# 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 March 31, 2002

# 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.

YesXNo

The number of
shares of Registrant's Common Stock, $.10 par value, outstanding on May 14, 2002, was 8,273,811 shares.

# SWISS ARMY BRANDS, INC.
AND SUBSIDIARIES
INDEX

|PART I:    | FINANCIAL INFORMATION                                                                                                                          | Page No. | 
|---------- | ---------------------------------------------------------------------------------------------------------------------------------------------- | -------- | 
|Item 1.    | FINANCIAL STATEMENTS                                                                                                                           |          | 
|           | Consolidated Balance Sheets as of
March 31, 2002 (unaudited) and December 31, 2001                                                             | 3 - 4    | 
|           | Consolidated Statements of Operations for the
Three Months Ended March 31, 2002 and 2001 (unaudited)                                           | 5        | 
|           | Consolidated Statements of Stockholders' Equity
andComprehensive Income (Loss) for the Three Months Ended March 31, 2002 and 2001 (unaudited). | 6        | 
|           | Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 2002 and 2001 (unaudited).                                          | 7        | 
|           | Notes to Consolidated Financial Statements                                                                                                     | 8 - 10   | 
|Item 2.    | MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                                          | 11 - 14  | 
|Item 3.    | QUANTITATIVE AND QUALITATIVE DISCLOSURES
 ABOUT MARKET RISK                                                                                    | 15       | 
|Part II:   | OTHER INFORMATION                                                                                                                              |          | 
|Item 6.    | EXHIBITS AND REPORTS ON FORM 8-K                                                                                                               | 15       | 
|Signatures |                                                                                                                                                | 16       | 

The Exhibit Index Appears on Page 15.

# SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
Assets

|                                                                                                                  | March 31,
                      
                      
2002         
                      
              (unaudited) | December 31,2001 | 
|----------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | ---------------- | 
|Current assets:                                                                                                   |                                                                                                                        |                  | 
|Cash and cash equivalents                                                                                         | $ 408                                                                                                                  | $ 2,639          | 
|Accounts receivable, less
       allowance for doubtful       accounts of $1,210, and
       $1,310, respectively | 23,712                                                                                                                 | 29,172           | 
|Inventories                                                                                                       | 39,079                                                                                                                 | 34,758           | 
|Deferred income taxes                                                                                             | 1,889                                                                                                                  | 1,768            | 
|Prepaid and other                                                                                                 | 6,396                                                                                                                  | 4,772            | 
|Total current
 assets                                                                                             | 71,484                                                                                                                 | 73,109           | 
|Deferred income taxes                                                                                             | 853                                                                                                                    | 896              | 
|Property, plant and   equipment, net                                                                              | 6,879                                                                                                                  | 7,153            | 
|Investments                                                                                                       | 3,834                                                                                                                  | 3,834            | 
|Intangible assets, net                                                                                            | 11,046                                                                                                                 | 11,246           | 
|Other assets                                                                                                      | 18,499                                                                                                                 | 17,896           | 
|Total Assets                                                                                                      | $112,595                                                                                                               | $114,134         | 

The accompanying notes to consolidated financial statements are an integral
part of these balance sheets.

3

# SWISS ARMY
BRANDS, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
Liabilities and Stockholders Equity

|                                                                                                                                | March 31,
                    
