SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

              [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2000

                                       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

          Securities registered pursuant to Section 12(b) of the Act:
                                              Name of each exchange on
               Title of each class                which registered
               -------------------            ------------------------
                      None                         Not applicable

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, $.10 par value per share
                                (Title of Class)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
                                                                 Yes  X  No
                                                                     ---    ---
     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by  reference in Part III of this Form 10-K or any  amendments  to
this Form 10-K. [x]

     The aggregate  market value of voting stock held by  non-affiliates  of the
registrant on March 20, 2001, was approximately  $16,300,000.  On such date, the
closing  price of  registrant's  common stock was $6.3125 per share.  Solely for
purposes of this calculation,  shares beneficially owned by directors, executive
officers and stockholders of the registrant that  beneficially own more than 10%
of the registrant's common stock have been excluded,  except shares with respect
to which  such  directors  and  officers  disclaim  beneficial  ownership.  Such
exclusion  should not be deemed a  determination  or admission by the registrant
that such individuals are, in fact, affiliates of the registrant.

     The  number  of  shares  of  registrant's  common  stock,  $.10 par  value,
outstanding on March 20, 2001 was 8,065,346  shares.

                      DOCUMENTS INCORPORATED BY REFERENCE
     Portions of the  registrant's  definitive  Proxy  Statement  to be filed in
connection  with the Annual Meeting of Stockholders of registrant to be held May
24, 2001 are incorporated by reference in Part III herein.
<PAGE>

                                     PART I
                                     ------
                           FORWARD LOOKING STATEMENTS
                           --------------------------

     The following  discussion,  as well as other portions of this Annual Report
on Form 10-K, 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
Swiss franc-U.S.  dollar exchange rates; the extent to which the Company is able
to successfully hedge against foreign currency  fluctuations;  and the Company's
anticipated  credit  needs  and  ability  to  obtain  such  credit.  Even if the
assumptions upon which the projections 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 increased  competition,  changes in consumer
tastes,  the impact of generally  adverse economic  conditions and other factors
not yet known or anticipated.  Accordingly,  the actual results of the Company's
operations  in the future may vary widely from the  forward  looking  statements
herein.


Item 1.  Business.
-------  ---------

     SwissArmy Brands, Inc. ("SABI" or the "Company") imports,  manufactures and
distributes  consumer  products,  including  watches,   pocketknives,   cutlery,
multi-tools  and  sunglasses.  The Company is the exclusive  distributor  in the
United States,  Canada (with one minor  exception for cutlery) and the Caribbean
of  the  Victorinox   Original  Swiss   Army   Knife,   Victorinox    SwissTool,
Victorinox   SwissCard  and Victorinox  Cutlery.  SABI also markets its own line
of Swiss Army  Brand Watches, Swiss Army  Brand Sunglasses and Swiss Army  Brand
Writing  Instruments  under its Swiss Army Brand  worldwide.  Also,  the Company
manufactures and distributes  Bear MGC  knives and multi-tools.  The Company has
been marketing  Victorinox Original Swiss Army Knives and Victorinox Cutlery for
over fifty years and has been the exclusive  United States  distributor  of such
products  since  1972  under  agreements  with  SABI's  principal   supplier  of
pocketknives and cutlery,  Victorinox A.G.  ("Victorinox"),  a Swiss corporation
and Europe's  largest  cutlery  producer.  In December 2000,  Victorinox and its
affiliates, long-time stockholders of the Company purchased sufficient shares of
SABI common stock in private and open market  transactions  to acquire  majority
control of the Company. As of February 28, 2001,  Victorinox owned approximately
66% of the Company's  outstanding  common stock.  See  "Victorinox  Distribution
Agreements" for further information.

     In July 2000, the Company purchased a controlling interest in Xantia, S.A.,
which designs and  manufactures  watches.  Xantia is the  principal  supplier of
watches to the Company,  and in addition they also manufacture watches for third
party customers.  See Note 4 to the Company's  Consolidated Financial Statements
included herein for further information.

     The  Company  is  engaged  in  one  line  of  business  - the  importation,
manufacture  and   distribution  of  consumer   products,   including   watches,
pocketknives,  cutlery,  multi-tools and sunglasses. Total SABI revenues for the
calendar  years  2000,  1999  and  1998  were  $132,022,000,  $129,546,000,  and
$127,851,000,  respectively.  Sales of  Victorinox  Original  Swiss Army Knives,
Victorinox  SwissTools,  Victorinox SwissCards and Bear MGC products,  accounted
for approximately 43% of SABI's 2000 revenues while watches and other Swiss Army
Brand  products  accounted for  approximately  39%.  Sales of  professional  and
consumer cutlery  accounted for  approximately 15% of SABI's 2000 revenues while
other  products  and  licensing  accounted  for  approximately  3%. No  customer
accounted  for more  than 10% of net  sales  during  any year in the  three-year
period  ended  December  31,  2000.  See Note 16 to the  Company's  Consolidated
Financial Statements included herein for further information.

     The  Company  was  incorporated  in  Delaware  on  December  12,  1974 as a
successor to a New York  corporation.  SABI's  principal  executive  offices are
located at One Research  Drive,  Shelton,  Connecticut  06484 and its  telephone
number is (203) 929-6391. As of December 31, 2000, SABI and its subsidiaries had
289 full-time employees, including 10 in Canada and 35 in Switzerland.

                                        2
<PAGE>
                                    Products
                                    --------


     Victorinox   Original  Swiss  Army  Knives  are   multiblade   pocketknives
containing implements capable of more functions than standard pocketknives.  For
example,  SABI's most popular  Victorinox  Original Swiss Army Knife model,  the
Classic, with a suggested retail price of $16, features a blade, scissors,  nail
file with  screwdriver  tip,  toothpick and tweezers.  SABI markets more than 70
different  models of Victorinox  Original Swiss Army Knives  containing up to 35
different implements (with up to 45 separate  functions),  with suggested retail
prices  primarily in the range of $10 to $100.  SABI also offers  multi-function
lockblade  knives designed for the hunting and outdoor  market,  the  Victorinox
SwissCard,  a credit card shaped,  ten-function instrument,  and the  Victorinox
SwissTool,  a multi-tool with 24 features,  including full size pliers. In 1999,
the Company  added to its product line a  collection  of  specialty  tools:  the
Victorinox   CyberTool,   Victorinox   GolfTool,  Victorinox   Altimeter  Knife,
AutoTool  and  SportRatchetTool,  which tools are  designed  for use in specific
activities.

     SABI's line of Swiss Army Brand  products  currently  includes 40 models of
Swiss Army Brand Watches with over 125 SKUs ranging from the Active  Collection,
starting at a suggested  retail  price of $85, to the  Professional  Collection,
which tops out at a suggested retail price of $1,395.  In July 2000, the Company
purchased a controlling interest in Xantia. The Company purchases  substantially
of its Swiss Army Brand  Watches  from  Xantia.  SABI's line of Swiss Army Brand
Sunglasses includes four models with suggested retail prices ranging from $60 to
$80 and its line of Swiss Army Brand writing instruments  includes six SKUs at a
suggested retail price of $95.

     The  Company  also sells  stainless  steel  professional  cutlery  products
primarily  manufactured  by  Victorinox.  The  majority  of SABI's  professional
cutlery  products  are  marketed  under  the  trademarks  "Forschner"  and "R.H.
Forschner."  Professional  cutlery  imported from  Switzerland is generally more
expensive than domestic  United States  products.  SABI believes that it has the
largest  market  share of imported  professional  cutlery  products  sold in the
United  States  and that it has the  second  largest  share of all  professional
cutlery,  foreign and domestic,  sold in this country. SABI believes that it has
achieved and maintained its market share due to the quality of its products.

     The  Company's  line of Bear MGC knives  and  multi-tools  include  over 50
models with suggested retail prices primarily in the range of $20 to $60.

     The Company distributes its products  throughout the United States,  Canada
and the Caribbean through independent sales representatives and its direct sales
force to over 3,800  wholesalers  and retailers,  including  department  stores,
specialty  stores,  high-end  jewelers,  sporting  goods stores,  cutlery shops,
catalog  showrooms,  mass  merchandisers  and mail  order  houses,  and  through
distributors to corporations and other  organizations for promotional  purposes,
premium and employee gift award programs and corporate identity  catalogs.  SABI
imprints  its  products  primarily  at its own  facilities  with the  customer's
corporate  name or logo.  SABI's  customers  for  professional  cutlery  include
distributors of hotel, restaurant,  butcher,  institutional,  commercial fishing
and  slaughterhouse  supplies and retail cutlery  stores located  throughout the
United States and Canada.

     Sales of  Victorinox  Original  Swiss  Army  Knives  and Swiss  Army  Brand
products are generally  seasonal with sales typically  stronger during September
through December.

                                        3
<PAGE>


     Although  the Company is the  largest  United  States  seller of Swiss Army
Knives, it faces competition from Precise Imports Corp. ("Precise"),  the United
States and Canadian distributor of Swiss Army Knives manufactured by Wenger S.A.
("Wenger"), the only company other than Victorinox supplying knives to the Swiss
armed forces.  Precise imports a substantially smaller number of knives into the
United  States  than  SABI.  The  Company  also  faces   competition   from  the
manufacturers  and importers of other  pocketknives  and  multi-tools  including
importers  that sell non  Swiss-made  pocketknives  under the "Swiss Army Knife"
name.

     SABI is unable to determine  its  competitive  position with respect to the
estimated  seven major  competitors  in the general  United  States pocket knife
market.  SABI's  direct  competitors  in the  specialty  advertising  market are
manufacturers of name brand products of similar price and quality. SABI has many
competitors in the sale of watches and  sunglasses at all price points.  Many of
these  competitors have market shares and resources  substantially  greater than
those of SABI.

                             Victorinox Travel Gear
                             ----------------------

     In March 2000, the Company signed a license agreement with TRG Accessories,
LLC  ("TRG"),  a  United  States  based  company,  reflecting  a prior  informal
arrangement  between  the two  companies.  Under the  agreement,  TRG  develops,
manufactures  and markets a line of travel gear under the  Victorinox  trademark
and the famous Victorinox Crest. The collection,  including  luggage,  backpacks
and small  leather  goods  (wallets,  PDA covers,  etc.) was  launched to select
department  stores  and  specialty   retailers  in  late  1999.  The  marks  are
sub-licensed  to TRG by the  Company  on a royalty  basis in  accordance  with a
license  agreement  between the Company and Victorinox  granting the Company the
right to utilize and sub-license the Victorinox  trademarks in conjunction  with
the development and international marketing of a collection of travel gear.

                               Victorinox Apparel
                               ------------------

     In October  2000,  the Company  signed a license  agreement  with  Tropical
Sportswear  International  Corporation,  ("TSI") a United States based  company.
Under the agreement, TSI is to develop, manufacture and market a line of apparel
under the Victorinox  trademark and the famous  Victorinox  Crest. The marks are
sub-licensed  to TSI by the  Company  on a royalty  basis in  accordance  with a
license agreement  between the Company and Victorinox,  granting the Company the
right to utilize and sub-license the Victorinox  trademarks in conjunction  with
the  development  and  international  marketing  of  a  collection  of  Apparel.
Victorinox Apparel is a complete collection of menswear including shirts, pants,
sweaters, fleece and high performance outerwear.

                              Trademark Agreements
                              --------------------

     In 1992, in connection with the settlement of litigation with Precise, SABI
granted Precise a perpetual worldwide  royalty-free license to use the trademark
Swiss Army in connection with Swiss-made non-knife goods, other than timepieces,
sunglasses and compasses.  Under this  agreement,  Precise  acknowledged  SABI's
exclusive  rights to the Swiss Army trademark for non-knife  products  including
timepieces, compasses and sunglasses.

     The  Company is the owner of United  States and certain  foreign  trademark
registrations  for  "Swiss  Army",  as applied to  watches  and  sunglasses  and
actively  defends its trademarks  throughout  the world.  Although the Company's
registrations have been challenged,  on the basis of the advice of its trademark
counsel, SABI expects to prevail in those proceedings.  The Company is dedicated
to a vigorous enforcement of these exclusive trademark rights.

                                        4
<PAGE>

     No U.S.  trademark  registrations have ever been issued for "Swiss Army" as
applied to multi-bladed  knives.  In 1994, in a case originally  brought by SABI
against  Arrow  Trading Co.,  Inc.  ("Arrow") in September  1992 in the District
Court for the Southern  District of New York,  the U.S. Court of Appeals for the
Second Circuit reversed a judgment  originally issued in the Company's favor and
held that the use of "Swiss Army" on  Chinese-made  knives could not be enjoined
on grounds of geographic misdescriptiveness. On remand, the District Court ruled
that Arrow had violated  Section 43(a) of the Lanham Act and New York common law
in connection  with its sale of  Chinese-made  multi-bladed  pocketknives  which
Arrow  called  "Swiss  Army  Knives."  The court  found that SABI had proved its
contention  that  Arrow  engaged  in unfair  competition  and held  that  Arrow,
although  free to use the phrase  "Swiss Army Knife" to  designate  its product,
must  amply  distinguish  it from the SABI  product  and  prohibited  Arrow from
selling any multi-function pocketknives as "Swiss Army Knives" unless the phrase
"Swiss Army Knife" is immediately preceded or followed by Arrow's name in such a
way as to clearly designate its origin and that the size of the type designating
origin be no smaller or less  prominent  than the type used in the phrase "Swiss
Army Knife".  The Company  intends to utilize all reasonable  means to safeguard
the public from being misled by inferior imitation products.

     On January 17, 1995,  Victorinox and Wenger  confirmed and  memorialized in
writing  the grant of  separate  trademark  licenses of Swiss Army as applied to
multi-function  pocketknives to SABI and Precise.  The license to the Company is
royalty-free  and  continues so long as SABI is a  distributor  for  Victorinox.
Victorinox  and Wenger have filed with the U.S.  Patent and  Trademark  Office a
dual  application  for "Swiss  Army" as applied to  multi-bladed  knives,  which
application has been opposed by various third parties.

     The Company  actively  considers  marketing other products under the "Swiss
Army" trademark or under other trademarks.  However,  no assurances can be given
that the  Company  will ever enter into any  additional  markets,  or if entered
into, that such activities will be profitable.

     If the Company's efforts to protect its owned and licensed trademarks prove
to be unsuccessful,  the Company may incur increased  competition from non-Swiss
made knives and other  products  sold under the "Swiss Army" name. No assurances
can be given that such competition from non-Swiss made products would not have a
material  adverse  effect on the business and  prospects of the Company.  In its
capacity  of  licensor of certain  trademarks  the  Company  might be exposed to
additional costs should the exclusive rights to such trademarks be challenged.

                         Swiss Confederation Trademarks
                         ------------------------------

     On December 18, 1996, the Swiss Military Department  representing the Swiss
Confederation  ("Swiss   Confederation")  and  SABI  entered  into  a  trademark
agreement (the "Trademark Agreement") pursuant to which SABI was granted certain
worldwide use and sublicensing  rights in connection with trademarks  containing
the words "Swiss Army" registered by the Swiss Confederation in Switzerland (the
"Swiss Confederation  Trademarks").  The Swiss Confederation acknowledged SABI's
exclusive right to use SABI's trademarks in the countries of their  registration
or application and agreed to assist SABI in enforcing SABI's rights with respect
to its trademarks.  In addition, the Swiss Confederation stated its intention to
assist  Victorinox,  Wenger,  SABI and Precise in safeguarding their rights with
respect to "Swiss Army" as applied to knives.

