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, 1999
                                       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  nonaffiliates  of the
registrant on March 20, 2000, was approximately  $21,898,000.  On such date, the
closing  price of  registrant's  common  stock was $7.97 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, 2000 was 7,850,860 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
18, 2000 are incorporated by reference in Part III herein.
<PAGE>


                                     PART I
Item 1.Business.

     Swiss  Army  Brands,  Inc.  ("SABI"  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.  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.  In
addition, in 1999, the Company began  manufacturing  and distributing  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 Cutlery
Company  ("Victorinox"),  a  Swiss  corporation  and  Europe's  largest  cutlery
producer.  SABI  added  Canada  and the  Caribbean  (including  Bermuda)  to its
exclusive  territory for Victorinox Original Swiss Army Knives in 1992 and 1993,
respectively.

     In April 1999, the Company  purchased  substantially  all of the assets and
assumed certain  liabilities of Bear MGC Cutlery,  Inc., which  manufactured and
distributed  Bear  MGC  knives  and  multi-tools.  See  Note 4 to the  Company's
Consolidated Financial Statements included herein for further information.

     The  Company  is  engaged  principally  in  one  line  of  business  -  the
importation,   manufacturing   and   distribution   of  cutlery,   pocketknives,
multi-tools,  watches  and other  consumer  products.  Total  SABI sales for the
calendar  years  1999,  1998  and  1997  were  $129,452,000,  $127,851,000,  and
$118,744,000, respectively. Sales  of  Victorinox  Original  Swiss Army  Knives,
Victorinox  SwissTools,  Victorinox SwissCards and Bear MGC products,  accounted
for  approximately  39% of SABI's 1999 sales while  watches and other Swiss Army
Brand  products  accounted for  approximately  46%.  Sales of  professional  and
consumer  cutlery  accounted  for  approximately  15% of SABI's 1999  sales.  No
customer  accounted  for  more  than  10% of net  sales  during  any year in the
three-year  period  ended  December  31,  1999.  See  Note  17 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, 1999, SABI and its subsidiaries had
219 full-time employees, including 10 in Canada and five 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),  ranging from a basic
knife  with a  suggested  retail  price of $10 to the  highest  priced  model at
approximately $70 as well as a SwissChamp Deluxe SOS kit with a suggested retail
price of  approximately  $160. SABI also sells  multi-function  lockblade knives
designed  for the  hunting  and  outdoor  market.  The  Company  also offers the
SwissCard , a credit card shaped, ten-function instrument, and the SwissTool , a
multi-tool  with 23 features,  including full size pliers.  In 1999, the Company
added to its product  line, a collection  of  Victorinox  Lifestyle  Tools;  the
CyberTool, GolfTool, AutoTool and SportRatchetTool. These tools are designed for
use in specific activities.

     SABI's line of Swiss Army Brand  products  includes 25 models of Swiss Army
Brand  Watches with over 125 SKUs ranging from the Active  Collection,  starting
out a suggested retail price of $85, to the Professional Collection,  which tops
out at a  suggested  retail  price of  $1,395.  SABI's  line of Swiss Army Brand
Sunglasses includes four models with suggested retail prices ranging from $60 to
$80. In addition,  SABI's line of Swiss Army Brand writing instruments  includes
six SKUs at a suggested  retail price of $95. SABI currently  obtains a majority
of its  Swiss  Army  Brand  Watches  from a  single  Swiss  supplier,  which  is
responsible for the final assembly of watch  components  manufactured by several
manufacturers.  The Company believes that alternate suppliers would be available
if  necessary  and that the loss of its  current  supplier  of Swiss  Army Brand
Watches would not have a material adverse effect on the Company's business.

     The Company also sells  professional  cutlery  products,  made of stainless
steel,  primarily  manufactured  by Victorinox.  Although the majority of SABI's
professional cutlery products are marketed under the trademarks  "Forschner" and
"R.H.  Forschner," the Company also has a private label  business.  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 its
share of all professional cutlery, foreign and domestic, sold in this country is
second  to the  dominant  seller of such  products.  SABI  believes  that it has
achieved and  maintained its market share due to the quality of its products and
its merchandising efforts.

     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,  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.





                                        3

<PAGE>


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

     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 multiblade knives 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"),  an Untied  States  based  company,  reflecting  a prior  informal
arrangement  between the two  companies.  Under the agreement TRG is to develop,
manufacture and market a line of Travel Gear under the Victorinox  trademark and
logo in the United States.  The  collection,  including  luggage,  backpacks and
small  leather  goods  (wallets,  PDA  covers,  etc.)  was  launched  to  select
department  store  and  specialty  retailers  in the late  1999.  The  marks are
sublicensed  to TRG by the  Company  on a royalty  basis  pursuant  to a license
agreement between the Company and Victorinox,  granting the Company the right to
utilize and  sublicense  the  Victorinox  trademarks,  in  conjunction  with the
development and international marketing of a collection of Travel Gear.

                              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.  See  Item 3 for  discussion  of  legal
proceedings between SABI and Precise.

     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.

     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.


                                        4

<PAGE>

     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 is actively  considering  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 these  additional  markets,  or if
entered into, that such activities will be profitable.

     If  the  Company's   efforts  to  protect  its   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.

                         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 and in preventing the use of "Swiss
Army" with respect to multi-blade  pocketknives,  multi-tools and other products
which are not Swiss products.

     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
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.


                                       5
<PAGE>


     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 equal to 3% of net sales.  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  equal  to 3% of net  sales,  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 workmanship  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 Agreements
                              ---------------------
     All of SABI's products,  except for the Bear MGC products, are manufactured
by independent suppliers.  SABI's principal supplier of pocketknives and cutlery
is  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 along with another Swiss manufacturer.

     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:

          o.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").

          o.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  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.

          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
     1998,  Victorinox agreed to reduce the minimum purchase  requirements.  The
     Company met the reduced minimum purchase requirements in years 1996 through
     1998. In 1999, Victorinox met the minumum purchase requirement as set forth
     in the U.S. Distribution Agreement.



                                        6
<PAGE>



          o.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.

          o.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 and a 3% discount on purchases of cutlery. 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.

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

          o.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"),  a corporate  stockholder  of SABI that is
controlled by Louis Marx, Jr., a Director of SABI, in exchange for shares of the
common stock of that corporation.

                                   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
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,  paid in cash, to acquire 190,477 Series B Preferred Units of Hudson
River. SABI's interest in Hudson River currently  represents,  in the aggregate,
approximately  9.6% of the  equity of Hudson  River.  Hudson  River is a private
equity firm specializing in middle market  acquisitions,  recapitalizations  and
expansion capital investments.  The preferred units of Hudson River held by SABI
carry a preference on liquidation equal to their cost and, in certain instances,
are entitled to an annual preferred return.




                                        7

<PAGE>


     In 1996,  Hudson  River  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.

