================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 10-Q


(Mark One)

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

               For the quarterly period ended September 27, 1997

                                       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 - 19596
      

                            SLM INTERNATIONAL, INC.
            ------------------------------------------------------
            (Exact name of registrant as specified in its charter)


                DELAWARE                                         13-36-32297
     ------------------------------                          -------------------
     (State or other jurisdiction of                            (IRS Employer
     incorporation or organization)                          Identification No.)


 C/O MASKA U.S., INC., 139 HARVEST LANE, 
       PO BOX 1200, WILLISTON, VT                                   05495
---------------------------------------                           ----------
(Address of principal executive offices)                          (Zip code)


        Registrant's telephone number, including area code 802-872-4226


     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 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
                                  ---       ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.


              CLASS                         OUTSTANDING AT NOVEMBER 13, 1997
   ----------------------------             --------------------------------
   Common Stock, $.01 par value                          6,500,000

================================================================================



<PAGE>


                             SLM INTERNATIONAL, INC.

                                    FORM 10-Q

                                   ----------

                                      INDEX

                                                                        Page No.
                                                                        --------
PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

        Unaudited Consolidated Statements of Operations for the 
          three months ended September 27, 1997, April 12 
          through September 27, 1997, January 1 through April 11, 
          1997 and the three months and nine months ended 
          September 28, 1996 .........................................      1

        Unaudited Consolidated Balance Sheets at September 27, 
          1997 and December 31, 1996 .................................      2

        Unaudited Consolidated Statements of Cash Flows for 
          April 12 through September 27, 1997, January 1 
          through April 11, 1997 and the nine months ended
          September 28, 1996 .........................................      3

        Notes to Unaudited Consolidated Financial Statements .........      4


Item 2. Management's Discussion and Analysis of Financial
          Condition and Results of Operations ........................     13


PART II OTHER INFORMATION

Item 1. Legal Proceedings ............................................     18

Item 5. Other Information ............................................     18

Item 6. Exhibits and Reports on Form 8-K .............................     18



<PAGE>


<TABLE>
                                                  SLM INTERNATIONAL, INC.

                                           CONSOLIDATED STATEMENTS OF OPERATIONS
                                                        (Unaudited)
                                             (In thousands, except share data)

<CAPTION>

                                                    |   Reorganized Company     |           Predecessor Company
                                                    |-------------------------  |  ---------------------------------------
                                                    |            1997           |    1997    |            1996
                                                    |-------------------------  |  --------  |  --------------------------
                                                    |     (a)            (a)    |            |
                                                    |Three Months     April 12  |  January 1 |  Three Months  Nine  Months
                                                    |    Ended         through  |   through  |     Ended         Ended
                                                    |  Sept. 27       Sept. 27  |   April 11 |    Sept. 28      Sept. 28
                                                    |---------------------------|------------|----------------------------
<S>                                                   <C>            <C>             <C>           <C>          <C>     
Net sales ......................................... | $   38,696     $   66,773 |    $25,539 |     $44,930      $104,645
                                                    |                           |            |
Cost of goods sold ................................ |     22,886         39,797 |     16,007 |      29,820        67,476
                                                    |---------------------------|------------|----------------------------
     Gross profit ................................. |     15,810         26,976 |      9,532 |      15,110        37,169
                                                    |                           |            |
Selling, general and                                |                           |            |
  administrative expenses ......................... |      9,659         17,088 |     11,321 |      11,989        33,217
                                                    |                           |            |
Amortization of excess reorganization               |                           |            |
  value (see Note 4) .............................. |        604          1,108 |            |        
                                                    |                           |            |
Restructuring charges (see Note 6) ................ |                           |      6,315 |       2,488         2,488
                                                    |---------------------------|------------|----------------------------
     Operating  income (loss) ..................... |      5,547          8,780 |     (8,104)|         633         1,464
                                                    |                           |            |
Debt related fees (see Note 7) .................... |                           |      1,243 |       2,085         5,711
                                                    |                           |            |
Other expense (income), net ....................... |        149             77 |        193 |         (74)          (37)
                                                    |                           |            |
Interest expense .................................. |      1,403          2,503 |        114 |       3,160         9,440
                                                    |---------------------------|------------|----------------------------
     Income (loss) before income taxes and          |                           |            |
       extraordinary gain on discharge of debt .... |      3,995          6,200 |     (9,654)|      (4,538)      (13,650)
                                                    |                           |            |
Income taxes ...................................... |        133            293 |         32 |        
                                                    |---------------------------|------------|----------------------------
     Income (loss) before extraordinary gain        |                           |            |
       on discharge of debt ....................... |      3,862          5,907 |     (9,686)|      (4,538)      (13,650)
                                                    |                           |            |
Extraordinary gain on discharge of debt ........... |                           |     58,726 |        
                                                    |---------------------------|------------|----------------------------
Net income (loss) ................................. | $    3,862     $    5,907 |    $49,040 |     $(4,538)     $(13,650)
                                                    |===========================|=========================================
Net income per share (b) .......................... | $     0.59     $     0.91 | 
                                                    |===========================|
Average shares outstanding(b) ..................... |  6,500,000      6,500,000 | 
                                                     ===========================
---------------

(a)  Due to the Reorganization Plan and implementation of fresh-start reporting, financial statements after April 11, 1997
     for the reorganized company are not comparable to financial statements prior to that date. See "Notes to Unaudited
     Consolidated Financial Statements" for more information on the Reorganization Plan and implementation of fresh-start
     reporting. (See "Management`s Discussion and Analysis" (page 13) for comparison purposes.)

(b)  Common shares and per share data for periods prior to April 12, 1997 are omitted because, due to the Reorganization
     Plan and implementation of fresh-start reporting, they are not meaningful.

                 The accompanying notes are an integral part of the unaudited consolidated financial statements.

</TABLE>

                                                            1

<PAGE>


                             SLM INTERNATIONAL, INC.

                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                                 (In thousands)


                                                       Reorganized | Predecessor
                                                         Company   |   Company
                                                        Sept. 27,  |  Dec. 31,
                                                          1997     |    1996
                                                       ------------|----------
ASSETS                                                             |
                                                                   |
CURRENT ASSETS                                                     |
Cash and cash equivalents .........................     $    498   | $  35,589
Accounts receivable, net ..........................       38,223   |    33,313
Inventories (see Note 8) ..........................       33,441   |    37,179
Prepaid expenses and other assets .................        4,333   |     5,757
Net assets of discontinued operations .............         --     |       189
                                                        -----------|----------
     Total current assets .........................       76,495   |   112,027
Property, plant and equipment, net of                              |
  accumulated depreciation                                         |
  (1997 $14,623; 1996 $17,172) ....................        9,203   |    12,817
Intangible and other assets, net of                                |
  accumulated amortization                                         |
  (1997 $1,437; 1996 $61) .........................       49,053   |        81
                                                        -----------|----------
     Total assets .................................     $134,751   | $ 124,925
                                                        ===========|==========
                                                                   |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                     |
                                                                   |
CURRENT LIABILITIES                                                |
Short-term debt (see Note 9) ......................     $  9,066   | $    --   
Accounts payable and accrued liabilities ..........       17,752   |    15,297
Long-term debt, current portion ...................        1,486   |       369
Income taxes payable ..............................          619   |       648
Current portion of liabilities subject to                          |
  compromise under reorganization                                  |
  proceedings  (see Note 3) .......................        2,130   |    45,035
                                                        -----------|----------
     Total current liabilities ....................       31,053   |    61,349
Long-term debt (see Note 9) .......................       30,620   |      --
Other liabilities .................................          490   |       601
Liabilities subject to compromise under                            |
  reorganization proceedings  (see Note 3) ........         --     |   160,164
                                                        -----------|----------
     Total liabilities ............................       62,163   |   222,114
                                                        -----------|----------
                                                                   |
COMMITMENTS AND CONTINGENCIES (see Note 10)                        |
                                                                   |
STOCKHOLDERS' EQUITY (DEFICIT)                                     |
Common stock ......................................           65   |       189
Additional paid-in capital ........................       66,507   |    88,564
Retained earnings (deficit) .......................        5,907   |  (182,291)
Foreign currency translation adjustments ..........          109   |    (3,651)
                                                        -----------|----------
     Total stockholders' equity (deficit) .........       72,588   |   (97,189)
                                                        -----------|----------
     Total liabilities and stockholders'                           |
       equity (deficit) ...........................     $134,751   | $ 124,925
                                                        ======================
                                                    
