SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
AMENDMENT NO.1
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For quarterly period ended March 1, 1997
Commission File No. 0-19369
LITTLE SWITZERLAND, INC.
(Exact name of registrant as specified in its charter)
Delaware 66-0476514
(State of Incorporation) (I.R.S Employer
Identification No.)
161-B Crown Bay Cruise Ship Port
St. Thomas U.S.V.I. 00802
(Address of Principal Executive Offices) (Zip Code)
(809) 776-2010
(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 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
At April 10, 1997, 8,461,488 shares of $.01 par value
common stock of the registrant were outstanding.
<PAGE>
LITTLE SWITZERLAND, INC.
INDEX TO FORM 10-Q/A
FOR THE QUARTER ENDED March 1, 1997
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of
March 1, 1997 (unaudited) and
June 1, 1996 3
Consolidated Statements of Income
for the three and nine months
ended March 1, 1997 and March 2,
1996 (unaudited) 4
Consolidated Statements of Cash Flows
for the nine months ended March 1,
1997 and March 2, 1996 (unaudited) 5
Notes to Consolidated Financial
Statements (unaudited) 6-12
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 13-16
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 17
Signature Page 18
<PAGE>
PART I. FINANCIAL INFORMATION FORM 10-Q/A
Item 1. Financial Statements Page 3
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (in thousands)
March 1, June 1,
ASSETS 1997 1996
---- ----
Current assets: (unaudited)
Cash and cash equivalents........................$ 4,820 $ 5,393
Accounts receivable.............................. 1,843 1,892
Inventory........................................ 46,383 43,678
Prepaid expenses and other current assets........ 3,632 1,607
------ ------
Total current assets....................... 56,678 52,570
------ ------
Property, plant and equipment, at cost.............. 37,874 34,247
Less -- Accumulated depreciation................. (14,863) (12,522)
------ ------
23,011 21,725
------ ------
Other assets........................................ 3,382 3,582
------ ------
Total assets...............................$ 83,071 $ 77,877
====== ======
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Current portion of long term debt................$ 2,219 $ 832
Unsecured notes payable.......................... 9,100 7,100
Accounts payable................................. 10,856 6,839
Accrued and currently deferred income taxes...... 751 2,002
Other accrued expenses and deferred income....... 2,552 3,225
------ ------
Total current liabilities.................. 25,478 19,998
Long term debt...................................... 6,681 8,068
Deferred income taxes............................... 90 90
------ ------
Total liabilities.......................... 32,249 28,156
------ ------
Commitments and contingencies....................... --- ---
Minority interest................................... 1,619 1,619
------ ------
Stockholders' equity:
Preferred stock, $.01 par value--
Authorized--5,000 shares
Issued and outstanding--none.................... --- ---
Common stock, $.01 par value--
Authorized--20,000 shares
Issued and outstanding--8,461 shares
at March 1, 1997 and 8,457
at June 1, 1996............................... 85 85
Capital in excess of par.......................... 14,811 14,792
Retained earnings................................. 34,307 33,225
------ ------
Total stockholders' equity.................... 49,203 48,102
------ ------
Total liabilities, minority interest
and stockholders' equity...................$ 83,071 $ 77,877
====== ======
See accompanying notes to consolidated financial statements
<PAGE>
PART I. FINANCIAL INFORMATION FORM 10-Q/A
Item 1. Financial statements Page 4
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(in thousands except per share data)
(unaudited)
For the three For the nine
months ended months ended
March 1, March 2, March 1, March 2,
1997 1996 1997 1996
Net sales.....................$32,624 $20,680 $65,950 $44,499
Cost of sales................. 18,126 11,794 36,918 25,352
------- ------- ------- -------
Gross profit.................. 14,498 8,886 29,032 19,147
Selling, general and
administrative expenses....... 11,263 8,259 27,211 20,961
Business interruption
insurance proceeds............ --- --- 560 ---
------- ------- ------- -------
Operating income (loss)..... 3,235 627 2,381 (1,814)
Interest expense, net......... 398 144 1,166 324
------- ------- ------- -------
Income (loss) before
income taxes............ 2,837 483 1,215 (2,138)
Provision (benefit) for
income taxes.................. 426 86 133 (394)
------- ------- ------- -------
Net income (loss).............$ 2,411 $ 397 1,082 $(1,744)
======= ======= ======= =======
