
Total assets............................. 447,809 799,770 314,185 (790,350) 771,414
========== =========== ========== =========== ==========

LIABILITIES:
Notes payable ................................ 0 11,350 0 (11,350) 0
Accounts payable and accrued expenses......... 1 70,575 65,052 0 135,628
Current maturities of long term debt.......... 10,342 0 0 0 10,342
Deferred income, current portion.............. 0 689 0 0 689
Income taxes payable.......................... 0 (1,164) 1,045 1,215 1,096
---------- ----------- ---------- ----------- ----------
Total current liabilities................ 10,343 81,450 66,097 (10,135) 147,755
Long term debt................................ 284,195 286,404 5,450 (286,404) 289,645
Deferred income, less current portion......... 0 269 0 783 1,052
Deferred income taxes......................... 0 16,254 2,969 (8,358) 10,865
---------- ----------- ---------- ----------- ----------
Total liabilities........................ 294,538 384,377 74,516 (304,114) 449,317
Shareholders' equity.......................... 153,271 415,393 239,669 (486,236) 322,097
---------- ----------- ---------- ----------- ----------
Total liabilities and shareholders'
equity................................ 447,809 799,770 314,185 (790,350) 771,414
========== ========== ========== =========== =========

Cash Flow Information

Net cash provided by (used in) operating
activities............................... (17,555) 66,983 10,870 (65,556) (5,258)
Net cash provided by (used in) investing
activities............................... (9,474) 35,241 (35,407) (20,176) (29,816)
Net cash provided by (used in) financing
activities............................... 27,035 (109,261) 16,971 85,732 20,477
Effect of exchange rate....................... 0 0 (289) 0 (289)
Cash at beginning............................. 0 3,083 17,332 0 20,415
Cash at end ................................ 6 (3,954) 9,477 0 5,529

</TABLE>

13
<PAGE> 14

NINE MONTHS ENDED SEPTEMBER 30, 1998
----------------------------------------------------------------------------
(In thousands)
WINDMERE DURABLE NON
HOLDINGS, INC. GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED
----------------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
Net Sales..................................... 0 236,791 103,132 (61,508) 278,415
Cost of goods sold............................ 0 180,914 83,466 (62,212) 202,168
---------- ----------- ---------- ------------ ----------
Gross profit............................. 0 55,877 19,666 704 76,247
Operating expenses............................ (448) 61,276 2,460 270 63,558
Repositioning charge.......................... 0 9,914 0 0 9,914
---------- ----------- ---------- ----------- ----------
Operating Income.............................. 448 (15,314) 17,207 434 2,775
Other (income) expense, net................... (277) (35,084) 1,699 (1,076) (34,738)
----------- ------------ ---------- ------------ -----------
Earnings before income taxes and
minority interest in
subsidiaries............................. 212 19,039 18,906 (643) 37,513
Provision for income taxes.................... 0 15,354 1,251 (5,766) 10,838
Equity in earnings of affiliated
companies, net of tax.................... 151 1,407 0 0 1,558
---------- ----------- ---------- ----------- ----------
Net earnings.................................. 362 5,092 17,655 5,124 28,233
========== =========== ========== =========== ==========

BALANCE SHEET
Cash.......................................... 0 5,254 7,572 0 12,826
Accounts receivables.......................... 0 123,103 21,466 (622) 143,947
Intercompany receivables...................... 24,761 (20,296) 3,585 (538) 7,513
Inventories................................... 0 137,773 45,134 283 183,190
Other current assets.......................... 0 37,317 2,550 (1,182) 38,685
---------- ------ ----- ----- ------
Total current assets..................... 24,761 283,151 80,307 (2,059) 386,160
Investment in affiliated companies............ 414,427 23,021 70,477 (492,135) 15,788
Property and equipment, net................... 0 59,475 31,485 0 90,960
Other assets.................................. 0 617,284 19,940 (354,438) 282,786
---------- ----------- ---------- ------------ ----------
Total assets............................. 439,188 982,930 202,209 (848,633) 775,694
========== =========== ========== ============ ==========

Notes payable................................. 0 11,350 998 (11,350) 998
Accounts payable and accrued expenses......... 1 132,079 9,103 (622) 140,561
Current maturities of L.T..................... 8,630 0 0 0 8,630
Deferred income taxes......................... 0 15,839 866 (656) 16,049
---------- ----------- ---------- ------------ ----------
Total current liabilities................ 8,631 159,268 10,967 (12,628) 166,238
Long term debt................................ 260,370 356,869 0 (354,869) 262,370
Deferred income, less current portion......... 0 15,218 0 824 16,042
Deferred income taxes......................... 0 12,836 2,146 (1,960) 13,022
---------- ----------- ---------- ------------ ----------
Total liabilities........................ 269,001 544,192 13,113 (368,634) 457,672
Shareholders' equity.......................... 170,187 438,738 189,097 (479,999) 318,022
---------- ----------- ---------- ------------ ----------
Total liabilities and shareholders
equity................................. 439,188 982,930 202,209 (848,633) 775,694
========== ========== ========== ============ =========

Cash Flow Information

Net cash provided (used) in operating activities 40,685 (613,451) (5,983) 545,368 (33,382)
Net cash provided (used) in investing activities (398,521) 30,606 (1,885) 100,401 (269,399)
Net cash provided (used) in financing activities 357,836 588,099 7,217 (645,769) 307,383
Cash at beginning............................. 0 0 8,224 0 8,224
Cash at end................................... 0 5,254 7,572 0 12,826

</TABLE>

7. RELATED PARTY TRANSACTIONS

On April 14, 1999, the Company sold 210,000 shares of authorized
Common Stock at the fair market value of $7.125 per share to its Chief
Executive Officer in exchange for a promissory note. The note is on a
full recourse basis, with a maturity of three years from the date of
purchase and bears interest at LIBOR plus 2.75%.

14
<PAGE> 15

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

This document contains forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. Such statements
are indicated by words or phrases such as "anticipate," "projects," "management
believes," "the Company believes," "intends," "expects," and similar words or
phrases. Such forward-looking statements are subject to certain risks,
uncertainties or assumptions and may be affected by certain other factors.
Should one or more of these risks, uncertainties or other factors materialize,
or should underlying assumptions prove incorrect, actual results, performance,
or achievements of the Company may vary materially from any future results,
performance or achievements expressed or implied by such forward-looking
statements. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the cautionary statements in this paragraph. The
Company disclaims any obligation to publicly announce the results of any
revisions to any of the forward-looking statements contained herein to reflect
future events or developments.

The Company, through its subsidiaries, is a leading diversified manufacturer
and distributor of a broad range of branded and private label small household
appliances, including electric housewares (kitchen and garment care), personal
care, and other products. The Company manufactures and markets products under
the Windmere(R) and other Company-owned brand names, under private-label brand
names, under licensed brand names, such as Black & Decker(R) and, pursuant to
licenses such as, the White-Westinghouse(R) brand name. The Company's customers
for such products include mass merchandisers, specialty retailers and appliance
distributors primarily in North America, Latin America and the Caribbean. In
addition, the Company manufactures products on an OEM basis for other major
consumer products companies. The Company also manufactures and markets the
LitterMaid(R) self-cleaning cat litter box.

RESULTS OF OPERATIONS

The operating results of the Company expressed as a percentage of sales and
other revenues are set forth below:

NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1999 1998
---- ----
Net Sales...................................... 100.0% 100.0%
Cost of goods sold ............................ 70.0 72.6
----- -----
Gross Profit .................................. 30.0 27.4
Selling, general and administrative expenses .. 24.6 22.8
Other (income) expense - net .................. 3.9 (12.4)
Equity in net earnings (loss) of joint ventures (2.7) .6
----- -----
Earnings (loss) before income taxes ........... (1.2) 14.0
Provision (benefit) for income taxes .......... (.5) 3.9
----- -----
Net earnings (loss) ........................... (.7)% 10.1%
===== =====

THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1998

Sales and other revenues

Sales and other revenues ("Revenues") for the Company increased by $43.8
million to $204.2 million, an increase of 27.3% over Revenues for the third
quarter of 1998. Sales to Walmart accounted for 20% and 14% of total sales for
the 1999 and 1998 periods, respectively.