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

     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) are held by Brae
Capital.  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.  Pursuant  to an  agreement  between  Hudson  River and Brae,  if
certain  conditions  are met,  Brae is required to purchase from Hudson River at
Hudson  River's cost 10%,  and may  purchase up to 20%, of the "equity  portion"
(defined as the common and warrant portion, or the preferred and warrant portion
if no common is purchased  provided that the preferred portion is participating)
of each investment  made by Hudson River.  Brae may allocate all or a portion of
the  securities to be acquired  pursuant to such  agreement  among the officers,
directors,  employees,  consultants and common equityholders of Hudson River and
such other  persons  who may be in a position  to benefit  Hudson  River in such
proportions as Brae shall determine.  Brae is party to a similar  agreement with
Victory Ventures.

     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 Hudson River (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 Hudson River 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 Hudson River.  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 Hudson River and Victory  Ventures.
Mr.  Robert S.  Prather,  Jr., a director of SABI,  also serves as a director of
Victory Ventures, LLC.

                     St. John Knits, Inc. License Agreement
                     --------------------------------------

     On May 15, 1997,  SABI entered into an agreement with St. John Knits,  Inc.
("St. John") providing for the grant of an exclusive license, subject to certain
terms and conditions, to SABI to market watches bearing the St. John  trademark.
St.  John is a leading  designer,  manufacturer  and  marketer  of fine  woman's
apparel.  SABI  introduced the St. John  Timepiece  Collection in November 1998.
SABI  discontinued  the sale of the St. John  Timepiece  Collection in the third
quarter of 1999.





                                        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.

     In addition,  SABI leases  approximately 7.4 acres in Shelton,  Connecticut
upon which the landlord has  constructed a 85,000 square foot building that SABI
uses as a facility for warehousing,  distribution,  imprinting and assembly. The
lease  commenced  in June 1991 and has a term of ten  years,  subject to renewal
options.  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 expired in December  1997. The Company has
extended the term on this lease until  December 31, 2000.  Also,  in 1996,  SABI
entered into a four-year lease for 7,000 square feet of space in a 30,000 square
foot building in Bienne,  Switzerland  for use as a  distribution  center.  This
lease has been extended until January 2001.

     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.

     On  July  14,  1997,  the  Company  filed  with  the  American  Arbitration
Association in New York, New York a demand for arbitration  against Precise.  In
the demand for  arbitration,  the Company  charged that Precise had violated the
license  agreement  dated  June 30,  1992  between  Precise  and the  Company by
utilizing  the trademark  Swiss Army in ways  prohibited  by the  agreement.  In
response, Precise alleged certain counterclaims.  These claims and counterclaims
between the Company and Precise were  dismissed  with  prejudice on December 31,
1999 pursuant to the terms of a November 7, 1998 stipulation since neither party
exercised its right to continue the proceeding.

     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 1998 were as follows:
<TABLE>
<CAPTION>

                             1998                   1999               2000*
                      High       Low          High      Low       High     Low
<S>                <C>        <C>          <C>        <C>       <C>        <C>

First Quarter       $12 1/16   $ 9 3/16     $10 1/8    $8 5/8    $8 1/2     $6

Second Quarter       12 1/2     10 1/4       10         7 5/8

Third Quarter        11 1/4      8 3/4       11 1/2     7 9/32

Fourth Quarter       10 3/8      8 7/8        9 1/2     6 5/8
</TABLE>


*Through March 20, 2000.

     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,  2000,  shares  of  Common  Stock  were held of record by 299
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,  which expires on June 30, 2001, 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, 1999
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:                    1999          1998       1997(1)      1996(2)     1995
                                   ----          ----       -------      -------     ----
<S>                             <C>           <C>         <C>          <C>        <C>
Net sales                        $ 129,452     $127,851    $118,744     $130,030   $126,695
Gross profit                        50,846       49,982      42,724       40,836     44,264
Selling, general and
 administrative expenses            46,305       49,005      49,639       46,241     40,265
Operating income (loss)              4,541          977      (6,915)      (5,405)     3,999
Gain (loss) on sale (write-down)
 of investments                     (2,280)       1,651         398       (2,382)     1,771
Other income (expense), net           (610)          55         116          179       (134)
Income (loss) before income taxes    1,651        2,683      (6,401)      (7,608)     5,636
Income tax provision (benefit)       1,531        1,220      (2,376)      (2,343)     2,523
                                  ---------     --------    --------     --------   --------
Net income (loss)                 $    120       $1,463     ($4,025)     ($5,265)    $3,113
                                  =========     ========    ========     ========   ========
Earnings per share:
     Basic                          $ 0.02       $ 0.18      ($0.49)      ($0.64)     $0.38
     Diluted                        $ 0.01       $ 0.18      ($0.49)      ($0.64)     $0.38
Balance Sheet Data:
Current assets                   $  70,540     $ 70,383     $64,144      $70,933    $74,355
Total assets                       107,604      100,404      94,051       98,643    101,230
Current liabilities                 19,169       25,210      18,343       18,787     16,291
Long-term debt                      11,362          -           -            -          -
Stockholders' equity                76,380       74,598      75,708       79,856     84,939
Cash dividends per common share  $     -       $    -       $   -        $   -      $   -
Weighted average number of shares outstanding:
      Basic                          7,862        8,138       8,209        8,202      8,185
      Diluted                        8,021        8,236       8,209        8,202      8,236
</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).
See Note 16 to the Company's Consolidated Financial Statements.

     (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.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
------  -----------------------------------------------------------------------
        of Operations
        -------------
                           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 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 included herein.

                                       11
<PAGE>


Results of Operations

     The  financial  results  for 1999  and 1997  were  negatively  impacted  by
investment  write-downs,  inventory write-offs and restructuring costs. The 1999
results  included a $2.7 million  ($2.4  million  after-tax)  write-down  of the
Company's  investment  in Hudson River Capital LLC. The 1997  financial  results
included a $1.3 million inventory write-off of discontinued  inventory (included
in cost of sales) and $0.8 million of restructuring  costs (included in selling,
general  and  administrative  expenses).  These  restructuring  costs  primarily
consisted of severance and related expenses.

     The  following  table shows,  as a percentage  of net sales,  the Company's
Consolidated  Statements of Operations for each of the three years in the period
ended December 31, 1999:
<TABLE>
<CAPTION>

                                         Year Ended December 31,
                                  1999            1998            1997
                                  ----            ----            ----
<S>                             <C>             <C>             <C>

Net sales                        100.0%          100.0%          100.0%
Cost of sales                     60.7            60.9            64.0
                                 -----           -----           -----
Gross profit                      39.3            39.1            36.0
Selling, general and
  administrative expense          35.8            38.3            41.8
                                 -----           -----           -----
Operating income (loss)            3.5             0.8            (5.8)
Interest income (expense), net    (0.5)             -               .1
Gain (loss) on sale (write-down)
  of investments                  (1.8)            1.3              .3
Other income, net                   -               -               -
                                  -----           -----           -----
Income (loss) before
  income taxes                     1.2             2.1            (5.4)
Income tax provision (benefit)     1.1             1.0            (2.0)
                                  -----           -----           -----
Net income (loss)                  0.1%            1.1%           (3.4%)
                                  =====           =====           =====
</TABLE>

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

     Net 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  related to Bear Cutlery,  Inc.,  an increase in  sales of new  Victorinox
products,  primarily the Victorinox CyberTool,  SwissCard  and AutoTool,  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.

