SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-1282-3
Swiss Army Brands, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-2797726
(State of incorporation) (I.R.S. Employer Identification No.)
One Research Drive, Shelton, Connecticut 06484
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 929-6391
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
The number of shares of Issuer's Common Stock, $.10 par value, outstanding on
October 31, 1996, was 8,208,860 shares.
<PAGE>
SWISS ARMY BRANDS, INC.
AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION Page No.
<S> <C> <C>
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets as of
September 30, 1996 and December 31, 1995. 3 - 4
Consolidated Statements of Operations for the
three and nine months ended September 30, 1996 and 1995. 5
Consolidated Statements of Stockholders Equity
for the nine months ended September 30, 1996 and 1995. 6
Consolidated Statements of Cash Flows for the
nine months ended September 30, 1996 and 1995. 7
Notes to Consolidated Financial Statements 8 - 9
Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 10 - 13
Part II: OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K 14
Signatures 15
The Exhibit Index appears on page 13.
</TABLE>
2
<PAGE>
SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Assets
<TABLE>
<CAPTION>
At September 30, At December 31,
1996 1995
(unaudited)
<S> <C> <C>
Current assets:
Cash and short-term investments .......... $ 2,103,726 $ 608,757
Accounts receivable, less
allowance for doubtful accounts
of $860,000 and $975,000, respectively .. 27,652,904 31,970,449
Inventories .............................. 34,695,192 36,733,146
Deferred income tax benefits ............. 2,395,858 2,395,858
Prepaid and other ........................ 5,332,354 2,647,121
----------- -----------
Total current assets .................. 72,180,034 74,355,331
----------- -----------
Deferred income tax benefits ................ 771,371 771,371
Property, plant and equipment, at cost:
Leasehold improvements ................... 1,001,824 818,446
Equipment ................................ 7,006,789 6,199,914
Furniture and fixtures ................... 1,665,650 1,473,188
----------- -----------
9,674,263 8,491,548
Less-accumulated depreciation ............ (5,636,528) (4,385,683)
----------- -----------
4,037,735 4,105,865
----------- -----------
Investment in preferred units, at cost ...... 9,002,999 7,002,990
Investment in unconsolidated affiliate ...... 1,912,430 2,591,415
Foreign distribution rights, net of
accumulated amortization of $2,359,319
and $1,843,812, respectively ............. 4,383,372 4,900,396
Other assets, net of accumulated
amortization of $2,256,081 and
$3,166,339, respectively ................. 8,526,728 7,502,884
----------- -----------
Total Assets $ 100,814,669 $ 101,230,252
============= =============
</TABLE>
3
<PAGE>
SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Liabilities and Stockholders' Equity
<TABLE>
<CAPTION>
At September 30, At December 31,
1996 1995
(unaudited)
<S> <C> <C>
Current liabilities:
Accounts payable ......................... $ 10,920,912 $ 6,479,200
Accrued liabilities ...................... 7,522,354 8,697,994
Note payable ............................. 675,000 ---
Income taxes payable ..................... --- 1,114,389
---------- -----------
Total current liabilities .............. 19,118,266 16,291,583
---------- -----------
Commitments and contingencies
Stockholders equity
Preferred stock, par value $.10
per share: shares authorized -
2,000,000; no shares issued ........... --- ---
Common stock, par value $.10 per
share: shares authorized -
12,000,000; shares issued -
8,820,468 and 8,800,718, respectively.. 882,047 880,072
Additional paid-in capital ............... 46,136,390 45,897,740
Unrealized gain on marketable
securities ............................ 169,465 ---
Foreign currency translation adjustment .. (1,804) (9,216)
Retained earnings ........................ 39,623,772 43,283,540
---------- -----------
86,809,870 90,052,136
Less-cost of common stock in
treasury; 614,108 shares .............. (5,113,467) (5,113,467)
---------- -----------
Total stockholders equity 81,696,403 84,938,669