15
<PAGE> 16

The increase is primarily the result of a $26.2 million or 26.1% increase in
sales by the Household Products Group. The remaining increase in revenues may
be attributed to a $6.0 million increase in Windmere Group sales, including
$2.5 million in LitterMaid sales and sales of Newtech electronics of
approximately $14.5 million, offset by a $4.7 million decrease in Durable OEM
sales.

Gross Profit Margin

The Company's gross profit margin decreased to 31.9% of Revenues in 1999 from
34.3% in the 1998 period. The decrease in gross profit margin is primarily the
result of approximately $14.5 million in sales, at significantly lower margins,
of inventory purchased as part of the second quarter Newtech acquisition.
The minimal amount of inventory remaining from the June 1999 Newtech transaction
should result in less dilution to fourth quarter margins.

Excluding sales of Newtech inventory, the gross profit margin was 33.7% for the
1999 period as compared to the 34.3% in 1998. Productivity gains at the
Company's manufacturing facilities, offset by product mix and by aggressive
pricing strategies used to gain additional market share in the Black & Decker
business were the primary contributors to the minimal change in gross profit
rate.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the Company increased by
$.8 million in the third quarter of 1999 yet decreased as a percentage of sales,
to 19.6% from 24.3% in the 1998 period.

Equity in Net Earnings of Joint Ventures

In June 1999, the Company wrote down its remaining investment in Newtech and,
therefore, discontinued recording its interest in the joint ventures'
operations.

Interest Expense

Interest expense decreased to $7.2 million in 1999 from $8.1 million in 1998.
The higher interest costs in 1998 were due to bridge debt outstanding during
July of 1998 which was at significantly higher interest rates than the
Company's existing facilities.

Taxes

The Company's tax expense is based on the earnings of each of its foreign and
domestic operations and it includes such additional U.S. taxes as are
applicable to any repatriation of foreign earnings. Foreign earnings, other
than in Canada, Mexico and certain other countries in Latin America, are
generally taxed at rates lower than in the United States.

Earnings Per Share

Basic shares for the three month periods ended September 30, 1999 and 1998 were
22,478,303 and 21,132,969, respectively. Included in diluted shares are common
stock equivalents relating to options, warrants and convertible debt of
1,327,338 and 997,061 for the three month periods ended September 30, 1999 and
1998, respectively.

Windmere Group

Windmere Group sales increased by $6.0 million to $53.6 million in the third
quarter of 1999. The increase in Windmere Group sales is attributable to
increased sales of electric housewares and growth in LitterMaid product sales
partially offset by weakness in personal care sales. LitterMaid distribution
sales increased by $2.5 million or 46.8% over 1998 sales.

Gross profit margin for the Windmere Group decreased to 20.7% in the 1999
period as compared to 27.2% in 1998. The decrease is the result of increased
sales of lower margin items comprising the period's product mix.

16
<PAGE> 17

Selling, general and administrative expenses decreased by $.6 million in the
1999 third quarter to approximately $10.2 million and as a percentage of sales
to 19.0% from 22.7% in 1998.

Household Products Group

Sales for the Household Products Group increased by $26.2 million to $126.5
million or 26.1% from the 1998 period. Approximately 66% of the increase in
sales may be attributed to existing and new product introductions to domestic
retailers. The remaining growth is the result of existing and new product
introductions in Latin America and Canada.

The gross profit margin for the Household Products Group decreased from 32.8%
in 1999 of sales to 32.0% of sales in 1999. The decrease is the result of
increased volume and productivity gains partially offset by product mix and
more competitive pricing strategies used to gain additional market share.

Selling, general and administrative expenses for the Household Products Group
decreased by approximately $2.2 million in the 1999 third quarter to $23.1
million. The decrease is primarily the result of the exiting 19 of the 20
service contracts with Black & Decker in the second quarter. Selling, general
and administrative expenses represented 18.3% and 25.2% of segment sales in the
1999 and 1998 periods, respectively.

Durable Manufacturing

Sales at the Company's China based manufacturing subsidiary increased by $14.7
million in the 1999 period as compared to 1998. Included in 1999 total sales are
OEM sales to third parties totaling $7.6 million.

Operating earnings for Durable Manufacturing increased by $.6 million to $9.5
million in the 1999 third quarter. Increased productivity and capacity
utilization contributed to the improved results.

NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1998

Sales and other revenues

Sales and other revenues ("Revenues") for the Company increased by $193.8
million to $472.3 million, an increase of 70% over Revenues for the nine months
ended September 30, 1998. The increase is primarily the result of an increase in
Household Products Group sales of $168.9 million to $269.7 million in
distribution sales and which is inclusive of HPG results for the entire 1999
period. Sales to Walmart accounted for 18% of total sales for the 1999 period.
The remaining increase in revenues may be attributed to a $9.1 million increase
in Windmere Group sales and $17.0 in sales of Newtech electronics offset by a
decrease in Durable OEM sales of $7.8 million.

Gross Profit Margin

The Company's gross profit margin was 30.0% in 1999 and in 1998, excluding the
$7.7 million portion of the repositioning charge recorded as cost of goods sold
in the 1998 period. Productivity gains at the Company's manufacturing facilities
offset by product mix and by aggressive pricing strategies used to gain
additional market share in the Black & Decker business were the primary
contributors to the unchanged gross profit rate.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the Company increased by $52.5
million to $116.0 million in the nine months ended September 30, 1999. As a
percentage of sales, costs increased to 24.6% from 22.8% in the 1998 period.
The increase is primarily due to the June 26, 1998 acquisition of the Household
Products Group ("HPG").

17
<PAGE> 18

Equity in Net Earnings of Joint Ventures

The Company's equity in net earnings of joint ventures decreased to a loss of
$12.9 million in the 1999 period compared to income of $1.6 million in the 1998
period. The decrease is primarily the result of a one-time non cash charge of
$12.6 million ($8.3 million after tax) to write down the Company's remaining
investment in Newtech in conjunction with the June 1999 purchase of Newtech's
assets.

Interest Expense

Interest expense increased to $19.9 million in 1999 from $10.6 million in 1998.
The change is the result of amounts borrowed in conjunction with the
acquisition of HPG, beginning in July 1998.

Taxes

Earnings Per Share

Basic shares for the nine month periods ended September 30, 1999 and 1998 were
22,290,429 and 19,437,363, respectively. Included in diluted shares are common
stock equivalents relating to options, warrants and convertible debt of
1,561,771 for the nine month period ended September 30, 1998. All common stock
equivalents have been excluded from the per share calculation in the 1999
period, as the Company incurred a loss in the period and their inclusion would
have been anti-dilutive.

Windmere Group

Windmere Group sales increased by $9.1 million to $148.5 million in the first
nine months ended September 30, 1999. The increase in Windmere Group sales is
attributable to increases in LitterMaid, kitchen and seasonal product sales
partially offset by weakness in personal care sales. LitterMaid distribution
sales increased by $8.0 million or 66.9% over 1998 sales.

Gross profit margin for the Windmere Group decreased to 19.4% in the 1999
period as compared to 21.7% in 1998. The decrease is the result of increased
sales of lower margin items comprising the period's product mix.

Selling, general and administrative expenses for the Windmere Group increased
by approximately $2.2 million to $32.7 million or 22.0% of segment sales from
$30.5 million or 21.9% of segment sales in the 1998 period. Contributing
significantly to the increase were costs directly associated with the increase
in LitterMaid sales volume such as royalties, a reserve for a customer who
filed for bankruptcy in the period and approximately $500,000 related to the
write-off of product design costs in conjunction with a change in accounting
regulations.

Household Products Group

Sales for the Household Products Group increased by $168.9 million to $269.7
million in 1999. The Company acquired the Household Products Group on June 26,
1998, therefore group results were excluded from the first six months of 1998.
The remaining increase is due to a $26.2 million increase in 1999 third quarter
sales as compared to the 1998 period. Third quarter growth resulted from
existing and new product introductions primarily in North America as well as
Latin America and Canada.