Net earnings (loss)
per share.................$ 0.28 $ 0.05 $ 0.13 (0.21)
======= ======= ======= =======
Weighted average shares
outstanding............... 8,540 8,456 8,498 8,455
======= ======= ======= =======
`
See accompany notes to consolidated financial statements
<PAGE>
PART I. FINANCIAL INFORMATION FORM 10-Q/A
Item 1. Financial statements Page 5
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
For the nine months ended
March 1, March 2,
1997 1996
---- ----
Cash flows from operating activities:
Net income (loss).....................................$ 1,082 $ (1,744)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities--
Depreciation................................... 2,341 1,762
Changes in assets and liabilities:
Decrease (increase) in accounts receivable... 49 (618)
(Increase) in inventory....................... (2,705) (4,816)
(Increase) in prepaid expenses
and other current assets................... (2,025) (772)
Decrease (increase) in other assets.......... 200 (73)
Increase in accounts payable................. 4,017 2,016
(Decrease) increase in other accrued
expenses and deferred income.............. (950) 6,256
(Decrease) in accrued and currently
deferred income taxes...................... (974) (710)
------- -------
Net cash provided by operating activities.......... 1,035 1,301
------- -------
Cash flows from investing activities:
Capital expenditures............................. (3,627) (5,002)
Acquisition of inventory and fixed assets........ 0 (8,917)
------- -------
Net cash (used in) investing activities............ (3,627) (13,919)
------- -------
Cash flows from financing activities:
Proceeds from unsecured notes payable............ 21,500 23,800
Repayments of unsecured notes payable............ (19,500) (18,600)
Proceeds from long term borrowings............... 0 8,900
Issuance of common stock......................... 19 17
------- -------
Net cash provided by financing activities............. 2,019 14,117
------- -------
Net increase in cash and cash equivalents........... (573) 1,499
Cash and cash equivalents, beginning of period........ 5,393 2,899
------- -------
Cash and cash equivalents, end of period..............$ 4,820 $ 4,398
Non-cash activity:
Issuance of preferred stock by subsidiary
used in acquisition $ -- $ 1,619
======== ========
During the nine months ended March 1, 1997 and March 2, 1996, the Company paid
income taxes of $1,354 and $316, respectively, and paid interest of $1,100 and
$120, respectively.
See accompanying notes to consolidated financial statements
<PAGE>
FINANCIAL INFORMATION FORM 10-Q/A
Item 1. Financial statements Page 6
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements include the operations
of Little Switzerland, Inc. (the "Company") and its wholly owned subsidiaries,
L.S. Holding, Inc. and L.S. Wholesale, Inc. All significant intercompany
balances have been eliminated in consolidation. The interim financial statements
are unaudited and, in the opinion of management, contain all adjustments
necessary to present fairly the Company's financial position as of March 1, 1997
and March 2, 1996 and the results of its operations and cash flows for the
interim periods presented. It is suggested that these interim financial
statements be read in conjunction with the financial statements and the notes
thereto included in the Company's latest report on Form 10-K.
Effective with the second quarter of fiscal year 1996, the Company adopted
a "4-5-4" fiscal calendar wherein each fiscal quarter contains two four week
periods and one five week period, with each period beginning on a Sunday and
ending on a Saturday. Previously, the Company used calendar months for its
fiscal periods. The purpose of this change is to provide more consistent
comparability between fiscal periods. The change in fiscal calendar resulted in
one less day in the nine month period of the current fiscal year, as compared to
the prior fiscal year. Management estimates that this one day difference did not
cause any material incomparability in the net income of the two periods. There
was no fiscal calendar difference in the three month period, this year compared
to last year.
The results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for a full fiscal year, due
to the seasonal nature of the Company's operations.
2. RESTATEMENT
In July, 1997 management disclosed to its independent auditors that certain
transactions may have been recorded in error on the books of the Company. As a
result, the Company engaged Arthur
<PAGE>
FORM 10-Q/A
Page 7
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
Andersen, LLP to evaluate the matter and determine the impact, if any, on the
Company's previously and currently reported consolidated financial statements.