Due to the Reorganization Plan and implementation of fresh-start reporting,
financial statements after April 11, 1997 for the reorganized company are not
comparable to financial statements prior to that date. See "Notes to Unaudited
Consolidated Financial Statements" for more information on the Reorganization
Plan and implementation of fresh-start reporting.

The accompanying notes are an integral part of the unaudited consolidated
financial statements.


                                       2



<PAGE>


                             SLM INTERNATIONAL, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)


                                            Reorganized|
                                              Company  |   Predecessor Company
                                              -------- | -----------------------
                                                1997   |   1997    |    1996
                                              -------- | --------- | -----------
                                              April 12 | January 1 | Nine months
                                              through  |  through  |    ended
                                              Sept. 27 |  April 11 |  Sept. 28
                                              ---------|-----------|----------
OPERATING ACTIVITIES:                                  |           |
Net income (loss) .........................   $  5,907 |  $ 49,040 |  $(13,650)
Adjustments to reconcile net income                    |           |
  (loss) to net cash provided by (used in)             |           |
  operating activities:                                |           |
    Restructuring charges .................            |     6,315 |     2,488  
    Depreciation and amortization .........      2,563 |       807 |     2,071
    Provisions for inventory, doubtful                 |           |
      accounts and other deductions .......      6,275 |     2,301 |    11,493
    Loss (gain) on sale and disposal of                |           |           
      fixed assets ........................        (17)|         5 |       (19) 
    Extraordinary gain on discharge of                 |           |      
      debt ................................            |   (58,726)|
    Loss (gain) on foreign exchange .......       (227)|       263 |        13
Change in operating assets and liabilities:            |           |
    Accounts receivable ...................    (14,675)|       965 |   (19,306)
    Inventories ...........................        976 |       884 |     1,972
    Prepaid expenses and other assets .....      1,834 |       816 |    (2,570)
    Accounts payable and accrued                       |           |          
      liabilities .........................    (10,033)|     4,576 |     7,819
    Discontinued operations ...............            |       189 |     6,817
                                              ---------|-----------|----------
        Net cash provided by (used in)                 |           |
          operating activities.............     (7,397)|     7,435 |    (2,872)
                                              ---------|-----------|----------
INVESTING ACTIVITIES:                                  |           |
    Proceeds from sale of subsidiary ......      2,125 |           |
    Purchases of fixed assets .............       (619)|      (285)|    (1,771)
    Proceeds from sales of fixed assets ...        338 |        73 |       293
                                              ---------|-----------|----------
        Net cash provided by (used in)                 |           |
          investing activities.............      1,844 |      (212)|    (1,478)
                                              ---------|-----------|----------
FINANCING ACTIVITIES:                                  |           |
     Short-term borrowings, net ...........      3,966 |           |      
     Principal payments on debt ...........     (2,311)|       (89)|    (5,342)
     Deferred financing costs .............            |    (2,146)|      
     Liabilities subject to compromise ....            |   (36,099)|      
                                              ---------|-----------|----------
        Net cash provided by (used in)                 |           |
          financing activities.............      1,655 |   (38,334)|    (5,342)
                                              ---------|-----------|----------
Effects of foreign exchange rate on cash ..        (60)|       (22)|         4
                                              ---------|-----------|----------
Decrease in cash ..........................     (3,958)|   (31,133)|    (9,688)
Cash at beginning of period ...............      4,456 |    35,589 |    18,605
                                              ---------|-----------|----------
Cash at end of period .....................   $    498 |  $  4,456 |  $  8,917
                                              ================================
                                                     

Due to the Reorganization Plan and implementation of fresh-start reporting,
financial statements after April 11, 1997 for the reorganized company are not
comparable to financial statements prior to that date. See "Notes to Unaudited
Consolidated Financial Statements" for more information on the Reorganization
Plan and implementation of fresh-start reporting.

               The accompanying notes are an integral part of the
                  unaudited consolidated financial statements.


                                       3



<PAGE>


                             SLM INTERNATIONAL, INC.

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)
                                         

1. BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements include the
accounts of SLM International, Inc. ("SLM") and subsidiaries (collectively the
"Company"). All significant intercompany transactions and accounts are
eliminated. 

SLM and six of its subsidiaries (collectively, the "Debtors", or the
"Predecessor Company") filed voluntary petitions for relief under Chapter 11 of
the United States Bankruptcy Code (the "Filing") in the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court") on October 24, 1995
(the "Petition Date"). On September 12, 1996, the Debtors filed a Chapter 11
Plan of Reorganization and on November 13, 1996, the Debtors filed a First
Amended Chapter 11 Plan of Reorganization, as amended from time to time (the
"Reorganization Plan") with the Bankruptcy Court. On January 23, 1997, the
Bankruptcy Court confirmed the Reorganization Plan which became effective on
April 11, 1997 (the "Effective Date") and the Debtors emerged from bankruptcy
(the "Reorganized Company") (see Notes 2 and 4).

The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with generally accepted accounting principles applicable
to a going concern which, except as otherwise disclosed, assumes that assets
will be realized and liabilities will be discharged in the normal course of
business. The financial statements for periods preceeding the Effective Date do
not include any adjustments which resulted from the Reorganization Plan. The
Reorganization Plan had a significant impact on the financial statements of the
Reorganized Company and the Company accounted for such Reorganization Plan using
"fresh-start" reporting (see Note 4).

In the opinion of management, all normal recurring adjustments necessary for a
fair presentation of the Company's Unaudited Consolidated Statements of
Operations, Balance Sheets and Statements of Cash Flows for the interim periods
in 1997 and in 1996 have been included. These unaudited interim consolidated
financial statements do not include all of the information and footnotes
required by generally accepted accounting principles to be included in a full
set of financial statements. Results for the interim period are not necessarily
a basis from which to project results for the full year due to the seasonality
of the Company's business and the Filing. These unaudited consolidated financial
statements should be read in conjunction with the Company's annual report on
Form 10-K filed with the Securities and Exchange Commission for the year ended
December 31, 1996. Certain prior period amounts have been reclassified to
conform to the current period presentation.