                                       12
<PAGE>


     Gross profit for the year ended December 31, 1999 was $50.8  million,  1.7%
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,  partially offset by unfavorable  product mix. The Company's gross
profit margin is a function of both product mix and Swiss franc exchange  rates.
Since the Company imports  virtually all of its products from  Switzerland,  its
costs are affected by both the spot rate of exchange and by its foreign currency
hedging program. 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 first 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,  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 35.8% in 1999 from 38.3% in 1998.

     As a result of the above,  the Company  recorded  operating  income of $4.5
million for the year ended December 31, 1999 compared to $1.0 million in 1998.

     Interest  expense of  $748,000  for the year ended  December  31,  1999 was
$615,000 higher than interest  expense in 1998 due to the debt incurred  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  lower than  interest  income in 1998,  due to decreased  cash balances
during 1999 compared to 1998.

     Gain (loss) on sale of  investments  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 Hudson River  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 Hudson River  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 sold its
investment in SWWT, Inc. and realized a gain of $94,000.




                                       13
<PAGE>


     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 expense (benefit) 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 on the capital loss  write-down of the Hudson River Capital
LLC investment.

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

Comparison of the Years Ended December 31, 1998 and December 31, 1997
---------------------------------------------------------------------

     Net sales for the year ended December 31, 1998 were $127.9 million compared
with $118.7  million for the same  period in 1997,  representing  an increase of
$9.1 million or 7.7%.  The sales  increase was due primarily to a 14.2% increase
in sales of  Victorinox   products,  primarily the  Victorinox   SwissTool   and
SwissCard,   and an increase in sales of Swiss Army  Brand   Sunglasses  and the
introduction of watches marketed under the St. John Timepiece Collection.

     Gross profit for the year ended December 31, 1998 was $50.0 million,  17.0%
higher  than in 1997.  The  increase  in gross  profit was  primarily  due to an
increase in net sales,  an increase in the value of the U.S.  dollar  versus the
Swiss franc, and a $1.3 million inventory write-off in 1997.

     Selling,  general and  administrative  expenses for the year ended December
31,  1998 were $49.0  million,  $0.6  million  or 1.3%  lower than in 1997.  The
expense decrease resulted primarily from decreased advertising expense offset by
increased expenditures in the areas of product development and merchandising and
promotion.  As a percentage of net sales,  selling,  general and  administrative
expenses decreased to 38.3% in 1998 from 41.8% in 1997.

     As a result of the above,  the Company  recorded  operating  income of $1.0
million for the year ended  December 31, 1998  compared to an operating  loss of
$6.9 million in 1997.

     Interest  expense of  $133,000  for the year ended  December  31,  1998 was
$93,000 higher than interest  expense in 1997, due to higher  borrowings in 1998
related to the Company's repurchase of $3.1 million of its common stock.

     Interest  income of  $188,000  for the year  ended  December  31,  1998 was
$33,000  higher than  interest  income in 1997,  due to increased  invested cash
balances during the first half of 1998 compared to 1997.

     The gain on sale of  investments  for the year ended  December 31, 1998 was
$1.7 million  compared to $398,000 in 1997. In 1998, the Company recorded a $1.5
million gain due to a cash and stock distribution from the Company's  investment
in Hudson River  Capital LLC. In addition,  the Company  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 sold its investment in SWWT,  Inc. and realized a gain of $94,000.  The gain
in 1997 was due to a  distribution  from the  Company's  investment  in  Victory
Ventures  LLC and a  $112,000  recovery  of a  privately  held  entity  that was
written-off in 1996.




                                       14
<PAGE>


     As a result of the above, the income before income taxes for the year ended
December 31, 1998 was $2.7 million compared to $6.4 million loss in 1997.

     Income tax expense (benefit) was provided at an effective rate of 45.5% for
the year ended  December 31, 1998 compared to 37.1% for the year ended  December
31,  1997.  The change in the  effective  tax rate was due to foreign  and state
income taxes.

     As a result of the above,  the net income for the year ended  December  31,
1998 was $1.5 million ($0.18 per share) compared to $4.0 million loss ($0.49 per
share) in 1997.

Liquidity and Capital Resources
-------------------------------

     As of December 31, 1999,  the Company had working  capital of $51.4 million
compared  with $45.2  million as of  December  31,  1998,  an  increase  of $6.2
million.  Significant sources of working capital included proceeds from the sale
of long-term  investments of $1.9 million and the conversion of short-term  debt
to long-term debt.  Also,  working  capital  increased due to the acquisition of
Bear. Significant uses of working capital consisted of additions to other assets
of $3.8 million,  capital expenditures of $1.7 million and repurchases of common
stock of $0.5 million.  The Company  currently has no material  commitments  for
capital expenditures.

     Cash provided from operating  activities was approximately  $4.9 million in
the year ended  December  31, 1999  compared  to $0.2  million in the year ended
December 31, 1998. The change primarily resulted from a decrease in inventory in
1999 compared to an increase in 1998, a smaller increase in accounts  receivable
in 1999 compared to 1998, a decrease in prepaid and other in 1999 compared to an
increase in 1998 and an increase in accrued  liabilities  in 1999  compared to a
decrease  in 1998,  offset in part by a  decrease  in  accounts  payable in 1999
compared to an increase in 1998.

     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, 1999, the Company had $12,237,000 of outstanding  borrowings  under
its bank  agreement.  The Company  currently  has a $23.0  million  credit line,
consisting  of a $16.0  million  revolving  credit  line and a $7.0 million term
loan. The revolving  credit line expires in June 2001. 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.

Year 2000
---------

     The Company  conducted a review of its computer  systems and  operations to
identify  those areas that could have been affected by the "Year 2000" issue and
developed  an  implementation  plan to  minimize  disruption.  Based  upon  that
assessment,  certain  computer  systems were vulnerable to the Year 2000 issues.
The Company modified  certain software and hardware,  and made investment in new
software and hardware,  which successfully mitigated the effect of the Year 2000
problem as it related to its own  computer  systems.  The  Company's  operations
incurred no disruption of their ability to conduct business.

     The costs  associated  with the Year  2000  compliance  were  approximately
$100,000. As of December 31, 1999, all the costs have been incurred.

     The Company also  communicated  with its significant  suppliers and service
providers to ensure that those parties had appropriate  plans to manage the Year
2000 issue as it relates to the Company's operations. The Company experienced no
significant problems with its key suppliers, service providers or customers as a
result of the Year 2000 issue.

                                       15
<PAGE>

Recently Issued Accounting Standards
------------------------------------

     In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133 "Accounting for Derivative  Instruments  and Hedging  Activities."  This
statement  standardizes  the accounting and reporting  standards for derivatives
and hedging  activities and is effective for fiscal years  beginning  after June
15, 2000. The Company will adopt this statement  effective  January 1, 2001. The
Company is  currently  evaluating  the  impact of SFAS No. 133 on the  Company's
financial position and results of 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
and recognized in cost of sales when the related  inventory is sold. At December
31, 1999,  the Company  entered into foreign  currency  contracts and options to
purchase  approximately  107,000,000 Swiss francs in 2000 and 2001 at a weighted
average rate $1.509 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, 1999, 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.