---------- -----------
Total Liabilities and Stockholders Equity .. $ 100,814,669 $ 101,230,252
============= =============
</TABLE>
4
<PAGE>
SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales ................. $34,616,208 $30,186,155 $89,372,371 $85,481,135
Cost of sales ............. 22,619,819 19,720,049 63,394,304 55,598,986
---------- ---------- ---------- ----------
Gross profit .............. 11,996,389 10,466,106 25,978,067 29,882,149
Selling, general and
administrative expenses ... 10,828,014 9,636,030 29,537,378 26,768,550
Special charges ........... --- --- 2,073,000 ---
---------- ---------- ---------- ----------
Operating income (loss) ... 1,168,375 830,076 (5,632,311) 3,113,599
Interest (expense) ........ (61,856) (85,861) (103,918) (104,395)
Interest income ........... 5,431 106,861 107,356 523,165
Impairment of investment .. --- --- (800,000) ---
Other income (expense), net 28,121 (310,745) 156,105 (258,433)
---------- --------- --------- ----------
Total interest and other
income,net ................ (28,304) (289,745) (640,457) 160,337
---------- --------- --------- ----------
Income (loss) before
income taxes ............. 1,140,071 540,331 (6,272,768) 3,273,936
Income tax provision (benefit) 498,000 344,041 (2,613,000) 1,588,681
---------- --------- --------- ----------
Net income (loss) ......... $642,071 $196,290 ($3,659,768) $1,685,255
========== ========= ========== ==========
Net income (loss) per share $0.08 $0.02 ($0.44) $0.20
========== ========= ========== ==========
Weighted average number of
shares outstanding ..... 8,334,166 8,252,978 8,328,423 8,231,012
========== ========= ========== ==========
</TABLE>
5
<PAGE>
SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
<TABLE>
<CAPTION>
Foreign
Common Stock Par Additional Currency Unrealized Gain
Value $.10 Paid-In Translation on Marketable Retained Treasury
Shares Amount Capital Adjustment Securities Earnings Stock
<S> <C> <C> <C> <C> <C> <C> <C>
Balance
December 31, 1994 8,796,968 $879,697 $45,866,814 ($28,085) $ --- $40,170,324 ($5,113,467)
Net income for
nine months ended
September 30, 1995
(unaudited) --- --- --- --- --- 1,685,255 ---
Stock options and
warrants exercised 2,500 250 22,862 --- --- --- ---
Foreign currency
translation adjustment --- --- --- 28,190 --- --- ---
--------- -------- ----------- ------- --------- ----------- -----------
Balance, September
30, 1995 (unaudited) 8,799,468 $879,947 $45,889,676 $105 --- $41,855,579 ($5,113,467)
========= ======== =========== ======= ========= =========== ===========
Balance
December 31, 1995 8,800,718 $880,072 $45,897,740 ($9,216) $ --- $43,283,540 ($5,113,467)
Net income (loss) for
nine months ended
September 30, 1996
(unaudited) --- --- --- --- --- (3,659,768) ---
Stock options and
warrants exercised 19,750 1,975 238,650 --- --- --- ---
Unrealized gain on
marketable securities --- --- --- --- 169,465 --- ---
Foreign currency
translation adjustment --- --- --- 7,412 --- --- ---
--------- ------- ----------- ------- --------- ----------- ----------
Balance, September
30, 1996 (unaudited) 8,820,468 $882,047 $46,136,390 ($1,804) $169,465 $39,623,772 ($5,113,467)
========= ======== =========== ======= ========= =========== ==========
</TABLE>
6
<PAGE>
SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) ($3,659,768) $ 1,685,255
Adjustments to reconcile net income (loss) to cash
provided from (used for) operating activities:
Depreciation and amortization 2,334,200 2,421,880
Equity in earnings of unconsolidated
subsidiaries, net of goodwill amortization --- 299,702
Deferred income taxes --- 141,364
Special charges 6,594,000 ---
Impairment of investment 800,000 ---
Gain on sale of fixed assets (24,319) ---
Gain on sale of partial investment in stock (11,050) ---
--------- ---------
6,033,063 4,548,201
Changes in other current assets and liabilities:
Accounts receivable 4,317,544 3,477,571
Inventories (2,483,046) (15,146,112)
Prepaid and other (3,531,233) (1,765,827)
Accounts payable 4,527,554 (4,385,566)
Accrued liabilities (1,562,365) (298,284)
Income taxes payable (1,113,505) (1,223,193)
--------- ----------
Net cash provided from (used for) operating
activities 6,188,012 (14,793,210)