18
<PAGE> 19

Selling, general and administrative expenses for the Household Products Group
totaled $70.2 million or 26.0% of segment sales compared to $25.4 million or
25.2% in the 1998 period. Included in selling, general and administrative
expenses in the 1999 period was approximately $3.2 million in costs under
contracts where Black & Decker was providing services to the Company during a
transition period while the Company was putting in place its own personnel and
systems and $2.4 million in costs to run back office operations at the
Company's Shelton, CT location. All significant service contracts with Black &
Decker have been exited as of May 31, 1999 and all back office operations have
been relocated to the Company's Miami headquarters, as of June 30, 1999. Also
included is approximately $9.4 million in amortization of intangibles recorded
in conjunction with the acquisition.

Durable Manufacturing

Sales at the Company's China based manufacturing subsidiary increased by $17.9
million or 18.1% to $117.0 million in the 1999 period. Included in total sales
are OEM sales to third parties totaling $29.8 million, a decrease of $7.8
million from 1998.

Operating earnings for Durable Manufacturing increased by $2.8 million to $19.8
million in the 1999 period. Increased productivity and capacity utilization
contributed to the improved results.

Liquidity and Capital Resources

At September 30, 1999, the Company's working capital was $291.8 million, as
compared to $219.9 million at September 30, 1998. At September 30, 1999 and
1998, the Company's current ratio was 3.0 to 1 and 2.3 to 1, respectively, and
its quick ratio was 1.6 to 1 and 1.2 to 1, respectively. The improvement in
ratios is primarily the result of the acquisition.

Cash balances decreased by approximately $14.9 million for the nine months
ended September 30, 1999. The net cash used in operating activities is
primarily the result of the increased growth in sales resulting from the June
26, 1998 acquisition of HPG resulting in higher accounts receivable and
inventory balances.

Cash used in investing activities totaled approximately $29.8 million for the
period and is primarily the result of $17.1 million in capital expenditures at
the Company's manufacturing facilities and approximately $15.0 million for the
purchase of the assets of Newtech.

Funds provided by financing activities totaled approximately $20.5 million in
the period reflecting increased net borrowings of $19.0 million. Borrowings are
used to meet additional working capital requirements associated with the
increased level of operations.

No provision for U.S. taxes has been made on undistributed earnings of the
Company's foreign subsidiaries and joint ventures because management plans to
reinvest such earnings in their respective operations or in other foreign
operations. Repatriating those earnings or using them in some other manner
which would give rise to a U.S. tax liability would reduce after tax earnings
and available working capital.

Certain of the Company's foreign subsidiaries have approximately $36.0 million
in trade finance lines of credit, payable on demand, which are secured by the
subsidiaries' tangible and intangible property, and in some cases, a Company
guarantee. Outstanding borrowings by the Company's Hong Kong subsidiaries are
primarily in U.S. dollars.

The Company's primary sources of liquidity are its cash flow from operations and
borrowings under the Senior Secured Credit Facilities. The Company is currently
borrowing $129.0 million under the term loan portion of its Senior Secured
Credit Facilities. The Senior Secured Revolving Credit Facility as amended,
provides for borrowings by the Company of up to $110.0 million through December
31, 1999 and $160.0 million thereafter and through the remainder of the term of
the loan. As of November 9, 1999, the Company is borrowing $50.5 million under
the Senior Secured Revolving Credit Facility and has approximately $63.8 million
available for future borrowings, under all its credit facilities. Advances under
the Senior Secured Revolving Credit Facility are based upon percentages of
outstanding eligible accounts receivable and inventories.

The Company's aggregate capital expenditures for the nine months ended September
30, 1999 were $17.1 million. The Company anticipates that the total capital
expenditures for 1999 will be approximately $21.0 million, which includes the
cost of new tooling. The Company plans to fund those capital expenditures from
cash flow from operations and, if necessary, borrowings under the Senior Secured
Revolving Credit Facility.

19
<PAGE> 20

At September 30, 1999, debt as a percent of total capitalization was 48
percent.

The Company's ability to make scheduled payments of principal of, or to pay the
interest on, or to refinance, its indebtedness, or to fund planned capital
expenditures, product research and development expenses and marketing expenses
will depend on its future performance, which, to a certain extent, is subject
to general economic, financial, competitive, legislative, regulatory, and
international and United States domestic political factors and other factors
that are beyond the Company's control. Based upon the current level of
operations and anticipated cost savings and revenue growth, management believes
that cash flow from operations and available cash, together with available
borrowings under the Senior Credit and other facilities, will be adequate to
meet the Company's future liquidity needs for at least the next several years.
The Company may, however, need to refinance all or a portion of the principal
of the indebtedness on or prior to maturity. There can be no assurance that the
Company's business will generate sufficient cash flow from operations, that
anticipated revenue growth and operating improvements will be realized or that
future borrowings will be available under the Senior Secured Credit Facilities
in an amount sufficient to enable the Company to service its indebtedness,
including the Senior Subordinated Notes, or to fund its other liquidity needs.
In addition, there can be no assurance that the Company will be able to effect
any such refinancing on commercially reasonable terms or at all. It is the
Company's intention to pay down outstanding borrowings under its Revolving
Credit Facility in the first quarter of 2000.

CURRENCY MATTERS

While the Company transacts business predominantly in U.S. dollars and most of
its revenues are collected in U.S. dollars, a portion of the Company's costs,
such as payroll, rent and indirect operations costs, are denominated in other
currencies, such as Chinese renminbi, Hong Kong dollars and Mexican pesos.
Changes in the relation of these and other currencies to the U.S. dollar will
affect the Company's cost of goods sold and operating margins and could result
in exchange losses. The impact of future exchange rate fluctuations on the
Company's results of operations cannot be accurately predicted.

The Company uses forward exchange contracts to reduce fluctuations in foreign
currency cash flows related to third party raw material and other operating
purchases as well as trade receivables. The purpose of the Company's foreign
currency management activity is to reduce the risk that eventual cash flows
from foreign currency denominated transactions may be adversely affected by
changes in exchange rates.

Durable uses the Hong Kong dollar as its functional currency. The Hong Kong
dollar has historically been "pegged" to a fixed exchange rate vis-a-vis the
U.S. dollar. If the Hong Kong dollar were to be significantly devalued against
the U.S. dollar and the exchange rate allowed to fluctuate, the Company could
experience significant changes in its currency translation account which would
impact the Company's future comprehensive income. The Company has acquired the
Queretaro property and related assets from The Black & Decker Corporation.
Because the operations of such facilities are primarily peso-denominated and
the revenues derived from products manufactured at such facilities are
primarily dollar-denominated, the Company is now subject to fluctuations in the
value of the peso. The December 1994 devaluation of the peso had a number of
effects on the Mexican economy that adversely affected the financial condition
of businesses in Mexico. The devaluation caused the peso value of dollar
denominated indebtedness associated with businesses in Mexico to increase
significantly, and also greatly increased the rate of inflation, resulting in a
sharp rise in nominal interest rates on peso-denominated financing. There can
be no assurance that the peso to dollar foreign exchange rate will not be
volatile in the future and that financial markets will not have a material
adverse effect on the Company's business, financial condition and results of
operations.

The Company uses interest rate swaps of one to four years in duration to reduce
the impact of changes in interest rates on its floating rate debt. The notional
amounts of the agreements are used to measure interest to be paid or received
and do not represent the amount of exposure to credit loss. The differential
paid or received on the agreements is recognized as an adjustment of interest
expense.

20
<PAGE> 21

As of September 30, 1999, the Company had purchased interest rate swaps on $120
million notional principal amount with a market value of approximately
($98,000). The market value represents the amount the Company would have to pay
to exit the contracts at September 30, 1999. The Company does not intend to
exit such contracts at this time.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued Statement of Financial Accounting Standards (FAS)
No. 133, "Accounting for Derivative Instruments and Hedging Activities." FAS No.
133 establishes standards for accounting and reporting for derivative
instruments, and conforms the requirements for treatment of different types of
hedging activities. This statement is effective for all fiscal years beginning
after June 15, 2000. The Company has not completed its evaluations of FAS No.
133.