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. Disagreements on Accounting and Financial Disclosure
------  ----------------------------------------------------

        None.

                                    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 18, 2000.






                                       16
<PAGE>



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

     Incorporated  herein by  reference  to the  information  under the headings
"Compensation  of  Directors",  "Compensation  Committee  Interlocks and Insider
Participation",  "Compensation of Executive Officers",  "Options" and "Report of
the  Compensation  Committee 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 18, 2000.

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

     Incorporated  herein by  reference  to the  information  under the headings
"Principal Shareholders" and "Security Ownership of Management" in the Company's
Proxy  Statement with respect to the Company's  Annual  Meeting of  Stockholders
scheduled to be held on May 18, 2000.

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  Stockholder's
scheduled to be held May 18, 2000.
































                                       17

<PAGE>


                                     PART IV
                                     -------
<TABLE>
<CAPTION>


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

(a)      Documents filed as part of this report:
                                                                        Page(s)

(1)
         Financial Statements:

         Report of Independent Public Accountants                           F-1

         Consolidated Balance Sheets - December 31, 1999 and 1998    F-2 to F-3

         Consolidated Statements of Operations for the Years Ended
          December 31, 1999, 1998 and 1997                                  F-4

         Consolidated Statements of Stockholders' Equity and
          Comprehensive Income for the Years
          Ended December 31, 1999, 1998 and 1997                            F-5

         Consolidated Statements of Cash Flows for the Years
          Ended December 31, 1999, 1998 and 1997                            F-6

         Notes to Consolidated Financial Statements                 F-7 to F-23
(2)
         Schedule --

         Schedule II -- Valuation and Qualifying Accounts
          for the Years Ended December 31, 1999, 1998 and 1997             F-24
</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, 1999
and 1998, 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,  1999.  These  financial  statements  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,  1999  and  1998,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December 31, 1999, 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
  February 18, 2000







                                       F-1
<PAGE>

<TABLE>
<CAPTION>

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

                                     ASSETS
                                                            December 31,
                                                      1999              1998
                                                      ----              ----
<S>                                                <C>                <C>

Current assets
   Cash and cash equivalents                        $1,302             $1,309

   Accounts receivable, less
    allowance for doubtful accounts
    of  $1,060 and $975, respectively               33,718             31,321

   Inventories                                      30,227             28,890

   Deferred income taxes                             2,235              2,205

   Prepaid and other                                 3,058              6,658
                                                    ------            -------
      Total current assets                          70,540             70,383
                                                    ------            -------

Deferred income taxes                                1,474              1,069


Property, plant and equipment, net                   4,856              3,735


Investments                                          4,476              9,467


Intangible assets, net                              11,548              2,875


Other assets, net                                   14,710             12,875
                                                    ------             ------
Total assets                                      $107,604           $100,404
                                                  ========           ========
</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,
<S>                                                   <C>              <C>
Total Liabilities                                      1999             1998

Current liabilities

   Current portion of long-term debt                   $875            $5,140

   Accounts payable                                   7,732            12,439
   Accrued liabilities                               10,562             7,631
                                                     ------            ------
 Total current liabilities                           19,169            25,210
                                                     ------            ------
Long-term liabilities

   Long-term debt                                    11,362               -

   Other                                                693               596
                                                     ------            ------
                                                     31,224            25,806

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 - 8,866,218
      and 8,858,218, respectively                       886              885

   Additional paid-in capital                        49,137           46,472

   Accumulated other comprehensive income (loss)       (401)             177

   Retained earnings                                 35,576           35,456
                                                     ------           ------
                                                     85,198           82,990

   Less: Treasury stock; 1,014,108 and
958,108 shares,  respectively                        (8,711)          (8,194)

         Deferred compensation                         (107)            (198)
                                                     ------           ------
   Total stockholders' equity                        76,380           74,598
                                                     ------           ------

Total liabilities and stockholders' equity       $  107,604         $100,404
                                                    =======          =======
</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,
                                                 -----------------------
                                      1999              1998             1997
                                      ----              ----             ----
<S>                                <C>              <C>               <C>

Net sales                           $129,452         $127,851          $118,744
Cost of sales                         78,606           77,869            76,020
                                    --------         --------          --------
Gross profit                          50,846           49,982            42,724
Selling, general, administrative
  expenses                            46,305           49,005            49,639
                                    --------         --------          --------
Operating income (loss)                4,541              977            (6,915)
                                    --------         --------          --------
Interest expense                        (748)            (133)              (40)
Interest income                           44              188               155
Gain (loss) on sale (write-down)
  of investments                      (2,280)           1,651               398
Other income, net                         94              -                   1
                                    --------         --------          --------
Total interest and other
  income (expense), net               (2,890)           1,706               514
                                    --------         --------          --------
Income (loss) before income taxes      1,651            2,683            (6,401)
Income tax provision (benefit)         1,531            1,220            (2,376)
                                    --------         --------          --------
Net income (loss)                      $ 120           $1,463           ($4,025)
                                    ========         ========          ========
Earnings per share:
  Basic                                $0.02            $0.18            ($0.49)
                                    ========         ========          ========
  Diluted                              $0.01            $0.18            ($0.49)
                                    ========         ========          ========
Weighted average number of shares
  outstanding:
  Basic                                7,862            8,138             8,209
                                    ========         ========          ========
  Diluted                              8,021            8,236             8,209
                                    ========         ========          ========
</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, 1999, 1998 AND 1997
                        (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)
<S>                      <C>           <C>             <C>                <C>             <C>            <C>             <C>

BALANCE
December 31, 1996         8,822,968     $882            $46,182           ($113)           $38,018       ($5,113)

Comprehensive Loss:
   Net loss                   -           -                 -                -              (4,025)          -           ($4,025)
   Foreign currency
     translation adjustment   -           -                 -              (127)               -             -              (127)
                                                                                                                          -------
Comprehensive Loss                                                                                                       ($4,152)
                                                                                                                          =======
Stock options exercised         750       -                   4              -                 -             -
                          ----------    -----            -------           -----           --------       -------
BALANCE
December 31, 1997         8,823,718      882             46,186            (240)            33,993        (5,113)

Comprehensive Income:
   Net income                 -           -                 -                -               1,463           -            $1,463
   Unrealized gain on
      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)
                          ==========   ======            =======          =====            ========      =======
</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,
                                                     -----------------------
                                                 1999            1998            1997
                                                 ----            ----            ----
<S>                                            <C>             <C>             <C>


Cash flows from operating activities:
   Net income (loss)                            $ 120           $1,463         ($4,025)
   Adjustments to reconcile net income (loss)
     to cash provided from operating activities:
      Depreciation and amortization             3,230            2,834           2,709
      Stock compensation expense                   73               21             -
      Deferred income taxes                      (435)           2,652          (1,034)
      (Gain) loss on (sale) write-down
        of investments                          2,280           (1,651)           (398)
                                               -------          -------        --------
                                                5,268            5,319          (2,748)