     The Trademark Agreement grants SABI the right to an exclusive  royalty-free
license  of the  Swiss  Confederation  Trademarks  as  applied  to  watches  and
sunglasses in the United States, Canada and the Caribbean.  SABI is also granted
such rights with respect to certain  designated  products  that either it or its
licensees  sell in commercial  quantities in the United  States,  Canada and the
Caribbean within designated time periods.  In the event SABI or its licensees do
not sell commercial quantities of product categories within the time periods set

                                        5
<PAGE>

     by the agreement,  the Swiss Confederation shall have the right, subject to
certain  conditions,  to license the Swiss  Confederation  Trademarks to a third
party and, in such event,  SABI shall be  obligated  to offer such third party a
license of SABI's appropriate  trademark.  Outside of the United States,  Canada
and the Caribbean, the Trademark Agreement provides for the grant to SABI of the
right to an exclusive  license,  subject to the existing legal rights of others,
for watches and sunglasses at a royalty rate, as defined. In addition,  SABI has
the right to a license for  certain  designated  products  outside of the United
States, Canada and the Caribbean, also at a royalty rate, as defined, to use the
Swiss  Confederation  Trademarks  provided  that  SABI  commences  the  sale  of
commercial  quantities  of such products  within time periods  prescribed by the
Trademark  Agreement.  The Trademark  Agreement  also provides that all products
sold under the license must be of a quality at least equal in  work-manship  and
materials to the products currently sold by SABI,  Victorinox or Wenger and that
in the event SABI  discontinues  sales of goods in commercial  quantities in any
category of goods for three  consecutive  years, the Swiss  Confederation  shall
have the right to terminate  the license as to that  category  after giving SABI
notice and an opportunity to resume sales. Except for the foregoing  limitation,
the rights of SABI with respect to the use of the Swiss Confederation Trademarks
under the Trademark Agreement are perpetual. It is anticipated that the right to
utilize  the Swiss  Confederation  Trademarks  on  certain  products  other than
timepieces and sunglasses will be made available to Precise by SABI on terms yet
to be discussed.

                       Victorinox Distribution Agreements
                       ----------------------------------

     All of SABI's pocketknives and the majority of its cutlery,  except for the
Bear MGC products,  are  manufactured by Victorinox,  which has manufactured the
Original  Swiss Army Knife for the Swiss Army for more than 100 years.  The loss
of this supplier would have a material adverse effect on SABI's business.  SABI,
Victorinox's  largest  single  customer,  has  been  distributing   Victorinox's
products since 1937.  Distribution was on a non-exclusive basis for more than 45
years when, as a result of understandings  reached on SABI's behalf by Mr. Louis
Marx, Jr. and Mr. Stanley R. Rawn, Jr., both now SABI Directors, and Mr. Charles
Elsener,  Sr., Chief Executive Officer of Victorinox,  SABI became  Victorinox's
exclusive  United States  distributor  of Victorinox  Original Swiss Army Knives
under an agreement dated December 12, 1983 (as subsequently  amended,  the "U.S.
Distribution Agreement"). In 1992 and 1993, Messrs. Marx and Rawn held extensive
conversations principally in Switzerland,  with Victorinox looking to expand the
scope of SABI's exclusive  territory.  This resulted in SABI obtaining exclusive
distributorship  rights first in Canada,  and then in Bermuda and the  Caribbean
areas,  as well as SABI's  receipt of exclusive  U.S.,  Canadian  and  Caribbean
distribution rights to the Victorinox Watch, which is supplied to the Company by
Victorinox.

     The U.S.  Distribution  Agreement,  together with the Company's  agreements
with respect to the rights obtained in 1992 and 1993 (together,  the "Victorinox
Agreements"), provides:

               SABI is the  exclusive  distributor  in the  United  States,  its
               territories and possessions,  Canada (with one minor  exception),
               Bermuda  and  the  Caribbean  (excluding  Cuba so long as SABI is
               prohibited   by  United  States  law  from   operating   therein)
               (together, the "Territories"),  of Victorinox Original Swiss Army
               Knives and most other Victorinox  cutlery products and Victorinox
               Swiss-made watches (collectively, "Products").

               The U.S.  Distribution  Agreement  was  renewed  in 1998  through
               December  12,  2003  and is  subject  to  renewal  at  five  year
               intervals at SABI's option unless, in any two consecutive  years,
               purchases  of Products  by SABI fall below the average  purchases
               for 1981 and 1982,  which was  19,766,035  Swiss  francs.  SABI's
               distribution  rights in Canada,  which were renewed in 1999,  and
               the Caribbean, which were renewed 2000, were for initial terms of
               seven years subject to renewal for successive  five-year periods.
               In the event that  Victorinox  elects not to renew SABI's  Canada
               distribution rights,  Victorinox will be required to pay SABI the
               amount of $3,500,000.


                                        6
<PAGE>


               During each calendar year,  SABI must purchase from Victorinox at
               least 85% of the maximum  quantities of each of Swiss Army Knives
               and cutlery  (expressed in Swiss  francs)  purchased in any prior
               year. The only remedy of Victorinox for SABI's failure to achieve
               these goals would be the termination of SABI's U.S.  distribution
               rights.  In the years 1996  through  2000,  Victorinox  agreed to
               reduce the  minimum  purchase  requirements.  The Company met the
               reduced minimum purchase requirements in years 1996 through 2000.
               The  Company  is  currently  in   negotiations   with  Victorinox
               regarding the minimum purchase requirement for 2001.

               In each calendar year Victorinox must, if requested, furnish SABI
               with up to 105% of each  type of  product  purchased  during  the
               immediately preceding year. Victorinox has historically been able
               to  accommodate  SABI's supply  requirements  even when they have
               exceeded such amount.  However,  Victorinox's  plant has a finite
               capacity  and no  assurances  can be given that  Victorinox  will
               continue to meet any increased supply requirements of SABI.

               Pricing  provisions  assure  that  the  prices  paid by SABI  for
               products  shipped  to the United  States  will be as low or lower
               than those charged to any other Victorinox customer. In addition,
               SABI is granted a 4% discount on purchases of  pocketknives.  For
               products shipped directly to Canada and the Caribbean, the prices
               paid by SABI are  Victorinox's  regular export prices.  SABI also
               pays a royalty  to  Victorinox  of 1% of net sales of  Victorinox
               Watches.

               SABI will not sell any new cutlery items without the agreement of
               Victorinox.

               SABI will have complete discretion as to advertising,  packaging,
               pricing and other marketing matters.

     In consideration of the grant of the Canadian  distribution rights in 1992,
SABI issued to Victorinox  277,066  shares of common  stock,  par value $.10 per
share, of SABI ("Common Stock"). In consideration for the grant of the Caribbean
distribution  rights in 1993, the Victorinox watch  distribution  rights and the
acquisition by SABI of  Victorinox's  20% interest in a subsidiary of SABI, SABI
issued to Victorinox a five-year warrant to purchase  1,000,000 shares of Common
Stock at a discount  from the market price on the date of  exercise.  Victorinox
exercised  the  warrant in full in April  1994 at a price per share of $9.75,  a
discount of $4.25 per share from the then  current  market  price of SABI Common
Stock.  All of the shares issued upon exercise of the warrant were  subsequently
sold to Brae Group,  Inc.  ("Brae"),  which is controlled by Louis Marx,  Jr., a
Director  of  SABI,  in  exchange  for  shares  of  the  common  stock  of  that
corporation.

     In addition,  pursuant to  agreements  between the Company and  Victorinox,
Victorinox  has granted the  Company  the right to utilize and  sub-license  the
Victorinox  trademarks and the famous Victorinox Crest to third parties with the
development and marketing of Victorinox Travel Gear and Apparel.

                                   Investments
                                   -----------

     In 1994, SABI invested a total of $7,002,990, paid in cash and in shares of
stock of a publicly  traded  corporation,  to acquire 700,299 shares of Series A
Preferred  Stock of   Forschner  Enterprises, Inc., a privately held corporation


                                        7
<PAGE>

which was merged into Victory Capital LLC. In 1996,  Victory Capital LLC changed
its name to Hudson River Capital LLC ("Hudson  River").  In 1996,  SABI invested
$2,000,209 to acquire 190,477 Series B Preferred Units of Hudson River. In 2000,
Hudson  River  changed its name to Highgate  Capital  LLC  ("Highgate").  SABI's
interest in Highgate currently represents, in the aggregate,  approximately 9.6%
of the equity of Highgate.  Highgate is a private  equity firm  specializing  in
middle market acquisitions, recapitalizations and expansion capital investments.
The preferred  units of Highgate held by SABI carry a preference on  liquidation
equal to their  cost  and,  in  certain  instances,  are  entitled  to an annual
preferred return.

     In 1996, Highgate  distributed  pro-rata to its members all of its interest
in Victory  Ventures  LLC, a private  equity firm  specializing  in small market
venture  capital  investments  ("Victory   Ventures").   SABI  received  in  the
distribution, and continues to hold, 890,776 Series A Preferred Units of Victory
Ventures  valued at the time of the  distribution  at $1.23 per unit,  currently
representing approximately 1.2% of the equity of Victory Ventures. The preferred
units of Victory  Ventures held by SABI carry a preference on liquidation  equal
to the value of the  Series A  Preferred  Units on the date of the  distribution
and, in certain instances, are entitled to an annual preferred return.

     Brae Capital  Corporation  ("Brae Capital"),  a wholly-owned  subsidiary of
Brae,  currently  owns  490,000 of  Highgate's  common  units and  2,279,763  of
Highgate's Series B Preferred Units (currently  representing,  in the aggregate,
approximately 29.9% of Highgate's  outstanding equity). Mr. Marx is the owner of
700,000 plan units  (representing  approximately 7.5% of Highgate's  outstanding
equity) issued by Highgate under its Equity  Incentive  Plan,  which entitle Mr.
Marx to voting rights and to receive a portion of the appreciation of Highgate's
assets after the date of grant of such units under certain circumstances.

     Brae Capital also currently owns 490,000 of Victory  Ventures' common units
and  6,917,035  of  Victory   Ventures'  Series  A  Preferred  Units  (currently
representing  in  the  aggregate,   approximately   9.6%  of  Victory  Ventures'
outstanding  equity).  In addition,  Brae Capital is the owner of 2,911,613 plan
units (representing  approximately 3.8% of Victory Ventures' outstanding equity)
issued by Victory  Ventures under its Equity  Incentive Plan, which entitle Brae
Capital to voting rights and to receive a portion of the appreciation of Victory
Ventures'   assets  after  the  date  of  grant  of  such  units  under  certain
circumstances.

     Also,  Mr. Marx is a director and  chairman of a private  company that owns
6,841,784.4   Series  A  preferred  units  of  Victory  Ventures   (representing
approximately  8.9% of the total  outstanding  units),  and  193,652.6  Series B
preferred  units  of  Highgate  (representing  approximately  2.1% of the  total
outstanding  units).  Mr.  Marx  does  not own any  units  of  Victory  Ventures
directly.

     Mr. Marx, a Director of SABI, is a Co-Chairman of the Board, a director and
an equity holder of each of Highgate and Victory  Ventures,  and a consultant to
Victory Ventures.  Mr. Clarke H. Bailey, a Director of SABI, is a Co-Chairman of
the Board,  a Director and an  equityholder  of Highgate . Mr.  Stanley R. Rawn,
Jr.,  Senior  Managing  Director  and a  Director  of SABI,  and Mr.  Herbert M.
Friedman, Vice President and General Counsel and Director of SABI, also serve as
directors and are  equityholders of each of Highgate and Victory  Ventures.  Mr.
Robert S. Prather, Jr., a director of SABI, also serves as a director of Victory
Ventures.
                                        8
<PAGE>
Item 2.  Properties.
-------  -----------

     The  executive  and  administrative  offices of SABI  occupy  approximately
42,500  square feet of leased  space in an office  building  located in Shelton,
Connecticut.  SABI moved into these premises in September 1993. The initial term
of the lease on this space  expires  on  September  1, 2001,  subject to renewal
options. The facility for warehousing,  distribution, imprinting and assembly of
SABI is located in Shelton,  Connecticut in approximately  85,000 square feet of
leased space.  SABI moved into these  premises in June 1991. The initial term of
the lease on this  space  expires  on  December  31,  2001,  subject  to renewal
options.  The Company is currently  reviewing  its renewal  options on the above
locations  as  well  as  exploring  other  alternatives  related  to  the  above
functions.

     SABI also leases approximately 13,000 square feet in a building in Toronto,
Canada that it uses for office  space and  warehousing  of  products.  The lease
commenced in December 1992 and has been extended  until  December 31, 2001.  The
Company is currently  exploring its options regarding its facility needs for its
Canadian location.  In 2000, SABI entered into a lease for 37.5 square meters of
space in Bienne, Switzerland for use as a distribution center. Also, the Company
leases  40,000  square feet for a building in  Jacksonville,  Alabama  that Bear
Cutlery, Inc uses as its office,  manufacturing and distribution facility.  This
leases  expires in April 2009.  In  addition,  Xantia owns a building in Bienne,
Switzerland , which was constructed in 1997. The building is 1,500 square meters
and is used as the office, warehouse and manufacturing facility for Xantia.

     SABI believes its properties are sufficient for the current and anticipated
needs of its business.

Item 3.  Legal Proceedings
-------  -----------------

     Except as set forth or referenced below, the Company is not involved in any
material pending legal proceedings.

     K-Swiss filed on December 30, 1996  petitions to cancel the Company's  U.S.
Trademark Reg. No.  1,734,665 for watches and Reg. No.  1,715,093 for sunglasses
for "Swiss  Army".  The Company  believes it has  meritorious  defenses to these
petitions although their outcome cannot be predicted at this time.

     The  Company is also a  plaintiff  in several  proceedings  to enforce  its
intellectual property rights. In addition, see "Business- Trademark Agreements".

Item 4.  Submission of Matters to a Vote of Security Holders.
-------  ----------------------------------------------------

     Not Applicable.















                                        9
<PAGE>
                                    PART II
                                    -------

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters.
-------  ----------------------------------------------------------------------

     A. Market Information.
        -------------------

     Shares of SABI's  Common Stock trades on The Nasdaq Stock Market  under the
symbol "SABI". The high and low closing sales prices for shares of Common Stock,
which is the only class of capital  stock of SABI  outstanding,  as  reported by
Nasdaq since the first quarter of 1999 were as follows:
<TABLE>
<CAPTION>

                                  1999                   2000                    2001*
                                  ----                   ----                    ----
                            High        Low        High        Low        High         Low
                            ----        ---        ----        ---        ----         ---
<S>                        <C>        <C>         <C>        <C>         <C>          <C>
First Quarter               $10 1/8    $8 5/8      $8 1/2     $4 3/4      $6 11/16     $5 3/4
Second Quarter               10         7 5/8       6 7/8      5
Third Quarter                11 1/2     7 9/32      6          4 1/8
Fourth Quarter                9 1/2     6 5/8       6 7/16     5 3/16
</TABLE>


*Through March 20, 2001.

     The public market for Common Stock is limited and the foregoing  quotations
should not be taken as  necessarily  reflective of prices that might be obtained
in transactions involving substantial numbers of shares.

     B. Holders.
        --------

     On March  20,  2001,  shares  of  Common  Stock  were held of record by 304
persons,  including several holders who are nominees for an undetermined  number
of beneficial owners.