SEASONALITY

The Company's business is highly seasonal, with operating results varying from
quarter to quarter. The Company has historically experienced higher revenues in
the third and fourth quarters of each fiscal year primarily due to increased
demand by customers for products in the late summer for "back-to-school" sales
and in the fall for holiday sales. As a result of the HPG acquisition, the
fourth quarter has now become the Company's largest quarter. The Company's
major sales occur during August through November. Sales are generally made on
45 to 90 day terms. Heaviest collections on its open accounts receivable are
received from November through March, at which time the Company is in its most
liquid state.

YEAR 2000 ISSUES

The Company uses a significant number of computer software programs and
operating systems across its entire organization, including applications used
in financial business systems, manufacturing and administrative functions. A
complete evaluation has been performed to identify whether any of the Company's
software applications contain source code that is unable to interpret the
upcoming year 2000 and beyond. The appropriate modifications have been made and
the Company now believes that its critical systems are Year 2000 compliant. The
Company has received communications from its major suppliers and trading
partners, some of who have filed reports with the Securities and Exchange
Commission, and believes that they are also Year 2000 Compliant. The cost of
implementing required system changes is not material to the Company's
consolidated financial statements. No assurance can be given, however, that all
of the Company's systems, the systems of acquired businesses and those of
significant customers and suppliers will not experience Year 2000 compliance
difficulties. Difficulties that arise may result in unfavorable business
consequences including disruption in product shipments, delays in receipt of
materials, delay in customer receipts and payments to suppliers.

LEGAL PROCEEDINGS

The Company is a defendant in SHERLEIGH ASSOCIATES LLC AND SHERLEIGH ASSOCIATES
INC. PROFIT SHARING PLAN, ON THEIR OWN BEHALF AND ON BEHALF OF ALL OTHERS
SIMILARLY SITUATED V. WINDMERE-DURABLE HOLDINGS, INC., DAVID M. FRIEDSON, HARRY
D. SCHULMAN AND NATIONSBANC MONTGOMERY SECURITIES LLC, 98-2273-CIV-LENARD which
was filed in the United States District Court, Southern District of Florida on
October 8, 1998.

This matter is a class action complaint, which is the consolidation of eight
separate class action complaints with substantially similar allegations. On
June 30, 1999, a consolidated amended class action complaint was filed. The
consolidated amended class action complaint was purportedly filed on behalf of
those security holders of the Company who purchased such securities during a
certain period in the second and third quarters of 1998, alleging violations of
the federal securities laws (including Rule 10b-5 promulgated pursuant to the
Securities Exchange Act of 1934, as amended) in connection with the acquisition
by the Company of certain product categories of the Household Products Group of
the Black & Decker Corporation. Among other things, the plaintiffs allege that
the Company and certain of its directors and officers, along with NationsBanc
Montgomery Securities LLC, provided false information in connection with a
public offering of debt and equity securities. The plaintiffs seek, among other
relief, to be declared a class, to be awarded compensatory damages, rescission
rights, unspecified damages and attorneys' fees and costs. The defendants have
moved to dismiss the consolidated class action complaint. The motion is pending
consideration by the Court.

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<PAGE> 22

By Order dated March 9, 1999, in addition to consolidating the above-referenced
cases, the Court provisionally certified the class of plaintiffs who purchased
Windmere stock between May 12, 1998 and September 22, 1998, and provisionally
certified Sherleigh Associates LLC and Sherleigh Associates, Inc. Profit
Sharing Plan as lead plaintiff. By Order dated June 3, 1999, the Court, among
other things, appointed lead counsel and directed the filing of a joint
scheduling order. On June 23, 1999, the parties submitted a Joint Scheduling
Report and a proposed scheduling order, which is still under consideration by
the Court.

The Company is currently advancing the legal expenses of the directors and
officers who were named as defendants. Such defendants have agreed to repay the
Company for all or any portion of such advances to which they are ultimately
found not to be entitled pursuant to applicable law. Based on the information
currently available to the Company, management does not believe that the
indemnification of the officers and directors named as defendants in the
above-listed matters will have a material adverse effect on the financial
condition, results of operations or liquidity of the Company. However, the
actual effects of such indemnification on the Company cannot be finally
determined until the amount of such indemnification, if any, is fixed.

The Company is subject to other legal proceedings and claims which arise in the
ordinary course of its business. In the opinion of management, the amount of
ultimate liability, if any, in excess of applicable insurance coverage, is not
likely to have a material effect on the financial position of the Company.
However, as the outcome of litigation or other claims is difficult to predict,
significant changes in the estimated exposures could occur.

MANUFACTURING OPERATIONS

The Company's products are manufactured primarily at the Company's facilities
in the PRC and Mexico. The Company has ceased manufacturing at the Asheboro
facility as of March 31, 1999 and completely exited the facility as of June 30,
1999. Prior to the HPG acquisition, the majority of the Company's products were
manufactured by Durable, its wholly-owned Hong Kong subsidiary operating in Bao
An County, Guangdong Province of the People's Republic of China, which is
approximately 60 miles northwest of Central, Hong Kong. The Company has a
significant amount of its assets in the People's Republic, primarily consisting
of inventory, equipment and molds. The supply and cost of products, as well as
finished products, can be adversely affected, among other reasons, by changes
in foreign currency exchange rates, increased import duties, imposition of
tariffs, imposition of import quotas, interruptions in sea or air
transportation and political or economic changes. From time to time, the
Company explores opportunities to diversify its sourcing and/or production of
certain products to other low-cost locations or with other third parties or
joint venture partners in order to reduce its dependence on production in the
People's Republic and/or reduce Durable's dependence on the Company's existing
distribution base. However, at the present time, the Company intends to
continue its production in the People's Republic and Mexico.

The Mexican government exercises significant influence over many aspects of the
Mexican economy. Accordingly, the actions of the Mexican government concerning
the economy could have a significant effect on private sector entities in
general and the Company in particular. In addition, during the 1980s and 1990s,
Mexico experienced periods of slow or negative growth, high inflation,
significant devaluations of the peso and limited availability of foreign
exchange. As a result of the Company's reliance upon manufacturing facilities
in Mexico, economic conditions in Mexico could adversely affect the Company's
business, financial condition and results of operations.

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<PAGE> 23

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's major market risk exposure is to changing interest rates, debt
obligations issued at a fixed rate and fluctuations in the currency exchange
rates. The Company's policy is to manage interest rate risk through the use of
a combination of fixed and floating rate instruments, with respect to both its
liquid assets and its debt instruments.

The Senior Credit Facilities accrue interest at variable rates; however, the
company has purchased interest rate protection for such loans in the form of
interest rate swaps. Based on the current amount of variable rate, as well as
underlying swaps, the exposure to interest rate risk is not material.
Fixed-rate debt obligations issued by the Company are not callable until July
31, 2003.

The Company is subject to foreign currency exchange rate risk relating to
receipts from customers and payments to suppliers in foreign currencies. As a
general policy, the Company hedges foreign currency commitments of future
payments and receipts by purchasing foreign currency-forward and option
contracts. As of September 30, 1999, the notional value of such derivatives was
approximately $67 million, with no significant unrealized gain or loss. The
majority of the Company's receipts and expenditures are contracted in U.S.
dollars, and the Company does not consider the market risk exposure relating to
currency exchange to be material at this time.

23
<PAGE> 24

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See "Legal Proceedings" in Part I, Item 2 of this report.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits

10.44 - Employment agreement dated August 2, 1999 between
Windmere-Durable Holdings, Inc. and
Harry Schulman. Filed herewith.
27.1 - Financial Data Schedule (for S.E.C. use only)

(b) Reports on Form 8-K:

None

24
<PAGE> 25

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.

WINDMERE-DURABLE HOLDINGS, INC.
(Registrant)

November 12, 1999 By: /s/ HARRY D. SCHULMAN
--------------------------
Harry D. Schulman
Chief Operating Officer
(Duly authorized to sign on
behalf of the Registrant)

November 12, 1999 By: /s/ TERRY L. POLISTINA
---------------------------
Terry L. Polistina
Senior Vice President - Finance
(Duly authorized to sign on
behalf of the Registrant)

<PAGE> 1
EXHIBIT 10.44

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is executed this 2nd day
of August, 1999, by and between Windmere-Durable Holdings, Inc., a Florida
corporation with its principal place of business at 5980 Miami Lakes Drive,
Miami Lakes, Florida (the "Company"), and Harry D. Schulman, an individual
residing in the State of Florida (the "Executive").