2. REORGANIZATION CASE

On June 26, 1996, the Debtors announced that they entered into an agreement with
representatives of the Debtors' Noteholders and trade and other unsecured
creditors (the "Unsecured Creditors Committee") on a term sheet (the "Term
Sheet") setting forth the material provisions of a Reorganization Plan.
Thereafter, the Debtors and Unsecured Creditors Committee reached an agreement
in principle with assignees of the Debtors' former lenders (the "Secured
Creditor Group") on the terms of the Reorganization Plan. On September 12, 1996,
the Debtors filed with the Bankruptcy Court a proposed Chapter 11 Plan of
Reorganization (the "Proposed Plan") and a Disclosure Statement Pursuant to
Section 1125 of the United States Bankruptcy Code incident to the Proposed Plan.
After further negotiations and term modifications among the Debtors and their
creditor constituencies, on November 13, 1996, the Debtors filed with the
Bankruptcy Court the Reorganization Plan and the First Amended Disclosure
Statement Pursuant to Section 1125 of the United States Bankrupcty Code incident
to the Reorganization Plan. On November 19, 1996, the Bankruptcy Court approved
the adequacy of the First Amended Disclosure Statement as modified in open court
(the "Disclosure Statement"). On January 23, 1997, the Bankruptcy Court entered
an order confirming the Reorganization Plan as modified, the effectiveness of
which was contingent upon, among other things, the completion of a secured
credit facility. The Reorganization Plan represented the culmination of
management analyses and negotiation amongst representatives of principal parties
in interest regarding the best means to maximize and to allocate value to the
Debtors' creditors and stockholders in accordance with their legal and
contractual rights and priorities with due regard to the potential causes of
action and claims that could be asserted against and by certain creditors. Upon
the satisfaction of all conditions precedent to the occurrence of the Effective
Date, the Reorganization Plan was declared effective on April 11, 1997.


                                       4



<PAGE>


                             SLM INTERNATIONAL, INC.

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)
                                         

Under the Reorganization Plan, among other things:

o    The Debtors' secured creditors received $44,213 in cash, $29,500 principal
     in new senior notes (the "New Senior Notes") and 2,470,000 shares of new
     common stock (the "New Common Stock") of the Reorganized Company, in
     exchange for approximately $108,000 of secured and unsecured indebtedness
     (which amount included the secured creditors estimate of post-filing
     interest and expenses). The 2,470,000 shares of New Common Stock
     represented (before dilution) 38.0% of the ownership of the Reorganized
     Company. The lenders sold such shares to W.S. Acquisition L.L.C. on the
     Effective Date. The New Senior Notes have a term of seven years with
     principal payments beginning in the fifth year. Interest thereon is due and
     payable semi-annually at 14.0% (including 4.0% payable in kind ("PIK")),
     with such PIK interest reduced permanently if the Reorganized Company
     achieves certain earnings levels established in the New Senior Notes'
     Indenture. The New Senior Notes are pre-payable at 101% of principal plus
     accrued interest, are secured by a lien on substantially all of the
     Reorganized Company`s assets, subordinate only to the Reorganized Company's
     new secured credit facilities, and have covenants, representations and
     other terms customary in instruments of this nature.

o    The Debtors' unsecured creditors received: 4,030,000 shares of New Common
     Stock representing, at the time of issuance, 62.0% of the ownership in the
     Reorganized Company, subject to dilution upon the exercise of warrants
     distributed to equity security holders and stock options which may be
     issued to the Reorganized Company's officers and key personnel (up to 15.0%
     of the New Common Stock at varying exercise prices), in exchange for
     approximately $120,000 of unsecured indebtedness. For purposes of the
     Reorganization Plan, the New Common Stock was valued at approximately
     $10.16 per share.

o    The Company's equity security holders (who held 18,859,679 shares of Common
     Stock plus the 1,000,000 shares to have been issued pursuant to the
     settlement of a securities litigation lawsuit (see Note 10)) received a
     total of 300,000 5-year warrants to purchase an aggregate of 300,000 shares
     of New Common Stock at an exercise price of $16.92 per share. In addition,
     the warrant holders have the option to receive an aggregate payment of $500
     upon cancellation of such warrants in connection with a sale of the
     Reorganized Company for more than $140,000.

The Reorganization Plan also provided for other terms including: structured
settlements with Fleet Credit Corporation (in connection with its claims arising
from equipment financing), NHL Enterprises, Inc. and its affiliates (in
connection with their claims arising from royalty obligations under licenses
with the Company and alleged infringement of their property) and with the
lessors under certain leases of real property (which lessors were former
officers and directors of the Company); the incorporated Consent Decree entered
in Vermont Superior Court by agreement with Maska U.S., Inc. ("Maska"); and an
overall structured settlement among and between all of the creditor classes
which resulted in, among other things, the recoveries described above for the
secured creditors and unsecured creditors collectively as well as an
intra-creditor structured recovery resulting (depending on the ultimate
resolution of disputed claims) in the Company's former Senior Noteholders
realizing approximately 40.9% on their claims, Maska's unsecured creditors
realizing approximately 56.6% on their claims and the unsecured creditors of the
other Debtors realizing approximately 31.9% on their claims. 

3. LIABILITIES SUBJECT TO COMPROMISE UNDER REORGANIZATION PROCEEDINGS

Substantially all the Company's liabilities as of the Petition Date were subject
to settlement under a plan of reorganization, except as otherwise provided by
order of the Bankruptcy Court. The Company was generally not permitted to make
payments with respect to its pre-Petition Date liabilities until a plan of
reorganization was confirmed by the Bankruptcy Court and consummated.

                                                      Sept. 27,   Dec. 31,
                                                        1997        1996
                                                      --------    --------
    Priority Claims ..............................     $2,130     $    661
    Secured Debt
         Principal ...............................                  92,045
         Interest ................................                  12,838
    General Unsecured Claims .....................                  14,990
    Unsecured Debt, Principal and Interest .......                  84,665
                                                       -------------------
                                                       $2,130     $205,199
                                                       ===================


                                       5



<PAGE>


                             SLM INTERNATIONAL, INC.

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)
                                         

Priority claims, the repayment of which the Company is required to prioritize
under bankruptcy law, are comprised principally of income and property tax
claims. Priority claims at September 27, 1997 remain subject to resolution with
the Bankruptcy Court. 

The Company has recorded interest expense only to the extent paid or earned
during the proceedings and to the extent it was probable that the Bankruptcy
Court would allow interest on pre-Petition Date debt as a priority, secured or
unsecured claim. The excess contractual interest expense over recorded interest
expense for the year ended December 31, 1995 and through the nine months ended
September 28, 1996 was approximately $2,100 and $13,300, respectively, and
$3,700 for the three months ended September 28, 1996. There is no interest
expense recorded in 1997 on pre-Petition debt.

4. FRESH-START REPORTING

In connection with the emergence from bankruptcy, the Company adopted
fresh-start reporting, as of April 11, 1997, in accordance with the requirements
of Statement of Position 90-7, Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code ("SOP 90-7"). 

In applying fresh-start reporting, the value of the Reorganized Company was
allocated to the Company's net assets in conformity with the procedures
specified by Accounting Principles Board Opinion No. 16, Business Combinations.
SOP 90-7 required a determination of the Company's reorganizational value,
representing the fair value of all of the Company's assets and liabilities, and
an allocation of such values to the assets and liabilities (excluding deferred
taxes) based on their relative fair values with the excess in reorganizational
value over market values recorded as an intangible asset. As a result, the
carrying values of the Company's assets and liabilities were adjusted to fair
value as of April 11, 1997. Reorganizational value in excess of amounts
allocable to identifiable assets of approximately $48,000 is being amortized on
a straight line basis over twenty years. The application of SOP 90-7 resulted in
the creation of a new reporting entity having no retained earnings or
accumulated deficit.

For the purpose of the Reorganization Plan, the reorganizational equity value
was estimated to be $66,572 based in part on management's estimates of future
operating results. Reorganizational value necessarily assumes that the
Reorganized Company will achieve its estimated future operating results in all
material respects. If such results are not achieved, the value of the
Reorganized Company that is ultimately realized could be materially different.