     C. Dividends.
        ----------

     The  Company  has not paid a cash  dividend  since its  inception,  and its
present  policy  is to  retain  earnings  for use in its  business.  Payment  of
dividends is dependent  upon the  earnings and  financial  condition of SABI and
other  factors that its Board of Directors  may deem  appropriate.  Under SABI's
revolving  credit  agreement,  SABI  agreed not to declare or pay any  dividends
unless  immediately  following  such payment  SABI's is in  compliance  with the
financial covenants set forth in the revolving credit agreement.


                                       10
<PAGE>
Item 6.  Selected Financial Data
-------  -----------------------

     The following selected financial data for the five years ended December 31,
2000 was derived from the consolidated financial statements of the Company. This
data should be read in conjunction with "Management's Discussion and Analysis of
Financial  Condition and Results of Operations" and the  Consolidated  Financial
Statements, related notes and other financial information included herein.
<TABLE>
<CAPTION>

(In thousands, except per share amounts)                     Year Ended December 31,
----------------------------------------                     -----------------------


Operating Data:                                  2000          1999        1998       1997(1)       1996(2)
                                                 ----          ----        ----       -------       -------
<S>                                           <C>           <C>         <C>          <C>           <C>

Net revenues                                 $ 132,022     $ 129,546    $127,851     $118,744      $130,030
Gross profit                                    50,706        50,940      49,982       42,724        40,836
Selling, general and administrative expenses    47,467        46,305      49,005       49,639        46,241
Operating income (loss)                          3,239         4,635         977       (6,915)       (5,405)
Investment gain (loss), net                      1,508        (2,280)      1,651          398        (2,382)
Other income (expense), net                     (1,204)         (704)         55          116           179
Income (loss) before income taxes                3,543         1,651       2,683       (6,401)       (7,608)
Income tax provision (benefit)                   1,579         1,531       1,220       (2,376)       (2,343)
Minority interest                                  (49)          -           -            -             -
Net income (loss)                             $  2,013        $  120    $  1,463    ($  4,025)    ($  5,265)

Earnings per share:
     Basic                                      $ 0.25        $ 0.02      $ 0.18       ($0.49)       ($0.64)
     Diluted                                    $ 0.25        $ 0.01      $ 0.18       ($0.49)       ($0.64)
Weighted average number of shares outstanding:
      Basic                                      7,973         7,862       8,138        8,209         8,202
      Diluted                                    8,187         8,021       8,236        8,209         8,202
Balance Sheet Data:
Current assets                              $   78,612    $   70,540   $  70,383      $64,144       $70,933
Total assets                                   124,449       107,604     100,404       94,051        98,643
Current liabilities                             21,002        19,169      25,210       18,343        18,787
Long-term debt                                  16,038        11,362         -            -             -
Stockholders' equity                            80,684        76,380      74,598       75,708        79,856
Cash dividends per common share             $      -      $      -     $     -        $   -         $   -
</TABLE>


     (1) The  financial  results for 1997  include a $1.3  million  write-off of
discontinued  inventory  (included  in  cost  of  sales)  and  $0.8  million  of
restructuring costs (included in selling, general and administrative expenses).

     (2) The financial results for 1996 include special charges of approximately
$9.9  million.  The special  charges  consisted of a $4.9  million  write-off of
discontinued  inventory (included in cost of sales), a $2.6 million write-off of
obsolete displays,  goodwill and other assets (included in selling,  general and
administrative   expenses)  and  a  $2.4  million  write-down  of  non-strategic
investments.

                                       11
<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
-------  -----------------------------------------------------------------------
of Operation.
-------------

Results of Operations

     The following table shows,  as a percentage of net revenues,  the Company's
Consolidated  Statements of Operations for each of the three years in the period
ended December 31, 2000:
<TABLE>
<CAPTION>
                                                   Year Ended December 31,
                                                   -----------------------
                                              2000          1999          1998
                                              ----          ----          ----
<S>                                         <C>           <C>           <C>

Net revenues                                 100.0%        100.0%        100.0%

Cost of sales                                 61.6          60.7          60.9
                                             -----         -----         -----

Gross profit                                  38.4          39.3          39.1

Selling, general and administrative
  expenses                                    36.0          35.7          38.3
                                             -----         -----         -----

Operating income                               2.4           3.6           0.8

Interest income (expense), net                (0.8)         (0.5)           -

Investment gain (loss) , net                   1.1          (1.8)          1.3

Other income, net                               -             -             -
                                              -----         -----         -----
Income before income taxes                     2.7           1.3           2.1

Income tax provision                           1.2           1.2           1.0

Minority interest                               -             -             -
                                              -----         -----         -----
Net income                                     1.5%          0.1%          1.1%
                                              =====         =====         =====
</TABLE>

Comparison of the Years Ended December 31, 2000 and December 31, 1999
---------------------------------------------------------------------
<TABLE>
<CAPTION>

                  Net revenues consist of the following:
                                                          2000           1999
                                                          ----           ----
                                                             (in thousands)
                       <S>                             <C>            <C>

                        Product sales, net              $130,483       $129,452
                        Royalty income                     1,539             94
                                                        --------       --------
                                                        $132,022       $129,546
                                                        ========       ========
</TABLE>

     Product  sales for the year ended  December  31, 2000 were  $130.5  million
compared  with  $129.5  million  for the same  period in 1999,  representing  an
increase of $1.0 million or 0.8%.  The sales  increase was  primarily  due to an
increase in sales of  Victorinox   Original  Swiss Army  Knives  and  Victorinox
SwissCards   and  sales  related  to  Xantia in which  the  Company  acquired  a
controlling  interest  in July 2000,  offset in part by a  decrease  in sales of
Swiss Army Brand   Watches.  Royalty income relates to the licensing  program of
Victorinox  Travel Gear, which was introduced in the fourth quarter of 1999.

                                       12
<PAGE>

     Gross profit for the year ended December 31, 2000 was $50.7  million,  0.5%
lower than in 1999. The decrease in gross profit was primarily due to a decrease
in Swiss Army Brand Watch sales  offset in part by the  increase in the value of
the U.S.  dollar  versus the Swiss  franc,  an  increase  in total  sales and an
increase in royalty income,  which has a higher gross margin than product sales.
The  Company's  gross profit  margin is a function of both product mix and Swiss
franc  exchange  rates.  Since the Company  imports the majority of its products
from  Switzerland,  its costs are affected by both the spot rate of exchange and
by its foreign  currency  hedging  program.  Increases in the value of the Swiss
franc versus the dollar may  effectively  increase the cost of these products to
the  Company.  The increase in the cost of products to the Company may result in
either higher prices charged to customers or reductions in gross profit, both of
which may have an adverse  effect on the Company's  results of  operations.  The
Company enters into foreign currency contracts and options to hedge the exposure
associated  with foreign  currency  fluctuations.  Based upon current  estimated
Swiss franc  requirements,  the Company believes it is hedged through the fourth
quarter of 2001.  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 of any increase
in the dollar  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 year ended December
31, 2000 were $47.5  million,  $1.2  million or 2.5%  higher  than in 1999.  The
expense increase resulted primarily from increased advertising and merchandising
expense  related to Swiss  Army Brand  Watches.  As a  percentage  of net sales,
selling,  general and  administrative  expenses  increased to 36.0% in 2000 from
35.7% in 1999.

     As a  result  of the  above,  the  Company  recorded  operating  income  of
$3,239,000 for the year ended December 31, 2000 compared to $4,635,000 in 1999.

     Interest  expense of  $1,274,000  for the year ended  December 31, 2000 was
$526,000  greater  than  interest  expense  in 1999,  due to the debt  issued in
connection with the acquisitions of Bear in April 1999 and Xantia in July 2000.

     Interest  income of $43,000 for the year ended December 31, 2000 was $1,000
less than interest income in 1999.

     Investment gain (loss), net for the year ended December 31, 2000 was income
of $1,508,000  compared to a loss of $2,280,000  for the year ended December 31,
1999.  The gain in 2000 was due to a  $1,716,000  gain  from  the  common  stock
received related to the demutualization of John Hancock Financial Services, Inc.
offset in part by a $208,000  loss related to the  write-down  of the  Company's
common  stock  investment  in  Chaparral  Resources,  Inc. due to the other than
temporary impairment in the value of the investment.  The loss in 1999 consisted
of a $2.7 million  non-cash  write-down of the Company's  investment in Highgate
Capital  LLC due to the  other  than  temporary  impairment  in the value of the
investment,  offset  in part  by a  $420,000  gain  related  to the  sale of the
Company's investment in Iron Mountain, Inc.

     As a result of the above, income before income taxes was $3,543,000 for the
year ended December 31, 2000 compared to $1,651,000 in 1999.

     Income tax  provision  was provided at an  effective  rate of 44.6% for the
year ended  December 31, 2000 compared to 92.7% for the year ended  December 31,
1999.  The change in the  effective  rate was the result of the  Company  taking
limited tax  benefits in 1999 on the capital  loss  write-down  of the  Highgate
Capital LLC investment.

                                       13
<PAGE>
     As a result of the above,  the net income for the year ended  December  31,
2000 was $2,013,000  ($0.25 per  share-basic  and diluted)  compared to $120,000
($0.02 per share-basic, $0.01 per share-diluted) in 1999.
<TABLE>
<CAPTION>

Comparison of the Years Ended December 31, 1999 and December 31, 1998
---------------------------------------------------------------------

                Net revenues consist of the following:
                                                          1999           1998
                                                          ----           ----
                                                            (in thousands)
                       <S>                              <C>           <C>
                        Product sales, net               $129,452      $127,851
                        Royalty income                         94           -
                                                         --------      --------
                                                         $129,546      $127,851
                                                         ========      ========
</TABLE>
     Product  sales for the year ended  December  31, 1999 were  $129.5  million
compared  with  $127.9  million  for the same  period in 1998,  representing  an
increase of $1.6 million or 1.3%.  The sales  increase was due primarily to $5.3
million in sales  following the  acquisition of Bear Cutlery,  Inc.  ("Bear") in
April 1999,  an  increase in sales of new  Victorinox  products,  primarily  the
Victorinox  CyberTool and SwissCard,  and an increase in North American sales of
Swiss Army Brand Watches.  The increases were partially  offset by a decrease in
sales of watches marketed under the St. John Timepiece Collection and a decrease
in sales of Swiss Army Brand Sunglasses.

     Gross profit for the year ended December 31, 1999 was $50.9  million,  1.9%
higher than in 1998.  The  increase  in gross  profit was  primarily  due to the
increase in the value of the U.S.  dollar versus the Swiss franc and an increase
in net sales.

     Selling,  general and  administrative  expenses for the year ended December
31,  1999 were $46.3  million,  $2.7  million  or 5.5%  lower than in 1998.  The
expense decrease resulted primarily from decreased advertising and merchandising
expense  related  to Swiss  Army  Brand  Sunglasses  offset in part by  expenses
related  to  Bear.  As  a  percentage  of  net  sales,   selling,   general  and
administrative expenses decreased to 35.7% in 1999 from 38.3% in 1998.

     As a  result  of the  above,  the  Company  recorded  operating  income  of
$4,635,000 for the year ended December 31, 1999 compared to $977,000 in 1998.

     Interest  expense of  $748,000  for the year ended  December  31,  1999 was
$615,000  greater than  interest  expense in 1998 due to the debt related to the
acquisition of Bear, and the Company's  repurchase of $3.6 million of its common
stock since the fourth quarter of 1998.

     Interest  income  of  $44,000  for the year  ended  December  31,  1999 was
$144,000  less than  interest  income in 1998,  due to decreased  cash  balances
during 1999 compared to 1998.

     Investment  gain (loss),  net was a loss of  $2,280,000  for the year ended
December 31, 1999  compared to a gain of  $1,651,000  in 1998.  The loss in 1999
consisted of a $2.7 million non-cash  write-down of the Company's  investment in
Highgate Capital LLC due to the other than temporary  impairment in the value of
the  investment,  offset in part by a $420,000  gain  related to the sale of the
Company's investment in Iron Mountain, Inc. In 1998, the Company recorded a $1.5
million gain due to a cash and stock distribution from the Company's  investment
in Highgate  Capital  LLC;  received  distributions  from  Victory  Ventures LLC
consisting of common stock in two publicly traded  entities,  both of which were
sold by the Company resulting in a $57,000 gain; and also sold its investment in
SWWT, Inc. and realized a gain of $94,000.

     As a result of the above, the income before income taxes was $1,651,000 for
the year ended December 31, 1999 compared to $2,683,000 in 1998.

     Income tax  provision  was provided at an  effective  rate of 92.7% for the
year ended  December 31, 1999 compared to 45.5% for the year ended  December 31,
1998.  The change in the  effective  rate was the result of the  Company  taking
limited tax  benefits in 1999 on the capital  loss  write-down  of the  Highgate
Capital LLC investment.

     As a result of the above,  the net income for the year ended  December  31,
1999 was $120,000 ($0.02 per share-basic,  $0.01 per share-diluted)  compared to
$1.5 million ($0.18 per share-basic and diluted) in 1998.

                                       14
<PAGE>

Liquidity and Capital Resources

     As of December 31, 2000,  the Company had working  capital of $57.6 million
compared  with $51.4  million as of  December  31,  1999,  an  increase  of $6.2
million.   Working  capital   increased  due  to  the  acquisition  Swiss  franc
requirements,  of Xantia.  Significant  uses of  working  capital  consisted  of
additions  to other  assets of $2.6  million  and capital  expenditures  of $1.4
million.   The  Company  currently  has  no  material  commitments  for  capital
expenditures.

     Cash provided from operating  activities was approximately  $4.0 million in
the year ended  December  31, 2000  compared  to $4.9  million in the year ended
December 31, 1999. The change  primarily  resulted from an increase in inventory
in 2000 compared to a decrease in 1999, an increase in prepaid and other in 2000
compared  to a decrease  in 1999,  a decrease  in  accrued  liabilities  in 2000
compared  to an  increase  in 1999,  offset in part by an  increase  in accounts
payable in 2000  compared  to an  decrease  in 1999 and a decrease  in  accounts
receivable in 2000 compared to an increase in 1999.

     The Company meets its short-term  liquidity  needs with cash generated from
operations, and, when necessary, bank borrowings under its bank agreement. As of
December 31, 2000, the Company had $6,335,000 of  outstanding  borrowings  under
its line of credit agreement. Also, the Company has approximately $11,196,000 of
outstanding  term loans and debt related to the acquisitions of Bear and Xantia.
At December  31, 2000,  the Company has a $16.0  million  credit line,  of which
$9,665,000 is available  for  borrowings.  The  revolving  credit line is due to
expire in June 2001. In March 2001, the Company  received a firm commitment from
its current lender to extend the line of credit through June 2003  under similar
terms  and  conditions  as the  existing  agreement.  The  Company's  short-term
liquidity is affected by seasonal changes in inventory levels, payment terms and
seasonality  of sales.  The Company  believes its current  liquidity  levels and
financial resources continue to be sufficient to meet its operating needs.

Recently Issued Accounting Standards

     In June 1998, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standard No. 133 ("SFAS 133"), as amended in
June 2000 by SFAS No. 138 ("SFAS 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  $750,000  will  be  recognized  in  the  balance  sheet  with  an
offsetting amount in other comprehensive income (loss).

     In December  1999,  the  Securities  and Exchange  Commission  issued Staff
Accounting  Bulletin  No. 101 ("SAB  101"),  "Revenue  Recognition  in Financial
Statements." SAB 101 summarizes some of the SEC staff's  interpretations  of the
application of generally accepted accounting  principles to revenue recognition.
The Company  adopted SAB 101 in the fourth  quarter  2000  without any  material
impact on the Company's financial statements or results from operations.