RECITALS:

A. The Executive is currently employed as the Chief Operating Officer,
Chief Financial Officer and Secretary of the Company.

B. The Executive possesses intimate knowledge of the business and
affairs of the Company and its subsidiaries, their policies, methods and
personnel.

C. The Board of Directors of the Company (the "Board") recognizes that
the Executive has contributed to the growth and success of the Company and its
subsidiaries, and desires to assure the Company and its subsidiaries of the
Executive's continued employment and to compensate him therefor.

D. The Board has determined that this Agreement will reinforce and
encourage the Executive's continued attention an dedication to the Company and
its subsidiaries.

E. The Executive is willing to make his services available to the
Company on the terms and conditions hereinafter set forth.

AGREEMENT

Therefore, in consideration of the premises, mutual covenants and
agreements of the parties contained herein, and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Company and the Executive hereby agree as follows:

1. Employment. Commencing on the Closing Date, the Company shall
employ the Executive and the Executive shall accept employment by the Company,
upon the terms and conditions set forth in this Agreement.

2. Term. The term of employment (the "Term") of this Agreement shall
begin on the date hereof and shall terminate as provided herein. Except as
otherwise provided in Sections 7, 8, 9, 10, 11 and 12 below, the Term shall be
for a continuous three-year period commencing on this date and running for a
period such that on each "Anniversary Date" (as defined below) an additional
year automatically shall be added. On any Anniversary Date, either party may
provide written notice to the other party of that party's intention not to
extend the Term of this Agreement beyond the number of years then remaining in

<PAGE> 2

the Term, which shall always be three. Such written notice shall be deemed the
notice to terminate this Agreement at the end of the three-year term then in
effect. The "Anniversary Date," as used herein, shall be the first day of the
second year of the Term and the first day of each subsequent year, including
each year beyond the first three years of the Term. It is the intention of the
parties that the Term as of each Anniversary Date automatically shall be three
years, that three years' written notice shall be required to terminate this
Agreement, except as otherwise provided in Sections 7, 8, 9, 10, 11 and 12
below, and that said written notice to terminate may only be given on an
Anniversary Date.

3. Duties. The Executive will have such duties as are assigned or
delegated to the Executive by the Board or Chief Executive Officer of the
Company, and will initially serve as the Chief Operating Officer, Chief
Financial Officer and Secretary of the Company. The Executive will devote his
entire business time, attention, skill, and energy exclusively to the business
of the Company and its subsidiaries, will use his best efforts to promote the
success of the Company and its subsidiaries, and will cooperate fully with the
Board in the advancement of the best interests of the Company and its
subsidiaries.

4. Compensation. During the Term, the Company shall compensate
Executive as follows:

(a) Salary. The Company shall pay Executive an annual salary of
$395,000 (the "Annual Base Salary"), to be distributed in equal periodic
installments according to the Company's customary payroll practices. The Annual
Base Salary will increase progressively for each of the ensuing twelve month
periods ("Fiscal Year") during the Term by an amount at least equal to the
percentage increase in the United States Consumer Price Index for all urban
consumers (CPI-U), U.S. City Average - All Items, published by the Bureau of
Labor Statistics, United States Department of Labor (the "Index") for the
previous calendar year. If at any time required for the determination of the
Annual Base Salary adjustment as above described, the Index is no longer
published or issued, the parties shall use such other index as is then
generally recognized or accepted for similar determinations of purchasing
power. If the parties are unable to agree on the selection of an index which
would most accurately carry out the intent hereof, or if there is a dispute
with respect to any computations as called for herein, then the issue with
respect thereto shall be determined by arbitration according to the then
existing rules of the American Arbitration Association. Nothing contained
herein shall be construed to prevent the Company from increasing Executive's
Annual Base Salary more often than annually or by a higher amount than required
by the Index.

(b) Annual Bonus. The Executive shall be entitled to receive
incentive compensation (the "Incentive Compensation") for each year during the
Term as set forth below:

(i) Performance Bonus. At the beginning of each calendar year
during the Term, the Board (or the Compensation Committee thereof)
shall establish target goals for (A) earnings before interest, taxes,
depreciation and amortization ("EBITDA") of the Company on a
consolidated basis and (B) the Executive's personal performance
(collectively, the "Performance Goals"). The Executive shall be
entitled to an annual bonus (the "Performance Bonus") based 50% on the

2
<PAGE> 3

achievement of the Performance Goal set forth in (A) above and 50% on
the achievement of the Performance Goal set forth in (B) above, it
being understood that a pro rata Performance Bonus may be earned by
the Executive as set forth below in any year in which either
Performance Goal is met. Such Performance Bonus shall be equal to a
percentage of his Annual Base Salary to be determined as follows:

AGGREGATE PERCENTAGE OF BONUS AS PERCENTAGE
PERFORMANCE GOALS ACHIEVED OF ANNUAL BASE SALARY
----------------------------------------- ----------------------
75% - 79% (Threshold Performance) 35%
80% - 84% 38%
85% - 89% 41%
90% - 94% 44%
95% - 99% 47%
100% - 104% (Target Performance) 50%
105% - 109% 63%
110% - 114% 66%
115% - 119% 69%
120% - 124% 72%
125% and above (Maximum Performance) 75%

(ii) Synergy Bonus. At the beginning of each of the calendar
years 1999, 2000, 2001 and 2002, the Board (or the Compensation
Committee thereof) shall establish target goals for the synergies to
be attained as a result of the integration of the business Household
Products, Inc., a subsidiary of the Company (the "HPG Group"), into
the Company (the "Synergy Goals"). Not later than 90 days after the
end of each such year in which the portion of the Synergy Goals
achieved are at least equal to 75%, the Executive shall be paid a cash
bonus (the "Synergy Bonus") equal to a percentage of his Annual Base
Salary to be determined as follows:

AGGREGATE PERCENTAGE OF BONUS AS PERCENTAGE
SYNERGY GOALS ACHIEVED OF ANNUAL BASE SALARY
---------------------------------- ----------------------
75% - 79% (Threshold Performance) 5%
80% - 84% 7%
85% - 89% 9%
90% - 94% 11%
95% - 99% 13%
100% - 104% (Target Performance) 15%
105% - 109% 17%
110% - 114% 19%
115% - 119% 21%
120% - 124% 23%
125% and above (Maximum Performance) 25%

3
<PAGE> 4

(iii) Special Bonus. From time to time during the Term, as
determined by the Compensation Committee, the Executive shall be entitled to
additional bonuses to be paid in cash, stock or otherwise.

5. Expense Reimbursement and Other Benefits.

(a) Reimbursement of Expenses. During the term of Executive's
employment hereunder, the Company, upon the submission of proper
substantiation, including copies of all relevant invoices, receipts or other
evidence reasonably requested by the Company, by the Executive, shall reimburse
the Executive for all reasonable expenses actually paid or incurred by the
Executive in the course of and pursuant to the business of the Company,
including first class or business class air travel.

(b) Executive Benefits. Executive shall participate in the
Company's Group Health and Hospitalization Plan, Group Life Insurance Plan,
Group Disability Insurance Plan and all other insurances, or insurance plans
(collectively, the "Welfare Benefits"), and Executive benefits and bonuses
covering the Company senior executive officers as are now or may in the future
be in effect, subject to applicable eligibility requirements. Additionally, the
Company shall provide the Executive with life insurance in an amount equal to
five times his Annual Base Salary. During the Term, the Company shall pay for
(i) the Executive's annual dues in a country club and (ii) tax preparation and
financial planning for the Executive on an annual basis up to a maximum of
$5,000. Notwithstanding anything to the contrary contained in this Agreement,
the Executive shall be entitled to all benefits, including bonuses, paid or
given by the Company to executive officers of the Company during the Term, and
nothing contained in this Agreement shall in any way be deemed to limit the
Executive's receipt of or participation in such benefits, bonuses or benefit
plans or to preclude the Company from making additional payments, in the form
of bonuses or otherwise, or conferring additional benefits upon the Executive.
Additionally, if in the future the Company adopts a supplemental executive
retirement plan, a deferred compensation plan or similar arrangement, the
Executive shall be entitled to participate in such plan or arrangement on the
terms and conditions consistent with those applicable to senior executive
officers as determined by the Compensation Committee or the Board of Directors.