2002                   
 (unaudited) | December 31,2001 | 
|------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------- | ---------------- | 
|Current liabilities:                                                                                                            |                                                                     |                  | 
|Current portion of long-term
debt                                                                                               | $ 1,261                                                             | $ 1,264          | 
|Accounts payable                                                                                                                | 14,200                                                              | 14,034           | 
|Accrued liabilities                                                                                                             | 8,471                                                               | 9,349            | 
|Total current liabilities                                                                                                       | 23,932                                                              | 24,647           | 
|Long-term liabilities:                                                                                                          |                                                                     |                  | 
|Long-term debt                                                                                                                  | 6,721                                                               | 6,408            | 
|Other                                                                                                                           | 675                                                                 | 675              | 
|Total Liabilities                                                                                                               | 31,328                                                              | 31,730           | 
|Minority interest                                                                                                               | 6,656                                                               | 6,644            | 
|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18,000,000;  shares
issued         9,076,442 for both periods | 908                                                                 | 908              | 
|Additional paid-in capital                                                                                                      | 48,988                                                              | 48,988           | 
|Accumulated other comprehensive
loss                                                                                            | (763)                                                               | (550)            | 
|Retained earnings                                                                                                               | 33,501                                                              | 34,437           | 
|                                                                                                                                | 82,634                                                              | 83,783           | 
|Less:  Treasury stock;
  908,743 shares for both           
    periods                                                         | (8,023)                                                             | (8,023)          | 
|Total stockholders' equity                                                                                                      | 74,611                                                              | 75,760           | 
|Total Liabilities and Stockholders' Equity                                                                                      | $112,595                                                            | $114,134         | 

The accompanying notes to consolidated financial statements are an integral
part of these balance sheets.

4

# SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

|                                               | Three Months EndedMarch 31,2002
              2001 |         
|---------------------------------------------- | -------------------------------------------------- | --------
|Net revenues                                   | $24,741                                            | $21,023 
|Cost of sales                                  | 14,428                                             | 13,287  
|Gross profit                                   | 10,313                                             | 7,736   
|Selling, general and   administrative expenses | 11,322                                             | 11,410  
|Operating loss                                 | (1,009)                                            | (3,674) 
|Interest income (expense) and other, net       | (162)                                              | (218)   
|Loss before income taxes                       | (1,171)                                            | (3,892) 
|Income tax benefit                             | (343)                                              | (1,585) 
|Minority interest                              | 108                                                | (48)    
|Net loss                                       | ($936)                                             | ($2,259)
|Earnings per share:                            |                                                    |         
|Basic                                          | ($0.11)                                            | ($0.27) 
|Diluted                                        | ($0.11)                                            | ($0.27) 
|Weighted average number of shares outstanding: |                                                    |         
|Basic                                          | 8,168                                              | 8,278   
|Diluted                                        | 8,168                                              | 8,278   

The accompanying notes to consolidated financial statements are an integral
part of these statements.

5

# SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' 
EQUITY AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
(in thousands, except for share data)
(unaudited)

|                                                                           | Common StockPar Value  $.10
Shares      Amount | AdditionalPaid-InCapital | AccumulatedOtherComprehensiveIncome
(Loss) | RetainedEarnings | TreasuryStock | ComprehensiveIncome (Loss) |         
|-------------------------------------------------------------------------- | ---------------------------------------------- | ------------------------ | ------------------------------------------ | ---------------- | ------------- | -------------------------- | --------
|BALANCEDecember 31, 2000                                                   | 8,971,080                                      | $897                     | $49,005                                    | $1,234           | $37,589       | ($8,003)                   |         
|Comprehensive Loss:
  Net loss for the three  
months ended March 31, 2001 |                                               |                         |                                           |                 | (2,259)       |                           | ($2,259)
|Fair value adjustment for
   derivatives, net of tax                       |                                               |                         |                                           | (1,315)          |              |                           | (1,315) 
|Cumulative effect
   transaction adjustment for   derivatives, net of tax  |                                               |                         |                                           | (415)            |              |                           | (415)   
|Change in unrealized
   gain on marketable   securities                    |                                               |                         |                                           | 83               |              |                           | 83      
|Foreign currency
   translation adjustment                                 |                                               |                         |                                           | (40)             |              |                           | (40)    
|Comprehensive Loss                                                         |                                                |                          |                                            |                  |               |                            | ($3,946)
|BALANCEMarch 31, 2001                                                      | 8,971,080                                      | $897                     | $49,005                                    | ($453)           | $35,330       | ($8,003)                   |         
|BALANCEDecember 31, 2001                                                   | 9,076,442                                      | $908                     | $48,988                                    | ($550)           | $34,437       | ($8,023)                   |         
|Comprehensive Loss:  Net loss for the
three   months ended   March 31,2002 |                                               |                         |                                           |                 | (936)         |                           | ($936)  
|Fair value adjustment   
for derivatives, net of tax                       |                                               |                         |                                           | (166)            |              |                           | (166)   
|Foreign currency  
 translation adjustment                                 |                                               |                         |                                           | (47)             |              |                           | (47)    
|Comprehensive Loss                                                         |                                                |                          |                                            |                  |               |                            | ($1,149)
|BALANCEMarch 31, 2002                                                      | 9,076,442                                      | $908                     | $ 48,988                                   | ($763)           | $33,501       | ($8,023)                   |         