Item 7a.  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

                                       15
<PAGE>

and recognized in cost of sales when the related  inventory is sold. At December
31, 2000,  the Company  entered into foreign  currency  contracts and options to
purchase  approximately  64.7 million Swiss francs in 2001 at a weighed  average
rate of $1.580 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
December 31, 2000, 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.   See  Notes  to
Consolidated  Financial  Statements  for  further  discussion  of the  Company's
accounting  policies  and  other  information  related  to it  foreign  exchange
instruments.

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 December  31,  2000,  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.






                                       16

<PAGE>

                                    PART III
                                    --------

Item 10.  Directors and Executive Officers of the Registrant
--------  ---------------------------------------------------

     Incorporated  herein by  reference  to the  information  under the  heading
"Election of  Directors" in the Company's  Proxy  Statement  with respect to the
Company's Annual Meeting of Stockholders scheduled to be held on May 24, 2001.

Item 11.  Executive Compensation
--------  ----------------------

     Incorporated  herein by  reference  to the  information  under the headings
"Compensation  of  Directors",  "Compensation  Committee  Interlocks and Insider
Participation",  "Management Compensation", "Option Grants in Last Fiscal Year",
"Option Exercises and Year-End Value Table" and  "Compensation  Committee Report
on Executive  Compensation" in the Company's Proxy Statement with respect to the
Company's Annual Meeting of Stockholders scheduled to be held on May 24, 2001.

Item 12.  Security Ownership of Certain Beneficial Owners and Management
--------  --------------------------------------------------------------

     Incorporated  herein by  reference  to the  information  under the  heading
"Security  Ownership  of  Certain  Beneficial  Owners  and  Management"  in  the
Company's  Proxy  Statement  with  respect to the  Company's  Annual  Meeting of
Stockholders scheduled to be held on May 24, 2001.

Item 13.  Certain Relationships and Related Transactions
--------  ----------------------------------------------

     Incorporated  herein by  reference  to the  information  under the headings
"Compensation  Committee Interlocks and Insider  Participation" in the Company's
Proxy  Statement with respect to the Company's  Annual  Meeting of  Stockholders
scheduled to be held May 24, 2001.













                                       17
<PAGE>

                                     PART IV
                                     -------

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K
--------  ----------------------------------------------------------------
<TABLE>
<CAPTION>

(a)               Documents filed as part of this report:
                                                                       Page(s)
                 <S>                                                 <C>

(1)
                  Financial Statements:

                  Report of Independent Public Accountants                   F-1

                  Consolidated Balance Sheets - December 31, 2000
                  and 1999                                            F-2 to F-3

                  Consolidated Statements of Operations for the
                  Years Ended December 31, 2000, 1999 and 1998               F-4

                  Consolidated Statements of Stockholders' Equity
                  and Comprehensive Income for the Years Ended
                  December 31, 2000, 1999 and 1998                           F-5

                  Consolidated Statements of Cash Flows for the Years
                  Ended December 31, 2000, 1999 and 1998                     F-6

                  Notes to Consolidated Financial Statements         F-7 to F-24
(2)
                  Schedule --

                  Schedule II -- Valuation and Qualifying Accounts
                  for the Years Ended December 31, 2000, 1999 and 1998      F-25
</TABLE>


All other schedules  called for under  Regulation S-X are not submitted  because
they are not applicable or not required,  or because the required information is
included in the financial statements or notes thereto.








                                       18

<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Stockholders of Swiss Army Brands, Inc.:

We have  audited  the  accompanying  consolidated  balance  sheets of Swiss Army
Brands,  Inc. (a Delaware  corporation) and subsidiaries as of December 31, 2000
and 1999, and the related consolidated  statements of operations,  stockholders'
equity and comprehensive  income,  and cash flows for each of the three years in
the period ended December 31, 2000. These financial  statements and the schedule
referred  to below  are the  responsibility  of the  Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Swiss Army Brands,  Inc. and
subsidiaries  as of  December  31,  2000  and  1999,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December 31, 2000, in conformity with accounting  principles  generally accepted
in the United States.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements  taken as a whole. The schedule listed in Item 14(a)(2) is
presented  for  purposes  of  complying   with  the   Securities   and  Exchange
Commission's  rules  and is not part of the  basic  financial  statements.  This
schedule has been subjected to the auditing  procedures applied in our audits of
the  basic  financial  statements  and,  in our  opinion,  fairly  states in all
material  respects  the  financial  data  required  to be set forth  therein  in
relation to the basic financial statements taken as a whole.




                                                             ARTHUR ANDERSEN LLP

Stamford, Connecticut
  March 27, 2001



                                       F-1

<PAGE>
<TABLE>
<CAPTION>

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

                                     ASSETS

                                                               December 31,
                                                               ------------
                                                            2000         1999
                                                            ----         ----
  <S>                                                    <C>           <C>
   Current assets
   Cash and cash equivalents                              $5,002        $1,302

   Accounts receivable, less
    allowance for doubtful accounts
    of  $1,260 and $1,060, respectively                   34,173        33,718

   Inventories                                            33,461        30,227

   Deferred income taxes                                   1,887         2,235

   Prepaid and other                                       4,089         3,058
                                                          -------      --------
      Total current assets                                78,612        70,540
                                                          -------      --------


Deferred income taxes                                        675         1,474

Property, plant and equipment, net                         7,506         4,856

Investments                                                8,274         4,476

Intangible assets, net                                    12,595        11,548

Other assets, net                                         16,787        14,710
                                                         --------      --------
Total assets                                            $124,449      $107,604
                                                        =========     =========
</TABLE>


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





                                       F-2

<PAGE>
<TABLE>
<CAPTION>


                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (in thousands, except share amounts)


                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                December 31,
                                                                ------------
                                                              2000         1999
                                                              ----         ----
<S>                                                       <C>           <C>

Current liabilities

   Current portion of long-term debt                       $  1,493      $  875

   Accounts payable                                          11,057       7,732

   Accrued liabilities                                        8,452      10,562
                                                             ------      ------
     Total current liabilities                               21,002      19,169
                                                             ------      ------
Long-term liabilities

   Long-term debt                                            16,038      11,362

   Other                                                        675         693
                                                             -------     -------
     Total liabilities                                       37,715      31,224

Minority interest                                             6,050         -


Commitments and contingencies (Note 15)

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 - 8,971,080
      and 8,866,218, respectively                               897         886

   Additional paid-in capital                                49,005      49,137

   Accumulated other comprehensive income (loss)              1,234        (401)

   Retained earnings                                         37,589      35,576
                                                            --------    --------
                                                             88,725      85,198

   Less: Treasury stock; 905,734 and 1,014,108 shares,
              respectively                                   (8,003)     (8,711)


            Deferred compensation                               (38)       (107)
                                                            --------    --------
   Total stockholders' equity                                80,684      76,380
                                                            --------    --------

Total liabilities and stockholders' equity                $ 124,449   $ 107,604
                                                          ==========  ==========
</TABLE>

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

                                       F-3
<PAGE>
<TABLE>
<CAPTION>


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



                                                         Year Ended December 31,
                                                      2000          1999        1998
                                                      ----          ----        ----
      <S>                                         <C>           <C>         <C>
       Net revenues                                $132,022      $129,546    $127,851

       Cost of sales                                 81,316        78,606      77,869

       Gross profit                                  50,706        50,940      49,982

       Selling, general and administrative
         expenses                                    47,467        46,305      49,005
                                                   --------      --------    --------
       Operating income                               3,239         4,635         977
                                                   --------      --------    --------
       Interest expense                              (1,274)         (748)       (133)
       Interest income                                   43            44         188
       Investment gain (loss), net                    1,508        (2,280)      1,651
       Other income, net                                 27           -           -
                                                   --------      --------    --------
       Total interest and other income
         (expense), net                                 304        (2,984)      1,706
                                                   --------      --------    --------
       Income before income taxes                     3,543         1,651       2,683

       Income tax provision                           1,579         1,531       1,220

       Minority interest                                (49)          -           -
                                                   --------      --------    --------
       Net income                                    $2,013         $ 120     $ 1,463
                                                   ========      ========    ========
       Earnings per share:
          Basic                                       $0.25         $0.02       $0.18
                                                      =====         =====       =====
          Diluted                                     $0.25         $0.01       $0.18
                                                      =====         =====       =====
       Weighted average number of shares
          outstanding:
          Basic                                       7,973         7,862       8,138
                                                      =====         =====       =====
          Diluted                                     8,187         8,021       8,236
                                                      =====         =====       =====
</TABLE>


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




                                       F-4

<PAGE>
<TABLE>
<CAPTION>


                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND
                              COMPREHENSIVE INCOME
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                        (in thousands, except share data)

                                                                         Accumulated
                                  Common Stock         Additional          Other
                                 Par Value $.10          Paid-In        Comprehensive      Retained     Treasury     Comprehensive
                               Shares       Amount       Capital        Income (Loss)      Earnings       Stock      Income (Loss)
BALANCE                        -------------------     ----------       -------------      --------     --------     -------------
<S>                         <C>             <C>         <C>                <C>             <C>          <C>              <C>

December 31, 1997            8,823,718       $882        $46,186           ($240)           $33,993     ($5,113)

Comprehensive Income:
   Net income                    -             -             -                -               1,463         -             $1,463
   Unrealized gain in
      marketable securities      -             -             -               603                -           -                603
   Foreign currency
     translation adjustment      -             -             -              (186)               -           -               (186)
                                                                                                                          --------
Comprehensive Income                                                                                                      $1,880
                                                                                                                          ========
Stock options exercised          9,500         -              70              -                 -           -
Stock grant                     25,000          3            216              -                 -           -
Repurchase of common stock       -             -             -                -                 -        (3,081)
                            -----------    -------        --------        --------         ---------    ---------
BALANCE

December 31, 1998            8,858,218        885         46,472             177             35,456      (8,194)

Comprehensive Loss:
   Net income                    -             -             -                -                 120         -               $120
   Foreign currency
     translation adjustment      -             -             -               233                -           -                233
   Unrealized gain in
     marketable securities       -             -             -              (811)               -           -               (811)
                                                                                                                          --------
Comprehensive Loss                                                                                                         ($458)
                                                                                                                          ========
Acquisition of Bear MGC
   Cutlery, Inc.                 -             -           2,630              -                 -           -
Stock options exercised         10,000          1             53              -                 -           -
Cancellation of stock grant     (2,000)        -             (18)             -                 -           -
Repurchase of common stock       -                           -                -                 -          (517)
                            ------------    --------      --------        --------         ----------    ---------
BALANCE

December 31, 1999            8,866,218        886         49,137            (401)            35,576      (8,711)

Comprehensive  Income:
   Net income                    -             -             -                -               2,013         -             $2,013
   Foreign currency
     translation adjustment      -             -             -              (655)               -           -               (655)
   Unrealized gain in
     marketable securities       -             -             -             2,290                -           -              2,290
                                                                                                                         ---------
Comprehensive Income                                                                                                      $3,648
                                                                                                                         =========
Issuance of common stock       106,112         11            (11)             -                 -           -
Cancellation of stock grant     (1,250)        -             (11)             -                 -           -
Acquisition of Xantia, S.A.      -             -            (110)             -                 -           708
                             -----------    -------      ---------        --------         ----------    ---------
BALANCE

December 31, 2000            8,971,080       $897        $49,005          $1,234            $37,589     ($8,003)
                             ===========    =======      =========        ========         ==========    =========
</TABLE>

     The accompanying notes to consolidated financial statements are an integral
part of these statements.
                                      F-5
<PAGE>
<TABLE>
<CAPTION>

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

                                                                         Year Ended December 31,
                                                              2000                1999                 1998
                                                              ----                ----                 ----
<S>                                                        <C>                  <C>                  <C>
Cash flows from operating activities:
   Net income                                               $ 2,013              $ 120                $1,463
   Adjustments to reconcile net income to cash
   provided from operating activities:
      Minority interest                                         (49)               -                     -
      Depreciation and amortization                           3,504              3,230                 2,834
      Stock compensation expense                                 58                 73                    21
      Deferred income taxes                                     543               (435)                2,652
      Investment (gain) loss, net                            (1,508)             2,280                (1,651)
                                                            --------            -------               -------
                                                              4,561              5,268                 5,319

Changes in other current assets and liabilities:
   Accounts receivable                                        1,625             (1,206)               (3,167)
   Inventories                                                 (727)               383                (1,433)
   Prepaid and other                                           (630)             3,652                (2,814)
   Accounts payable                                           1,366             (5,030)                3,937
   Accrued liabilities                                       (2,161)             1,872                (1,661)
                                                            --------            -------               --------
    Net cash provided from operating activities               4,034              4,939                   181
                                                            --------            -------               --------

Cash flows from investing activities:
   Acquisition of Bear MGC Cutlery, Inc., net of cash
      acquired                                                  -               (7,982)                  -
   Acquisition of Xantia, S.A., net of cash acquired         (1,751)               -                     -
   Capital expenditures                                      (1,433)            (1,698)               (1,302)
   Additions to other assets                                 (2,605)            (3,776)               (2,701)
   Proceeds from sales of investments                           -                1,972                 1,949
                                                            --------            -------               --------
   Net cash used for investing activities                    (5,789)           (11,484)               (2,054)
                                                            --------           --------               --------
Cash flows from financing activities:
   Borrowings under bank agreements                          58,103             59,440                32,914
   Repayments under bank agreements                         (52,891)           (52,343)              (27,774)
   Repurchase of common stock                                   -                 (517)               (3,081)
   Proceeds from exercise of stock options and warrants         -                   54                    70
                                                            --------           --------               --------
   Net cash provided from financing activities                5,212              6,634                 2,129
                                                            --------           --------               --------

 Effect of exchange rate changes on cash                        243                (96)                  (25)
 Net increase (decrease) in cash and cash
    equivalents                                               3,700                 (7)                  231
   Cash and cash equivalents, beginning of period             1,302              1,309                 1,078
                                                            --------           --------               --------
   Cash and cash equivalents, end of period                  $5,002            $ 1,302               $ 1,309
                                                            ========           ========               ========
Cash paid during the period:
   Interest                                                  $1,109           $    766              $    102
                                                            ========           ========               ========
   Income taxes                                              $1,961           $    618               $ 1,752
                                                            ========           ========               ========
</TABLE>


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

                                       F-6
<PAGE>


                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (1) NATURE OF BUSINESS
          Swiss  Army  Brands,  Inc.  ("Swiss  Army"  or the  "Company")  is the
          exclusive  distributor  in the United  States,  Canada (with one minor
          exception for cutlery) and the Caribbean of the  Victorinox   Original
          Swiss Army  Knife, Victorinox  SwissTool,   Victorinox  SwissCard  and
          Victorinox  Cutlery.  Swiss  Army also  markets  its own line of Swiss
          Army  Brand  Watches,  Swiss Army   Brand  Sunglasses  and Swiss  Army
          Brand Writing  Instruments  under its Swiss Army Brand  worldwide.  In
          addition,  the Company  manufactures  and distributes Bear MGC  knives
          and  multi-tools.  Swiss  Army  has only one  business  segment  - the
          importation,   manufacture  and  distribution  of  consumer  products,
          including watches, pocketknives,  cutlery, multi-tools and sunglasses.
          No customer  accounted for greater than 10% of net sales in any of the
          three years ended December 31, 2000.

          In December 2000, Victorinox A.G., a Swiss Corporation and a principal
          supplier to and long time  stockholder of the Company  ("Victorinox"),
          and its affiliates purchased sufficient shares of the Company's common
          stock in private  and open  market  transactions  to acquire  majority
          control of the Company.