Changes in other current assets and liabilities:
   Accounts receivable                         (1,206)          (3,167)          4,745
   Inventories                                    383           (1,433)          2,204
   Prepaid and other                            3,652           (2,814)           (967)
   Accounts payable                            (5,030)           3,937          (2,462)
   Accrued liabilities                          1,872           (1,661)          1,880
                                               -------          -------        --------
    Net cash provided from operating
      activities                                4,939              181           2,652
                                               -------          -------        --------
Cash flows from investing activities:
   Acquisition of Bear MGC Cutlery, Inc.,
     net of cash acquired                      (7,982)             -               -
   Capital expenditures                        (1,698)          (1,302)         (1,056)
   Additions to other assets                   (3,776)          (2,701)         (3,070)
   Proceeds from sales of investments           1,972            1,949             550
                                               -------         --------        --------
   Net cash used for investing activities     (11,484)          (2,054)         (3,576)

Cash flows from financing activities:
   Borrowings under bank agreements            59,440           32,914           1,930
   Repayments under bank agreements           (52,343)         (27,774)         (1,930)
   Repurchase of common stock                    (517)          (3,081)            -
   Proceeds from exercise of stock
     options and warrants                          54               70               4
                                              --------         --------        --------
   Net cash provided from financing activities  6,634            2,129               4
                                              --------         --------        --------

 Effect of exchange rate changes on cash          (96)             (25)            (69)
 Net increase (decrease) in cash and cash
    equivalents                                    (7)             231            (989)
   Cash and cash equivalents, beginning
    of period                                   1,309            1,078           2,067
                                              --------         --------        --------
   Cash and cash equivalents, end of period   $ 1,302          $ 1,309         $ 1,078
                                              ========         ========        ========

Cash paid during the period:
   Interest                                  $    766         $    102         $    34
                                              ========         ========        ========
   Income taxes                              $    618         $  1,752         $   321
                                              ========         ========        ========
</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,
          Victorinox Cutlery and Victorinox Watches. 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,  in 1999, the  Company began  manufacture and
          distributing Bear MGC  knives and multi-tools. Swiss Army has only one
          business segment - the importation,  manufacture   and distribution of
          cutlery, knives, multi-tools,  watches and other consumer products. No
          customer  accounted  for  greater  than 10% of net sales in any of the
          three years ended December 31, 1999.

          In April 1999, the Company  purchased  substantially all of the assets
          and assumed  certain  liabilities  of Bear MGC  Cutlery,  Inc.,  which
          manufactured and distributed Bear MGC knives and multi-tools. 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   wholly-owned   subsidiaries.   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.

         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 (loss).




                                      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, 1999 and 1998, the amount at which inventories are stated
          would  have  been  $3,372,000  and  $3,076,000  higher,  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,
                                                          1999          1998
                                                             (in thousands)
                                                          ------------------
                     <S>                                 <C>          <C>
                      Leasehold improvements              $1,133       $1,115
                      Equipment                            8,485        5,966
                      Furniture and fixtures               1,458        1,290
                                                          ------       ------
                                                          11,076        8,371
                      Accumulated depreciation            (6,220)      (4,636)
                                                          ------       ------
                                                          $4,856       $3,735
                                                          ======       ======
</TABLE>
          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
                           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, 1999, 1998, and 1997,  depreciation  expense of property,
          plant and  equipment  was  approximately  $1,594,000,  $1,300,000  and
          $1,260,000, respectively.

                                       F-8
<PAGE>



         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, 1999.

         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  between  cost and fair value are  reflected as a
          component of stockholders'  equity.  Any write-down of the cost due to
          impairment 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.  No common  share
          equivalents have been included in the year ended December 31, 1997, as
          they would have had an anti-dilutive  effect. 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.

         Recent Accounting Pronouncements
          In June 1998, the Financial Accounting Standards Board ("FASB") issued
          SFAS No.  133  "Accounting  for  Derivative  Instruments  and  Hedging
          Activities." This statement  standardizes the accounting and reporting
          standards for derivatives and hedging  activities and is effective for
          fiscal years  beginning  after June 15,  2000.  The Company will adopt
          this  statement  effective  January 1, 2001.  The Company is currently
          evaluating  the  impact  of SFAS No.  133 on the  Company's  financial
          position and results of operations.

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




                                       F-9
<PAGE>

<TABLE>
<CAPTION>

(3)     INTANGIBLE ASSETS
              Intangible assets are comprised of the following:
                                                            December 31,
                                                         1999         1998
                                                         ----         ----
             <S>                                      <C>          <C>

              Goodwill (A)                             $ 8,153      $   -
              Foreign distributon rights (B)             2,207        2,875
              Trademark rights (C)                       1,188          -
                                                       --------     --------
                                                       $11,548       $2,875
                                                       ========     ========
</TABLE>


          (A)  Represents  the goodwill  related to the  acquisition of 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  Cutlery
          Company  ("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, 1999,  1998,  and 1997,  amortization
          expense was $916,000, $674 000 and $674,000, respectively.

(4)     ACQUISTION
          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  "Agreement")  with Bear MGC Cutlery,  Inc.  ("Bear MGC") and the
          stockholders (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 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 its 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.  Pursuant to the  Agreement,
          Swiss Army will also pay an  additional  $2,130,000  ( $1.0 million in
          cash and $1.13  million in common  stock of Swiss Army)  because  Bear
          attained  certain  earnings  targets for the year ending  December 31,
          1999.  The  cash  amount  is to be paid in  April  2000  and has  been
          included in accrued  liabilities  and the common stock amount has been
          included in additional paid-in capital as of December 31,1999.

                                      F-10
<PAGE>
          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 Bear 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
          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 preliminary allocation (in thousands):
<TABLE>
                  <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, 1999 and 1998, respectively,  had the acquisition of Bear
          occurred  at the  beginning  of each  of the  periods  presented,  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,
                                                      1999              1998
                                                     (Unaudited, in thousands
                                                       except per share data)
                  <S>                               <C>               <C>

                   Net sales                         $131,398          $134,743
                   Net income                             261             1,802
                   Earnings per share - basic
                     and diluted                         0.03              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 a
          principal supplier,  Victorinox,  a Swiss company.  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 the  years  1998 and 1997,  Victorinox  agreed to
          reduce the minimum purchase requirements.  The Company met the reduced
          minimum  purchase  requirements in 1998 and 1997. In 1999, the Company
          met the minimum purchase  requirement as set forth in the distribution
          agreement.   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-11
<PAGE>

          Foreign  distribution  rights with  Victorinox  are  comprised  of the
          following:
<TABLE>
<CAPTION>

                                                              December 31,
                                                          1999            1998
                                                          ----            ----
                                                             (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                  (4,537)         (3,869)
                                                         -------        --------
                                                         $2,207          $2,875
                                                         =======        ========
</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 are for a fixed
          seven-year  term  automatically   renewable  in  successive  five-year
          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 does not have any manufacturing facilities, except for the
          facility that manufacturers  Bear MGC products,  and imports virtually
          all of its products from independent suppliers. 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.  Although
          the Company has exclusive distributorship  agreements with Victorinox,
          its principal supplier, it does not have such contractual arrangements
          with its other suppliers.  The 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-12
<PAGE>


          Although  approximately  72%, or  $19,700,000,  of total  payments for
          watches and watch parts in 1999 were made to a single watch  supplier,
          which is  responsible  for the  final  assembly  of  watch  components
          manufactured  by several  manufacturers,  the  Company  believes  that
          alternate   watch   suppliers   would  be  available,   if  necessary.
          Furthermore,  the Company  believes  that the loss of this supplier of
          Swiss Army Brand Watches would not have a material  adverse  effect on
          the Company's business.