The Reorganization Plan had a significant impact on the financial statements of
the Reorganized Company, including the creation of a new reporting entity upon
emergence from bankruptcy through the application of fresh-start reporting
pursuant to SOP 90-7. Accordingly, the Company's post-Reorganization balance
sheets, statements of operations and statements of cash flows, which reflect the
application of fresh-start reporting, have not been prepared on a consistent
basis with the pre-Reorganization financial statements and are not comparable in
all respects to the financial statements prior to the Reorganization. For
accounting purposes, the inception date of the Reorganized Company is deemed to
be April 12, 1997. 

The effects of the Reorganization Plan and fresh-start reporting on the
Company`s balance sheet at April 11, 1997 are as follows:


                                       6



<PAGE>


<TABLE>
                             SLM INTERNATIONAL, INC.

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)
                                         

                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 April 11, 1997
                                   (Unaudited)
<CAPTION>

                                                Predecessor                  Reorganized
                                                 Company      Adjustments      Company
                                                 ---------------------------------------
<S>                                              <C>           <C>              <C>     
ASSETS 
    Cash ......................................  $ 40,554      $ (36,098) a     $  4,456
    Other current assets ......................    64,878           (189) b       64,689
                                                 ---------------------------------------
           Total current assets ...............   105,432        (36,287)         69,145
       Property, plant and equipment ..........    10,382                         10,382
       Intangible and other assets, net .......     1,494         48,979 c        50,473
                                                 ---------------------------------------
           Total assets .......................  $117,308       $ 12,692        $130,000
                                                 =======================================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
   Short-term debt ............................  $              $  5,100 d      $  5,100
   Accounts payable and accrued liabilities ...    18,029          3,162 e        21,191
   Long term debt, current portion ............       280          1,202 f         1,482
   Current portion of liabilities 
     subject to compromise under 
     reorganization proceedings ...............    45,035        (42,905)g         2,130
                                                 ---------------------------------------
           Total current liabilities ..........    63,344        (33,441)         29,903
   Long-term debt .............................                   32,935 f        32,935
   Other liabilities ..........................       590                            590
   Liabilities subject to compromise              
     under reorganization proceedings .........   160,164       (160,164)g   
                                                 ---------------------------------------
           Total liabilities ..................   224,098       (160,670)        63,428
                                                 ---------------------------------------
   Stockholders' equity (deficit) .............  (106,790)       173,362 h        66,572
                                                 ---------------------------------------
           Total liabilities and                 
             stockholders' equity (deficit) ...  $117,308       $ 12,692        $130,000
                                                 =======================================
</TABLE>


The following is a brief description of the adjustments made in preparing the
above Condensed Consolidated Balance Sheet (unaudited).

a.   To reflect $45,198 paid out in accordance with the Reorganization Plan, net
     of $9,100 borrowed under new credit facilities.

b.   To reflect the distribution of net assets of discontinued operations
     pursuant to the Reorganization Plan.

c.   To record excess of identifiable asset value as a result of fresh-start
     reporting, including principally a valuation associated with the Company's
     trademarks and costs associated with obtaining new credit facilities.

d.   To record borrowings under new credit facilities.

e.   To record accounts payable and accrued liabilities incurred pursuant to the
     Reorganization Plan.

f.   To record long-term debt under new credit facilities, New Senior Notes and
     other long-term debt incurred pursuant to the Reorganization Plan.

g.   To eliminate liabilities in accordance with the Reorganization Plan. The
     Reorganization Plan resulted in an extraordinary gain on debt forgiveness
     of approximately $58,726.

h.   To reflect fresh-start reporting and the new equity structure of the
     Reorganized Company pursuant to the Reorganization Plan.


                                       7



<PAGE>


                             SLM INTERNATIONAL, INC.

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)
                         

The following Pro Forma Condensed Consolidated Statement of Operations for the
nine months ended September 27, 1997 has been prepared giving effect to the
consummation of the Reorganization Plan, including the implementation of
fresh-start reporting, as if consummation had occurred on January 1, 1997. Due
to the Reorganization Plan and implementation of fresh-start reporting,
financial statements effective April 12, 1997 for the Reorganized Company are
not comparable to financial statements prior to that date for the Predecessor
Company. However, for presentation of this statement, total results for the 1997
interim period are shown under the caption "Total Before Adjustments". The
adjustments which give effect to the events that are directly attributable and
expected to have a continuing impact on the Reorganized Company and which are
set forth under the caption "Adjustments" reflect the implementation of the
Reorganization Plan and the adoption of fresh-start reporting as if they had
occurred on January 1, 1997.


            PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                  For the nine months ended September 27, 1997
                                   (Unaudited)


                                            Total Before
                                            Adjustments   Adjustments  Pro Forma
                                            ------------------------------------
Net sales ................................    $92,312                   $92,312
                                            ------------------------------------
Operating income .........................        676      $ 5,608 a      6,284
Debt related fees ........................      1,243       (1,243)b
Other expense (income), net ..............        270          210 c        480
Interest expense .........................      2,617        1,464 d      4,081
                                            ------------------------------------
(Loss) income before income taxes and
  extraordinary gain on discharge of debt.     (3,454)         5,177      1,723
Income taxes .............................        325                       325
                                            ------------------------------------
Net (loss) income before extraordinary
  gain on discharge of debt ..............     (3,779)       5,177        1,398
Extraordinary gain on discharge of debt ..     58,726      (58,726)e
                                            ------------------------------------
Net income (loss) ........................    $54,947     $(53,549)     $ 1,398
                                            ====================================

The following is a brief description of the adjustments made in preparing the
Pro Forma Condensed Consolidated Statement of Operations (unaudited).

a.  To reflect adjustments of $6,315 for restructuring charges, net of $707 for
    amortization of the excess reorganization value associated with fresh-start
    reporting for the period January 1, 1997 through April 11, 1997.

b.  To reflect adjustments for costs incurred by the Company outside of its
    continuing operations.

c.  To reflect amortization of the deferred financing costs associated with the
    Company's new credit facilities.

d.  To reflect incremental interest expense associated with the Company's new
    credit facilities and New Senior Notes.

e.  To reflect adjustments for extraordinary gain on discharge of debt.


                                       8


<PAGE>


                             SLM INTERNATIONAL, INC.

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)
                         

5. SALE OF SUBSIDIARY

In May 1997, the Company sold for cash of $2,125 the shares of one of its wholly
owned subsidiaries, Mitchel & King Skates Limited. The operating results of
Mitchel & King Skates Limited are reflected in the Company's consolidated
financial statements through the date of sale.

6. RESTRUCTURING CHARGES

During the nine months ended September 27, 1997, the Company recorded
significant restructuring charges totaling $6,315 to reflect the impact of
reorganizing operations strategically to position itself to sustain ongoing
profitability. These costs consist primarily of lease cancellation costs
($2,257) at its Peterborough, N.H. and Beauport, Quebec facilities, impairment
of fixed assets ($1,659), principally leasehold improvements at its
Peterborough, N.H. facility, and severance and employee costs associated with
the shutdown of three of the Company's manufacturing facilities. During the
three and nine months ended September 28, 1996, the Company recorded significant
charges totaling $2,488 to reflect the impact of reorganizing management
strategically to position itself for a definitive restructuring plan. These
costs consisted primarily of severance pay, including that of the Company's
former Chief Executive Officer, who left the Company in September 1996.

7. DEBT RELATED FEES AND DEFAULT INTEREST

As a result of the Filing, the Company incurred significant legal and
professional fees totaling $1,243 and $5,711 for the nine months ended September
27, 1997 and September 28, 1996, respectively, and $2,085 for the three months
ended September 28, 1996. These fees include the cost of the Company's legal
counsellors, financial advisors and consultants, as well as those of its
bankers, Senior Noteholders and creditors. The debt related fees are net of $208
of interest earned on accumulated cash resulting from the Filing for the three
months ended September 28, 1996 and $500 and $530 for the nine months ended
September 27, 1997 and September 28, 1996, respectively. These costs are
included as Debt Related Fees in the Unaudited Consolidated Statement of
Operations for the periods then ended. 