          On July 24, 2000, the Company and Victorinox, each acquired 50% of the
          issued and  outstanding  capital  stock of Xantia,  S.A.  Fabrique  de
          Montres Precision ("Xantia"), the principal manufacturer and assembler
          of watches sold by the Company. See Note 4 for further information.

     (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
              Principles of consolidation
               The consolidated financial statements include the accounts of the
               Company  and  its  subsidiaries  in  which  it has a  controlling
               interest.  All significant  inter-company  transactions have been
               eliminated.

              Revenue recognition
               The Company  recognizes  revenue  upon  shipment of product.  Net
               sales  are  comprised  of  gross  revenues  less  returns,  trade
               discounts  and  customer  allowances.   Revenues  from  licensing
               agreements are recognized when earned.

              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  disclosures 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.

              Foreign currency translation and transactions
               Assets and  liabilities of the Company's  foreign  operations are
               translated into U.S. dollars using the exchange rate in effect at
               the balance  sheet date.  Results of  operations  are  translated
               using the average exchange rate prevailing throughout the period.
               The effects of exchange rate fluctuations on translating  foreign
               currency assets and liabilities into U.S. dollars are included in
               the  foreign  currency   translation   adjustment   component  of
               stockholders'  equity,  while  gains and  losses  resulting  from
               foreign currency transactions are included in net income.


                                       F-7
<PAGE>

               The vast  majority of the  Company's  products are imported  from
               Switzerland  and are paid for in Swiss  francs.  Increases in the
               value of the  Swiss  franc  versus  the  dollar  may  effectively
               increase the cost of these products to the Company.  The increase
               in the cost of  products  to the  Company  may  result  in either
               higher prices charged to customers or reductions in gross margin,
               both of which may have an adverse effect on the Company's results
               of operations. The Company enters into foreign currency contracts
               and  options  to  hedge  the  exposure  associated  with  foreign
               currency  fluctuations.  However,  such hedging  activity  cannot
               eliminate   the  long-term   adverse   impact  on  the  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. Gains and losses on these contracts are deferred and
               recognized  in cost of sales when the related  inventory is sold.
               These  hedging  transactions,  which are meant to reduce  foreign
               currency risk, also reduce the beneficial  effects to the Company
               of any increase in the dollar  relative to the Swiss  franc.  The
               Company  plans to  continue  to engage in  hedging  transactions;
               however,  it is  uncertain as to the extent to which such hedging
               transactions   will   reduce  the  effect  of  adverse   currency
               fluctuations.

               Cash and cash equivalents
               Cash  and  cash   equivalents   consist  of  all  highly   liquid
               investments  with  original  maturities  of three months or less.
               Investments  with maturities  between three and twelve months are
               considered short-term investments.

              Inventories
               Domestic  inventories  are valued at the lower of cost determined
               by the  last-in,  first-out  (LIFO)  method  or  market.  Had the
               first-in,  first-out  (FIFO)  method been used to value  domestic
               inventories as of December 31, 2000 and 1999, the amount at which
               inventories  are stated would have been $4,246,000 and $3,372,000
               greater,  respectively.  Foreign  inventories  are  valued at the
               lower  of  cost  or  market   determined   by  the  FIFO  method.
               Inventories  primarily  consist of finished  goods and  packaging
               materials.

              Property, plant and equipment
               Property,   plant  and  equipment  are  stated  at  cost.   Major
               improvements  that add to productive  capacity or extend the life
               of an asset are  capitalized  while repairs and  maintenance  are
               charged to expense as incurred. Property, plant and equipment are
               comprised of the following:
<TABLE>
<CAPTION>
                                                               December 31,
                                                          2000          1999
                                                             (in thousands)
                                                          ------------------
                     <S>                                <C>           <C>

                      Leasehold improvements             $1,158        $1,133
                      Building and building
                         improvements                     2,282           -
                      Equipment                           9,966         8,485
                      Furniture and fixtures              1,635         1,458
                                                         ------        ------
                                                         15,041        11,076
                      Accumulated depreciation           (7,535)       (6,220)
                                                         ------        ------
                                                         $7,506        $4,856
                                                         ======        ======
</TABLE>

                                       F-8
<PAGE>


               Depreciation is computed  principally by use of the straight-line
               method based on the following estimated useful lives:
<TABLE>
<CAPTION>

                                                                    Years
                                                                    -----
                          <S>                                     <C>

                           Equipment                               3 to 10
                           Building and building improvements           40
                           Furniture and fixtures                  3 to 10
</TABLE>


               The  provision  for  amortization  of leasehold  improvements  is
               provided on a straight-line basis over the estimated useful lives
               of the assets or terms of the leases,  whichever is shorter.  For
               the years ended December 31, 2000,  1999, and 1998,  depreciation
               expense  of  property,  plant  and  equipment  was  approximately
               $1,710,000, $1,594,000, and $1,300,000, respectively.

              Long-lived assets
               The Company follows  Statement of Financial  Accounting  Standard
               ("SFAS") No. 121,  "Accounting  for the  Impairment of Long-Lived
               Assets and for Long-Lived  Assets to Be Disposed Of". The Company
               continually  reviews the  recoverability of the carrying value of
               these assets using the provisions of SFAS No. 121. Based upon the
               Company's review of its long-lived  assets,  no impairment exists
               at December 31, 2000.

              Investments
               Investments in preferred units are accounted for at cost, subject
               to review for impairment.  Since these  investments do not have a
               readily   determinable   fair  value,   the  valuation  of  these
               investments is subject to uncertainty.

               Investments  in common  stock of  companies  in which the Company
               owns less than 20% are  accounted  for at fair value,  subject to
               review for  impairment.  Changes in fair value are reflected as a
               component of stockholders' equity. Any write-down of the cost due
               to  impairments  that are  considered  other  than  temporary  is
               reflected in income.

              Earnings per share
               Basic  earnings  per share is  computed  by  dividing  net income
               (loss) by the number of weighted  average number of common shares
               outstanding.  Diluted  earnings per share is computed by dividing
               net income (loss) by the weighted average number of common shares
               and dilutive  common  share  equivalents  outstanding  during the
               period.   Common  share  equivalents  are  calculated  using  the
               treasury stock method.

              Stock-based compensation
               The  Company  accounts  for  stock  options  and  warrants  under
               Accounting Principles Board Opinion No. 25, "Accounting for Stock
               Issued  to  Employees".  Disclosures  required  by SFAS No.  123,
               "Accounting for Stock-Based  Compensation",  are included in Note
               14.

               Income taxes
               The provision for income taxes, as determined using the liability
               method,   includes   deferred  taxes   resulting  from  temporary
               differences  in  income  for  financial  and tax  purposes.  Such
               temporary  differences  primarily result from differences between
               the tax  bases of  assets  and  liabilities  and  their  carrying
               amounts for financial reporting purposes.




                                       F-9
<PAGE>

               Recent Accounting Pronouncements
               In June 1998, the Financial  Accounting  Standards Board ("FASB")
               issued  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  $750,000 will be
               recognized  in the  balance  sheet with an  offsetting  amount in
               other comprehensive income (loss).

               In December 1999, the Securities and Exchange  Commission  issued
               Staff   Accounting   Bulletin  No.  101  ("SAB  101"),   "Revenue
               Recognition in Financial  Statements." SAB 101 summarizes some of
               the SEC staff's  interpretations  of the application of generally
               accepted  accounting  principles  to  revenue  recognition.   The
               Company  adopted SAB 101 in the fourth  quarter  2000 without any
               material impact on the Company's financial  statements or results
               from operations.

              Reclassifications
               Certain  reclassifications  have  been  made  to the  prior  year
               financial   statements   to  conform   with  the   current   year
               presentation.

     (3)  INTANGIBLE ASSETS
<TABLE>
<CAPTION>

               Intangible assets are comprised of the following:

                                                               December 31,
                                                          2000            1999
                                                          ----            ----
                                                              (in thousands)
             <S>                                        <C>            <C>

              Goodwill (A)                               $9,990         $8,153
              Foreign distribution rights (B)             1,538          2,207
              Trademark rights (C)                        1,067          1,188
                                                         ------         ------
                                                        $12,595        $11,548
                                                        =======        =======
</TABLE>

               (A) Represents the goodwill  related to the acquisition of Xantia
               and Bear MGC Cutlery,  Inc. The goodwill is being  amortized on a
               straight-line  basis  over  20  years.  See  Note  4 for  further
               discussion.

               (B) Represents foreign  distribution rights with Victorinox.  The
               foreign   distribution   rights   are   being   amortized   on  a
               straight-line  basis  over  10  years.  See  Note  5 for  further
               discussion.

               (C) On August 17, 1999,  the Company  purchased all the rights in
               and trademarks  containing Swiss Martial Terms, as defined,  from
               S.A.W. Company S.A. These trademark rights are being amortized as
               a straight-line basis over 10 years.

               For  the  years  ended   December  31,  2000,   1999,  and  1998,
               amortization  expense  was  $1,265,000,  $916,000  and  $674,000,
               respectively.




                                      F-10
<PAGE>


    (4)  ACQUISITIONS
          On July 24, 2000, the Company and Victorinox  each acquired 50% of the
          issued and outstanding capital stock of Xantia from its stockholders (
          the  "Sellers")  pursuant to an  agreement,  dated June 23,  2000,  as
          amended  by  agreements   dated  July  10,  2000  and  July  24,  2000
          (collectively,  the "Agreement").  The Agreement  contains  provisions
          that secure ongoing control of Xantia by the Company.

          Pursuant to the Agreement, at closing the Company paid 2,250,000 Swiss
          Francs  ("CHF")  ($1,354,500)  and  delivered  108,374  shares  of the
          Company's common stock ("Common  Stock"),  such shares being valued at
          1,000,000  CHF  ($598,000).  At the  closing,  Victorinox  paid to the
          Sellers  3,250,000 CHF ($1,943,500).  In addition,  in accordance with
          the Agreement,  in November 2000, the Company and Victorinox each paid
          an additional  500,000 CHF ($299,000) as an adjustment to the purchase
          price.  Each of the  Company  and  Victorinox  also  agreed  to pay an
          additional  6,000,000 CHF ($3,670,200)  over the next seven years plus
          interest.

          The  purchase  method  of  accounting  was  used  to  account  for the
          acquisition.  The aggregate  purchase  price has been allocated to the
          assets and  liabilities  of Xantia based on  preliminary  estimates of
          fair market value.  Any adjustments  resulting from the final purchase
          price allocation, which could result in changes to the carrying values
          of assets and liabilities,  including goodwill, are not expected to be
          material to the consolidated financial statements. The purchase price,
          including  acquisition  costs,  amounts paid or owed by Victorinox and
          the issuance of the Common Stock has resulted in acquired  goodwill of
          approximately   $2.3   million,   which  is  being   amortized   on  a
          straight-line  basis over 20 years.  The following is a summary of the
          preliminary allocation (in thousands):
<TABLE>
                          <S>                                           <C>

                           Cash                                         $3,724
                           Accounts receivable                           2,015
                           Inventory                                     3,156
                           Other current assets                            428
                           Plant and equipment                           2,868
                           Goodwill                                      2,270
                           Accrued expenses and other liabilities       (2,557)
                                                                       --------
                                          Total                        $11,904
                                                                       ========
</TABLE>

          On April 16,  1999,  Swiss Army and Bear  Cutlery,  Inc.  ("Bear"),  a
          Delaware  corporation  and a wholly-  owned  subsidiary  of Swiss Army
          (collectively,  the "Buyer"), entered into an Asset Purchase Agreement
          (the  "Bear Agreement")  with Bear MGC Cutlery,  Inc. ("Bear MGC") and
          the shareholders (the  "Shareholders")  of Bear MGC, pursuant to which
          the Buyer acquired substantially all of the assets and assumed certain
          of the liabilities of Bear MGC. In  consideration  for the acquisition
          of the assets,  the Buyer paid Bear MGC  $6,970,000 in cash and repaid
          debt of $298,000  upon  execution  of the Bear  Agreement.  In further
          consideration of the acquired assets,  on each of April 16, 2000, 2001
          and 2002,  the Company  shall  transfer  to Bear MGC 52,868  shares of
          Common Stock,  valued at $500,000  (based on the average daily closing
          price of the Common  Stock  during the 30 trading  days prior to April
          16, 1999). The total value of these shares of Common Stock is included
          in  additional  paid-in  capital as of December 31, 1999. In addition,
          pursuant to the Bear  Agreement,  in April 2000,  Swiss Army paid $1.0
          million in cash and issued $377,000 of Common Stock of Swiss Army, and
          will issue an  additional  $377,000  of Common  Stock of Swiss Army in
          April 2001 and April 2002,  because  Bear  attained  certain  earnings
          targets for the year ended December 31, 1999.


                                      F-11
<PAGE>


          The  purchase  method  of  accounting  was  used  to  account  for the
          acquisition.  The  aggregate  purchase  price,  including  acquisition
          costs,  has been allocated to the assets and liabilities of Bear based
          on estimates of fair market value.  The purchase price has resulted in
          acquired  goodwill  of  approximately  $8.4  million,  which  is being
          amortized on a straight-line  basis over 20 years.  The following is a
          summary of the allocation (in thousands):
<TABLE>
<CAPTION>
                  <S>                                              <C>

                   Cash                                                 $ 16
                   Accounts receivable                                 1,175
                   Inventory                                           1,497
                   Other current assets                                   13
                   Plant and equipment                                 1,025
                   Goodwill                                            8,368
                   Accrued expenses and other liabilities               (466)
                                                                      -------
                           Total                                     $11,628
                                                                     ========
</TABLE>

          The  unaudited  pro forma  results of  operations  for the years ended
          December 31, 2000, 1999 and 1998, respectively, had the acquisition of
          Xantia occurred on January 1, 2000 and 1999 of the respective  periods
          and the acquisition of Bear occurred on January 1, 1999 and January 1,
          1998 of the respective  periods,  are provided in the following table.
          These pro forma  results  include  adjustments  for  depreciation  and
          amortization  of assets  acquired based on their fair market values at
          the acquisition date, increased interest on debt,  additional issuance
          of Common Stock,  and the related  income tax effect.  For purposes of
          computing  income taxes,  an effective  tax rate of 40% was used.  The
          unaudited pro forma  information  does not necessarily  represent what
          the results of  operations  would have been in such periods and is not
          intended to be indicative of future results.
<TABLE>
<CAPTION>


                                                        Year Ended December 31,
                                                    2000           1999           1998
                                                       (Unaudited, in thousands
                                                         except per share data)
              <S>                               <C>              <C>                <C>
               Net revenues                      $132,641         $132,953           $134,743
               Net income                           2,445              629              1,802
               Earnings per share - basic            0.31             0.08               0.21
               Earnings per share - diluted          0.30             0.07               0.21
</TABLE>


    (5)  PRINCIPAL SUPPLIERS
          Swiss  Army   imports  for  resale  all  of  its  Swiss  Army  Knives,
          SwissTools,  SwissCards  and most of its other  cutlery  products from
          Victorinox.   Effective  December  12,  1998,  Swiss  Army  renewed  a
          five-year  agreement  with  Victorinox,  which  appoints Swiss Army as
          exclusive  distributor  of  Victorinox  Original  Swiss  Army  Knives,
          Victorinox  SwissTools,  Victorinox  SwissCards and Victorinox Cutlery
          and  which  gives  Swiss  Army  exclusive  rights  to  use  Victorinox
          trademarks  and trade names in the United States with respect to those
          products.  The agreement is subject to renewal at five year  intervals
          at the  Company's  option and  remains in effect as long as Swiss Army
          continues  to  purchase  quantities  of Swiss Army  Knives and cutlery
          (based on the Swiss franc purchase price) at least equal to 85% of the
          maximum  amount of purchases of each in any  preceding  year. In 1998,
          1999 and  2000,  Victorinox  agreed  to reduce  the  minimum  purchase
          requirements  and the Company  met those  purchase  requirements.  The
          Company is currently in  negotiations  with  Victorinox  regarding the
          2001 minimum purchase requirement.  Pursuant to this agreement,  Swiss
          Army must obtain  Victorinox's  permission to sell new cutlery  items.
          All of the Swiss Army  Knives and  certain of the  cutlery  items that
          Swiss Army  sells in Canada and the  Caribbean  also are  supplied  by
          Victorinox.