(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 years ended
          December 31, 1998 and 1997,  Swiss Army  incurred fees of $174,000 and
          $629,000, respectively, relating to these services.

          Four of Swiss  Army's  directors  serve as  directors  of 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 that is a stockholder of Swiss Army
          and in which a Swiss Army  director  and a principal  supplier  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,
          1999 and 1998 were approximately $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,

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

               Preferred units of Hudson
                  River Capital LLC (A)                   $3,613        $6,313
               Preferred units of
                  Victory Ventures LLC (B)                   851           851
              Common stock of Iron Mountain, Inc. (C)         -          2,273
              Common stock of Chaparral Resources, Inc. (D)   12            30
                                                          -------       -------
                  Total investments                       $4,476        $9,467
                                                          =======       =======
</TABLE>



                                      F-13
<PAGE>


          (A) Hudson River  Capital LLC ("Hudson  River"),  is a private  equity
          firm specializing in middle market acquisitions, re-capitalization and
          expansion   capital   investments.   In  January  1998,  Hudson  River
          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
          to two stock  split),  valued at  $1,481,000,  of Iron  Mountain  Inc.
          ("Iron Mountain"). In 1998, the Company recognized a $1.5 million gain
          on this cash and common stock  distribution  which is included in gain
          on sale of investments in the accompanying  financial  statements.  In
          1999, the Company recorded a $2.7 million write-down of its investment
          in Hudson  River due to the other  than  temporary  impairment  in the
          value of the  investment.  At December 31, 1999 and 1998,  the Company
          owned  890,776  preferred  units of  Hudson  River  which  represented
          approximately  9.6% of the  outstanding  equity of Hudson  River.  The
          preferred  units  in  Hudson  River  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.

          (B) Victory Ventures LLC ("Victory  Ventures")is a private equity firm
          specializing in small market venture capital investments. In 1997, the
          Company  received  a  cash   distribution  from  Victory  Ventures  of
          $438,000,  of  which  $286,000  was  recorded  as a gain  and has been
          included in gain (loss) on sale (write-down) of investments.  In 1997,
          Victory  Ventures   distributed  to  its  members  its  investment  in
          Chaparral  Resources,   Inc.   ("Chaparral").   See  (D)  for  further
          discussion.  In 1998, Victory distributed 3,053 shares of common stock
          of Micromuse  and 4,178 shares of common stock of FaxSav.  The Company
          liquidated   these   investments  in  1998  and  realized  a  gain  of
          approximately  $57,000 on these investments.  At December 31, 1999 and
          1998, the Company owned 890,776  preferred  units of Victory  Ventures
          which  represented  approximately  1.2%  and  1.3% 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.

          (C) Iron  Mountain,  a  publicly  traded  company,  is a full  service
          provider of records  management and related services.  At December 31,
          1998, the Company owned 63,019 shares of Iron Mountain stock valued at
          $36.06 per share.  The Company  accounted for this  investment at fair
          value,  with  changes  between  cost and  fair  value  reflected  as a
          component of stockholders'  equity.  In January 1999, the Company sold
          its  entire  investment  in Iron  Mountain  and  recognized  a gain of
          approximately $420,000.

          (D) Chaparral,  a publicly traded  company,  is an independent oil and
          gas  exploration  and  production  company.  At December 31, 1999, the
          Company owned 1,461 shares  (adjusted for a reverse stock split of one
          share in exchange for sixty) of Chapparal common stock valued at $7.88
          per share.  The Company  accounts for this  investment  at fair value,
          with changes  between cost and fair value  reflected as a component of
          stockholders' equity.






                                      F-14

<PAGE>


(8)     OTHER ASSETS
              Other assets are comprised of the following :
<TABLE>
<CAPTION>

                                               December 31,        Amortization
                                            1999        1998          Period
                                            ----        ----       ------------
                                              (in thousands)
      <S>                               <C>          <C>             <C>
       Cash surrender value of
           life insurance (see Note 15)  $14,111      $12,044           N/A

       Other                               3,085        2,808         1-5 years
                                         --------     --------
       Accumulated amortization           (2,486)      (1,977)
                                         --------     --------
                                         $14,710      $12,875
                                         ========     ========
</TABLE>

          For the years ended  December  31, 1999,  1998 and 1997,  amortization
          expense related to other assets was approximately $720,000,  $860,000,
          and $775,000, respectively.

(9)     ACCRUED LIABILITIES
              Accrued liabilities are comprised of the following:
<TABLE>
<CAPTION>
                                                            December 31,
                                                       1999              1998
                                                       ----              ----
                                                           (in thousands)
               <S>                                   <C>               <C>
                Sales, marketing and promotional      $3,951            $3,106
                Payroll related                        1,353             1,515
                Acquisition payment - see Note 4       1,000               -
                Other                                  4,258             3,010
                                                      -------          --------
                                                     $10,562            $7,631
                                                     ========          ========
</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, 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 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, interest rate coverage
          and current  ratio,  and to  continue  the  exclusive  distributorship
          arrangement with  Victorinox.  At December 31, 1999, 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.

          The Company  has  entered  into an  interest  rate cap   agreement  to
          provide  interest  rate  protection  on  $5.0  million  of debt to the
          maximum interest rate of 7.0% (before  applicable  margin) expiring in
          November 2004.





                                      F-15
<PAGE>



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

                            2000             $ 875
                            2001             6,185
                            2002               875
                            2003               875
                            2004             3,427
</TABLE>

(11)    INCOME TAXES
          The income tax provision  (benefit)  for the years ended  December 31,
          1999,  1998 and 1997,  consists of the following:
<TABLE>
<CAPTION>

                                                 Year Ended December 31,

                                           1999           1998            1997
                                           ----           ----            ----
                                                    (in thousands)
         <S>                             <C>            <C>            <C>
          Current
           Federal                        $1,681        ($1,662)       ($1,276)
           Foreign                           -              -             (280)
           State                             285            230            214
                                          ------         ------         -------
             Total current                 1,966         (1,432)        (1,342)
          Deferred
           Federal                          (600)         2,294           (700)
           State                             165            358           (334)
                                          ------         -------        -------
             Total deferred                 (435)         2,652         (1,034)
                                          ------         -------        -------
          Provision (benefit) for
           income taxes                   $1,531         $1,220        ($2,376)
                                          ======         =======        =======
</TABLE>

          The  significant  components  of the deferred tax asset as of December
          31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>                                                   1999           1998
                                                            ----           ----
                                                               (in thousands)
                   <S>                                     <C>            <C>

                    Sales and marketing reserves            $940           $888
                    Inventory related reserves               850            843
                    Depreciation and amortization            771            561
                    Loss carryforwards                     1,329            411
                    Accrued employee benefits                234            363
                    Other, net                               228            208
                                                           ------          -----
                                                           4,352          3,274
                    Valuation allowance                     (643)           -
                                                           ------         ------
                       Total                              $3,709         $3,274
                                                          =======        =======
</TABLE>


          A valuation  allowance of $643,000 has been recorded against a portion
          of the  Company's  deferred  tax assets  related to the  capital  loss
          write-down of the Company's investment in Hudson River.