After extensive review, analysis and evaluation, which focused on unlocated
differences in cash balances, management believes that an employee defalcation
has occurred during the current fiscal year. The estimated loss of approximately
$935,000 and $1,693,000 has been classified as a general and administrative
expense in the accompanying restated consolidated statements of income for the
three and nine month periods ended March 1, 1997.
3. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
4. TRANSACTIONS WITH AFFILIATES
The Company enters into a number of transactions with Town & Country
Corporation, of which one of the Company's Directors is an Executive Officer.
The Company purchases a portion of its merchandise from Town & Country
Corporation and its affiliated companies at prices which approximate
arm's-length transactions.
5. CREDIT ARRANGEMENTS
The Company has available a total of $17.5 million in unsecured credit
facilities, of which $8.4 million is available for borrowing with maturities
ranging from one to three years from March 1, 1997. Any unfunded portion of the
facilities can be withdrawn at the bank's discretion. Outstanding borrowings
against these credit facilities totaled $9.1 million as of March 1, 1997.
<PAGE>
FORM 10-Q/A
Page 8
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
Additionally, in February 1996, the Company secured term debt of approximately
$8.9 million from its two lead banks to finance the acquisition of the fixtures,
leasehold rights and inventories of two stores in Barbados. Interest on this
debt accrues at an annual interest rate of approximately 7.25%, and is payable
monthly. The principal is payable in equal quarterly payments over a four year
period, commencing March 1997. As of March 1, 1997, the Company was in
compliance with all restrictive covenants related to its unsecured and term debt
agreements. Additionally, the Company has available separate facilities for
foreign exchange contracts.
6. EARNINGS PER SHARE
Earnings per share is based on the weighted average number of common and
dilutive common equivalent shares (stock options) outstanding during each
period.
7. ACCOUNTING FOR INCOME TAXES
The Company uses the liability method in accounting for income taxes in
accordance with SFAS No. 109. This standard determines deferred income taxes
based on the estimated future tax effects of any differences between the
financial statement and the tax basis of assets and liabilities, given the
provisions of the enacted tax laws.
8. INTANGIBLE ASSETS
The Company accounts for long-lived and intangible assets in accordance
with SFAS No. 121, Accounting for the Impairment of Long-lived Assets and for
Long-lived Assets to be Disposed of. The Company continually reviews its
intangible assets for events or changes in circumstances which might indicate
that the carrying amount of the assets may not be recoverable. The Company
assesses the recoverability of the assets by determining whether the
amortization of such intangibles over their remaining lives can be recovered
through projected undiscounted future results. The amount
<PAGE>
FORM 10-Q/A
Page 9
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
of impairment, if any, is measured based on projected discounted future results
using a discount rate reflecting the Company's average cost of funds.
9. STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 128 - EARNINGS
PER SHARE
In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 (SFAS No. 128), Earnings per Share, which
supersedes Accounting Principles Board Opinion 15, the existing authoritative
guidance. SFAS No. 128 is designed to improve the earnings per share information
provided in the financial statements by simplifying the existing computational
guidelines, revising the disclosure requirements, and increasing the
comparability of earnings per share on an international basis. SFAS No. 128 is
effective for financial statements for both interim and annual periods ending
after December 15, 1997 and requires restatement of all prior-period earnings
per share data presented. The new statement modifies the calculations of primary
and fully diluted earnings per share and replaces them with basic and diluted
earnings per share. Basic earnings per share includes no dilution and is
calculated by dividing net income by the weighted average number of common
shares outstanding for the period. Diluted earnings per share reflects the
potential dilution of stock options that could share in the earnings of an
entity, similar to fully diluted earnings per share. Earnings per share in these
financial statements would not be affected under the new pronouncement.
10. STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 123 -
ACCOUNTING FOR STOCK-BASED COMPENSATION
In December 1995, the Financial Accounting Standards Board issued SFAS No.
123, Accounting for Stock-Based Compensation, which is to become effective for
fiscal years beginning after December 15, 1995. SFAS No. 123 requires employee
stock-based compensation to be either recorded or disclosed at its fair value.
Management intends to continue to account for employee stock-based compensation
under Accounting Principles Board Opinion No. 25 and
<PAGE>
FORM 10-Q/A
Page 10
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
will not adopt the new accounting provision for employee stock- based
compensation under SFAS No. 123, but will include the additional required
disclosures in the fiscal 1997 year end financial statements.
