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

                       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 June 27, 1998


                                       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, 
    P.O. 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 ISSUERS INVOLVED IN BANKRUPTCY
                    PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

     Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under the plan
confirmed by the court:

                              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 August 7, 1998
             ---------------                -----------------------------
              Common Stock,                          6,500,507
             $.01 par value

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



<PAGE>


                             SLM INTERNATIONAL, INC.

                                    FORM 10-Q

                                   ----------

                                      INDEX


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

  ITEM 1. FINANCIAL STATEMENTS

          Unaudited Consolidated Balance Sheets at June 27,
          1998, December 31, 1997 and June 28, 1997                           1

          Unaudited Consolidated Statements of Operations for the
          Three Months and Six Months ended June 27, 1998
          and for April 12 through June 28, 1997, March
          30 through April 11, 1997 and January 1 through
          April 11, 1997                                                      2

          Unaudited Consolidated Statements of Comprehensive (Loss)
          Income for the Three Months and Six Months ended
          June 27, 1998 and for April 12 through
          June 28, 1997, March 30 through April 11, 1997
          and January 1 through April 11, 1997                                3

          Unaudited Consolidated Statements of Cash Flows for the Six
          Months Ended June 27, 1998 and for April 12 through June
          28, 1997 and January 1 through April 11, 1997                       4

          Notes to Unaudited Consolidated Financial Statements                5


Item 2.   Management's Discussion and Analysis of Financial Condition and 
          Results of Operations                                              12

Part II    Other Information
----------------------------

Item 1.    Legal Proceedings                                                 16

Item 5.    Other Information                                                 16

Item 6.    Exhibits and Reports on Form 8-K                                  16



<PAGE>

<TABLE>
<CAPTION>



                             SLM INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                        (In thousands, except share data)


                                                  June 27, 1998  Dec. 31, 1997 June 28, 1997
                                                  -------------  ------------- -------------
                                                                                 Restated
<S>                                                  <C>          <C>          <C>
ASSETS

Current assets
     Cash and cash equivalents ...................   $     203    $   8,051    $   1,885
     Accounts receivable, net ....................      21,688       22,759       25,671
     Inventories (see Note 8) ....................      34,639       28,475       39,758
     Prepaid expenses and other assets ...........       3,587        4,805        5,529
                                                     ---------    ---------    ---------
     Total current assets ........................      60,117       64,090       72,843
Property, plant and equipment, net of accumulated
     depreciation and amortization ($2,648,
     $1,466 and $535, respectively) ..............       9,167        9,508        9,848
Intangible and other assets, net of accumulated
     amortization ($3,787, $2,226 and $654,
     respectively) ...............................      43,596       45,182       48,669
                                                     =========    =========    =========
     Total assets ................................   $ 112,880    $ 118,780    $ 131,360
                                                     =========    =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
     Short-term debt (see Note 9) ................   $  15,467    $     415    $   9,821
     Accounts payable and accrued liabilities ....      15,802       14,174       18,389
     Long-term debt, current portion (see Note 9)        2,653        1,421        1,484
     Income taxes payable ........................         819        1,214          777
     Liabilities subject to compromise under
         reorganization proceedings (see Note 3) .       1,130        1,130        2,130
                                                     ---------    ---------    ---------

     Total current liabilities ...................      35,871       18,354       32,601
Long-term debt (see Note 9) ......................      11,875       30,064       30,737
Deferred income taxes ............................       1,450        1,480          491
                                                     ---------    ---------    ---------
     Total liabilities ...........................      49,196       49,898       63,829

Commitments and contingencies (see Note 11)

Stockholders' equity

Commonstock, par value $0.01 per share, 15,000,000
      shares authorized, 6,500,507
      shares issued and outstanding
      at June 27, 1998 and 6,500,000 shares
      issued and outstanding at December 31, 1997
      and June 28, 1997 ..........................          65           65           65
Additional paid-in capital .......................      66,515       66,507       66,507
Retained (deficit) earnings ......................      (1,238)       2,859          838
Foreign currency translation adjustments .........      (1,658)        (549)         121
                                                     ---------    ---------    ---------
     Total stockholders' equity ..................      63,684       68,882       67,531
                                                     ---------    ---------    ---------
     Total liabilities and stockholders' equity ..   $ 112,880    $ 118,780    $ 131,360
                                                     =========    =========    =========