6

# SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)(unaudited)

|                                                                                                                                                                                                                                                                                 | Three Months EndedMarch 31,2002    2001                  |                                                         | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | ------------------------------------------------------- | 
|Cash flows from operating activities:   
 Net loss     Adjustments to reconcile net loss to net cash     
 provided by (used in) operating activities:       Stock compensation expense
       Minority interest       Depreciation and
amortization       Deferred income taxes | ($936) 
           108      
 930     36 138            | ($2,259) 
     18   (48)       1,159 
      10(1,120)   | 
|Changes in other current assets and liabilities: 
   Accounts receivable     Inventories     Prepaid and
other     Accounts payable     Accrued liabilities   
    Net cash provided by (used in) operating activities                                                           | 8,495 (4,949) 
     (1,685)   (2,598)       (864)(1,463) | 16,722 (8,084) 
     (325)   (1,978)       (2,623)2,592 | 
|Cash flows from investing activities:   
 Capital expenditures     Additions to other assets       
Net cash used in investing activities                                                                                                                                        | (409)(681)(1,090)                                        | (387)(241)(628)                                        
|Cash flows from financing activities:   
 Borrowings under bank agreement     Repayments under bank agreement    
   Net cash provided by (used in) financing activities                                                                                                         | 14,610(14,279)331                                        | 11,830(16,058)(4,228)                                  
|Effect of exchange rate changes on cash                                                                                                                                                                                                                                          | (9)                                                      | (702)                                                   | 
|Net decrease in cash and cash equivalents  
  Cash and cash equivalents, beginning of period     Cash and cash equivalents, end of period                                                                                                                                        | (2,231)   2,639  
 $408                                  | (2,966)   5,002$2,036                                   | 
|Cash paid during the period:    
Interest     Income taxes                                                                                                                                                                                                                       | $110   
  69                                             | $248   
  187                                           | 

7

# SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002 and 2001
(unaudited)

1. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated  financial
statements included in this Form 10-Q have been prepared by Swiss Army Brands, Inc. ("Swiss Army" or the "Company") without audit.
Certain  information and 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 ("SEC").  It is suggested that these  consolidated  financial  statements be read in conjunction with the consolidated
financial statements and notes thereto  included in the Company's  Annual Report on Form 10-K for the year ended December 31, 2001.
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.

On May 3, 2002, the Company
decided to no longer engage Arthur Andersen LLP as its independent auditor and appointed KPMG LLP ("KPMG") as successor auditor
subject to KPMG's completion of its customary client acceptance process. Accordingly, a review in accordance with Statement of
Auditing Standards No. 71 has not been performed for the quarter ended March 31, 2002. In accordance with guidance issued by the
SEC, a review for the quarter ended March 31, 2002 will be conducted on a retrospective basis in conjunction with such review for
the three month period ended June 30, 2002.

1. INVENTORIES

Domestic  inventories are
stated at the lower of cost (determined by the last-in,  first-out  (LIFO) method) or market.  Foreign inventories are stated at the
lower of cost (determined  by the first-in first-out (FIFO)  method) or market.  Inventories  principally  consist of finished
goods.

1. INCOME TAXES

Income taxes are provided at
the projected  annual  effective tax rate. The income tax provision  (benefit) for the interim 2002 and 2001 periods differ from the
federal statutory rate of 34% due primarily to state and foreign income taxes.