Additionally, as a result of the Company's defaults under its financing
agreements, its financial condition and the terms of Standstill Agreements with
its lenders, from February 1995 until April 11, 1997 the Company was charged an
additional 3.0% rate of interest on its bank debt. The higher interest rates
resulted in incremental interest expense of $796 and $2,350 for the three months
and nine months ended September 28, 1996, respectively, which is included in
Interest Expense in the Unaudited Consolidated Statements of Operations.

8. INVENTORIES 

Inventories consist of:

                                                 Sept. 27,      Dec. 31,
                                                   1997           1996
                                                ------------------------
     Finished products ......................     $26,098       $26,592
     Work in process ........................       1,597         2,669
     Raw materials and supplies .............       5,746         7,918
                                                ------------------------
                                                  $33,441       $37,179
                                                ========================

9. INDEBTEDNESS

A. NEW INDEBTEDNESS

(i.) BANK AGREEMENTS

On the Effective Date of the Reorganization Plan, SLM and two of its U.S.
subsidiaries, Maska U.S., Inc. and #1 Apparel, Inc. (the "U.S. Subsidiaries"),
entered into a Credit Agreement (the "U.S. Credit Agreement") with the lenders
referred to therein (the "Lenders") and The Chase Manhattan Bank, as Agent
("Chase"). Simultaneously, one of the Company's Canadian subsidiaries, Sport
Maska Inc., entered into a Credit Agreement (the "Canadian Credit Agreement"
and, together with the U.S. Credit Agreement, the "Credit Agreements") with The
Chase Manhattan Bank of Canada ("Chase Canada"). The maximum amount of loans and
letters of credit that may be outstanding under the Credit Agreements is
$74,000, consisting of $35,000 revolving credit loans under the U.S. Credit
Agreement, $35,000 of revolving credit loans under the Canadian Credit Agreement
and a $4,000 term loan (which was permanently reduced by $2,125 in June 1997
with the proceeds from the sale of one of the Company's subsidiaries) under the
U.S. Credit Agreement. Borrowings under the Credit Agreements are guaranteed by
certain subsidiaries and are collateralized by substantially all of


                                       9


<PAGE>


                             SLM INTERNATIONAL, INC.

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)
                         

the assets (including, without limitation, accounts receivable, inventory and
the stock of certain subsidiaries) of the Company, the two U.S. Subsidiaries
referred to above and the Company's other subsidiaries which are guarantors.
Total amounts outstanding under the Credit Agreements were $9,100 and $10,941 at
April 14, 1997 and September 27, 1997, respectively.

Borrowings under the U.S. Credit Agreement bear interest at an alternate base
rate plus 1% per annum or at an interest rate based on LIBOR plus 2 3/4% per
annum. Borrowings under the Canadian Credit Agreement bear interest at Chase
Canada's prime rate or at an alternate base rate plus 1% per annum. In addition,
the Company is charged a quarterly commitment fee of up to 3/8 of 1% on the
unused portion of the revolving credit facilities under the Credit Agreements
and certain other fees.

The Credit Agreements include customary affirmative and negative covenants,
including those relating to capital expenditures, interest coverage and the
incurrence of additional indebtedness.

(ii.) NEW SENIOR NOTES

On April 11, 1997 the Company issued $29,500 principal amount of 14% Senior
Secured Notes due April 1, 2004 (the "New Senior Notes"), pursuant to an
Indenture with The Bank of New York, as trustee (see Note 2). The New Senior
Notes were issued by the Company under the Reorganization Plan as partial
satisfaction of the Company's obligations to its former secured lenders under
the Loan and Security Agreement referred to below. 

Interest is payable on the New Senior Notes semi-annually at the rate of 14% per
annum, with such interest rate being permanently reduced by up to 4% if the
Company meets certain earnings tests. Further, of the initial 14% interest rate,
10% is payable in cash and 4% is payable in cash or by the issuance of
additional New Senior Notes. On November 1, 1997 the Company elected to make the
entire first interest payment in cash.

The New Senior Notes are guaranteed by certain subsidiaries and are
collateralized by substantially all of the assets of the Company (including,
without limitation, accounts receivable, inventory and the stock of certain
subsidiaries). The lien of the trustee for the benefit of itself and the New
Senior Noteholders is junior to the liens of Chase and Chase Canada. The
Indenture also includes customary affirmative and negative covenants.

B. OLD INDEBTEDNESS

As a result of the Filing, certain of the Company's indebtedness was classified
as liabilities subject to compromise under reorganization proceedings, at
December 31, 1996. The Reorganization Plan substantially altered the rights of
most pre-petition unsecured creditors by liquidating their allowed claims at
less than 100% of their face value (see Note 2).

Under the Reorganization Plan, lenders under a Loan and Security Agreement
received (i) $44,213 in cash; (ii) $29,500 principal in New Senior Notes; and
(iii) 2,470,000 shares of New Common Stock, representing approximately 38.0% of
the outstanding New Common Stock. The lenders sold such shares to W.S.
Acquisition L.L.C. on the Effective Date. In addition, holders of the Company's
6.76% Senior Notes due February 15, 2004 and the lender of a note issued to
settle certain litigation received distributions of shares of the Company's New
Common Stock (see Notes 2 and 10).

10. CONTINGENCIES AND LITIGATION

A. ENVIRONMENTAL LITIGATION:

In 1991, the Vermont Department of Environmental Conservation ("VTDEC") notified
the Company that the Bradford, Vermont property operated by its wholly-owned
subsidiary, Maska, had been included on the U.S. Environmental Protection
Agency's Comprehensive Environmental Response, Compensation and Liability
Information System and the Vermont Hazardous Sites List and was being evaluated
for possible remedial action. Under relevant environmental laws, Maska, as an
owner of the property, was potentially liable for the entire cost of
investigating and remediating the contamination allegedly emanating from its
Bradford property and certain civil penalties.


                                       10


<PAGE>


                             SLM INTERNATIONAL, INC.

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)
                         

Maska undertook its own investigation to determine the extent of contamination,
the rate of movement and the concentration of the contaminants, the appropriate
action required for site remediation and the identification of other parties who
should bear a share of the costs of remediation. The Company is seeking recovery
against the former owners and affiliates of the Bradford property and facility
and the owner of an adjacent parcel for the costs of such investigation and
remediation. During April 1996, Maska and the State of Vermont entered into a
consent decree ("Consent Decree") setting forth the terms under which Maska has
agreed to remediate specified hazardous materials if, and to the extent, found
on the contaminated property or caused by Maska. The Consent Decree was approved
by the Bankruptcy Court on May 14, 1996 and approved and entered in Vermont
Superior Court on June 20, 1996. The Consent Decree is subject to several
conditions, including ongoing payment by the Company of certain State of Vermont
oversight fees up to a maximum of $60 per year. In addition, the Company paid to
Vermont a civil fine stipulated penalty of $250. While the total cost of
investigation and remediation cannot be determined until the investigation
required by VTDEC is complete and the extent of the Company's remedial
obligations have been determined, the Company believes that the remaining costs
will be approximately $1,400 in the aggregate, payable over the next several
years. During 1993 and 1994, the Company accrued $1,400 toward these costs.