                                      F-12

<PAGE>

          Foreign  distribution  rights with  Victorinox  are  comprised  of the
          following:
<TABLE>
<CAPTION>
                                                              December 31,
                                                          2000            1999
                                                          ----            ----
                                                            (in thousands)
                   <S>                                  <C>             <C>

                    Canadian distribution  rights (A)    $3,483          $3,483
                    Caribbean and Victorinox Watch
                        distribution rights (B)           3,261           3,261
                                                        --------        -------
                                                          6,744           6,744
                    Accumulated amortization             (5,206)         (4,537)
                                                        --------        -------
                                                         $1,538          $2,207
                                                        ========        =======
</TABLE>

          (A)  In  April  1992,  Swiss  Army  entered  into  an  agreement  with
          Victorinox under which it received the exclusive  distribution  rights
          for Victorinox  Original Swiss Army Knives in Canada and was appointed
          the  principal  distributor  of  Victorinox  professional  cutlery  in
          Canada.  In exchange for the grant of these rights,  Swiss Army issued
          to Victorinox  277,066 shares of its common stock from  treasury.  The
          rights  received  were  awarded to Swiss  Army for a fixed  seven-year
          term,  which were renewed in April 1999,  with a continuous  five-year
          renewal arrangement upon expiration of the fixed term.  Victorinox has
          the right  not to renew  the  agreement;  however,  should  Victorinox
          choose not to renew the agreement, Victorinox is required to pay Swiss
          Army $3,500,000.

          (B) In  December  1993,  Swiss Army  entered  into an  agreement  with
          Victorinox under which it received the exclusive  distribution  rights
          for Victorinox Original Swiss Army Knives and professional  cutlery in
          the  Caribbean.  Swiss  Army also  received  the  right to  distribute
          Victorinox  Swiss-made  watches in the United  States,  Canada and the
          Caribbean  and  acquired  the 20% share of the  Company's  subsidiary,
          Victorinox of Switzerland, Ltd., that Victorinox owned. As part of the
          agreement,  Swiss Army pays Victorinox a royalty of 1% of net sales of
          Victorinox  Watches.  The Caribbean  distribution rights received were
          awarded to Swiss Army for a fixed  seven-year term, which were renewed
          in December 2000, with a continuous five-year renewal arrangement upon
          expiration of the fixed term periods  unless either party notifies the
          other at least six months  prior to  expiration  of such period of its
          intent not to renew. The term of Victorinox Watch distribution  rights
          in each  territory  coincides  with the term  for  Victorinox  cutlery
          products in that territory.

          The Company  imports  virtually all of its  pocketknives,  multitools,
          cutlery,  and  watches,  except for items  manufactured  by Bear.  The
          Company's  business  is  subject  to  certain  risks  related  to  its
          arrangements   with  its   foreign   suppliers,   including   possible
          restrictions on transfer of funds, the risk of imposition of quotas on
          the amount of  products  that may be imported  into the United  States
          (although  no quota  currently  exists),  maritime  union  strikes and
          political instability.  The exclusive distributorship  agreements with
          Victorinox  provides for certain minimum annual  purchases of products
          by the  Company,  and failure to achieve  these goals would  result in
          Victorinox having the right to terminate the agreements.  Although the
          Company has a contractual right to receive minimum quantities of Swiss
          Army  Knives from  Victorinox,  were this source of supply to fail for
          any  reason,   the  Company  probably  would  be  unable  to  find  an
          alternative  source. Any termination or substantial  disruption of the
          Company's  relationships with Victorinox would have a material adverse
          effect on its  operation  and results.  Virtually all of the Company's
          imported products are subject to United States custom duties.


                                      F-13
<PAGE>

     (6) RELATED PARTY TRANSACTIONS
          Until 1998, one of Swiss Army's  directors was a partner in a law firm
          that  provided  legal  services  to the  Company.  For the year  ended
          December 31, 1998,  Swiss Army incurred  fees of $174,000  relating to
          these services.

          Four of Swiss Army's  directors serve as directors of Highgate Capital
          LLC  ("Highgate"),   formerly  known  as  Hudson  River  Capital  LLC,
          including two who serve as Co-Chairman. Five of Swiss Army's directors
          serve as directors of Victory  Ventures LLC,  including one who serves
          as Co-Chairman. See Note 7 for further discussion.

          In July 1994,  Swiss Army entered into a Services  Agreement with Brae
          Group,  Inc.  ("Brae"),  a company in which a Swiss Army  director and
          Victorinox  have a controlling  and  non-controlling  stock  interest,
          respectively.  Under the  Services  Agreement,  Brae agreed to provide
          various  services to Swiss Army for a period of four years relating to
          maintaining,  enhancing and expanding Swiss Army's  relationship  with
          the Company's principal supplier. In exchange for these services, Brae
          received an option to purchase  500,000  shares of Swiss Army's common
          stock at the then current market price of $10.75 per share. The option
          vested  immediately and can be exercised for 10 years from the date of
          the Services Agreement.

          On May 1,  1998,  the  Company  entered  into  an  agreement  with  an
          affiliated  company  whereby this company would supply Swiss Army with
          legal  services.  The fees  incurred for the years ended  December 31,
          2000,  1999  and  1998  were  approximately  $172,000,   $179,000  and
          $103,000,  respectively.  This  agreement  can be terminated by either
          party upon thirty days written notice.

     (7) INVESTMENTS
          Investments are comprised of the following:
<TABLE>
<CAPTION>
                                                                 December 31,
                                                               2000        1999
                                                               ----        ----
                                                                 (in thousands)
         <S>                                                 <C>         <C>

          Common stock of John Hancock
           Financial Services, Inc. (A)                       $3,798     $   -
          Preferred units of Highgate
           Capital LLC (B)                                     3,613       3,613
          Preferred units of
           Victory Ventures LLC (C)                              851         851
          Common stock of Chaparral Resources, Inc. (D)           12          12
                                                              -------    -------
           Total investments                                  $8,274      $4,476
                                                              =======    =======
</TABLE>


          (A) John Hancock Financial Services,  Inc. ("John Hancock") a publicly
          traded  company,  is a life  insurance  company.  In 2000, the Company
          received 100,938 shares of common stock related to the demutualization
          of John Hancock.  As a result, the Company recorded an investment gain
          of $1,716,000. The Company accounts for this investment at fair value,
          with  changes  in fair value  reflected  as a  separate  component  of
          stockholders' equity.

          (B) Highgate is a private  equity firm  specializing  in middle market
          acquisitions,  re-capitalization and expansion capital investments. In
          January 1998,  Highgate  distributed to the Company $1,613,000 in cash
          and authorized the  distribution  of 63,019 shares of common stock (as
          adjusted for a three-for-two  stock split),  valued at $1,481,000,  of
          Iron Mountain Inc. ("Iron Mountain").  In 1998, the Company recognized



                                      F-14
<PAGE>


          a $1.5  million gain on this cash and common  stock  distribution.  In
          1999, the Company recorded a $2.7 million write-down of its investment
          in Highgate due to the other than temporary impairment in the value of
          the  investment.  At  December  31, 2000 and 1999,  the Company  owned
          890,776 preferred units of Highgate,  which represented  approximately
          9.6% of the  outstanding  equity of Highgate.  The preferred  units in
          Highgate owned by the Company carry a preference on liquidation  equal
          to their  per unit cost as well as, in  certain  instances,  an annual
          preferred return. The Company accounts for this investment on the cost
          basis,  subject to review for  impairment.  Since this investment does
          not have a readily  determinable  fair value,  the  valuation  of this
          investment is subject to uncertainty.

          (C) Victory Ventures LLC ("Victory Ventures") is a private equity firm
          specializing  in small market venture  capital  investments.  In 1998,
          Victory  distributed  shares of  common  stock in two  companies.  The
          Company  liquidated  these  investments in 1998 and realized a gain of
          approximately  $57,000 on these investments.  At December 31, 2000 and
          1999, the Company owned 890,776  preferred  units of Victory  Ventures
          which  represented  approximately  1.2% of the  outstanding  equity of
          Victory  Ventures,   respectively.  The  preferred  units  in  Victory
          Ventures owned by the Company carry a preference on liquidation  equal
          to their  per unit cost as well as, in  certain  instances,  an annual
          preferred return. The Company accounts for this investment on the cost
          basis,  subject to review for  impairment.  Since this investment does
          not have a readily  determinable  fair value,  the  valuation  of this
          investment is subject to uncertainty.

          (D)Chaparral, a publicly traded company, is an independent oil and gas
          exploration and production  company. At December 31, 2000, the Company
          owned 1,461 shares of common stock of Chaparral.  In 2000, the Company
          recorded  a non-cash  write-down  of  $208,000  of its  investment  in
          Chaparral due to the other than  temporary  impairment in the value of
          the investment.

    (8)  OTHER ASSETS
          Other assets are comprised of the following :
<TABLE>
<CAPTION>
                                                    December 31,      Amortization
                                                   2000      1999        Period
                                                   (in thousands)
            <S>        <C>    <C>    <C>

             Cash surrender value of
                 life insurance (see Note 15)     $16,019   $14,111        N/A

             Other                                  3,783     3,085      1-5 years
                                                  --------  --------
             Accumulated amortization              (3,015)   (2,486)
                                                  --------  --------
                                                  $16,787   $14,710
                                                  ========  ========
</TABLE>


          For the years ended  December  31, 2000,  1999 and 1998,  amortization
          expense related to other assets was approximately $529,000,  $720,000,
          and $860,000, respectively.


                                      F-15
<PAGE>


    (9)  ACCRUED LIABILITIES
          Accrued liabilities are comprised of the following:
<TABLE>
<CAPTION>

                                                            December 31,
                                                       2000              1999
                                                           (in thousands)
               <S>                                   <C>              <C>

                Sales, marketing and promotional      $3,014           $3,951
                Payroll related                        1,499            1,353
                Acquisition payment (see Note 4)         -              1,000
                Other                                  3,939            4,258
                                                      -------          -------
                                                      $8,452          $10,562
                                                      =======          =======
</TABLE>

   (10)  DEBT AGREEMENTS
          On November  15,  1999,  Swiss Army  entered  into a revolving  credit
          agreement  which,  among  other  things,  states  that the Company can
          borrow up to $23.0  million,  consisting  of a $16.0  million  line of
          credit for  working  capital  purposes  and a $7.0  million  term loan
          related to the  acquisition  of Bear MGC.  In July 2000,  the  Company
          entered  into a term  loan  agreement  with the  same  bank for a $1.6
          million  term loan  related to the  acquisition  of Xantia.  The above
          borrowings  carry interest at one of three interest rate options:  (i)
          LIBOR plus the applicable margin; (ii) Base Rate, as defined; or (iii)
          Cost of  Funds  rate,  as  defined.  The  interest  rate  also  varies
          dependent on the Company's financial  performance.  The line of credit
          is due to expire in June 2001. In March 2001,  the Company  received a
          firm  commitment  from its current lender to extend the line of credit
          through June 2003 under similar  terms and  conditions as the existing
          agreement.  The line of credit is  secured  by  substantially  all the
          assets of the  Company  and the  agreement  requires  the  Company  to
          satisfy certain  financial  covenants  including  minimum tangible net
          worth,  funded debt ratio,  interest rate coverage and current  ratio,
          and the continuation of the exclusive distributorship arrangement with
          Victorinox.  At December 31, 2000,  the Company is in compliance  with
          the covenants contained in the agreement. The fair value of the amount
          outstanding  under the line of credit  approximates  book value as the
          interest rate is adjusted on a quarterly basis.

          In  addition,  the  Company has  6,000,000  CHF  ($3,670,200)  of debt
          related to the acquisition of Xantia due to the former stockholders of
          Xantia.  The debt is payable  over seven  years and bears  interest at
          3.5% per annum.

          The Company has entered into an interest rate cap agreement to provide
          interest  rate  protection on $5.0 million of debt to the maximum rate
          of 7.0% (before  applicable  margin)  expiring in November 2004. Also,
          the Company has entered  into an  interest  rate collar  agreement  to
          provide  interest rate protection on $3.5 million of debt in the range
          of 5.5% to 7.0% (before  applicable  margin) expiring in June 2006. At
          December 31, 2000, the fair value of these agreements is immaterial to
          the financial statements.

          Scheduled principal payments due on debt in the next five years are as
          follows (in thousands):
<TABLE>
<CAPTION>
                                  <S>                            <C>

                                   2001                        $  1,493
                                   2002                           1,539
                                   2003                           7,890
                                   2004                           4,198
                                   2005 and thereafter            2,411
</TABLE>


          The above principal  payments are based upon the Company's  receipt of
          the firm commitment letter from its exiting lender in March 2001.