8

1. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

In June 1998, the Financial
Accounting  Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 133, as amended in June 2000 by
SFAS No. 138,  "Accounting for Derivative  Instruments and Hedging  Activities," which standardizes the accounting for derivative
instruments,  including certain derivative  instruments embedded in other contracts.  This standard requires that an entity
recognize  those items as assets or  liabilities  in the balance sheet and measure them at fair value,  resulting in an offsetting
adjustment to income or other comprehensive  income,  depending on effectiveness of the hedge. SFAS 133, as amended by SFAS 138, was
effective for the Company  beginning  January 1, 2001. The Company  adopted this statement effective  January 1, 2001.  Based upon
the estimated fair value of the Company's  derivative  instruments,  at January 1, 2001 derivative  liabilities of  approximately
$415,000, net of tax, were recognized in the balance sheet with an offsetting amount in other comprehensive income (loss).

The  Company is exposed to
foreign  currency  risks  relating  to  purchases  of  inventories  as part of its  ongoing  business operations and uses derivative
financial  instruments,  where  appropriate,  to manage these risks. In general,  instruments  used as hedges must be effective at
reducing  the risk  associated  with the  exposure  being hedged and must be  designated  as a hedge at the inception of the
contract.  At the inception of the contract,  the Company has designated its use of derivatives  for foreign  currency forecasted
transactions  as cash flow hedges.  The Company  hedges its  exposure to  variability  in future cash flows for  forecasted
transactions  up to a maximum of 24 months.  At such time that inventory is received,  the position is  re-designated  from a cash
flow hedge to a fair value  hedge.  Gains and losses on  derivatives  qualifying  as cash flow hedges are  recorded  in other
comprehensive income to the extent that hedges are effective until the  underlying  transactions  are  recognized  in earnings.
Gains and losses from fair value  hedges are included in earnings.  It is expected that approximately  $377,000 (net of tax) of
unrealized gains included in other  comprehensive  income at March 31, 2002, will be reclassified into earnings in the next twelve
months.  Gains and losses related to the ineffective  portion of hedging  instruments, which are included in net income, and gains
and losses from fair value hedges were insignificant.

1. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

On January 1, 2002, the Company
adopted the Emerging Issues Task Force ("EITF") Issue No. 00-14, "Accounting for Certain Sales Incentives," and EITF Issue No.
00-25, "Accounting for Consideration from a Vendor to a Retailer in Connection with the Purchase or Promotion of the Vendor's
Products."  The impact of the new accounting will result in the reclassification of certain revenue incentives, cooperative
advertising and promotional expenses from selling, general and administrative expenses to a reduction of net revenues, but will have
no impact on the Company's financial position or net income. The adoption of these EITF Issues resulted in a reduction of net
revenues and selling, general and administrative expenses of approximately $550,000 and $250,000 for the quarter ended
March 31, 2002 and 2001, respectively.

9

1. RECENTLY ISSUED ACCOUNTING STATEMENTS

On January 1, 2002,  SFAS No.
142,  "Goodwill and Other  Intangible  Assets," became  effective and as a result,  the Company no longer amortizes goodwill.  In
lieu of amortization,  the Company is required to complete an initial impairment  assessment of goodwill no later than six
months  after the  adoption  of SFAS No. 142 and perform an annual  impairment  review  thereafter.  The Company expects to complete
the initial  impairment  assessment of goodwill before the end of the second quarter of 2002. The Company  believes that a
significant  impairment  as determined by SFAS No. 142 will exist related to the goodwill of Bear Cutlery,  Inc. As of March 31,
2002, the net goodwill of Bear Cutlery, Inc. was approximately $7.3 million.

On January 1, 2002, SFAS No.
144,  "Accounting for the Impairment or Disposal of Long-Lived Assets" also became effective and it provides  further implementation
guidance  relative to SFAS No. 121,  "Accounting  for the  Impairment of  Long-Lived  Assets and for Long-Lived  Assets to be
Disposed Of." The Company  expects that the adoption of SFAS No. 144 will not have a material  adverse  impact on the results of
operations or financial condition of the Company.