11. ADVERTISING
The Company expenses the costs of advertising as advertisements are printed
and distributed. The Company's advertising consists primarily of advertisements
with local and national travel magazines which are produced on a periodic basis
and distributed to visiting tourists, and fees paid for promotional "port
lecturer" programs directed primarily at cruise ship passengers.
12. COMMITMENTS AND CONTINGENCIEs
In September 1995, Hurricanes Luis and Marilyn inflicted damage to several
of the Company's stores and caused significant damage to various islands'
infrastructures, including hotels and other tourist facilities. As of November
20, 1996, all stores had reopened.
The Company has settled all outstanding claims related to the hurricanes
with its insurance carrier. In connection with this final settlement, the
Company received approximately $13.4 million in property and business
interruption proceeds. The Company recorded a net gain of approximately $4.7
million in fiscal 1996, after write-offs related to damaged assets of
approximately $8.1 million, including furniture and fixtures, inventory and
other assets related to stores affected by the hurricanes. In addition,
approximately $560,000, representing fiscal 1997 lost profits for a store in
Marigot not reopened until November 1996, was recorded as deferred income on the
Company's consolidated balance sheet as of June 1, 1996. In the nine month
period, the Company recorded the $560,000, as business interruption insurance
proceeds, which represents lost profits for the closed Marigot store.
<PAGE>
FORM 10-Q/A
Page 11
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
The Company is currently insured for property losses and related business
interruption losses in excess of 5% of the insured value of the property subject
to a claim. For fiscal years 1995 and 1996, the Company was only insured for
wind related losses in excess of $5 million, subject to certain deductibles.
13. ACQUISITION
On February 16, 1996, World Gift Imports (Barbados), Inc., a subsidiary of
LS Holding, Inc. which is a subsidiary of Little Switzerland, Inc. (the
"Company"), purchased the leasehold rights, fixtures and inventories of two
retail stores located in Barbados, West Indies, from Dacosta Mannings Inc., a
subsidiary of Barbados Shipping & Trading Company Limited. The two stores were
previously operated under the name of "Louis Bayley" and sold merchandise
similar to that carried in the Company's retail stores, such as name brand
watches, jewelry, china, crystal and gift items at duty free prices. The Company
began operating the two stores as "Little Switzerland" stores on February 19,
1996.
The purchase price of approximately $10.6 million was financed by bank
borrowing provided by the Company's two primary banks, Chase Bank and Bank of
Nova Scotia, of approximately $8.9 million and the issuance of preferred stock
of approximately $1.6 million by World Gift Imports (Barbados), Inc. to the
seller. The purchase price is subject to adjustment three and four years after
the closing date, based on the sales performance of the two purchased stores and
any additional stores that may be opened by the Company in Barbados during that
period. The Company pays to the seller a management fee of 2.5% of its Barbados
stores' annual sales up to $15 million and 1.25% of annual sales in excess of
$15 million, so long as the preferred stock is unredeemed. The preferred stock
may be redeemed by the Company at face value at any time after three years from
the date of close through nine years from the date of close. Following that
period, the Company retains the right of first refusal to match any bona fide
offer from a third party to purchase the preferred stock.
<PAGE>
FORM 10-Q/A
Page 12
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
The Acquisition has been accounted for as a purchase transaction effective
as of February 16, 1996, in accordance with Accounting Principles Board Opinion
No. 16, "Business Combinations", and accordingly, the consolidated financial
statements for the period subsequent to February 16, 1996 reflect the purchase
price allocated to tangible and intangible assets acquired, based on their
estimated fair values as of February 16, 1996.