(c) Stock Options. During the Term of this Agreement, the
Executive shall be eligible to be granted options to acquire shares of the
Company Common Stock under (and therefore subject to all terms and conditions
of ) the Company stock option plans as then in effect, and all rules and
regulations of the Securities and Exchange Commission applicable to stock
option plans. Such options will contain such restrictions as required by the
Board or the applicable committee of the Board charged with administration of
the stock option plan. The number of shares of Common Stock subject to the
stock options shall be adjusted for any subsequent stock splits, stock
dividends or similar recapitalizations of the Company's Common Stock which
results in an increase or decrease of the number of shares of outstanding
Common Stock of the Company. The number of options and terms and conditions of
options shall be determined in the sole discretion of the Board, or applicable
committee thereof, and shall be based on several factors, including the
performance of the Company on a consolidated basis.

4
<PAGE> 5

(d) Automobile. During the Term, the Company shall provide
Executive with an automobile or a monthly automobile allowance, such automobile
or allowance to be substantially equal in value to, or greater in value than,
the automobile which is currently being provided to Executive.

(e) Vacation. During the Term, the Executive will be entitled
to four weeks' paid vacation for each year. The Executive will also be entitled
to the paid holidays and other paid leave set forth in the Company's policies.
Vacation days and holidays during any fiscal year that are not used by the
Executive during such fiscal year may not be carried over and used in any
subsequent fiscal year.

6. Restrictions.

(a) Non-Competition. During the Term and for a one year
period after the termination of the Term for any reason, the Executive shall
not, directly or indirectly, engage in or have any interest in any sole
proprietorship, partnership, corporation or business or any other person or
entity (whether as an Executive, officer, director, partner, agent, security
holder, creditor, consultant or otherwise) that directly or indirectly (or
through any affiliated entity) engages in competition with the Company (for
this purpose, any business that engages in the manufacture or distribution of
products similar to those products manufactured or distributed by the Company
at the time of termination of the Agreement shall be deemed to be in
competition with the Company); provided that such provision shall not apply to
the Executive's ownership of Common Stock of the Company or the acquisition by
the Executive, solely as an investment, of securities of any issuer that is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended, and that are listed or admitted for trading on any United States
national securities exchange or that are quoted on the National Association of
Securities Dealers Automated Quotations System, or any similar system or
automated dissemination of quotations of securities prices in common use, so
long as the Executive does not control, acquire a controlling interest in or
become a member of a group which exercises direct or indirect control or, more
than five percent of any class of capital stock of such corporation.

(b) Nondisclosure. During the Term and for a one year period
after the termination of the Term for any reason, the Executive shall not at
any time divulge, communicate, use to the detriment of the Company or for the
benefit of any other person or persons, or misuse in any way, any Confidential
Information (as hereinafter defined) pertaining to the business of the Company.
Any Confidential Information or data now or hereafter acquired by the Executive
with respect to the business of the Company (which shall include, but not be
limited to, information concerning the Company's financial condition,
prospects, technology, customers, suppliers, sources of leads and methods of
doing business) shall be deemed a valuable, special and unique asset of the
Company that is received by the Executive in confidence and as a fiduciary, and
Executive shall remain a fiduciary to the Company with respect to all of such
information. For purposes of this Agreement, "Confidential Information" means

5
<PAGE> 6

information disclosed to the Executive or known by the Executive as a
consequence of or through his employment by the Company (including information
conceived, originated, discovered or developed by the Executive) prior to or
after the date hereof, and not generally known, about the Company or its
business. Notwithstanding the foregoing, nothing herein shall be deemed to
restrict the Executive from disclosing Confidential Information to the extent
required by law. None of the foregoing obligations and restrictions apply to
any Confidential Information that the Executive demonstrates was or became
generally available to the public other than as a result of disclosure by the
Executive.

(c) Nonsolicitation of Executives and Clients. During the
Term and for a one year period after the termination of the Term for any
reason, the Executive shall not, directly or indirectly, for himself or for any
other person, firm, corporation, partnership, association or other entity,
other than in connection with the performance of Executive's duties under this
Agreement, (a) employ or attempt to employ or enter into any contractual
arrangement with any Executive or former Executive of the Company, unless such
Executive or former Executive has not been employed by the Company for a period
in excess of six months, (b) call on or solicit any of the actual or targeted
prospective clients of the Company on behalf of any person or entity in
connection with any business competitive with the business of the Company,
and/or (c) make known the names and addresses of such clients or any
information relating in any manner to the Company's trade or business
relationships with such customers (unless the Executive can demonstrate that
such information was or became generally available to the public other than as
a result of a disclosure by the Executive).

(d) Ownership of Developments. All copyrights, patents, trade
secrets, or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship developed
or created by Executive during the course of performing work for the Company or
its customers (collectively, the "Work Product") shall belong exclusively to
the Company and shall, to the extent possible, be considered a work made by the
Executive for hire for the Company within the meaning of Title 17 of the United
States Code. To the extent the Work Product may not be considered work made by
the Executive for hire for the Company, the Executive agrees to assign, and
automatically assign at the time of creation of the Work Product, without any
requirement of further consideration, any right, title, or interest the
Executive may have in such Work Product. Upon the request of the Company, the
Executive shall take such further actions, including execution and delivery of
instruments of conveyance, as may be appropriate to give full and proper effect
to such assignment.

(e) Books and Records. All books, records, and accounts
relating in any manner to the customers of the Company, whether prepared by the
Executive or otherwise coming into the Executive's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company on termination of the Executive's employment hereunder or on the
Company's request at any time.

(f) Definition of Company. For purposes of this Section 6,
the term "Company" also shall include, along with all current direct and
indirect subsidiaries, any existing or future subsidiaries of the Company that
are operating during the time periods described herein and any other entities
that directly or indirectly, through one or more intermediaries, control, are
controlled by or are under common control with the Company during the periods
described herein.

6
<PAGE> 7

(g) Acknowledgment by Executive. The Executive acknowledges
and confirms that (a) the restrictive covenants contained in this Section 6 are
reasonably necessary to protect the legitimate business interests of the
Company, and (b) the restrictions contained in this Section 6 (including
without limitation the length of the term of the provisions of this Section 6)
are not overbroad, overlong, or unfair and are not the result of overreaching,
duress or coercion of any kind. The Executive further acknowledges and confirms
that his full, uninhibited and faithful observance of each of the covenants
contained in this Section 6 will not cause him any undue hardship, financial or
otherwise, and that enforcement of each of the covenants contained herein will
not impair his ability to obtain employment commensurate with his abilities and
on terms fully acceptable to him or otherwise to obtain income required for the
comfortable support of him and his family and the satisfaction of the needs of
his creditors. The Executive acknowledges and confirms that his special
knowledge of the business of the Company is such as would cause the Company
serious injury or loss if he were to use such ability and knowledge to the
benefit of a competitor or were to compete with the Company in violation of the
terms of this Section 6. The Executive further acknowledges that the
restrictions contained in this Section 6 are intended to be, and shall be, for
the benefit of and shall be enforceable by, the Company's successors and
assigns.

(h) Reformation by Court. In the event that a court of
competent jurisdiction shall determine that any provision of this Section 6 is
invalid or more restrictive than permitted under the governing law of such
jurisdiction, then only as to enforcement of this Section 6 within the
jurisdiction of such court, such provision shall be interpreted and enforced as
if it provided for the maximum restriction permitted under such governing law.

(i) Extension of Time. If the Executive shall be in violation
of any provision of this Section 6, then each time limitation set forth in this
Section 6 shall be extended for a period of time equal to the period of time
during which such violation or violations occur. If the Company seeks
injunctive relief from such violation in any court, then the covenants set
forth in this Section 6 shall be extended for a period of time equal to the
pendency of such proceeding including all appeals by the Executive.

(j) Survival. The provisions of this Section 6 shall survive
the termination of this Agreement, as applicable.