10

# SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2002 AND 2001
(unaudited)

FORWARD LOOKING STATEMENTS

The following discussion
contains, in addition, to historical information, forward  looking statements. The forward looking statements were prepared on the
basis of certain assumptions which relate, among other things, to the demand for and cost of purchasing and marketing the Company's
products; the prices at which such products may be sold; new product development; seasonal selling trends; the strength of the
retail market; the Swiss franc- U.S. dollar exchange rates; the extent to which the Company is able to successfully manage the
effects of foreign currency fluctuations through financial instruments; the continued ability to obtain satisfactory payment terms
from the Company's principal supplier; future compliance with bank covenants; and the Company's anticipated credit needs and ability
to obtain such credit.  Even if the assumptions upon which the forward looking statements are based prove accurate and appropriate,
the actual results of the Company's operations in the future may vary widely from financial projections due to the effects of a
possible continuation of the national economic decline and its impact on retail sales, continuing effects of the terrorist attacks
of September 11, 2001 on sales of knives, luggage and other items sold or licensed by the Company, increased competition, the
restrictions on the carrying of knives on airliners and similar restrictions, changes in consumer tastes and other factors not yet
known, evaluated or anticipated. Accordingly, the actual results of the Company's operations in the future may vary widely from the
forward-looking statements included herein.

INDEPENDENT AUDITORS

On May 3, 2002, the Company
decided to no longer engage Arthur Andersen LLP as its independent auditor and appointed KPMG LLP ("KPMG") as successor auditor
subject to KPMG's completion of its customary client acceptance process. Accordingly, a review in accordance with Statement of
Auditing Standards No. 71 has not been performed for the quarter ended March 31, 2002. In accordance with guidance issued by the
SEC, a review for the quarter ended March 31, 2002 will be conducted on a retrospective basis in conjunction with such review for
the three month period ended June 30, 2002.

RESULTS OF OPERATIONS

Comparison of the Three Months Ended March 31, 2002 and 2001

Net revenues consist of the following:

|                   | 2002    | 2001    | 
|------------------ | ------- | ------- | 
|Product sales, net | $24,137 | $20,466 | 
|Royalty income     | 604     | 557     | 
|                   | $24,741 | $21,023 | 

11

Product  sales for the three
months ended March 31, 2002 were $24.1  million  compared  with $20.4 million for the same period in 2001,  representing an increase
of $3.7 million or 18.1%.  The sales  increase was primarily due to a 66% increase in watch sales and a $3.3 million  increase in
sales  related to a special  promotional  program,  offset in part by a 40%  decrease in sales of  Victorinox® Original Swiss
Army Knives and tools.  The Company  believes that the restrictions on the carrying of knives and tools on airliners and
similar restrictions  have  negatively  affected  sales of the  Company's  knife and tool products and that such negative trends may
continue. Sales to one customer related to the special  promotional  program were  approximately 16% of net revenues for the quarter
ended March 31, 2002. The sales figures for each quarter have been reduced as the result of the  reclassification of certain
promotional expenses from selling, general and administrative  expenses in accordance with EITF Issues No. 00-14 and 00-25 which the
Company adopted during the first quarter of 2002. The reclassified  amounts for the first quarter of 2002 and 2001 were
approximately $550,000 and $250,000, respectively.  Royalty income relates to the licensing program of Victorinox® Travel Gear
and Victorinox® Apparel.

Gross profit of $10.3  million
for the three months ended March 31, 2002  increased  $2.6 million or 33.3% from 2001.  The gross profit  margin  percentage for the
2002 period of 41.7% was higher than the gross profit margin  percentage of 36.8%  reported for the same period in 2001,  primarily
due to an  increase in watch  sales,  which have a higher  gross  profit  margin  percentage  than the Company's other products,
and favorable  exchange rates. The Company's gross profit margin is a function of both 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.  Based upon current Swiss franc  requirements,  the Company believes it is
hedged  through January 2003.  However,  such hedging  activity  cannot  eliminate the long-term  adverse impact on
the Company's  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,  the extent to which such  hedging  transactions  will reduce the effect of adverse
currency  fluctuations  is uncertain.