</TABLE>

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


                                       1

<PAGE>


                             SLM INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                        (In thousands, except share data)
<TABLE>
<CAPTION>

                                                                     New SLM                                       Old SLM
                                              -------------------------------------------------         ---------------------------
                                                    1998              1998              1997              1997             1997
                                                    ----              ----              ----              ----             ----
                                                                                      April 12          
                                                For the Three      For the Six        through           March 30         January 1
                                                Months ended      Months ended        June 28           through           through 
                                                   June 27           June 27         Restated           April 11          April 11 
                                              ---------------     ------------        ---------         --------         ----------
<S>                                             <C>               <C>                  <C>               <C>               <C>
Net Sales ...................................   $ 24,458          $ 42,279             $ 28,077          $  3,824          $ 25,539
Cost of goods sold ..........................     14,508            25,704               16,911             2,409            16,007
                                                --------          --------             --------          --------          --------
    Gross profit ............................      9,950            16,575               11,166             1,415             9,532
Selling, general and administrative expenses       9,057            17,711                7,429             2,104            11,321
Amortization of excess reorganization value]                                                                             
    (see Note 12) ...........................        602             1,226                  528                          
Restructuring charges (see Note 5) ..........                                                                                 6,315
                                                --------          --------             --------          --------          --------
       Operating income (loss) ..............        291            (2,362)               3,209              (689)           (8,104)
Chapter 11 and debt related fees (see Note 6)                                                                 311             1,243
Other (income) expense, net .................        (99)                6                  (96)              114               193
Interest expense (see Note 9B) ..............        492             1,683                1,100                92               114
                                                --------          --------             --------          --------          --------
    (Loss) income  before income taxes                                                                                   
       and extraordinary gain on
       discharge of debt ....................       (102)           (4,051)               2,205            (1,206)           (9,654)
Income taxes ................................         23                46                1,367                32                32
                                                --------          --------             --------          --------          --------
       (Loss) income before extraordinary                                                                                
          gain  on discharge of debt ........       (125)           (4,097)                 838            (1,238)           (9,686)
Extraordinary gain on discharge of debt .....                                                              58,726            58,726
                                                --------          --------             --------          --------          --------
       Net (loss) income ....................   $   (125)         $ (4,097)            $    838          $ 57,488          $ 49,040
                                                ========          ========             ========          ========          ========
Net (loss) income per  share (b) (see 
       Note 10):
                                                
         Basic net income per share (see
           Note 10) .........................   $  (0.02)         $  (0.63)            $   0.13
         Diluted net income per share           ========          ========             ========
           (see Note 10) ....................   $  (0.02)         $  (0.63)            $   0.13
                                                ========          ========             ========
</TABLE>

--------------

(a)  Due to the Reorganization Plan and implementation of fresh-start reporting,
     financial statements after April 11, 1997 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.

(b)  Common shares and per share data for the 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.


                                       2

<PAGE>

<TABLE>
<CAPTION>

                                                  SLM INTERNATIONAL, INC.
                                   CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
                                                        (UNAUDITED)
                                                       (In thousands)
 
                                                                     New SLM                                       Old SLM
                                              ----------------------------------------------------    ------------------------------
                                                    1998              1998               1997              1997             1997
                                                    ----              ----               ----              ----             ----
                                                For the Three      For the Six         April 12          March 30         January 1
                                                Months ended      Months ended         through           through           through
                                                   June 27           June 27           June 28           April 11         April 11
                                                ------------      ------------         --------          ---------        ----------
<S>                                               <C>              <C>                   <C>             <C>               <C> 
Net (loss) income ............................    $  (125)         $(4,097)              $838            $57,488           $49,040
Foreign currency translation adjustments .....     (1,581)          (1,109)               121                257                85
                                                  -------          -------               ----            -------           ------- 
Net comprehensive (loss) income ..............    $(1,706)         $(5,206)              $959            $57,745           $49,125
                                                  =======          =======               ====            =======           =======
</TABLE>
----------