Maska commenced an action in the United States District Court for the District
of Vermont (the "Vermont District Court") entitled Maska U.S. Inc. V. Kansa, et
al., Doc. No. 5:93-CV-309 (the "Insurance Litigation") against nine of its
liability insurers seeking coverage for environmental cleanup costs arising out
of claims brought by the State of Vermont and an adjoining landowner for their
failure to defend or to indemnify Maska with respect to these claims.

On September 30, 1996, United States Magistrate Judge Jerome J. Neidermeier
issued a Magistrate Judge's Report and Recommendation (the "Magistrate Report"),
which analyzes legal issues and recommends that the Vermont District Court grant
Maska's motion for partial summary judgment on the issue of the duty to defend.
The report also recommends that all the insurers' motions for summary judgment
be denied, except for two on certain individual policies which Maska conceded
provide no coverage for its claims. On December 2, 1996, Chief Judge J. Garvin
Murtha adopted the Magistrate Report in its entirety. Various motions for
reconsideration of that order and for certification of the issue for immediate
appeal have since been denied. After the completion of limited pre-trial
discovery, the case will be scheduled for trial.

In 1992, the owner of a property adjacent to Maska's manufacturing facility in
Bradford, Vermont, filed an action in Vermont Superior Court alleging that its
property has been contaminated as a result of the Company's manufacturing
activities and seeking compensatory and punitive damages under the Vermont
Groundwater Protection Law and various common law theories. During June 1995,
Maska reached a settlement of all claims with the adjacent landowner consisting
of $1,000 cash (which was paid during July 1995) and a $6,000 note. The Company
recorded a provision of $7,000 for this settlement during the year ended
December 31, 1995. Under the Plan, the adjacent landowner received a
distribution of shares of the Company`s New Common Stock to satisfy the note.

A holder of a Maska unsecured claim has asserted an equitable lien on Maska's
recovery, if any, in the Insurance Litigation and also has commenced an
independent action against the defendant insurance companies pursuant to
Vermont's direct action statute. The Company believes that the asserted
equitable lien is without merit and that the independent direct action violated
the automatic stay pursuant to Section 362 of the Bankruptcy Code. The Company
currently is evaluating its options for legal recourse in these matters.


                                       11


<PAGE>


                             SLM INTERNATIONAL, INC.

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)
                         

B. SECURITIES LITIGATION:

On February 14, 1996, the Company, together with certain of its former officers
and directors, reached a settlement with the plaintiffs in a class action
securities litigation. The settlement provided for the cash payment by the
Company's insurer of $8,750, on behalf of certain former officers and directors
of the Company who are defendants. In addition, the Company agreed to issue
1,000,000 shares of its Common Stock which were converted into warrants under
the Reorganization Plan. As a result of the settlement, the Company recorded a
provision of approximately $1,563 (the market value of 1,000,000 shares of
Common Stock on the date the settlement was agreed to) in the year ended
December 31, 1995. During July 1996, the settlement was approved by the
Bankruptcy Court and the U.S. District Court for the Southern District of New
York. Additionally, during August 1996 certain of the Company's creditors filed
an appeal with the Bankruptcy Court with respect to the Bankruptcy Court's
approval of the settlement which was dismissed with prejudice in connection with
the Reorganization Plan.

C. PRODUCT LIABILITY LITIGATION:

A pre-petition personal injury claim involving a spinal injury which was filed
in 1989 has been asserted against the Company for which the Company did not have
sufficient insurance coverage. That claim and its attendant litigation has been
settled, was approved by the Bankruptcy Court and was treated under the
Reorganization Plan pursuant to the terms of the settlement. The Company is
unaware of any other personal injury claims for which there is not adequate
insurance coverage. 

In connection with the claim, American Home Assurance Company ("American Home")
commenced, in 1991, a declaratory judgment action against the Company in the
U.S. District Court for the District of Massachusetts ("Massachusetts District
Court") in respect of its duty to defend and to indemnify the Company and an
action in Quebec Superior Court in Montreal, Canada to recover defense costs.
The Company filed a response to the declaratory judgment action and a
counterclaim in Quebec Superior Court alleging American Home failed to fulfill
its duty to defend the Company. American Home has alleged that it is entitled to
payment in full for any amounts it recovers against the Company. The Company
believes that American Home's claims and contentions are without merit and, in
any event, would be treated under the Reorganization Plan. In the event that the
Company is required to make such a payment, it anticipates having funds
sufficient to meet any Court-ordered obligation. American Home's claim in
respect of the recovery of defense costs against the Company is in the amount of
approximately $575.

Other than certain legal proceedings arising from the ordinary course of
business, which the Company believes will not have a material adverse effect on
the financial position, results of operations, or cash flows, there is no other
litigation pending or threatened against the Company.


                                       12


<PAGE>


                             SLM INTERNATIONAL, INC.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


INTRODUCTION

On October 24, 1995, SLM International, Inc. ("SLM") and six of its subsidiaries
filed for relief under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the District of Delaware. SLM and those
subsidiaries chose to seek court protection from creditors in order to conduct
their operations while preparing a reorganization plan. The Bankruptcy Court
entered an order authorizing the joint administration of the Debtors' Chapter 11
Cases. On September 12, 1996, the Debtors filed a Chapter 11 Plan of
Reorganization and on November 13, 1996, the Debtors filed a First Amended
Chapter 11 Plan of Reorganization, as amended from time to time, with the
Bankruptcy Court. On January 23, 1997, the Bankruptcy Court confirmed the
Reorganization Plan which became effective on April 11, 1997 and the Company
emerged from bankruptcy. Disruptions that occurred prior to and which may have
been or may be caused by the Filing will affect the Company's operating
performance for a given period and could continue to affect the Company's
results in 1997.

Financial comparisons herein are based on the combined results for the
Reorganized Company and the Predecessor Company for the nine months and three
months ended September 27, 1997 as compared to results for the Predecessor
Company for the nine months and three months ended September 28, 1996.

SELECTED FINANCIAL DATA

The combined consolidated financial information presented below should be read
in conjunction with the Results of Operations included in this Form 10-Q. FOR
THE PRESENTATION OF THIS STATEMENT, RESULTS FOR THE REORGANIZED COMPANY AND
PREDECESSOR COMPANY HAVE BEEN COMBINED FOR THE 1997 PERIODS.

<TABLE>
                             SLM INTERNATIONAL, INC.

                   COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                                 (In thousands)

<CAPTION>
                                                   For the Three Months         For the Nine Months
                                                           Ended                       Ended
                                                  -----------------------     ------------------------
                                                  Combined                    Combined
                                                  Sept. 27,     Sept. 28,     Sept. 27,      Sept. 28,
                                                     1997         1996          1997           1996
                                                  ---------------------------------------------------
<S>                                                <C>           <C>           <C>           <C>     
Net sales .....................................    $38,696       $44,930       $92,312       $104,645
Cost of goods sold ............................     22,886        29,820        55,804         67,476
                                                  ---------------------------------------------------
    Gross profit ..............................     15,810        15,110        36,508         37,169
Selling, general and administrative     
  expenses ....................................      9,659        11,989        28,409         33,217
Amortization of excess reorganization value ...        604                       1,108
Restructuring charges .........................                    2,488         6,315          2,488
                                                  ---------------------------------------------------
    Operating  income .........................      5,547           633           676          1,464
Debt related fees .............................                    2,085         1,243          5,711
Other expense (income), net ...................        149           (74)          270            (37)
Interest expense ..............................      1,403         3,160         2,617          9,440
                                                  ---------------------------------------------------
    Income (loss) before income
      taxes and extraordinary gain
      on discharge of debt ....................      3,995        (4,538)       (3,454)       (13,650)
Income taxes ..................................        133                         325
                                                  ---------------------------------------------------
   Income (loss) before extraordinary 
     gain on discharge of debt ................      3,862        (4,538)       (3,779)       (13,650)
Extraordinary gain on discharge of debt .......                                 58,726
                                                  ---------------------------------------------------
Net income (loss) .............................    $ 3,862       $(4,538)      $54,947       $(13,650)
                                                  ===================================================
</TABLE>