--------- ----------
Cash flows from investing activities:
Capital expenditures (1,221,052) (953,794)
Proceeds from sales of property, plant & equipment 42,955 ---
Additions to other assets (2,497,668) (1,333,024)
Investment in preferred units (2,000,008) ---
Investments in common stock --- (3,425,547)
Proceeds from sale of investments in stock 59,500 ---
--------- ---------
Net cash (used for) investing activities (5,616,273) (5,712,365)
--------- ---------
Cash flows from financing activities:
Proceeds from note payable 675,000 3,250,000
Proceeds from exercise of stock options 240,625 23,112
--------- ---------
Net cash provided from financing activities 915,625 3,273,112
--------- ---------
Effect of exchange rate changes on cash 7,605 (99,547)
--------- ---------
Net increase (decrease) in cash and short-term
investments 1,494,969 (17,332,010)
Cash and short-term investments, beginning
of period 608,757 18,019,797
--------- ----------
Cash and short-term investments, end of period 2,103,726 687,787
========= ==========
Cash paid during the period:
Interest $103,918 $24,395
========= ==========
Income taxes $1,692,233 $2,821,410
========= ==========
</TABLE>
7
<PAGE>
SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996 and 1995
(unaudited)
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements included in this Form 10-Q have
been prepared by the Swiss Army Brands, Inc.(the Company formerly The
Forschner Group, Inc.) without audit. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. It is suggested that these consolidated
financial statements be read in conjunction with the financial statements
and notes thereto included in the Company's report on Form 10-K for the
year ended December 31, 1995. In the opinion of management of the Company,
the interim financial statements included herein reflect all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial position, results of operations and cash
flows for the interim periods presented. The preparation of financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Due to
the seasonal nature of the Company's business, the results of operations
for the interim periods presented are not necessarily indicative of the
operating results for the full year.
INVENTORIES
- - -----------
Domestic inventories are stated at the lower of cost (determined by
the last-in, first-out (LIFO) method) or market. Foreign inventories are
valued at the lower of cost or market determined by the FIFO method.
Inventories principally consist of finished goods and packaging material.
INVESTMENTS
- - -----------
Investments are comprised of the following as of September 30, 1996
and December 31, 1995
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
Investment in preferred units, at cost (A) $9,002,999 $7,002,990
Investment in common stock and note
receivable, at cost (B) ............. --- 800,000
Investment in unconsolidated affiliate (C) 1,912,430 1,791,415
---------- ----------
Total investments $10,915,429 $9,594,405
========== ==========
</TABLE>
(A) Represents the Companys investment in Hudson River Capital LLC,
formerly Victory Capital LLC, a privately held corporation. The Companys
preferred units capital account is allocated preferred amounts under
certain circumstances in years in which Victory has profit. During the
second quarter, the Company increased its investment in Hudson River
Capital by approximately $2,000,000. The Company is accounting for this
investment on the cost basis.
8
<PAGE>
(B) Represents the Companys investment in a private affiliated
start-up entity that is in the business of designing, manufacturing and
marketing fine jewelry. The common stock and note receivable were recorded
at cost. This investment was written-off during the second quarter, due to
impairment in the value of this investment.
(C) Represents the Companys investment in SweetWater, Inc
(SweetWater). Effective January 1, 1996, the Company decreased its
percentage ownership of SweetWater to below 20%. In accordance with
generally accepted accounting principles, this investment is being
accounted for at fair value, with the Company recording unrealized gains
(losses) as a component of stockholders equity.