7. Death. The Term shall terminate upon the death of Executive and be
of no further force or effect. Upon such termination, the Company will pay the
Executive's estate a lump sum equal to the sum of (A) the Annual Base Salary at
the date of termination multiplied by the number of years remaining in the
Term, and (B) the product of the sum of the Performance Bonus for the prior
year multiplied by the number of years remaining in the Term.

7
<PAGE> 8

8. Disability. If during the Term Executive is unable to perform his
services, by reason of illness or incapacity, for a period of 180 consecutive
days or more, the Company may, at its option, upon written notice to Executive,
terminate the Term and his employment hereunder. If the Term is terminated as a
result of the Executive's disability, the Company will pay the Executive (A)
his Annual Base Salary at the date of termination for the period remaining in
the Term to be distributed in periodic installments according to the Company's
customary payroll practices, and (B) a lump sum equal to the product of the sum
of the Performance Bonus for the prior year multiplied by the number of years
remaining in the Term, to be paid at the time of such termination. The Company
shall also continue to pay the premiums for the same or substantially similar
Welfare Benefits for the remainder of the Term. Such termination shall not
affect any rights of Executive to insurance payments due to Executive as a
result of the insurance coverage provided for in Section 5(b) above.
Notwithstanding the foregoing, if the Executive shall find other employment
during the period he is receiving payments pursuant to this Section 8, then the
Executive shall promptly notify the Company in writing of the date and terms of
such employment and the Company shall be entitled to reduce the amount payable
to the Executive pursuant to this Section 8 during the period from the
commencement of such other employment by the cash compensation received and to
be received by the Executive for services rendered in connection with such
other employment.

9. Termination for Cause.

(a) The Company shall have the right to terminate the Term
and the Executive's employment hereunder for Cause (as defined below). Upon any
termination pursuant to this Section 9, the Company shall pay to the Executive
any unpaid Annual Base Salary through the effective date of termination
specified in such notice. The Company shall have no further liability hereunder
(other than for reimbursement for reasonable business expenses incurred prior
to the date of termination, subject, however, to the provisions of Section
5(a)).

(b) For purposes hereof, the term "Cause" shall mean: (A) the
willful and continued failure by the Executive to substantially perform his
duties with the Company, other than any such failure resulting from his
incapacity due to physical or mental illness or any such actual or anticipated
failure after the issuance by the Executive of a notice of termination for Good
Reason (as defined in section 11 hereof), after a written demand for
substantial performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties, or (B) the
willful engaging by the Executive in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise. For purposes of
this section, no act or failure to act on the part of the Executive shall be
deemed "willful" unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that his action or omission was in the
best interest of the Company. Notwithstanding the foregoing, the Executive
shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to the Executive a copy of the resolution duly
adopted by the affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and held for such
purpose (after reasonable notice to the Executive and an opportunity for the
Executive, together with his counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Executive was guilty of
conduct set forth above in clauses (A) or (B) above.

8
<PAGE> 9

10. Termination Without Cause. At any time the Company shall have the
right to terminate the Term and the Executive's employment hereunder by written
notice to the Executive. Upon any termination pursuant to this Section 10 (that
is not a termination under any of Sections 7, 8, 11 or 12), the Company shall
pay to the Executive a lump sum equal to the sum of (A) the Annual Base Salary
at the date of termination multiplied by the number of years remaining in the
Term, and (B) the product of the sum of the Performance Bonus for the prior
year multiplied by the number of years remaining in the Term. The Company shall
also continue to pay the premiums for the same or substantially similar Welfare
Benefits and the Executive shall be entitled to the other benefits set forth in
Section 5(b), (d) and (e) for the remainder of the Term. Further, any Company
stock option granted to Executive shall be exercisable immediately and the
Company stock acquired pursuant to such exercise may be sold by Executive
subject to no restrictions by the Company whatsoever (other than those imposed
by federal and state securities laws). The Company shall have no further
liability hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however, to the
provisions of Section 5(a)). The Executive shall be entitled to receive all
severance payments and benefits hereunder regardless of any future employment
undertaken by the Executive as long as he is in full compliance with the terms
of this Agreement.

11. Termination by Executive.

(a) The Executive shall at all times have the right, upon 60
days written notice to the Company, to terminate the Term and his employment
hereunder.

(b) Upon any termination pursuant to this Section 11 by the
Executive without Good Reason (as defined below), the Company shall pay to the
Executive any unpaid Annual Base Salary through the effective date of
termination specified in such notice. The Company shall have no further
liability hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however, to the
provisions of Section 5(a)). The Executive shall be entitled to receive all
severance payments and benefits hereunder regardless of any future employment
undertaken by the Executive as long as he is in full compliance with the terms
of this Agreement.

(c) Upon any termination pursuant to this Section 11 by the
Executive for Good Reason, the Company shall pay to the Executive the same
amounts that would have been payable by the Company to the Executive under
Section 10 of this Agreement if the Executive's employment had been terminated
by the Company without Cause. The Company shall have no further liability
hereunder (other than for reimbursement for reasonable business expenses
incurred prior to the date of termination, subject, however, to the provisions
of Section 5(a)).

9
<PAGE> 10

(d) For purposes of this Agreement, "Good Reason" shall mean
(i) the assignment to the Executive of any duties inconsistent in any material
respect with the Executive's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as contemplated
by Section 3 of this Agreement, or any other action by the Company which
results in a material diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive; (ii) the
relocation of the Executive to another location more than 50 miles from his
current location without his consent, or (iii) any failure by the Company to
comply with any of the material provisions of Section 4 of this Agreement,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive.

12. Change in Control.

(a) In the event that (i) a Change in Control (as defined in
paragraph (b) of this Section 12) in the Company shall occur during the Term,
and (ii) prior to the earlier of the expiration of the Term and one year after
the date of the Change in Control, the Term and Executive's employment with the
Company is terminated by the Company without Cause, as defined in Section 9(b)
(and other than pursuant to Section 7 by reason of the Executive's death or
Section 8 by reason of the Executive's disability) or the Executive terminates
the Term and his employment for Good Reason, as defined in Section 11(d), the
Company shall (1) pay to the Executive any unpaid Annual Base Salary through
the effective date of termination, (2) pay to the Executive the Incentive
Compensation, if any, not yet paid to the Executive for any year prior to such
termination, at such time as the Incentive Compensation otherwise would have
been payable to the Executive, (3) at the time of such termination, pay to the
Executive a lump sum equal to the sum of (A) the Annual Base Salary at the date
of termination multiplied by the number of years remaining in the Term, and (B)
the product of the sum of the Performance Bonus for the prior year multiplied
by the number of years remaining in the Term. The Company shall also continue
to pay the premiums for the same or substantially similar Welfare Benefits for
the number of years remaining in the Term. Further, any Company stock option
granted to Executive shall be exercisable immediately and the Company stock
acquired pursuant to such exercise may be sold by Executive subject to no
restrictions by the Company whatsoever (other than those imposed by federal and
state securities laws). The Company shall have no further liability hereunder
(other than for reimbursement for reasonable business expenses incurred prior
to the date of termination, subject, however, to the provisions of Section
5(a)).

(b) For purposes of this Agreement, the term "Change in
Control" shall mean:

(i) Approval by the shareholders of the Company of
(x) a reorganization, merger, consolidation or other form of corporate
transaction or series of transactions, in each case, with respect to
which persons who were the shareholders of the Company immediately
prior to such reorganization, merger or consolidation or other
transaction do not, immediately thereafter, own more than 50% of the
combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company's then
outstanding voting securities, or (y) a liquidation or dissolution of
the Company or (z) the sale of all or substantially all of the assets
of the Company (unless such reorganization, merger, consolidation or
other corporate transaction, liquidation, dissolution or sale is
subsequently abandoned); or

10
<PAGE> 11

(ii) Individuals who, as of the date hereof,
constitute the Board (as of the date hereof the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election
or nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest relating
to the election of the Directors of the Company, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Securities
Exchange Act) shall be, for purposes of this Agreement, considered as
though such person were a member of the Incumbent Board; or

(iii) The acquisition (other than from the Company)
by any person, entity or "group", within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act (excluding, for
this purpose, the Company or its subsidiaries, or any Executive
benefit plan of the Company or its subsidiaries) which acquires
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Securities Exchange Act), of 20% or more of either the then
outstanding shares of the Company's Common Stock or the combined
voting power of the Company's then outstanding voting securities
entitled to vote generally in the election of directors.