(a)  Due to the Reorganization Plan and implementation of fresh-start reporting,
     financial statements after April 11, 1997 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>


<TABLE>
<CAPTION>


                                                  SLM INTERNATIONAL, INC.
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                        (UNAUDITED)
                                             (In thousands, except share data)

                                                             New SLM                    Old SLM
                                              --------------------------------       --------------
                                                    1998             1997               1997
                                                    ----             ----               ----
                                                 For the Six       April 12          January 1
                                                Months ended        through           through
                                                   June 27          June 28           April 11
                                              ---------------      --------          ----------
                                                                   Restated

<S>                                             <C>                <C>              <C>
OPERATING ACTIVITIES:
Net (loss) income .........................     $ (4,097)          $    838         $ 49,040
Adjustments to reconcile net (loss) income                                          
     to net cash (used in) provided by                                              
     operating activities:                                                          
       Extraordinary gain on discharge of  
           debt ...........................                                          (58,726)
       Restructuring charges ..............                                            6,315
       Depreciation and amortization ......        2,840              1,189              807
       Provisions for inventory, doubtful                                           
           accounts and other deductions ..        1,775              2,384            2,301
       Loss (gain) on sale and disposal of                                          
           fixed assets ...................          (53)               (26)               5
       Loss (gain) on foreign exchange ....         (240)                                263
Change in operating assets and liabilities:                                         
       Accounts receivable ................         (604)             1,304           14,660
       Inventories ........................       (6,421)            (4,875)          (7,026)
       Prepaid expenses and other assets ..          311                599              816
       Accounts payable and accrued 
           liabilities ....................        1,081             (8,047)          (1,210)
       Income taxes payable ...............          517                                 189 
                                                --------           --------         --------
           Net cash (used in) provided by                                           
              operating activities ........       (4,891)            (6,634)           7,434
                                                --------           --------         --------  
INVESTING ACTIVITIES:                                                               
       Proceeds from sales of subsidiary,  
           net ............................                           1,831                                                  
       Purchases of fixed assets ..........       (1,054)              (328)            (285)
       Proceeds from sales of fixed assets            78                 27               73
                                                --------           --------         --------  
           Net cash (used in) provided by                                           
              investing activities ........         (976)             1,530             (212)
                                                --------           --------         --------  
FINANCING ACTIVITIES:                                                               
       Proceeds from borrowings, net ......       15,052              4,721         
       Principal payments on debt .........      (31,956)            (2,196)             (89)
       Proceeds from long-term debt .......       15,000                            
       Exercise of warrants ...............            8                            
       Deferred financing costs ...........          (90)                             (2,146)
       Liabilities subject to compromise ..                                          (36,098)
                                                --------           --------         --------  
           Net cash (used in)  provided by  
              financing activities ........       (1,986)             2,525          (38,333)
                                                --------           --------         --------
Effects of foreign exchange rate changes on     
   cash ...................................            5                  8              (22)  
                                                --------           --------         --------
Decrease in cash ..........................       (7,848)            (2,571)         (31,133)
Cash and cash equivalents at beginning of 
  period ..................................        8,051              4,456           35,589
                                                --------           --------         --------
Cash and cash equivalents at end of period      $    203           $  1,885         $  4,456
                                                ========           ========         ========
                                                                
</TABLE>

(a)  Due to the Reorganization Plan and implementation of fresh-start reporting,
     financial statements after April 11, 1997 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.