SPECIAL CHARGES
- - ---------------
The Company recorded non-cash special charges totaling $7.4 million in
the second quarter. The write-offs consist of $4.5 million in discontinued
inventory (reflected in cost of sales) and $2.9 million in obsolete
displays, goodwill, intangible assets, and non-strategic investments.
INCOME TAXES
- - ------------
Income taxes are provided at the projected annual effective tax rate.
The income tax provisions (benefits) for the interim 1996 and 1995 periods
exceed the federal statutory rate of 34% due primarily to state income
taxes (net of federal benefit).
EARNINGS PER COMMON SHARE
- - -------------------------
The weighted average number of shares of common stock outstanding
include the dilutive effect of stock options outstanding. The fully diluted
earnings per share amount for both periods is the same as primary earnings
per share.
9
<PAGE>
SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(unaudited)
RESULTS OF OPERATIONS
- - ---------------------
Comparison of the Three Months Ended September 30, 1996 and 1995
- - ----------------------------------------------------------------
Sales for the three months ended September 30, 1996 were $34.6 million
compared with $30.2 million for the same period a year ago, representing an
increase of $4.4 million or 14.6%. For the three month period, sales of
Swiss Army Brand Watches and cutlery increased, while sales of Victorinox
Original Swiss Army Knives decreased.
Gross profit of $12.0 million for the three months ended September 30,
1996 increased $1.5 million or 14% from 1995. The increase relates
primarily to the increase in net sales. The gross profit margin for the
second quarter of 1996 of 34.7% was equal to the gross profit margin for
the same period of 1995. Swiss Army's gross profit margin may fluctuate due
to changes in product mix and Swiss franc exchange rates. Since the Company
imports virtually all of its products from Switzerland, its costs are
affected by both the spot rate of exchange and by its foreign currency
hedging program. The Company enters into foreign currency contracts and
options to hedge the exposure associated with foreign currency
fluctuations. However, such hedging activity cannot eliminate the long-term
adverse impact on the Companys competitive position and results of
operations that would result from a sustained decrease in the value of the
dollar versus the Swiss franc. These hedging transactions, which are meant
to reduce foreign currency risk, also reduce the beneficial effects to the
Company if the dollar increases relative to the Swiss franc. The Company
plans to continue to engage in hedging transactions; however, it is
uncertain as to what extent to which such hedging transactions will reduce
the effect of adverse currency fluctuations.
Selling, general and administrative expenses for the three months
ended September 30, 1996 of $10.8 million were $1.2 million or 12% higher
than the amount for the comparable period in 1995. The increase in expenses
resulted primarily from increases in selling expenses and merchandising and
promotional expenses. As a percentage of net sales, selling, general and
administrative expenses decreased from 31.9% in 1995 to 31.3% in 1996.
Interest expense of $62,000 for the three months ended September 30,
1996 was $24,000 lower than in the comparable period of 1995 due to the
interest expense on a deferred payment to a large supplier in 1995,
slightly offset by higher levels of debt outstanding in 1996.
Due to lower invested cash balances in the three months ended
September 30, 1996 than in the comparable period of 1995, interest income
of $5,000 in 1996 is lower than the $107,000 recorded in the year earlier
period.
Other income of $28,000 for the quarter ended September 30, 1996 was
$339,000 more favorable compared to the $311,000 of expense for the same
period in 1995, due to recognition of the Companys share of net losses in
1995 in its equity investments.
As a result of these changes, net income before income taxes for the
quarter ended September 30, 1996 was $1.1 million versus $0.5 million of
income for the same period in 1995, for an increase of $0.6 million.
Income tax expense was provided at an effective rate of 43.7% for the
three months ended September 30, 1996, versus 63.6% in 1995, with the
decrease related primarily to the non-deductibility of the Companys share
of losses and amortization of goodwill relating to its equity investments
in 1995.
