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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 20549
FORM 12b-25
Commission File Number: 0-19369
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NOTIFICATION OF LATE FILING
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(Check One): [ ] Form 10-K [ ] Form 11-K [ ] Form 20-F [X] Form 10-Q [ ] Form N-SAR
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For Period Ended: February 27, 1999
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[ ] Transition Report on Form 10-K [ ] Transition Report on Form 10-Q
[ ] Transition Report on Form 20-K [ ] Transition Report on Form N-SAR
[ ] Transition Report on Form 11-K
For the Transition Period Ended: N/A
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Read attached instruction sheet before preparing form. Please print or
type.
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
If the notification relates to a portion of the filing checked above,
identify the Item(s) to which the notification relates: N/A
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Part I
REGISTRANT INFORMATION
Full name of registrant: Little Switzerland, Inc.
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Former name (if applicable): N/A
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Address of principal executive office (Street and number): 161-B Crown Bay
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Cruise Ship Port
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City, State and Zip Code: St. Thomas, USVI 00802
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Part II
RULE 12b-25 (b) AND (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check appropriate box.)
[X] (a) The reasons described in reasonable detail in Part III of this form
could not be eliminated without unreasonable effort or expense;
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[X] (b) The subject annual report, semi-annual report, transition report on
Form 10-K, 20-F, 11-K or Form N-SAR, or portion thereof will be filed on or
before the 15th calendar day following the prescribed due date; or the
subject quarterly report or transition report on Form 10-Q, or portion
thereof will be filed on or before the fifth calendar day following the
prescribed due date; and
[ ] (c) The accountant's statement or other exhibit required by Rule 12b-25(c)
has been attached if applicable.
Part III
NARRATIVE
State below in reasonable detail the reasons why Form 10-K, 11-K, 20-F, 10-
Q, N-SAR or the transition report portion thereof could not be filed within the
prescribed time period. (Attach extra sheets if needed.)
The Quarterly Report on Form 10-Q for the period ended February 27, 1999
cannot be filed by Little Switzerland, Inc. (the "Company") within the
prescribed time period without unreasonable effort or expense because of ongoing
negotiations with its two lead banks regarding the Company's noncompliance with
certain financial covenants contained in the original loan agreements with the
banks and the nonpayment of amounts totaling approximately $1.5 million under
the revolving term loans with one of the Company's banks on the maturity dates
of such loans. One of the Company's banks has notified the Company that payment
of all amounts outstanding under the revolving term loan, term loan and letters
of credit with the bank would be due upon notice and demand from the bank. The
other bank has placed its credit facility under review and informed the Company
that, during the review period, the Company would not be able to increase its
borrowings beyond the amounts outstanding.
As a result of not being in compliance with its financial covenants, the
Company has entered into active negotiations with both of its banks concerning a
standstill agreement pursuant to which the banks would agree not to exercise
their rights and remedies under the loan documents, including declaring all
amounts outstanding under the loans immediately due and offsetting any credit
balances in the Company's accounts in the banks as permitted under the loan
agreements, for a period of time. The Company is also seeking amendments to its
existing loan agreements under which, among other things, (i) the banks would
waive compliance with existing financial covenants, (ii) new financial covenants
would be negotiated, (iii) the banks would reinstate or extend the existing
credit facilities and (iv) the Company would grant a security interest to the
banks in certain of its assets. There can be no assurance, however, that the
Company will be successful in obtaining a standstill agreement with its banks,
that the Company will be successful in obtaining amendments to its existing loan
agreements or that such agreements will be on terms favorable to the Company. If
the Company is not successful in obtaining such agreements, the banks may
declare amounts outstanding under these loans immediately due and offset any
credit balances in the Company's accounts in the banks. If either of the banks
declares amounts outstanding under such loan agreements immediately due, the
Company does not believe that it will have sufficient funds available to make
such payments and such action by the banks will have a material adverse effect
on the Company.
In addition to addressing the status of its credit arrangements with its
existing lenders, the Company is actively exploring other financing
alternatives, including, without limitation, entering into discussions with
other lenders and pursing potential equity investments by certain third parties.
At this time, the Company does not have any firm commitments from other lenders
or third parties to provide it with funds that would be used to finance its
working capital or to pay amounts outstanding under the loans which the
Company's banks may declare immediately due. There is no assurance that the
Company will be successful in obtaining any other financing. Because the
Company's existing lenders will not permit the Company to increase its
borrowings under the existing credit facilities and have indicated that at this
time they will not increase the Company's availability in connection with a
potential amendment to the existing credit facilities, the Company's only source
of working capital is from funds from operations. At this time, the Company does
not believe that funds from operations will be sufficient to adequately support
its operations past the end of fiscal 1999. If the Company is unable to obtain
other financing that will provide it with funds for working capital purposes by
the end of fiscal 1999, it will have a material adverse effect on the Company.
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Due to these circumstances, the Company is requesting an extension on this
Form 12b-25. The Company intends to file the Form 10-Q within the time period
specified by Rule 12b-25 of the Securities Exchange Act of 1934, as amended.
Part IV
OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification:
David J. Nace, (340) 776-2010
(2) Have all other periodic reports required under Section 13 or 14(d) of
the Securities Exchange Act of 1934 or Section 30 of the Investment Company Act
of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If the answer is no,
identify report(s).
[X] Yes [ ] No
(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected by the
earnings statements to be included in the subject report or portion thereof?
[X] Yes [ ] No
If so: attach an explanation of the anticipated change, both narratively
and quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made. See attachment.
LITTLE SWITZERLAND, INC.
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(Name of Registrant as specified in charter)
Has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized:
Date: April 14, 199 By: /s/ David J. Nace
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David J. Nace
Chief Financial Officer,
Executive Vice President
and Treasurer
Instruction. The form may be signed by an executive officer of the
registrant or by any other duly authorized representative. The name and
title of the person signing the form shall be typed or printed beneath the
signature. If the statement is signed on behalf of the registrant by an
authorized representative (other than an executive officer), evidence of
the representative's authority to sign on behalf of the registrant shall be
filed with the form.
ATTENTION
Intentional misstatements or omissions of fact constitute Federal criminal
violations (see 18 U.S.C. 1001).
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LITTLE SWITZERLAND, INC.
FILE NO. 0-19369
FORM 12b-25
PART IV ATTACHMENT
As the date hereof, the Company anticipates that a significant change in
results of operations for the quarter ended February 27, 1999 from the quarter
ended February 28, 1998 will be reflected by the earnings statements to be
included in the Quarterly Report on Form 10-Q for the quarter ended February 27,
1999. The Company anticipates that it will report a loss in revenues for the
quarter ended February 27, 1999, primarily as a result of the loss of sales
relating to Rolex products. The Company anticipates that it will report a net
loss of approximately $1.3 million, or $.16 per share, for the quarter ended
February 27, 1999 as compared to a net income of $1.8 million, or $.21 per
share, for the corresponding period last year and a net loss of approximately
$7.5 million, or $.87 per share, for the nine-month period ended February 27,
1999 as compared to a net income of $1.5 million, or $.17 per share, for the
corresponding period last year.