                                      F-16
<PAGE>
   (11)  INCOME TAXES
          The income tax provision  (benefit)  for the years ended  December 31,
          2000, 1999 and 1998, consists of the following:
<TABLE>
<CAPTION>

                                                        Year Ended December 31,

                                                  2000          1999           1998
                                                  ----          ----           ----
                                                          (in thousands)
                    <S>                         <C>           <C>            <C>

                     Current
                           Federal               $ 632         $1,681        ($1,662)
                            Foreign                 99            -              -
                            State                  305            285            230
                                                 ------        -------       --------
                                Total current    1,036          1,966         (1,432)
                     Deferred
                            Federal                492           (600)         2,294
                            State                   51            165            358
                                                 ------        -------       --------
                                Total deferred     543           (435)         2,652
                                                 ------        -------       --------
                     Provision (benefit) for
                        income taxes            $1,579         $1,531         $1,220
                                                 ======        =======       ========
</TABLE>


<TABLE>
<CAPTION>

          The  significant  components  of the deferred tax asset as of December
          31, 2000 and 1999 are as follows:
                        <S>                                  <C>         <C>
                                                              2000        1999
                                                               (in thousands)
                         Sales and marketing reserves       $ 945        $ 940
                         Inventory related reserves           590          850
                         Depreciation and amortization        526          771
                         Capital gains and losses             194          919
                         Accrued employee benefits            270          234
                         Other, net                           498          638
                                                            ------       ------
                                                            3,023        4,352
                         Valuation allowance                 (461)        (643)
                                                            ------       ------
                             Total                         $2,562       $3,709
</TABLE>

          At December 31, 2000 and 1999,  a valuation  allowance of $461,000 and
          $643,000  respectively,  has been  recorded  against a portion  of the
          Company's  deferred  tax  assets  related  to state and  capital  loss
          carryfowards

          A reconciliation of the income tax provision  (benefit)  calculated at
          the federal  income tax  statutory  rate and the  Company's  effective
          income tax rate for 2000, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>


                                                      2000        1999       1998
                                                      ----        ----       ----
              <S>                                    <C>         <C>        <C>

               Statutory federal income tax rate      34.0%       34.0%      34.0%
               State income taxes, net of
                federal income tax benefit             6.3        11.4        5.7
               Foreign taxes                           4.9        19.7        2.1
               Valuation allowance                    (4.5)       38.9         -
               Other                                   3.9       (11.3)       3.7
                                                      -----      ------     ------
               Effective income tax rate              44.6%       92.7%      45.5%
                                                      =====      ======     ======
</TABLE>

                                      F-17
<PAGE>


   (12)  COMPREHENSIVE INCOME
          Accumulated other  comprehensive  income (loss) activity for the three
          years ended December 31, 2000 is as follows:
<TABLE>
<CAPTION>
                                                                                           Accumulated
                                                               Unrealized Gain                Other
                                     Foreign Currency             (Loss) On               Comprehensive
                                        Translation         Marketable Securities         Income (Loss)
                                                                (in thousands)
             <S>                          <C>                       <C>                      <C>

              December 31, 1997            ($240)                    $ -                      ($240)
              1998 activity                ( 186)                     603                       417
                                           ------                   ------                    ------
              December 31, 1998            ( 426)                     603                       177
              1999 activity                  233                     (811)                     (578)
                                           ------                   ------                    ------
              December 31, 1999             (193)                    (208)                     (401)
              2000 activity                 (655)                   2,290                     1,635
                                           ------                   ------                    ------
              December 31, 2000            ($848)                  $2,082                    $1,234
                                           ======                   ======                    ======

</TABLE>

   (13)  EMPLOYEE BENEFITS
          The Company maintains a non-contributory defined benefit pension plan.
          Benefits are based on years of service and the employee's compensation
          during the five highest  consecutive  compensation  years. Costs under
          the plan are  accrued  and funded on the basis of  accepted  actuarial
          methods.  Total pension expense approximated  $342,000,  $405,000, and
          $285,000,  for the  years  ended  December  31,  2000,  1999 and 1998,
          respectively.  The net periodic  pension cost of Swiss Army's  pension
          plan in 2000, 1999 and 1998 includes the following components:
<TABLE>
<CAPTION>
                                                             2000            1999           1998
                                                                       (in thousands)
     <S>                                                   <C>             <C>             <C>

      Service cost - benefits earned during the period      $ 326           $ 367           $286
      Interest cost on projected benefit obligation           162             182            166
      Expected return on assets                              (119)           (141)          (143)
      Amortization of net transition asset                    (14)            (14)           (14)
      Amortization of unrecognized  prior service cost        (13)            (13)           (13)
      Amortization of net loss                                 -               24              3
                                                            ------          -------        -------
      Net periodic pension cost                              $342            $405           $285
                                                            ======          =======        =======
</TABLE>



                                      F-18
<PAGE>


          The  changes in  benefit  obligations  and plan  assets and the funded
          status  reconciliation  as of  December  31,  2000 and 1999 for  Swiss
          Army's pension plan are shown below:
<TABLE>
<CAPTION>
                                                       2000               1999
                                                       ----               ----
                                                            (in thousands)
             <S>                                     <C>                <C>
              Change in Benefit Obligation
                Benefit obligation, January 1         $2,618             $2,741
                Service cost                             326                367
                Interest cost                            162                182
                Actuarial (gain) loss                    116               (581)
                Benefits paid - expected                 (98)               (91)
                                                      -------            -------
                Benefit obligation, December 31       $3,124             $2,618
                                                      =======            =======
              Change in Plan Assets
                Fair value of plan assets, January 1  $1,430              1,727
                Actual return on plan assets              90                 96
                Company contributions                    307                260
                Benefits paid - actual                   (52)              (653)
                                                      -------            -------
                Fair value of plan assets December 31 $1,775             $1,430
                                                      =======            =======
              Funded Status Reconciliation
                Funded status, December 31           ($1,349)           ($1,188)
                Unrecognized (gains) losses, net         560                460
                Unrecognized prior service costs        (217)             (230)
                Unrecognized transition amount           (28)              (42)
                                                     --------           --------
                Accrued pension cost, December 31    ($1,034)          ($1,000)
                                                     ========           ========
</TABLE>

          Rates used in determining the actuarial present value of the projected
          benefit obligation are as follows:
<TABLE>
<CAPTION>

                                                                  December 31,
                                                             2000          1999
                                                             ----          ----
        <S>                                                 <C>           <C>

         Discount rate                                       7.00%         7.00%
         Rate of increase in future compensation levels      4.50%         4.50%
         Expected long-term rate of return on plan assets    8.00%         8.00%
</TABLE>


          Plan  assets  consist  principally  of  investments  in  fixed  income
          securities, short-term investments and common stock.

          The Company maintains a 401(k) employee benefit plan pursuant to which
          participants   can  defer  a  certain   percentage   of  their  annual
          compensation  in order to receive  certain  benefits upon  retirement,
          death, disability or termination of employment.  The Company can elect
          to  make  a  matching  contribution  of up to  6% of  annual  eligible
          compensation  per  employee.  The  determination  to  make a  matching
          contribution  is made at the  beginning  of each fiscal  year.  During
          2000, 1999 and 1998, the Company  incurred  expenses of  approximately
          $168,000, $173,000, and $161,000, respectively, related to this plan.

          The Company offers no other post retirement benefits.



                                      F-19
<PAGE>


   (14)  STOCKHOLDERS' EQUITY
          The Swiss Army Brands,  Inc.  1996 Stock Option Plan  provides for the
          grant of options to employees,  including officers of the Company, and
          members of the Board of Directors.  Under this plan and previous stock
          option  plans,  234,593  shares  of  common  stock  are  reserved  and
          available for issuance.  Options  expire no later than ten years after
          the date of  grant.  Option  prices  equal  at least  100% of the fair
          market  value of Swiss Army's  common stock on the date of grant.  The
          vesting of options is determined by the Stock Option and  Compensation
          Committee of the Board of Directors,  which  administers the plan, and
          for options  outstanding as of December 31, 2000,  vesting ranges from
          immediately upon grant to three years.

          The following table  summarizes stock option plan and warrant activity
          for the three years ended December 31, 2000:
<TABLE>
<CAPTION>

                                                      Number
                                                     of Shares        Option Price
                                                     ---------        ------------
            <S>                                     <C>           <C>

             Outstanding at December 31, 1997        2,241,031     $ 5.25  - $ 14.50
             Granted  (A)                              555,000     $ 8.75 -  $ 10.125
             Exercised                                  (9,500)    $ 5.25 -  $  8.62
             Canceled                                 (270,780)    $ 8.75 -  $ 14.00
                                                     ----------
             Outstanding at December 31, 1998        2,515,751     $ 5.25 -  $ 14.50

             Granted                                     3,000     $ 8.75
             Exercised                                 (10,000)    $ 5.38
             Canceled                                 (274,501)    $ 8.75 -  $ 14.00
                                                     -----------
             Outstanding at December 31, 1999        2,234,250     $ 5.25 -  $ 14.50

             Granted  (B)                              727,000     $ 4.47 -  $  6.38
             Canceled                                 (216,500)    $ 6.38 -  $ 14.00
                                                     -----------
             Outstanding at December 31, 2000        2,744,750     $ 4.47 -  $ 14.50
                                                     ===========
</TABLE>

          Of  the  options  and  warrants  outstanding  at  December  31,  2000,
          2,213,000 are exercisable at a weighted average option price of $11.02
          per share.

          (A) In September  1998, the Company issued 505,000 options to purchase
          common  stock at $8.75 per share to various  employees  and  officers.
          These options are  exercisable in four equal  installments  over three
          years  starting  with the grant date.  In November  1998,  the Company
          issued 50,000 options to purchase common stock at $10.125 per share to
          two  directors.  Of these options,  25,000 options are  exercisable in
          four equal installments over three years starting with the grant date,
          and 25,000 options are exercisable immediately.

          (B) In 2000,  the Company issued  727,000  options to purchase  common
          stock  at a  weighted  average  price of $6.30  per  share to  various
          employees,  directors and officers. Of these options,  105,000 options
          were granted to directors and are exercisable immediately, and 622,000
          options were granted to employees and officers and are  exercisable in
          four equal installments over three years starting with the grant date.

          The weighted-average  fair value of the stock options granted in 2000,
          1999 and 1998 was approximately $4.04, $4.81 and $3.51,  respectively.
          The weighted-average fair value of the options was estimated using the
          Black-Scholes  option-pricing  model with the  following  assumptions:
          expected  volatility  of 61% in  2000,  51% in 1999  and 30% in  1998;
          expected life of options of six years;  dividend yield of 0%; and risk



                                      F-20

<PAGE>

          free interest rate of 6.68% in 2000,  5.26% in 1999 and 4.91% in 1998,
          respectively.

          The Company  accounts for stock options and warrants under  Accounting
          Principles  Board  Opinion  No. 25,  "Accounting  for Stock  Issued to
          Employees",  under which no compensation cost has been recognized. Had
          compensation  cost for the three years  ending  December 31, 2000 been
          determined  under the  principles  of SFAS No. 123, the  Company's net
          income (loss) and earnings per share would have been the following:
<TABLE>
<CAPTION>
                                                        2000         1999         1998
                                                        ----         ----         ----
                                                     (in thousands, except per share data)
           <S>                                        <C>           <C>         <C>

            Net income (loss)        As reported:      $2,013        $120        $1,463
                                     Pro forma:        $1,201       ($348)       $  812

            Earnings per share       As reported:
                                        Basic           $0.25       $0.02         $0.18
                                        Diluted         $0.25       $0.01         $0.18

                                     Pro forma:
                                        Basic           $0.15      ($0.04)        $0.10
                                        Diluted         $0.15      ($0.04)        $0.10
</TABLE>


          The effects of applying SFAS No. 123 in this pro forma  disclosure are
          not  indicative  of future  amounts  as SFAS No. 123 does not apply to
          stock  options and  warrants  granted  prior to 1995,  and  additional
          options and warrants may be granted in future years.

          In September  1998,  the Company  issued  25,000  shares of its common
          stock to certain  employees  and  officers.  The common stock vests in
          four equal  installments  over three  years  beginning  with the grant
          date.  The  Company  recognized  $58,000,  $73,000 and $21,000 for the
          years ended December 31, 2000, 1999 and 1998,  respectively,  in stock
          compensation expense related to this grant.

          On September 16, 1998, the Company's  Board of Directors  authorized a
          repurchase of up to 400,000 shares of its common stock. As of December
          31, 1999,  the Company had completed the  repurchase of 400,000 shares
          for a total purchase price of approximately $3,598,000.

   (15)  COMMITMENTS AND CONTINGENCIES
          The Company has minimum purchase  requirements under an agreement with
          Victorinox (see Note 5).

          At December 31, 2000,  minimum rental payment  commitments for office,
          warehouse  and  manufacturing   space  leased  by  the  Company  under
          operating leases were, as follows (in thousands):
<TABLE>
<CAPTION>
                                  <S>                  <C>
                                   2001                 $1,164
                                   2002                     94
                                   2003                     94
                                   2004                     94
                                   2005 and thereafter     391

</TABLE>

                                      F-21
<PAGE>

          During the years ended December 31, 2000,  1999 and 1998, rent expense
          was approximately $1,508,000, $1,487,000 and $1,374,000, respectively.

          At December  31,  2000,  the Company  has open  contracts  to purchase
          approximately  64.7 million  Swiss  francs in 2001 as a hedge  against
          future  purchase of  inventories  at a weighed  average rate of $1.580
          Swiss franc/dollar.

          The Company maintains split dollar life insurance  agreements covering
          two members of the Board of Directors.  Primarily,  these policies can
          only be  canceled  upon the mutual  agreement  of the  Company and the
          insured.  However,  if these  policies  were  canceled at December 31,
          2000,  the Company would receive in cash an amount equal to the lesser
          of the cash  surrender  value or  cumulative  premiums paid to date on
          these policies, which was approximately $7,200,000. Under the terms of
          these life  insurance  policies,  the  Company  will make  approximate
          future premium  payments,  if the policies remain in force, as follows
          (in thousands):
<TABLE>
<CAPTION>
                                  <S>                    <C>
                                   2001                   $  512
                                   2002                      493
                                   2003                      460
                                   2004                      460
                                   2005 and therafter      1,740
</TABLE>


          In  1993,  the  Company's  Board of  Directors  adopted  a  charitable
          insurance program that enables the Company to make a commitment to the
          Victorinox-Swiss   Army  Knife   Foundation  (the   "Foundation"),   a
          foundation that engages in various charitable activities including the
          promotion of athletic events for  underprivileged  urban youth.  Under
          the program,  the Company owns, is the beneficiary of and pays all the
          premiums  for life  insurance  policies on the lives of certain  Board
          members. Pursuant to the program, upon the death of each Director, the
          Company  retains  a  share  of the  insurance  proceeds  equal  to the
          cumulative  premiums  paid  by the  Company  for  the  policy  on that
          Director's  life.  One  half  of  any  additional  insurance  proceeds
          received upon the death of an insured Director will be used to fulfill
          charitable  pledges made to the Foundation.  The remaining half of the
          additional  proceeds  will  be  used  to  fulfill  charitable  pledges
          recommended by the individual Directors. Swiss Army is generally bound
          to continue to pay all  premiums on the  policies for the lives of the
          insured  Directors  or, in the case of the  Chairman of the  Executive
          Committee,  as long as he is an officer or a board member or agrees to
          serve as a consultant to the Company. Swiss Army will make approximate
          future  premium  payments  related to these  programs  as follows  (in
          thousands):
<TABLE>
<CAPTION>
                                   <S>                           <C>

                                    2001                          $  604
                                    2002                             604
                                    2003                             604
                                    2004                             604
                                    2005 and thereafter            7,673
</TABLE>

          Under  existing  federal  tax laws,  the receipt by the Company of the
          proceeds from an insurance  policy upon the death of a director  would
          not result in regular  taxable  income to the  Company;  however,  the
          Company may be subject to alternative  minimum tax on a portion of the
          receipts.  When the Company makes cash  contributions  to a designated
          charity, it will be  entitled to a tax deduction equivalent to the sum


                                      F-22
<PAGE>


          of  those  contributions.  The  extent  of  the  utilization  of  this
          deduction in that year will depend upon the Company's  taxable income,
          since the Company is entitled to claim as charitable  deductions  only
          10% of its taxable income in any year.  However,  these deductions may
          be carried forward for tax purposes for a period of five years.

          Based upon estimates  prepared by the Company's  insurance  agent, the
          anticipated  earnings  impact  related  to the  policies  for both the
          Foundation  and the two members of the Board of  Directors is expected
          to be insignificant.

          In addition, the Company is involved in certain legal matters relating
          to trademark,  patent, and other general business matters.  Management
          believes  that the  outcome  of these  legal  matters  will not have a
          material  adverse  effect on the  financial  position  and  results of
          operations of the Company.