                                       13



<PAGE>


                             SLM INTERNATIONAL, INC.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

   RESULTS OF OPERATIONS FOR THE NINE MONTHS AND 
   THREE MONTHS ENDED SEPTEMBER 27, 1997

      1997 COMPARED TO 1996

Net sales decreased 11.8% to $92.3 million in the nine months ended September
27, 1997 as compared to $104.6 million in the nine months ended September 28,
1996. The decline in sales resulted primarily from decreases in sales of inline
skates and apparel. Compared to 1996, sales in 1997 continued to be negatively
affected by a weak retail environment in the sports and leisure products
industry, increased amounts of deeply discounted merchandise offered by other
manufacturers and delays in receiving goods from overseas suppliers during the
three months ended September 27, 1997. Furthermore, the Company reduced the
amount of business conducted with certain specialty retailers and mass
merchandisers to whom previous sales were made at low margins and high credit
risk, and has reduced or eliminated certain incentives to customers. Net sales
decreased 13.9% to $38.7 million in the three months ended September 27, 1997 as
compared to $44.9 million in the three months ended September 28, 1996. The
decline in sales resulted primarily from the same factors which affected the
nine month sales noted above. The delays experienced in receiving goods from
overseas suppliers during the three months ended September 27, 1997 are
anticipated to be mitigated subsequent to September 27, 1997.

Gross profit for the nine months ended September 27, 1997 was $36.5 million
compared to $37.2 million in 1996, a decrease of 1.8% despite a sales decline of
11.8% during the same period. Measured as a percentage of net sales, gross
profit margins increased to 39.5% in 1997 from 35.5% in 1996. These higher gross
profit margins are a result of favorable product mix, improved utilization of
manufacturing capacity and reduced sales of excess, obsolete and slow moving
inventories as compared to 1996. Gross profit for the three months ended
September 27, 1997 was $15.8 million compared to $15.1 million for 1996, an
increase of 4.6% despite a sales decline of 13.9% during the same period.
Measured as a percentage of net sales, gross profit margins increased to 40.9%
in 1997 from 33.6% in 1996. Gross profit was positively affected by product mix
and improved utilization of manufacturing capacity.

For the nine months ended September 27, 1997, selling, general and
administrative expenses decreased 14.5% to $28.4 million compared to $33.2
million in the prior year period. Measured as a percentage of net sales, these
expenses were 30.8% in 1997 versus 31.7% in 1996. Expenses decreased due to
generally lower operating expenses resulting from the Company's continued
efforts to aggressively reduce costs, reduced variable selling costs,
principally commissions, and lower distribution and administrative expenses,
including personnel costs. The decreases were offset in part by increased sales
taxes. For the three months ended September 27, 1997, selling, general and
administrative expenses decreased 19.4% to $9.7 million from $12.0 million in
the same period in 1996 due to the factors noted above and an entire quarter of
cost reductions resulting from the Company's restructuring efforts. Measured as
a percentage of net sales, these expenses decreased to 25% from 26.7%.

Effective April 12, 1997, the Company began amortizing its excess reorganization
value which was established in accordance with fresh-start reporting. This
non-cash amortization amounted to $1,108 and $604 in the nine months and three
months ended September 27, 1997, respectively.

During the nine months ended September 27, 1997, the Company recorded
restructuring costs of $6.3 million relating to the downsizing of its
maufacturing and distribution operations. These costs consist primarily of lease
cancellation costs ($2.3 million) at its Peterborough, N.H. and Beauport, Quebec
facilities, impairment of fixed assets ($1.7 million), principally leasehold
improvements at its Peterborough, N.H. facility, and severance and employee
costs associated with the shutdown of three of the Company's manufacturing
facilities, and are included in Restructuring Charges in the Unaudited
Consolidated Statements of Operations. During the three and nine months ended
September 28, 1996, the Company recorded costs of $2.5 million to reflect the
impact of reorganizing management, consisting primarily of severance pay,
including that of the Company's former Chief Executive Officer.

Excluding the amortization of excess reorganization value and restructuring
charges, operating income for the nine months ended September 27, 1997 was $8.1
million compared to $4.0 million in the comparable prior year period and $6.2
million and $3.1 million for the three months ended September 27, 1997 and
September 28, 1996, respectively. The higher level of operating income in 1997
was primarily the result of increased gross profit margins and lower selling,
general and administrative expenses discussed above. Including the amortization
of 


                                       14


<PAGE>


                             SLM INTERNATIONAL, INC.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


excess reorganization value and restructuring charges, the operating income
was $0.7 million and $1.5 million for the nine months ended September 27, 1997
and September 28, 1996, respectively. Operating income for the three months
ended September 27, 1997 was $5.5 million compared to $0.6 million for the same
period in 1996.

As a result of the Debtor's Chapter 11 Cases, the Company incurred significant
legal and professional fees totaling $1.2 million and $5.7 million during the
nine months ended September 27, 1997 and September 28, 1996, respectively, and
$2.1 million during the three months ended September 28, 1996. These fees
include the cost of the Company's legal counsellors, financial advisors and
consultants, as well as those of certain of its creditors. These costs, which
represent approximately 33% and 42% of the Company's income (loss) before
extraordinary gain on discharge of debt for the nine months ended September 27,
1997 and September 28, 1996, respectively, and 46% for the three months ended
September 28, 1996, are included as Debt Related Fees in the Unaudited
Consolidated Statements of Operations for the periods then ended.


Interest expense approximated $2.6 million and $1.4 million for the nine months
and three months ended September 27, 1997 and $9.4 million and $3.2 million for
the respective periods ended September 28, 1996. During the reorganization
proceedings, the Company was generally not permitted to pay interest. Therefore,
the Company recorded interest expense only to the extent paid or earned during
the proceedings and to the extent it was probable that the Bankruptcy Court
would allow interest on pre-Petition Date debt as a priority, secured or
unsecured claim. On the Effective Date, the Company entered into various debt
agreements (see "Liquidity and Capital Resources" below) resulting in 1997
interest expense.

The Company's loss before extraordinary gain on discharge of debt for the nine
months ended September 27, 1997 was $3.8 million compared to $13.7 million in
the comparable prior year period. For the three months ended September 27, 1997,
income was $3.9 million compared to a loss of $4.5 million for the three months
ended September 28, 1996.

On April 11, 1997, the Company emerged from bankruptcy and, as a result of its
Reorganization Plan and implementation of fresh-start reporting, approximately
$58.7 million of its liabilities were forgiven and are included in Extraordinary
Gain on Discharge of Debt in the Unaudited Consolidated Statements of
Operations.

The Company`s net income for the nine months and three months ended September
27, 1997 was $54.9 million and $3.9 million, respectively, compared to net
losses of $13.7 million and $4.5 million in the comparable prior year periods.

LIQUIDITY AND CAPITAL RESOURCES

On October 24, 1995, SLM International, Inc. and six of its subsidiaries filed
for relief under Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the District of Delaware. From the Filing to April
11, 1997, the Company and those subsidiaries operated their businesses in the
ordinary course as debtors-in-possession subject to the jurisdiction of the
Bankruptcy Court. The Bankruptcy Court entered an order authorizing the joint
administration of the Debtors' Chapter 11 Cases. On September 12, 1996 the
Debtors filed a Chapter 11 Plan of Reorganization and on November 13, 1996, the
Debtors filed a First Amended Chapter 11 Plan of Reorganization, as amended from
time to time (the "Reorganization Plan"), with the Bankruptcy Court. On January
23, 1997, the Bankruptcy Court confirmed the Reorganization Plan and the Plan
became effective on April 11, 1997. 