Selling,  general and
administrative  expenses for the three months ended March 31, 2002 of $11.3  million were $0.1 million or 0.9% lower than the
amount for the  comparable  period in 2001.  The decrease was primarily  due to a decrease in severance costs, offset in part by
expenses  related to the Company's retail store,  which opened in October 2001 and an increase in expenses related to the Company's
international  operations.

Interest income (expense) and
other, net was expense of $162,000 for the three months ended March 31, 2002 compared to $218,000 in 2001. The decrease was
primarily due to a decrease in borrowings.

As a result of these changes,
loss before income taxes for the three months ended March 31, 2002 was a loss of $1,171,000 versus $3,892,000 for the same
period in 2001, a change of $2,721,000.

Minority interest related to
Xantia, S.A. and Victorinox Swiss Army Watch, S.A. was expense of $108,000 in 2002 and income of $48,000 in 2001, respectively.

12

Income tax provision (benefit)
was provided at an effective rate of 29.1% in 2002 and 40.7% in 2001.

As a result,  net loss for the
three  months  ended March 31, 2002 was a loss of $936,000  ($0.11 per share - basic and diluted) versus a loss of $2,259,000
($0.27 per share - basic and diluted) for the same period in 2001, a change of $1,323,000.

LIQUIDITY AND CAPITAL RESOURCES

The table below presents
summary cash flow information for the quarter ended March 31, 2002 and 2001 (in thousands):

|                                                    | 2002     | 2001     | 
|--------------------------------------------------- | -------- | -------- | 
|Net cash provided by (used in)
operating activities | ($1,463) | $2,592   | 
|Net cash provided by (used in)
investing activities | (1,090)  | (628)    | 
|Net cash provided by (used in)
financing activities | 331      | (4,228)  | 
|Total change in cash and cash
equivalents (a)       | ($2,222) | ($2,264) | 

(a)      Before exchange rate effects

Operating Activities

Cash provided by operating
activities is the Company's primary source of funds to finance operating needs.  The Company's revolving credit agreement provides
additional liquidity for seasonal and specific purpose expenditures.  The Company believes that cash generated from operations and
the availability under its revolving credit agreement provide sufficient liquidity to support its planned business activities.

As of March 31, 2002,  the
Company had working  capital of $47.6 million  compared with $48.5 million as of December 31, 2001, a decrease of $0.9  million.
Significant  uses of working  capital  consisted of additions to other assets of $0.7 million and capital expenditures of $0.4
million.  The Company currently has no material commitments for capital expenditures.

Cash used in  operating
activities  was  approximately  $1.5  million in the quarter  ended  March 31, 2002  compared to cash provided  from  operating
activities  of $2.6  million in the quarter  ended March 31,  2001.  The change  primarily  resulted  from a significantly  smaller
decrease in accounts  receivable in 2002 compared to 2001 offset in part by a smaller  increase in inventory in 2002 compared to
2001 and a lower net loss in 2002 as compared to 2001.

Investing Activities

Investing activities during
2002 consisted of capital expenditures of $0.4 million and additions to other assets of $0.7 million.

Investing activities during
2001 consisted of capital expenditures of $0.4 million and additions to other assets of $0.2 million.

13

The Company anticipates that
its capital expenditures and additions to other assets during 2002 will be similar to the amounts spent in 2001.

Financing Activities

During 2002 and 2001, the
Company's principal financing activities consisted of the borrowing and repayment of bank debt and debt owed to the former owners of
Xantia.

The Company meets its
short-term liquidity needs with cash generated from operations, and, when necessary, bank borrowings under its bank agreement.  As
of March 31, 2002, the Company had a $16.0 million credit line, of which $1,610,000 was outstanding and $14,390,000 was available
for borrowings.  Also, the Company has approximately $6,372,000 of outstanding term loans and debt related to the acquisitions of
Bear and Xantia.  The line of credit expires in June 2003. The Company believes its current liquidity levels and financial resources
will be sufficient to meet its operating needs in the next twelve months. The Company's credit facility includes various financial
covenants, including maintenance of a leverage coverage ratio and interest coverage ratio based on operating results for the
previous four quarters. The Company was in compliance with its bank covenants at March 31, 2002. Effective January 1, 2002, the bank
has amended certain covenants for the year ending December 31, 2002 to levels the Company believes it can attain. However, as
compliance depends upon sales, flexibility in obtaining extended payment terms from its largest supplier, Victorinox A.G., general
economic conditions and other factors not in the Company's control, no assurance can be given to such attainment.

