SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 12, 1998
(August 11, 1998)
SAMSONITE CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 0-23214 36-3511556
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(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
11200 East 45th Avenue
Denver, Colorado 80239-3018
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(Address of principal executive offices) (Zip Code)
(303) 373-2000
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events.
On August 11, 1998, the Registrant issued the press release filed
herewith as Exhibit 99.1, which is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Exhibit Number Description
99.1 Press Release issued by Samsonite Corporation on
August 11, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, hereunto duly authorized.
SAMSONITE CORPORATION
(Registrant)
By: /s/ Richard H. Wiley
__________________________
Name: Richard H. Wiley
Title: Chief Financial Officer
Dated: August 12, 1998
INDEX TO EXHIBITS
Exhibit No. Description
99.1 Press release issued by Samsonite Corporation on
August 11, 1998.
EXHIBIT 99.1
FOR IMMEDIATE RELEASE Contact: Richard Wiley
Samsonite Corporation
(303) 373-6373
DENVER, Colorado, August 11, 1998 - SAMSONITE CORPORATION
(NASDAQ: SAMC) today announced that, based on currently available
information, its preliminary estimate of results for the second quarter
ended July 31, 1998 would be substantially below the forecasts included in
the Company's report on Form 8-K filed with the SEC on May 20, 1998. It
said that net sales for the second quarter are expected to be in the range
of $158.0 million to $163.0 million, EBIT is expected to be a loss in the
range of $11.0 million to $13.0 million, and Adjusted EBITDA is expected to
be in the range of $6.5 million to $8.5 million. The Company's estimate of
EBIT reflects $9.3 million of expenses (which were not included in the
forecasts prepared in May) associated with the recently completed stock
tender offer, including expenses associated with adjustments to employee
stock options as a result of the tender offer, which expenses have been
excluded from Adjusted EBITDA. The Company expects to report actual second
quarter results on or about September 14, 1998.
The Company said that Adjusted EBITDA for the Company's
European business and U.S. retail business for the second quarter was in
line with expectations; however, these results were offset by poorer than
expected performance in the U.S. wholesale business, which accounted for
approximately 90% of the negative variance from the forecast of Adjusted
EBITDA. To much lesser extent, estimated second quarter results were
adversely affected by worsening economic conditions in Asia.
The Company said that a computer conversion problem was
responsible for as much as 75% of the negative variance in the U.S.
Wholesale business's performance. This problem virtually halted shipments
to customers and the Company's own retail stores during the first 20 days
of July and disrupted all aspects of the distribution process in the U.S.,
including invoicing. Shipments were resumed during the last ten days of the
month, but at less than full capacity. Conversion of the U.S. distribution
system was the last phase of the $8.0 million project to upgrade computer
systems in the United States, which includes the installation of new
financial, manufacturing and distribution software. The Company said that
the poor performance of its U.S. wholesale business was also attributable
to a number of industry factors affecting the U.S. market in general,
including weaker than anticipated demand, numerous discount luggage
promotions and excess inventory levels at retail industry-wide. These
factors contributed to higher than expected returns and put pressure on the
U.S. wholesale business to offer additional markdowns and advertising
allowances to move excess inventory through the system and clear space on
customer shelves for the introduction of new product in the third fiscal
quarter.
Chief Executive Officer, Luc Van Nevel, stated: "Despite strong
performance in the Company's European and U.S. retail businesses, the
Company's total operating results continue to reflect the weakness in our
U.S. wholesale business. Earlier this year we predicted that the wholesale
business in the United States would be depressed for a least the first two
quarters. With the introduction of the Silhouette 6 product line in
October, we should begin to see a turn around in this portion of our
business. The worsening Asian economic crisis is having a greater impact on
our operations in that region; however, the strong U.S. dollar is having a
favorable effect on the cost of parts and products sourced in Asia, which
will be more fully reflected in future periods. Our Asian subsidiaries are
in the development stage and currently do not account for a significant
amount of our overall business. Although the Asian economic crisis will
slow our growth plans in that region, we believe that Samsonite will have a
strong position in Asia when economic recovery occurs. The computer system
conversion problem in the United States will negatively impact our
wholesale and retail businesses only in the short term. We have made
substantial progress towards resolving the problem and expect that the
Company will be able to ship at normal levels before the end of August.
From a long-term perspective, the software conversion addresses our
computer system year 2000 issues and will provide a fully integrated,
state-of-the-art system to better manage our business for many years to
come."
As a result of the difficulties experienced during the second
quarter, the Company said that it does not expect to meet the May forecasts
for the full year.
Samsonite is one of the world's largest manufacturers and
distributors of luggage and markets its products primarily under the
SAMSONITE, AMERICAN TOURISTER, and LARK brand names.
Certain statements contained herein constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause future performance to
be materially different from any future estimated results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: ability to resolve customer
issues within anticipated time frames; ability to resolve computer system
conversion issues within anticipated time frames; ability to achieve
sufficient sales levels to yield planned production efficiencies and
absorption of fixed costs; customer acceptance of new products; general
economic and business conditions; industry capacity; changes in customer
preferences; demographic changes; competition; changes in methods of
distribution and technology; the loss of any significant customers;
completion of new product developments within anticipated time frames;
changes in interest rates and currency exchange rates; and other factors
beyond the Company's control. Any reference contained herein to the
forecasts included in the Company's report on Form 8-K filed with the SEC
on May 20, 1998 should not be construed as an update of such forecasts for
any period following the second fiscal quarter ended July 31, 1998, or as
assurance that such forecasts will be realized.
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