Unaudited pro forma operating results of the Company for the nine months
ended March 2, 1996 as adjusted for the debt financing and estimated effects of
the acquisition as if it had occurred on June 1, 1995, are as follows:
Net sales................................. $50,137,000
Net (loss)................................ (1,735,000)
Net (loss) per share...................... (0.21)
Weighted average shares outstanding....... 8,456,000
<PAGE>
FORM 10-Q/A
Page 13
PART I. FINANCIAL INFORMATION
ITEM 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
RESULTS OF OPERATIONS
NET SALES
Net sales for the third quarter ended March 1, 1997 were $32.6 million or
57.8% higher than net sales of $20.7 million for the corresponding period last
year. Net sales of $66.0 million for the nine month period ended March 2, 1997
were 48.2% higher than net sales of $44.5 million for the corresponding period
last year. The increase in net sales is primarily the result of sales this year
from stores that were closed for all or part of the prior year periods due to
Hurricanes Luis and Marilyn in September 1995, and sales generated by five new
stores: the Royal Plaza store in Aruba, the Juneau store in Alaska, two stores
in Barbados and one in St. Lucia.
Net sales of $19.1 million for stores which were open for the full three
month period this year and last year increased 1.2% from net sales of $18.9
million for the same period last year. Net sales of $16.0 million for stores
which were open for the full nine month period this year decreased 18.1% from
net sales of $19.6 million for the same period last year. This decrease reflects
the temporary shift of tourism last year to islands such as Aruba and Curacao
that were undamaged by Hurricanes Luis and Marilyn, in September 1995.
GROSS PROFIT
Gross profit as a percentage of net sales during the three and nine month
periods ended March 1, 1997 were 44.4% and 44.0%, respectively, compared to the
three and nine month periods ended March 2, 1996 of 43.0% each. This increase in
gross margin percentage reflects the strengthening of the U.S. dollar as
compared to the European currencies in which the Company purchases a substantial
portion of its merchandise.
<PAGE>
FORM 10-Q/A
Page 14
PART I. FINANCIAL INFORMATION
ITEM 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Third quarter selling, general and administrative expenses ("SG&A")
increased 36.4% to $11.3 million for the three month period ended March 1, 1997
from $8.3 million for the same period last year. As a percent to net sales, SG&A
expenses decreased to 34.5% for the quarter ended March 2, 1997 from 39.9% for
the same quarter last year. Nine month SG&A increased 29.8% to $27.2 million for
the period ended March 2, 1997 from $21.0 million for the same period last year.
As a percent to net sales, SG&A decreased to 41.3% for the nine month period
this year from 47.1% for the same period last year. In July, 1997 management
disclosed to its independent auditors that certain transactions may have been
recorded in error on the books of the Company. As a result, the Company engaged
Arthur Andersen, LLP to evaluate the matter and determine the impact, if any, on
the Company's previously and currently reported consolidated financial
statements. After extensive review, analysis and evaluation, which focused on
unlocated differences in cash balances, management believes that an employee
defalcation has occurred during the current fiscal year. The estimated loss of
approximately $935,000 and $1,693,000 has been classified as a general and
administrative expense in the accompanying restated consolidated statements of
income for the three and nine month periods ended March 1, 1997.
BUSINESS INTERRUPTION INSURANCE PROCEEDS
For the nine month period ended March 1, 1997, the Company recorded
$560,000, as Business interruption insurance proceeds, which represents the
insurance recovery for lost profits from its closed Marigot store during the
period. No Business interruption insurance proceeds, were recorded in the three
month period ended March 1, 1997.
<PAGE>
FORM 10-Q/A
Page 15
PART I. FINANCIAL INFORMATION
ITEM 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
OTHER
Net interest expense for the nine month periods ended March 1, 1997 and
March 2, 1996 totaled $1.2 million and $324,000, respectively. The increase is
due to higher average borrowings this year to support construction and
inventories for three new stores, and the interest on long term debt utilized in
the acquisition of the fixtures, leasehold rights and inventories of two stores
in Barbados in February 1996.
The Company's effective income tax rates for the nine month periods ended
March 1, 1997 and March 2, 1996 consisted of a provision of approximately 11%
and a benefit of 18%, respectively. The lower effective rate for the current
year is the result of the anticipated utilization of net operating losses for
two of the Company's foreign subsidiary corporations.