    (16)  SEGMENT REPORTING
          The  Company  is engaged  in one line of  business - the  importation,
          manufacture and distribution of consumer products,  including watches,
          pocketknives, cutlery, multi-tools and sunglasses. Sumarized financial
          information concerning the Company's reportable segment and geographic
          areas is shown in the following  table.  The "Other"  column  includes
          corporate related items.
<TABLE>
<CAPTION>

                                 United States      Canada     International      Other       Total
                                 -------------      ------     -------------      -----       -----
              2000
              ----
             <S>                  <C>              <C>            <C>           <C>         <C>

              Revenues             $114,314         $8,419         $9,289        $   -       $132,022
              Operating
                 income (loss)       22,567            827            (98)       (20,057)       3,239
              Identifiable
                assets               58,014          4,106         13,941         48,388      124,449
              1999
              ----
              Revenues             $114,856         $8,573         $6,117        $   -       $129,546
              Operating
                 income (loss)       26,218          1,168            187        (22,938)       4,635
              Identifiable
                assets               58,045          3,557          3,376         42,626      107,604
              1998
              ----
              Sales                $111,507         $8,483         $7,811        $   -       $127,851
              Operating
                 income (loss)       22,674          1,435            338        (23,470)         977
              Identifiable
                assets               52,998          3,512          4,832         39,062      100,404
</TABLE>



                                      F-23
<PAGE>


     (17)  QUARTERLY FINANCIAL DATA (Unaudited)

<TABLE>
<CAPTION>

                                                                    Quarter Ended
                                                          (in thousands, except per share data)
                                                          -------------------------------------
                                                March 31      June 30     September 30    December 31
             2000
             ----
            <S>                                <C>           <C>           <C>             <C>

             Net revenues                       $25,540       $29,385       $32,719         $44,378
             Gross profit                         9,724        11,741        12,799          16,442
             Income  before
                income taxes                        488           275         1,302           1,478
             Net income                             276           155           789             793
             Earnings per share - basic           $0.03         $0.02         $0.10           $0.10
             Earnings per share - diluted         $0.03         $0.02         $0.10           $0.10
</TABLE>

 <TABLE>
<CAPTION>




                                                March 31      June 30     September 30    December 31
             1999
             ----
            <S>                                <C>           <C>           <C>            <C>

             Net revenues                       $23,570       $30,396       $33,026        $42,554
             Gross profit                         8,949        11,990        12,798         17,203
             Income (loss) before
                income taxes                       (614)       (2,183)        1,353          3,095
             Net income (loss)                     (353)       (2,126)          766          1,833
             Earnings per share - basic          ($0.04)       ($0.27)        $0.10          $0.23
             Earnings per share - diluted        ($0.04)       ($0.27)        $0.10          $0.22


</TABLE>



                                      F-24
<PAGE>
<TABLE>
<CAPTION>


                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                                 (in thousands)


               Column A                           Column B          Column C          Column D        Column E

                                                                   Additions
                                                  Balance At       Charged to                         Balance At
                                                   Beginning       Costs and                            End of
           Classification                           of Year         Expenses         Deductions           Year
           --------------                         ----------       ----------        ----------       ----------
<S>                                                 <C>                <C>              <C>             <C>

Year Ended December 31, 2000:

   Allowance for Doubtful Accounts                   $1,060             $200             $ -             $1,260
                                                     ======            =====           ======            ======
   Inventory Reserve
                                                     $1,215             $ -             ($44)            $1,171
Year Ended December 31, 1999:
                                                     ======            =====           ======            ======
   Allowance for Doubtful Accounts                   $  975             $ 85             $ -             $1,060
                                                     ======            =====           ======            ======
   Inventory Reserve                                 $1,163             $ 51             $ -             $1,215
                                                     ======            =====           ======            ======
Year Ended December 31, 1998:

   Allowance for Doubtful Accounts                   $  975             $ -              $ -             $  975
                                                     ======            =====           ======            ======
   Inventory Reserve                                 $2,852             $ -          ($1,689)            $1,163
                                                     ======            =====           ======            ======
</TABLE>



                                      F-25
<PAGE>

Exhibits.

          Exhibit Title Exhibit No.

(b)       Reports on Form 8-K

          On October 6, 2000, the  Registrant  filed a Form 8-K/A that contained
          financial statements and pro forma financial  information with respect
          to the  acquisition  of Xantia S.A.,  previously  reported on Form 8-K
          filed on August 7, 2000.

(3)       (A)  Articles   of   Incorporation,  as   amended,   incorporated   by
          reference  to the  Exhibits to  Quarterly  Report on Form 10-Q for the
          fiscal year ended June 30, 1997.

          (B)  Amended-and  restated  by-laws of Swiss Army  Brands,  Inc. as of
          February 15, 1995, as further amended as of March 1, 2001.

(10)  Material Contracts

          (A) Letter  Agreement  dated  December  12,  1983  between  Victorinox
          Cutlery  Company  and The  Forschner  Group.,  Inc.,  incorporated  by
          reference to the Exhibits to Annual Report on Form 10-K for the fiscal
          year ended December 31, 1994.

          (B) Mutual  Agreement dated as of October 20, 1986 between  Victorinox
          Cutlery  Company  and  The  Forschner  Group,  Inc.,  incorporated  by
          reference to the Exhibits to Annual Report on Form 10-K for the fiscal
          year ended December 31, 1994.

          (C) Letter  Agreement dated as of October 20, 1986 between  Victorinox
          Cutlery  Company  and  The  Forschner  Group,  Inc.,  incorporated  by
          reference to the Exhibits to Annual Report on Form 10-K for the fiscal
          year ended December 31, 1994.

          (D) Life insurance  agreement dated as of December 7, 1991 between The
          Forschner  Group,  Inc. and Stanley R. Rawn,  Jr., as Trustee u/a dtd.
          December 9, 1986  between  Louis Marx,  Jr. and Stanley R. Rawn,  Jr.,
          incorporated  by reference  to the  Exhibits to Annual  Report on Form
          10-K for the fiscal year ended December 31, 1992.

          (E) License Agreement dated June 30, 1992 between The Forschner Group,
          In., and Precise Imports Corporation, incorporated by reference to the
          Exhibits  to  Annual  report on Form 10-K for the  Fiscal  year  ended
          December 31, 1992.

          (F) Life  insurance  agreement  dated  December  24, 1992  between The
          Forschner Group,  Inc. and Louis Marx, Jr., as Trustee u/a dtd., as of
          October 24, 1988  between  Stanley R. Rawn,  Jr. and Barbara  Rawn and
          Louis Marx,  Jr.,  incorporated by reference to the Exhibits to Annual
          Report on Form 10-K for the fiscal year ended December 31, 1992.

          (G) Mutual  Agreement dated April 6, 1992 between The Forschner Group,
          Inc. and Victorinox Cutlery Company,  incorporated by reference to the
          Exhibits  to  Annual  Report on Form 10-K for the  fiscal  year  ended
          December 31, 1992.

          (H) 1993 Stock Option Plan,  incorporated by reference to the Exhibits
          to Annual  Report on Form 10-K for the fiscal year ended  December 31,
          1993.


                                       19
<PAGE>

          (I) Lease dated May 3, 1993  between  One  Research  Drive  Associates
          Limited  Partnership and The Forschner  Group,  Inc.,  incorporated by
          reference to the Exhibits to Annual Report on Form 10-K for the fiscal
          year ended December 31, 1993.

          (J) Life insurance agreement dated as of December 24, 1992 between The
          Forschner Group,  Inc. and Louis Marx, Jr.,  incorporated by reference
          to the  Exhibits  to Annual  Report on Form 10-K for the  fiscal  year
          ended December 31, 1993.

          (K) Life  insurance  agreement  dated as of September 24, 1993 between
          The  Forschner  Group,  Inc.  and Louis  Marx,  Jr.,  incorporated  by
          reference to the Exhibits to Annual Report on Form 10-K for the fiscal
          year ended December 31, 1993.

          (L) Life  insurance  agreement  dated as of September 24, 1993 between
          The Forschner Group, Inc. and James D. Rawn, as Trustee u/a dtd. as of
          June 4, 1992  between  Louis  Marx,  Jr.,  Grantor  and James D. Rawn,
          Trustee, incorporated by reference to the Exhibits to Annual Report on
          Form 10-K for the fiscal year ended December 31, 1993.

          (M) Mutual  Agreement  dated  December 21, 1993 between The  Forschner
          Group, Inc. and Victorinox Cutlery Company,  incorporated by reference
          to the  Exhibits  to Annual  Report on Form 10-K for the  fiscal  year
          ended December 31, 1993.

          (N) 1994 Stock Option Plan,  incorporated by reference to the Exhibits
          to  Registration  Statement  on Form S-8,  No.  33-87078  filed by The
          Forschner Group, Inc.

          (O) Services Agreement dated as of July 29, 1994 between The Forschner
          Group,  Inc. and Brae Group,  Inc.,  incorporated  by reference to the
          Exhibits to Quarterly Report on Form 10-Q for the fiscal quarter ended
          September 30, 1994.

          (P)  Non-Incentive  Stock Option  Agreement  dated as of July 29, 1994
          between The Forschner Group, Inc. and Brae Group,  Inc.,  incorporated
          by reference to the Exhibits to Quarterly  Report on Form 10-Q for the
          fiscal quarter ended September 30, 1994.

          (Q) Consulting  Agreement  dated as of December 7, 1991 by and between
          The  Forschner  Group,  Inc.  and Louis  Marx,  Jr.,  incorporated  by
          reference to the Exhibits to Annual Report on Form 10-K for the fiscal
          year ended December 31, 1994.

          (R) First Amendment to Lease dated June 16, 1994 between The Forschner
          Group,  Inc.  and  Pefran  Trap  Falls  Associates,   incorporated  by
          reference to the Exhibits to Annual Report on Form 10-K for the fiscal
          year ended December 31, 1994.

          (S) Life  insurance  agreement  dated as of April 15, 1994 between The
          Forschner Group,  Inc. and Lawrence T. Warble,  as Trustee u/a dtd. as
          of March 21, 1994 between Stanley R. Rawn,  Jr.,  Grantor and Lawrence
          T.  Warble,  Trustee,  incorporated  by  reference  to the Exhibits to
          Annual  Report on Form 10-K for the  fiscal  year ended  December  31,
          1994.

          (T)  Employment  agreement  dated as of  January 2, 1996  between  The
          Forschner Group, Inc. and James W. Kennedy,  incorporated by reference
          to the  Exhibits  to Annual  Report on Form 10-K for the  fiscal  year
          ended December 31, 1995.

          (U) Warrant dated as of December 13, 1995 between The Forschner Group,
          Inc. and J. Merrick Taggart, incorporated by reference to the Exhibits
          to Annual  Report on Form 10-K for the fiscal year ended  December 31,
          1995.

                                       20
<PAGE>

          (V) Watch  design and  Consulting  Agreement  dated as January 2, 1995
          between The Forschner Group, Inc., Polenberg, Inc. and Myron Polenberg
          Incorporated by reference to the Exhibits to quarterly  report on Form
          10-Q for the fiscal quarter ended March 31, 1996.

          (W) 1996 Stock Option Plan  incorporated  by reference to the Exhibits
          on Form 10-K for the fiscal year ended December 31, 1996.

          (X) Trademark  Agreement  dated as of December 18, 1996 by and between
          the SwissConfederation  represented by the Federal Military Department
          represented  by the Federal  Defense  Production  Group and Swiss Army
          Brands,  Inc.  incorporated  by reference to the Exhibits on Form 10-K
          for the fiscal year ended December 31, 1996.*

          (Y) Asset Purchase  Agreement  dated January 31, 1997 among Cuisine de
          France Limited,  Sabatier USA, LLC, Robert P. Wolff and Robert Candler
          incorporated  by  reference  on Form 10-K for the  fiscal  year  ended
          December 31, 1996.

          (Z) License  Agreement  dated May 15,  1997 by and between  Swiss Army
          Brands, Inc. and St.John Knits, Inc., incorporated by reference to the
          Exhibits on Form 10-Q for the fiscal quarter ended June 30, 1997.

          (AA) Letter  Agreement  dated  September  27, 1996 between  Swiss Army
          Brands, Inc. and Victorinox Cutlery Company.

          (BB) Asset Purchase  Agreement dated April 16, 1999 by and among Swiss
          Army Brands, Inc., Bear Cutlery,  Inc., and Bear MGC Cutlery, Inc. and
          its Shareholders incorporated by reference on Form 8-K dated April 16,
          1999.

          (CC) The 1999 Amended and Restated  Commercial  Loan  Agreement  dated
          November 15, 1999 between  Fleet  National Bank and Swiss Army Brands,
          Inc. (A list of exhibits and  schedules to the  Agreement is set forth
          therein.   The   Company   agrees  to   furnish   to  the   Commission
          supplementally,  upon request, a copy of any such exhibit or schedules
          not otherwise filed herewith.)

          (DD) Amended and Restated  Trademark  License  Agreement,  dated as of
          February  17,2000,  between the Registrant and TRG  Accessories,  LLC,
          incorporated  by reference to Exhibit  10.1 to the  Registrant's  Form
          10-Q for the quarter ended March 31, 2000.*

          (EE) Share Purchase Agreement,  dated as of June 23, 2000 (the "Xantia
          Agreement"), by and among the Company, Swiss Army Brands CH, Inc. (the
          "Buyer") and Michel and Irene Thievent  (collectively,  the "Sellers")
          with respect to Xantia S.A.;  incorporated by reference to Exhibit 2.1
          to the Company's Current Report on Form 8-K filed on August 7, 2000.

          (FF) Amendment to the Xantia Agreement,  dated as of July 10, 2000, by
          and among the the Buyer, and the Sellers; incorporated by reference to
          Exhibit  2.2 to the  Company's  Current  Report  on Form 8-K  filed on
          August 7, 2000.

          (GG) Second  Amendment to the Xantia  Agreement,  dated as of July 24,
          2000, by and among the Company,  the Buyer, the Sellers and Victorinox
          AG;  incorporated by reference to Exhibit 2.3 to the Company's Current
          Report on Form 8-K filed on August 7, 2000.

          *  Confidential  treatment  have been  received  for  portions of this
          exhibit.
                                       21
<PAGE>





          (HH) Trademark License Agreement, dated as of October 13, 2000 between
          the Registrant and Tropical Sportswear International Corporation.**



          (21) Subsidiaries of Registrant.                                   21

          (23) Consent of Arthur Andersen LLP.                               23

          (27) Financial Data Schedule.



          **  Confidential  treatment  has been  requested  for portions of this
          exhibit.



                                       22
<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.

                  SWISS ARMY BRANDS, INC.
                  (Registrant)


                  /s/ J. Merrick Taggart
                  J. Merrick Taggart
                  President and Chief Executive Officer


                  /s/ Thomas M. Lupinski
                  Thomas M. Lupinski
                  Senior Vice President, Chief Financial Officer, Secretary, and
                  Treasurer


                  /s/ Marc A. Gold
                  Marc A. Gold
                  Vice President and Controller


Date:  March 27, 2001







                                       23
<PAGE>

<TABLE>
<CAPTION>

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following  persons on behalf of the Registrant and in the
capacities and on the dates indicated.

<S>                                                              <C>

/s/ J. Merrick Taggart                                            March 27, 2001
J. Merrick Taggart
President, Chief Executive Office, and Director

/s/ A. Clinton Allen                                              March 27, 2001
A. Clinton Allen
Director

/s/ Clarke H. Bailey                                              March 27, 2001
Clarke H. Bailey
Director

/s/ Vincent D. Farrell, Jr.                                       March 27, 2001
Vincent D. Farrell, Jr.
Director

/s/ Herbert M. Friedman                                           March 27, 2001
Herbert M. Friedman
Director

/s/ Peter W. Gilson                                               March 27, 2001
Peter W. Gilson
Director

/s/ Louis Marx, Jr.                                               March 27, 2001
Louis Marx, Jr.
Director


/s/ Robert S. Prather, Jr                                         March 27, 2001
Robert S. Prather, Jr.
Director

/s/. Stanley R. Rawn, Jr                                          March 27, 2001
Stanley R. Rawn, Jr.
Director

/s/ John Spencer                                                  March 27, 2001
John Spencer
Director

/s/ John V. Tunney                                                March 27, 2001
John V. Tunney
Director
</TABLE>


                                       24

<PAGE>