RECENTLY ISSUED ACCOUNTING STANDARDS

On January 1, 2002,  SFAS No.
142,  "Goodwill and Other  Intangible  Assets," became  effective and as a result,  the Company  no longer amortizes goodwill.  In
lieu of amortization,  the Company is required to complete an initial impairment  assessment of goodwill no later than six
months  after the  adoption  of SFAS No. 142 and perform an annual  impairment  review  thereafter.  The Company expects to complete
the initial  impairment  assessment of goodwill before the end of the second quarter of 2002. The Company  believes that a
significant  impairment  as determined by SFAS No. 142 will exist related to the goodwill of Bear Cutlery,  Inc. As of March 31,
2002, the net goodwill of Bear Cutlery, Inc. was approximately $7.3 million.

In January 1, 2002, SFAS No.
144,  "Accounting for the Impairment or Disposal of Long-Lived Assets" also became effective and it provides  further implementation
guidance  relative to SFAS No. 121,  "Accounting  for the  Impairment of  Long-Lived  Assets and for Long-Lived  Assets to be
Disposed Of." The Company  expects that the adoption of SFAS No. 144 will not have a material  adverse  impact on the results of
operations or financial condition of the Company.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Exchange Risk

The Company is exposed to
significant  market risk from changes in foreign exchange rates as the Company imports  virtually all its products from Switzerland.
To minimize the risks  associated  with  fluctuations  in the value of the Swiss franc versus the U.S. dollar,  the Company  enters
into foreign  currency  contracts and options.  Pursuant to guidelines  approved by its Board of Directors, the Company is to engage
in these  activities only as a hedging  mechanism  against foreign exchange rate  fluctuations  associated with specific inventory
purchase  commitments to protect gross margin and is not to engage in speculative  trading.  Gains or losses on these contracts and
options are deferred in  accumulated  other  comprehensive  income (loss) and recognized in cost of sales when the related inventory
is sold. At March 31, 2002, the Company entered into foreign  currency  contracts and options to purchase  approximately  47.1
million Swiss francs in 2002 and 2003 at a weighed average rate of $1.721 Swiss  franc/dollar.  The Company's  ultimate  unrealized
gain or loss on these  contracts and options will primarily  depend on the currency  exchange  rates in effect at the time the
contracts and options  mature.  At March 31, 2002,  the Company has reviewed its foreign  exchange risks and based upon its foreign
currency  hedging program and review of its  outstanding  foreign  exchange  contracts,  it believes  that a near-term  increase in
the value of the Swiss franc versus the U.S.  dollar would not have a material  effect on the  Company's  results of  operations  or
financial  condition.

Interest Rate Risk

The Company has entered into
interest rate protection  agreements to manage its exposure to  fluctuations in earnings  related to changes in interest  rates on
its variable  rate debt. At March 31, 2002, a 50 basis point  increase or decrease in market  interest rates, principally LIBOR,
would not materially increase or decrease interest expense or cash flows.

Item 8.Financial Statements and Supplementary Data

The financial information
required by Item 8 is included elsewhere in this report.  See Part IV, Item 14.

Item 9.Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure

None.

PART II.        OTHER INFORMATION

Item 6.           
     Exhibits and Reports on Form 8-K

a.)    
            Exhibits -

a.)    
            (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.

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# SIGNATURES

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.

Date:  May 15, 2002
                     
                      
                      
                      
                      
       By /s/ Thomas M. Lupinski
                     
                      
                      
                      
                      
       Name:Thomas M. Lupinski
                     
                      
                      
                      
                      
       Title:Senior Vice President,
                     
                      
                      
                      
                      
       Chief Financial Officer,
                     
                      
                      
                      
                      
       Secretary and Treasurer

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