This quarterly report on Form 10-Q contains certain statements that are
"forward-looking statements" as that term is defined under the Private
Securities Litigation Reform Act of 1995 and releases issued by the Securities
and Exchange Commission. The words "believe," "expect," "anticipate," "intend,"
"estimate" and other expressions which are predictions of or indicate future
events and trends and which do not relate to historical matters identify
forward-looking statements. Forward-looking statements involve known and unknown
risks, uncertainties and other factors, which may cause the actual results,
performance or achievements of the Company to differ materially from anticipated
future results, performance or achievements expressed or implied by such
forward- looking statements. The Company undertakes no obligation to publicly
update or revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
The future operating results and performance trends of the Company may be
affected by a number of factors, including, without limitation, the following:
(i) the frequency of tourist visits to the locations where the Company maintains
retail stores (ii) the Company's ability to retain relationships with its major
suppliers of product for resale (iii) weather in the Company's markets (iv)
actions of the Company's competitors and the Company's ability
<PAGE>
FORM 10-Q/A
Page 16
PART I. FINANCIAL INFORMATION
ITEM 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
to respond to such actions (v) economic conditions that affect the buying
patterns of the Company's customers (vi) availability of new tourist markets for
expansion and (vii) the continued success of the Company's efforts to implement
its planned strategic initiatives.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operations during the nine month period ended March 1,
1997 was $1.0 million, compared to $1.3 million provided by operations for the
same nine month period last year. The decrease in net cash provided by
operations primarily reflects a $6.2 million advance on hurricane insurance
proceeds in the prior year.
The Company's working capital position as of March 1, 1997 and June 1, 1996
was $31.2 million. Current ratios were 2.2 and 2.6 as of the same periods,
respectively. Capital expenditures were approximately $3.6 million during the
nine month period ended March 1, 1997, compared to approximately $5.0 million
during the same period last year. Major capital expenditures this year include
new in-store merchandise systems and related hardware, upgrade of the Company's
central computer system, new stores in Juneau, Alaska and St. Lucia, and the
refurbishment of stores in St. Thomas, Marigot and Antigua.
The Company has total unsecured credit facilities of $17.5 million provided
by its two lead banks. As of March 1, 1997, short-term borrowings of $9.1
million were outstanding against these facilities. Additionally, the Company has
secured facilities through its two lead banks for the acquisition of the
leasehold rights, fixed assets and inventory of two stores in Barbados. The
total borrowing provided for the acquisition was $8.9 million at an approximate
7.25% interest rate, with terms of interest only, for the first year and equal
principal payments due quarterly over the following three years. It remains
management's expectation that funds available from operations and bank financing
will be sufficient to fund operations and expansion for at least the next three
years.
<PAGE>
FORM 10-Q/A
Page 17
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports of Form 8-K
(a) Exhibits
3.1 The Amended and Restated Certificate of Incorpo-
ration of the Company is incorporated herein by
reference to Exhibit 3.3 to Amendment No. 1 to
the Company's Registration Statement on Form S-1,
Registration No. 33-40907, filed with the
Securities and Exchange Commission on July 10,
1992 ("Amendment No. 1 to the Form S-1").
3.2 The Amended and Restated By-Laws of the Company
are incorporated herein by reference to Exhibit
3.4 to Amendment No. 1 to the Form S-1/
(b) Reports on Form 8-K
No Form 8-K was issued by the registrant during the three month period
ended March 1, 1997.
<PAGE>
FORM 10-Q/A
Page 18
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
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.
LITTLE SWITZERLAND, INC.
Date: October 3, 1997 /s/ Ronald J. Lataille
Ronald J. Lataille
Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-1-1997
<PERIOD-START> DEC-30-1996
<PERIOD-END> MAR-1-1997
<CASH> 4,820
<SECURITIES> 0
<RECEIVABLES> 1,843
<ALLOWANCES> 0
<INVENTORY> 46,383
<CURRENT-ASSETS> 56,678
<PP&E> 37,874
<DEPRECIATION> 14,863
<TOTAL-ASSETS> 83,071
<CURRENT-LIABILITIES> 25,478
<BONDS> 6,681
0
0
<COMMON> 85
<OTHER-SE> 49,118
<TOTAL-LIABILITY-AND-EQUITY> 83,071
<SALES> 32,624
<TOTAL-REVENUES> 32,624
<CGS> 18,126
<TOTAL-COSTS> 18,126
<OTHER-EXPENSES> 11,263
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 398
<INCOME-PRETAX> 2,837
<INCOME-TAX> 426
<INCOME-CONTINUING> 2,411
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,411
<EPS-PRIMARY> 0.28
<EPS-DILUTED> 0.28
</TABLE>