                                      F-16
<PAGE>
          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 1999, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
                                               1999          1998          1997
                                               ----          ----          ----
       <S>                                    <C>           <C>          <C>

        Statutory federal income tax rate      34.0%         34.0%       (34.0%)
        State income taxes, net of
          federal income tax benefit           11.4           5.7         (0.8)
        Foreign taxes                          19.7           2.1         (4.0)
        Valuation allowance                    38.9            -            -
        Other                                 (11.3)          3.7          1.7
                                              ------         -----       ------
        Effective income tax rate              92.7%         45.5%       (37.1%)
                                              ======         =====       ======
</TABLE>


(12)    COMPREHENSIVE INCOME
          Accumulated other  comprehensive  income (loss) activity for the three
          years ended December 31, 1999 is as follows:
<TABLE>
<CAPTION>

                           Foreign Currency     Unrealized Gain (Loss)              Accumulated Other
                              Translation       On Marketable Securities       Comprehensive Income (Loss)
                           ----------------     ------------------------       ---------------------------
                                                      (In thousands)
     <S>                       <C>                    <C>                                 <C>

      January 1, 1997          ($ 113)                   $   -                            ($113)
      1997 activity             ( 127)                       -                             (127)
                               -------                   -------                          ------
      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)
                               =======                   =======                          ======
</TABLE>

(13)    EMPLOYEE BENEFITS
          Substantially   all   employees  of  the  Company  are  covered  by  a
          noncontributory  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 $405,000, $285,000, and $336,000, for the
          years ended December 31, 1999,  1998 and 1997,  respectively.  The net
          periodic  pension cost of Swiss Army's pension plan in 1999,  1998 and
          1997 includes the following components:
<TABLE>
<CAPTION>

                                                      1999       1998      1997
                                                      ----       ----      ----
                                                           (in thousands)
<S>                                                  <C>        <C>       <C>

Service cost - benefits earned during the period      $367       $286      $339
Interest cost on projected benefit obligation          182        166       189
Expected return on assets                             (141)      (143)     (171)
Amortization of net transition asset                   (14)       (14)      (14)
Amortization of unrecognized  prior service cost       (13)       (13)      (13)
Amortization of net loss                                24          3         6
                                                      -----      -----    ------
Net periodic pension cost                             $405       $285      $336
                                                      =====      =====    ======
</TABLE>


                                      F-17
<PAGE>

The  changes  in benefit  obligations  and plan  assets  and the  funded  status
reconciliation  as of December 31, 1999 and 1998 for Swiss  Army's  pension plan
are shown below:
<TABLE>
<CAPTION>

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

         Change in Benefit Obligation
           Benefit obligation, January 1                $2,742         $3,211
           Service cost                                    367            286
           Interest cost                                   182            166
           Actuarial (gain) loss                          (581)          (750)
           Benefits paid - expected                        (91)          (171)
                                                        -------        -------
           Benefit obligation, December 31              $2,619         $2,742
                                                        =======        =======
         Change in Plan Assets
           Fair value of plan assets, January 1         $1,726         $1,792
           Actual return on plan assets                     96            132
           Company contributions                           260            140
           Benefits paid - actual                         (653)          (338)
                                                        -------        -------
           Fair value of plan assets December 31        $1,429         $1,726
                                                        =======        =======
         Funded Status Reconciliation
           Funded status, December 31                  ($1,188)       ($1,016)
           Unrecognized (gains) losses, net                460            460
           Unrecognized prior service costs               (230)          (243)
           Unrecognized transition amount                  (42)           (56)
                                                        -------        -------
           Accrued pension cost, December 31           ($1,000)         ($855)
                                                        =======        =======
</TABLE>

          Rates used in determining the actuarial present value of the projected
          benefit obligation are as follows:
<TABLE>
<CAPTION>
                                                               December 31,
                                                            1999          1998
                                                            ----          ----
   <S>                                                     <C>           <C>

    Discount rate                                           7.00%         6.25%
    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
          1999, 1998 and 1997, the Company  incurred  expenses of  approximately
          $173,000, $161,000, and $175,000, respectively, related to this plan.

          The Company offers no other post retirement benefits.


                                      F-18
<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,  760,093  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, 1999,  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, 1999:
<TABLE>
<CAPTION>

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

        Outstanding at December 31, 1996      2,312,000        $  5.25 - $14.50

        Exercised                                  (750)       $  5.25
        Canceled                                (70,219)       $ 12.25 - $14.00
                                              ----------
        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
                                              ==========
</TABLE>

          Of  the  options  and  warrants  outstanding  at  December  31,  1999,
          2,006,750 are exercisable at a weighted average option price of $11.78
          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.

          The  weighted-average  fair value of the stock options granted in 1999
          and  1998  was  approximately  $3.53  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 30%;  expected  life of options of six years;
          dividend yield of 0%; and risk free interest rate of 5.26% in 1999 and
          4.91% in 1998, respectively.

                                      F-19
<PAGE>

          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, 1999, 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>
                                          1999          1998          1997
                                          ----          ----          ----
                                        (in thousands, except per share data)
 <S>                                     <C>          <C>           <C>

  Net income (loss)      As reported:     $120         $1,463       ($4,025)
                           Pro forma:    ($346)        $  812       ($5,320)

  Earnings per share     As reported:
                           Basic         $0.02          $0.18        ($0.49)
                           Diluted       $0.01          $0.18        ($0.49)

                        Pro forma:
                           Basic        ($0.04)         $0.10        ($0.65)
                           Diluted      ($0.04)         $0.10        ($0.65)
</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  $73,000 and $21,000 for the years ended
          December  31,  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.  Through
          December 31, 1999,  the Company had  repurchased  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, 1999,  minimum rental payment  commitments  for office
          and warehouse space leased by Swiss Army under operating  leases were,
          as follows (in thousands):
<TABLE>
                                   <S>              <C>


                                    2000             $1,296
                                    2001                828
</TABLE>

          During the years ended December 31, 1999,  1998 and 1997, rent expense
          was approximately $1,487,000, $1,374,000 and $1,390,000, respectively.

          At December  31,  1999,  the Company  has open  contracts  to purchase
          approximately  107.0  million Swiss francs in 2000 and 2001 as a hedge
          against future  purchase of inventories at a weighted  average rate of
          $1.509 Swiss Franc/dollar.