Net income was $0.6 million for the three months ended September 30,
1996 versus net income of $0.2 million in the comparable period of 1995,
representing an increase of $0.4 million.
10
<PAGE>
On a per share basis for the quarter ended September 30, 1996, net
income was $0.08 compared with net income of $0.02 in 1995.
Comparison of the Nine Months Ended September 30, 1996 and 1995
- - ---------------------------------------------------------------
Sales for the nine months ended September 30, 1996 were $89.4 million
compared with $85.5 million for the same period a year ago, representing an
increase of $3.9 million or 4.6%. Sales comparisons with the first nine
months of 1995 are significantly impacted by the exceptional promotional
program for a single customer of the Corporate Markets Division which began
in 1994 and concluded at the end of the first quarter of 1995. The
promotional program accounted for 9% of the Companys sales for the first
three quarters of 1995 versus 0% in 1996. Excluding the impact of this
promotional program on results for the 1995 period, sales increased 15% in
the nine months ended September 30, 1996. Sales of Swiss Army Brand Watches
and cutlery increased from the same period a year ago while Victorinox
Original Swiss Army Knife sales decreased.
Gross profit of $26.0 million for the nine months ended September 30,
1996 decreased $3.9 million or 13.1% from 1995. The decrease relates
principally to a $4.5 million inventory write-off in the second quarter and
the negative impact of a weaker U.S. dollar against the Swiss franc in the
first quarter of 1996. The gross profit margin for the first nine months of
1996 of 29.1% was down from the margin of 35.0% reported for the same
period of 1995. Excluding the inventory write-off, the gross profit margin
for 1996 would have been 34.1%. The Company's gross profit margin may
fluctuate due to changes in product mix and Swiss franc exchange rates.
Since the Company imports virtually all of its products from Switzerland,
its costs are affected by both the spot rate of exchange and by its foreign
currency hedging program.
11
<PAGE>
Selling, general and administrative expenses for the nine months ended
September 30, 1996 of $29.5 million were $2.7 million or 10.1% higher than
the amount for the comparable period in 1995. This increase is due
primarily to higher merchandising and promotional costs. As a percentage of
net sales, selling, general and administrative expenses increased from
31.3% in 1995 to 33.0% in 1996. Excluding sales associated with the special
promotion program in 1995, the percentage decreased in 1996 to 31.3% from
34.5% in 1995.
The Company recorded a special charge in the second quarter of $2.1
million relating to the write-off of obsolete displays, goodwill and other
intangible assets. There were no special charges recorded for the
comparable period in 1995.
Due to lower invested cash balances in the nine months ended September
30, 1996 than in the comparable period of 1995, interest income of $107,000
in 1996 was lower than the $523,000 recorded in the year earlier period.
The Company recorded a $0.8 million charge associated with the impairment
of a non-strategic investment. There were no comparable investment charges
for the same period in 1995.
Other income of $156,000 for the nine months ended September 30, 1996
was $414,000 more favorable than the $258,000 of expense for the same
period in 1995, due to recognition of the Companys share of net losses in
its equity investments.
As a result of these changes, loss before income taxes for the nine
months ended September 30, 1996 was $6.3 million versus income of $3.3
million for the same period in 1995, a decrease of $9.6 million or 290%.
Income tax expense was provided at an effective rate of 41.7% for the
nine months ended September 30, 1996, versus 48.5% in 1995, with the
decrease related primarily to the non-deductibility of the Companys share
of losses and amortization of goodwill relating to its equity investments.
Net loss was $3.7 million for the nine months ended September 30, 1996
versus net income of $1.7 million in the comparable period of 1995,
representing a decrease of $5.4 million or 318%.
On a per share basis for the nine months ended September 30, 1996, net
loss was $0.44 compared with net income of $0.20 in 1995, a 320% decrease
in earnings per share.
LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------
As of September 30, 1996, the Company had working capital of $53.1
million compared with $58.1 million as of December 31, 1995, a decrease of
$5.0 million principally due to investments the Company made during the
nine months ended September 30, 1996. Sources of working capital included
depreciation and amortization of $2.3 million. Significant uses of working
capital included the Company's $2.0 million increase in the preferred units
of Hudson River Capital LCC and capital expenditures and additions to other
assets of $3.7 million. The Company currently has no material commitments
for capital expenditures.
12
<PAGE>
Cash provided from operating activities was approximately $6.2 million
in the nine months ended September 30, 1996 compared with $14.8 million of
cash used in the comparable period in 1995. The cash provided from
operations resulted primarily from a smaller increase in inventories in
1996 than in the prior year and a larger increase in accounts payable
versus 1995.
The Company meets its short-term liquidity needs with cash generated
from operations, and, when necessary, bank borrowings under its revolving
credit agreement. As of September 30, 1996, the Company had $0.7 million of
outstanding borrowings under its revolving line of credit, leaving an
unused line of $19.3 million. Of the $20 million aggregate line of credit,
the expiration date for a $15 million facility has been extended to January
31, 1997. The Company's short-term liquidity is affected by seasonal
changes in inventory levels, payment terms and seasonality of sales. The
Company believes that cash generated from operations and borrowings under
its credit facility will be sufficient to meet the Companys anticipated
operating and capital needs.
13
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
A.) Exhibits
(2) Not Applicable
(3) Not Applicable
(4) Not Applicable
(10) Extension of Revolving Line of Credit
(11) Statement regarding computation of per share earnings
is not required because the relevant computation can
be clearly determined from the material contained
in the Financial Statements included herein.
(15) Not Applicable
(18) Not Applicable
(19) Not Applicable
(22) Not Applicable
(23) Not Applicable
(24) Not Applicable
(27) Financial Data Schedule
(99) Not Applicable
B.) There were no reports or exhibits on Form 8-K filed for the three months
ended September 30, 1996.
14
<PAGE>
Pursuant to the requirements to 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.
SWISS ARMY BRANDS, INC.
(Registrant)
Date: November 9, 1996 By /s/ Thomas D. Cunningham
Name: Thomas D. Cunningham
Title: Executive Vice President,
Principal Financial Officer
and a Director
By /s/ Thomas M. Lupinski
Name: Thomas M. Lupinski
Title: Senior Vice President, Controller
15
<PAGE>
Thomas M. Lupinski
Senior Vice President, Controller
October 28, 1996
Mr. Anthony Castellon
Vice President
Fleet Bank
157 Church Street
New Haven, CT 06510
Re: Extension of Revolving Line of Credit
Dear Tony:
To confirm our telephone conversion of October 25, 1996, Swiss Army Brands, Inc.
hereby requests a 3 month extension of the maturity date of its $15 million
revolving line of credit for 3 months to January 31, 1997 under the same terms
as the existing agreement.
Please confirm Fleet's acceptance of our request by signing the enclosed copy of
this letter and returning it to me via fax and hard copy at your earliest
convenience.
If you have any questions, please give me a call.
Sincerely,
Thomas Lupinski
TML/ls
ACCEPTED:
By: Signature Date
Name: Anthony H. Castellon
Its: Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000731947
<NAME> Swiss Army Brands, Inc.
<MULTIPLIER> 1,000
<CURRENCY> Us Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 2,104
<SECURITIES> 0
<RECEIVABLES> 28,513
<ALLOWANCES> 860
<INVENTORY> 34,695
<CURRENT-ASSETS> 72,180
<PP&E> 9,674
<DEPRECIATION> 5,637
<TOTAL-ASSETS> 100,815
<CURRENT-LIABILITIES> 19,118
<BONDS> 0
0
0
<COMMON> 882
<OTHER-SE> 80,814
<TOTAL-LIABILITY-AND-EQUITY> 100,815
<SALES> 89,372
<TOTAL-REVENUES> 89,372
<CGS> 63,394
<TOTAL-COSTS> 31,610
<OTHER-EXPENSES> (536)
<LOSS-PROVISION> 0
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