The Filing enabled the Company to stabilize its liquidity position because the
cash requirements for the payment of accrued interest, accounts payable and
other liabilities, which arose prior to the Filing, were in most cases deferred
until the Reorganization Plan was approved by the Bankruptcy Court.

Management expects to finance the Company's working capital and capital
expenditures requirements through cash generated by its operations and through
its new credit facilities. On the Effective Date of the Reorganization Plan, the
Company and two of its U.S. subsidiaries, Maska U.S., Inc. and #1 Apparel, Inc.,
entered into a Credit Agreement (the "U.S. Credit Agreement") with the lenders
referred to therein and The Chase Manhattan Bank, as Agent ("Chase").
Simultaneously, one of the Company's Canadian subsidiaries, Sport Maska Inc.,
entered into a Credit Agreement (the "Canadian Credit Agreement" and, together
with the U.S. Credit Agreement, the "Credit Agreements") with The Chase
Manhattan Bank of Canada ("Chase Canada"). The maximum amount of loans and
letters of credit that may be outstanding under the Credit Agreements is $74.0
million, consisting of $35.0 million of revolving credit loans under the U.S.
Credit Agreement, $35.0 million of revolving credit loans under the Canadian
Credit Agreement and a $4.0 million term loan (which was permanently reduced by
$2.1 million in June 1997 with the proceeds from the sale of one

  
                                     15


<PAGE>


                             SLM INTERNATIONAL, INC.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

of the Company's subsidiaries) under the U.S. Credit Agreement. Borrowings under
the Credit Agreements are guaranteed by certain subsidiaries and are secured by
substantially all of the assets (including, without limitation, accounts
receivable, inventory and the stock of certain subsidiaries) of the Company.
Total amounts outstanding under the Credit Agreements were $9.1 million and
$10.9 million at April 14, 1997 and September 27, 1997, respectively.

Borrowings under the U.S. Credit Agreement bear interest at an alternate base
rate plus 1% per annum or at an interest rate based on LIBOR plus 2 3/4% per
annum. Borrowings under the Canadian Credit Agreement bear interest at Chase
Canada's prime rate or at an alternate base rate plus 1% per annum. In addition,
the Company is charged a quarterly commitment fee of up to 3/8 of 1% on the
unused portion of the revolving credit facilities under the Credit Agreements
and certain other fees.

The Credit Agreements include customary affirmative and negative covenants,
including those relating to capital expenditures, interest coverage and the
incurrence of additional indebtedness.

On April 11, 1997 the Company issued $29.5 million principal amount of 14%
Senior Secured Notes due April 1, 2004 (the "New Senior Notes"), pursuant to an
Indenture with The Bank of New York, as trustee. The New Senior Notes were
issued by the Company under the Reorganization Plan as partial satisfaction of
the Company's obligations to its former senior lenders under a Loan and Security
Agreement ("Bank Agreement") with a syndicate of banks led by Fleet Credit
Corporation. Under the Plan, the lenders under the Bank Agreement also received
(i) $44.2 million in cash; and (ii) 2,470,000 shares of New Common Stock,
representing approximately 38.0% of the outstanding New Common Stock. The
lenders sold such shares to W.S. Acquisition L.L.C. on the Effective Date.

Interest is payable on the New Senior Notes semi-annually at the rate of 14% per
annum, with such interest rate being permanently reduced by up to 4% if the
Company meets certain earnings tests. Further, of the initial 14% interest rate,
10% is payable in cash and 4% is payable in cash or by the issuance of
additional New Senior Notes. The New Senior Notes have a term of seven years
with principal payments beginning in the fifth year. The New Senior Notes are
guaranteed by certain subsidiaries and are collateralized by substantially all
of the assets (including, without limitation, accounts receivable, inventory and
the stock of certain subsidiaries) of the Company, the two U.S. Subsidiaries
referred to above and the Company's other subsidiaries which are guarantors. The
lien of the trustee for the benefit of itself and the New Senior Noteholders is
junior to the liens of Chase and Chase Canada. The Indenture also includes
customary affirmative and negative covenants.

The Company's financing requirements for long-term growth, future capital
expenditures and debt service are expected to be met through cash generated by
its operations and through its new credit facilities. During the nine months
ended September 27, 1997, the Company's operations neither provided nor used
cash as compared to a use of $2.9 million in 1996, net of a source of cash of
$6.8 million provided by discontinued operations. The Company incurred a loss of
$3.8 million for the nine months ended September 27, 1997, exclusive of the
extraordinary gain on discharge of debt, compared to a loss of $13.7 million for
the nine months ended September 28, 1996; however, the cash impact was mitigated
due to non-cash charges for receivables, inventory, intangibles and
restructuring charges. Earning before interest, taxes, depreciation,
amortization, restructuring charges and debt related fees ("EBITDA") was $10.1
for the nine months ended September 27, 1997 compared to $6.1 million for the
previous year. EBITDA for the nine months ended September 27, 1997 does not
include the full impact of the cost reductions from the Company's restructuring
plan, as many of the cost reductions only began in May 1997.

Cash provided by investing activities during the nine months ended September 27,
1997 of $1.6 million includes $2.1 million of proceeds from the sale of one of
the Company`s subsidiaries, offset, in part, by $0.9 million of purchases of
fixed assets. Cash used in investing activities included $1.8 million of
purchases of fixed assets during the nine months ended September 28, 1996.

Net cash used in financing activities during the nine months ended September 27,
1997 was approximately $36.7 million, resulting primarily from payments to
creditors on the Effective Date to satisfy claims ($36.1 million), costs
incurred to secure new debt facilities ($2.1 million), principal payments on
debt ($2.4 million) including payment on the term loan under the U.S. Credit
Agreement, offset in part by borrowings under the Company`s Credit Agreements
($4.0 million) for its short-term working capital requirements. Net cash used in
financing activities during the nine months ended September 28, 1996 was
approximately $5.3 million, consisting of the


                                       16



<PAGE>


                             SLM INTERNATIONAL, INC.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


use of cash from discontinued operations for principal payments on the Company's
secured debt as allowed by the Bankruptcy Court.

The Company follows the customary practice in the sporting goods industry of
offering extended payment terms to credit worthy customers on qualified orders.
The Company's working capital requirements generally peak in the third and
fourth quarters as it builds inventory and makes shipments under these extended
payment terms.


                                       17



<PAGE>


                             SLM INTERNATIONAL, INC.

                                     PART II

                                OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

        Reference is made to Note 10 of Notes to Unaudited Consolidated
        Financial Statements included in Part I of this report.

ITEM 5. OTHER INFORMATION

        None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

        (a) Exhibits:

            27.1 Financial Data Schedule.

        (b) Reports filed on Form 8-K during the quarter ended 
            September 27, 1997:

            None.


                                       18


<PAGE>


                             SLM INTERNATIONAL, INC.

                                   SIGNATURES


Pursuant to the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.


                                      SLM INTERNATIONAL, INC.
                                           (Registrant)

 
                                      By: /s/ RUSSELL J. DAVID
                                           -------------------------------------
                                           Name:  Russell J. David
                                           Title: Senior Vice President, Finance
                                                  (Principal Financial and 
                                                   Accounting Officer)


Date: November 14, 1997