                                      F-20
<PAGE>

          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,
          1999,  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 $6,300,000. 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>
                           <S>                             <C>

                            2000                            $ 873
                            2001                              512
                            2002                              493
                            2003                              460
                            2004 and thereafter             2,200
</TABLE>

          In  1993,  Swiss  Army's  Board  of  Directors  adopted  a  charitable
          insurance  program that enables Swiss Army 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,  Swiss Army 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  Management
          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>
                              <S>                       <C>

                               2000                      $1,115
                               2001                       1,102
                               2002                       1,102
                               2003                       1,086
                               2004 and thereafter        4,914
</TABLE>


          Under  existing  federal  tax laws,  the  receipt by Swiss Army of the
          proceeds from an insurance  policy upon the death of a director  would
          not result in regular  taxable income to the Company;  however,  Swiss
          Army may be subject  to  alternative  minimum  tax on a portion of the
          receipts.  When Swiss Army makes cash  contributions  to a  designated
          charity, it will be entitled to a tax deduction  equivalent to the sum
          of  those  contributions.  The  extent  of  the  utilization  of  this
          deduction in that year will depend upon Swiss Army's  taxable  income,
          since Swiss Army 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.

                                      F-21
<PAGE>

          On July 14,  1997,  the Company  filed with the  American  Arbitration
          Association  in New York,  New York a demand for  arbitration  against
          Precise   Imports   Corporation,   the  United   States  and  Canadian
          distributor of Swiss Army Knives manufactured by Wenger S.A., the only
          company  other than  Victorinox  supplying  pocketknives  to the Swiss
          Armed Forces. In the demand for arbitration,  the Company charged that
          Precise had violated the license agreement dated June 30, 1992 between
          Precise and the Company by utilizing the trademark  Swiss Army in ways
          prohibited by the  agreement.  In response,  Precise  alleged  certain
          counterclaims.  These claims and counterclaims between the Company and
          Precise were dismissed with prejudice on December 31, 1999 pursuant to
          the  terms of a  November  7, 1998  stipulation  since  neither  party
          exercised its right to continue the proceeding.

          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)    SPECIAL CHARGES
          In 1997,  the Company  recorded  $0.8 million of  restructuring  costs
          (included  in selling,  general and  administrative  expenses) , which
          were paid in 1998, and a special  charge of $1.3 million  (included in
          cost of sales) related to discontinued  inventory.  The  restructuring
          costs primarily consisted of severance and related expenses.

(17)    SEGMENT REPORTING
          The Company has adopted SFAS No. 131,  "Disclosures  About Segments of
          an Enterprise and Related  Information."  This  statement  establishes
          standards for the reporting of information about operating segments.

          The  Company  is engaged  in one line of  business - the  importation,
          manufacture and distribution of cutlery, knives, multi-tools,  watches
          and other consumer  products.  There were no material amounts of sales
          or  transactions   between  or  among  geographic  areas.   Summarized
          financial information  concerning the Company's reportable segment and
          geographic  areas is shown in the following  table. The "Other" column
          includes   corporate   related  items  and  results  of  insignificant
          operations.
<TABLE>
<CAPTION>

                                 United
                                 States       Canada     International     Other       Total
          1999
          ----
         <S>                   <C>           <C>           <C>          <C>          <C>

          Sales                 $113,471      $8,573        $6,117       $  1,291     $129,452
          Operating
             income (loss)        26,124       1,168           187        (22,938)       4,541
          Identifiable
             assets               58,045       3,557         3,376         42,626      107,604
          1998
          ----
          Sales                 $111,107      $8,483        $7,811        $   450     $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-22

<PAGE>


(18)    QUARTERLY FINANCIAL DATA (Unaudited)
<TABLE>
<CAPTION>

                                                           Quarter Ended
                                               (in thousands, except per share data)

                                         March 31     June 30     September 30     December 31

      1999
      ----
     <S>                                <C>          <C>            <C>             <C>

      Net sales                          $23,570      $30,396        $33,026         $42,460
      Gross profit                         8,949       11,990         12,798          17,109
      Income (loss) before
        income taxes                        (614)      (2,183)         1,353           3,095
      Net income (loss)                     (353)      (2,126)           766           1,853
      Earnings per share - basic          ($0.04)      ($0.27)         $0.10           $0.23
      Earnings per share - diluted        ($0.04)      ($0.27)         $0.10           $0.22


      1998
      ----
      Net sales                          $24,610      $30,187        $31,370         $41,684
      Gross profit                         9,235       11,637         12,690          16,420
      Income before income
        taxes                                480          173            806           1,224
      Net  income                            286          103            465             609
      Earnings per share                   $0.03        $0.01          $0.06           $0.08

</TABLE>




          There was no difference  between basic and fully diluted  earnings per
          share for the 1998 periods presented above.
























                                      F-23

<PAGE>
<TABLE>
<CAPTION>


                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
                                 (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, 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
                                       =======           ======         =======         =======
Year Ended December 31, 1997:

   Allowance for Doubtful Accounts     $ 1,032            $(57)             -            $ 975
                                       =======           ======         =======         =======
   Inventory Reserve                   $ 1,950         $ 1,310             (408)        $2,852
                                       =======           ======         =======         =======
</TABLE>






















                                      F-24

<PAGE>

Exhibits.

            Exhibit Title                                        Exhibit No.
            -------------                                        -----------

(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) By-laws, as amended,  incorporated by reference to the Exhibits to
         Annual  Report on Form 10-K for the  fiscal  year ended  December  31,
         1995.


(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, Inc.
         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.

     (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.

                                       19
<PAGE>


     (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 Swiss Confederation represented by the Federal Military Department
         represented  by the Federal  Defense  Production  Group and Swiss Army
         Brands,  Inc.  (confidential  treatment  has been  granted for certain
         portions of this exhibit) 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. 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 schedule not
          otherwise filed herewith.)                                      10.1

    (21) Subsidiaries of Registrant.                                      21

    (23) Consent of Arthur Andersen LLP.                                  23

    (27) Financial Data Schedule.

















                                       21

<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)

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


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


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


Date:  March 27, 2000
























                                       22

<PAGE>


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/ J. Merrick Taggart                                          March 27, 2000
J. Merrick Taggart
President, Chief Executive Office and Director

/s/ A. Clinton Allen                                            March 27, 2000
A. Clinton Allen
Director

/s/ Clarke H. Bailey                                            March 27, 2000
Clarke H. Bailey
Director

/s/ Thomas A. Barron                                            March 27, 2000
Thomas A. Barron
Director

/s/ Vincent D. Farrell, Jr.                                     March 27, 2000
Vincent D. Farrell, Jr.
Director

/s/ Herbert M. Friedman                                         March 27, 2000
Herbert M. Friedman
Director

/s/ Peter W. Gilson                                             March 27, 2000
Peter W. Gilson
Director

/s/ Keith R. Lively                                             March 27, 2000
Keith R. Lively
Director

/s/ Louis Marx, Jr.                                             March 27, 2000
Louis Marx, Jr.
Director


/s/ Robert S. Prather, Jr.                                      March 27, 2000
Robert S. Prather, Jr.
Director




                                       23

<PAGE>



/s/ Stanley R. Rawn, Jr.                                        March 27, 2000
Stanley R. Rawn, Jr.
Director

/s/ Eric M. Reynolds                                            March 27, 2000
Eric M. Reynolds
Director

/s/ John Spencer                                                March 27, 2000
John Spencer
Director

/s/ John V. Tunney                                              March 27, 2000
John V. Tunney
Director



































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