(c) The payments made pursuant to paragraph (a) above shall
be in lieu of any and all compensation due to Executive for the years that
would otherwise be remaining in the Term. Upon receipt of said lump sum
payment, this Agreement and all rights and duties of the parties shall be
terminated, except as follows. In consideration for such lump sum payment and
for the right to terminate under the conditions set forth above, Executive
agrees to consult with the Company (or its successors), and its officers if
requested to do so for a period of at least two years from the date of such
termination. However, Executive shall be required to devote only such part of
his time to such services as Executive believes reasonable in Executive's sole
discretion, and the time and date such services are offered shall be determined
by Executive so long as that time and date is within a reasonable period of
time after the request. It is expressly agreed that the Company's rights to
avail itself of the advice and consultation services of Executive shall at all
times be exercised in a reasonable manner, that adequate notice shall be given
to Executive in such events, and that non-compliance with any such request by
Executive for good reason, including, but not limited to, ill health or prior
commitments, shall not constitute a breach or violation of this Agreement.
Executive agrees that, except for reimbursement of all reasonable expenses
incurred by him with respect to such consultation and advisory services,
payable as such consultation and advisory services are rendered, he shall not
be entitled to any further compensation. It is understood that in furnishing
any advisory and consulting services provided herein, Executive shall not be an
Executive of the Company but shall act in the capacity of independent
contractor.

11
<PAGE> 12

13. Waivers. It is understood that either party may waive the strict
performance of any covenant or agreement made herein; however, any waiver made
by a party hereto must be duly made in writing in order to be considered a
waiver, and the waiver of one covenant or agreement shall not be considered a
waiver of any other covenant or agreement unless specifically in writing as
aforementioned.

14. Savings Provisions. The invalidity, in whole or in part, of any
covenant or restriction, or any section, subsection, sentence, clause, phrase
or word, or other provisions of this Agreement, as the same may be amended from
time to time shall not affect the validity of the remaining portions thereof.

15. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Florida without giving effect to
its choice of law provision.

16. Notices. If either party desires to give notice to the other in
connection with any of the terms and provisions of this Agreement, said notice
must be in writing and shall be deemed given when (a) delivered by hand (with
written confirmation of receipt), (b) sent by facsimile (with written
confirmation of receipt), provided that a copy is mailed by registered mail,
return receipt requested, or (c) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt requested), in each
case addressed to the party for whom it is intended as follows (or such other
addresses as either party may designated by notice to the other party):

If to the Company: Windmere-Durable Holdings, Inc.
5980 Miami Lakes Drive
Miami, Lakes, Florida 33014
Attn: Chief Executive Officer

If to Executive: At the most recent home address of
Executive on the official records
of the Company

17. Default. In the event either party defaults in the performance of
its obligations under this Agreement, the non-defaulting party may, after
giving 30 days notice to the defaulting party to provide a reasonable
opportunity to cure such default, proceed to protect its rights by suit in
equity, action at law, or, where specifically provided for herein, by
arbitration, to enforce performance under this Agreement or to recover damages
for breach thereof, including all costs and attorneys' fees, whether settled
out of court, arbitrated, or tried (at both trial and appellate levels).

18. Section 162(m) Limits.

Notwithstanding any other provision of this Agreement, if and to the
extent that any remuneration payable by the Company to the Executive for any
year would exceed the maximum amount of such remuneration that the Company may
deduct for that year by reason of Section 162(m) of the Code, payment of the
portion of the remuneration for that year that would not be so deductible under
Section 162(m) shall, in the sole discretion of the Board, be deferred so that
it shall become payable at such time or times as the Board reasonably
determines that it would be deductible by the Company under Section 162(m),
with interest at the "short-term applicable federal rate" as such term is
defined in Section 1274(d) of the Code.

12
<PAGE> 13

19. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment,
distribution or other action by the Company to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, determined with regard to any
additional payments required under this Section 19) (a "Payment") would be
subject to an excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code"), or any interest or penalties are incurred by
the Executive with respect to any such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), the Company shall make a payment to the Executive (a
"Gross-Up Payment") in an amount equal to the Excise Tax imposed upon the
Payments.

(b) Subject to the provisions of paragraph (c) of this
Section 19, all determinations required to be made under this Section 19,
including whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by Grant Thornton LLP, or such other independent
public accounting firm regularly engaged by the Company from time to time (the
"Accounting Firm"), which shall provide detailed supporting calculations both
to the Company and the Executive within 20 business days of the receipt of
notice from the Executive that there has been a Payment, or such earlier time
as is requested by the Company. In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change of Control, the Company shall appoint another nationally recognized
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the Company. Any
Gross-Up Payment, as determined pursuant to this Section 19, shall be paid by
the Company to the Executive within five days of the receipt of the Accounting
Firm's determination. If the Accounting Firm determines that no Excise Tax is
payable by the Executive, it shall furnish the Executive with a written opinion
that failure to report the Excise Tax on the Executive's applicable federal and
state income tax return would not result in the imposition of a negligence or
similar penalty. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 19 and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

13
<PAGE> 14

(c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten business days after the
Executive is informed in writing of such claim and shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which it gives such notice to the Company
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Executive in writing
prior to the expiration of such period that it desires to contest such claim,
the Executive shall:

(i) give the Company any information reasonably
requested by the Company relating to such claim,

(ii) take such action in connection with contesting
such claim as the Company shall reasonably request in writing
from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney
reasonably selected by the Company,

(iii) cooperate with the Company in good faith in
order effectively to contest such claim, and

(iv) permit the Company to participate in any
proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 19(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

14
<PAGE> 15

(d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 19(c), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
(subject to the Company's complying with the requirements of Section 19(c))
promptly, after receipt by Executive of such refund, pay to the Company the
amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 19(c), a determination is
made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.

20. No Third Party Beneficiary. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
other than the Company, the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and assigns, any rights or
remedies under or by reason of this Agreement.

21. Waiver of Jury Trial. ALL PARTIES KNOWINGLY WAIVE THEIR RIGHTS TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION IN ANY COURT OF LAW, TRIBUNAL OR
LEGAL PROCEEDING INVOLVING THE PARTIES HERETO OR ANY DISPUTES ARISING OUT OF OR
RELATED TO THIS AGREEMENT.

[Signatures on following page.]

15
<PAGE> 16

IN WITNESS WHEREOF, the Company, by its appropriate officer, signed
this Agreement and Executive have signed this Agreement, as of the day and year
first above written.

WINDMERE-DURABLE HOLDINGS, INC.

By: /s/ David M. Friedson
--------------------------------------

EXECUTIVE

/s/ Harry D. Schulman
-----------------------------------------
Harry D. Schulman

<ARTICLE> 5
<MULTIPLIER> 1,000,000

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 5,529
<SECURITIES> 0
<RECEIVABLES> 204,016
<ALLOWANCES> 7,970
<INVENTORY> 185,480
<CURRENT-ASSETS> 439,594
<PP&E> 146,563
<DEPRECIATION> 68,697
<TOTAL-ASSETS> 771,414
<CURRENT-LIABILITIES> 147,755
<BONDS> 130,000
0
0
<COMMON> 2,251
<OTHER-SE> 319,846
<TOTAL-LIABILITY-AND-EQUITY> 771,414
<SALES> 472,250
<TOTAL-REVENUES> 472,250
<CGS> 330,493
<TOTAL-COSTS> 116,008
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,755
<INTEREST-EXPENSE> 19,947
<INCOME-PRETAX> (5,488)
<INCOME-TAX> (2,366)
<INCOME-CONTINUING> (3,122)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,122)
<EPS-BASIC> (.14)<F1>
<EPS-DILUTED> (.14)<F1>
<FN>
<F1>The [EPS-PRIMARY] amount represents BASIC earnings per share and the
[EPS-DILUTED] amount represents DILUTED earnings per share in accordance with
Statement of Financial Accounting Standards No. 128, Earnings Per Share.
</FN>

</TABLE>