                                       4


<PAGE>





                             SLM INTERNATIONAL, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. DESCRIPTION OF BUSINESS AND PRINCIPLES OF CONSOLIDATION:

SLM International, Inc. ("SLM") was incorporated in September 1991 and
reorganized in April 1997. The Company designs, develops, manufactures and
markets a broad range of sporting goods. The Company manufactures hockey and
hockey related products, including hockey uniforms, protective equipment,
hockey, figure and inline skates and street hockey products, marketed under the
CCM brand name and private label brands, and licensed sports apparel under the
CCM and #1 Apparel names. The Company sells its products worldwide to a diverse
customer base consisting of mass merchandisers, retailers, wholesalers, sporting
goods shops and international distributors. The Company manufactures and
distributes most of its products at facilities in North America and sources
products internationally. All significant intercompany transactions and accounts
have been eliminated.

B. BASIS OF PRESENTATION:

The accompanying unaudited interim consolidated financial statements appearing
in this quarterly report have been prepared on a basis consistent with the
annual financial statements of SLM and its subsidiaries (collectively, the
"Company"). SLM and six of its subsidiaries (collectively, "Old SLM") 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, Old SLM filed a Chapter 11 Plan of Reorganization and on
November 13, 1996, Old SLM 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 Old SLM emerged from bankruptcy ("New SLM") (see Notes 2 and 12).

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 preceding 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 New
SLM and the Company accounted for such Reorganization Plan using "fresh-start"
reporting (see Note 12).

In the opinion of management, all normal recurring adjustments necessary for a
fair presentation of the Company's Unaudited Consolidated Balance Sheets,
Statements of Operations, Statements of Comprehensive (Loss) Income and
Statements of Cash Flows for the 1998 and 1997 periods 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
periods 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, 1997. Certain prior period amounts
have been reclassified to conform to the current period presentation.

C. ACCOUNTING PRONOUNCEMENTS:

As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130 ("SFAS 130") "Reporting Comprehensive Income". SFAS 130
establishes new rules for the reporting of comprehensive income and its
components; however, the adoption of this Statement had no impact on the
Company's net income or stockholders' equity. SFAS 130 requires reporting, most
notably, adjustments arising from foreign currency translation adjustments,
which prior to the adoption were reported separately in stockholders' equity, to
be included in other comprehensive income. Prior year financial statements have
been reclassified to conform to the requirements of SFAS 130.

                                       5

<PAGE>

                             SLM INTERNATIONAL, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)


2. REORGANIZATION CASE

On April 11, 1997 the Company emerged from bankruptcy. Under the Reorganization
Plan, among other things:

o    Old SLM's secured creditors received $44,213 in cash, $29,500 principal in
     new senior notes (the "Senior Secured Notes") and 2,470,000 shares of new
     common stock (the "New Common Stock") of New SLM, in exchange for
     approximately $108,000 of secured and unsecured indebtedness (which amount
     includes 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 New SLM. The lenders sold such shares
     to W.S. Acquisition L.L.C. on the Effective Date. The Senior Secured Notes
     had a term of seven years with principal payments beginning in the fifth
     year. On March 16, 1998 the Company prepaid the Senior Secured Notes in
     full (see Note 9).

o    Old SLM's unsecured creditors received: 4,030,000 shares of New Common
     Stock representing, at the time of issuance, 62.0% of the ownership of New
     SLM, subject to dilution upon the exercise of warrants distributed to
     equity security holders and stock options which have been or may be issued
     to New SLM'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    Old SLM'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) 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.

3. LIABILITIES SUBJECT TO COMPROMISE UNDER REORGANIZATION PROCEEDINGS

Substantially all the Company's liabilities as of the Petition Date were subject
to compromise 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.

Liabilities subject to compromise under reorganization proceedings consist of
priority claims, the repayment of which the Company is required to prioritize
under bankruptcy law, which are comprised principally of income and property tax
claims. At June 27, 1998, December 31, 1997 and June 28, 1997, priority claims
of $1,130, $1,130 and $2,130, respectively, remain subject to resolution with
the Bankruptcy Court.

4. SALE OF SUBSIDIARY

In May 1997, the Company sold for cash of $2,125 (including $294 cash on hand)
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.

5. RESTRUCTURING CHARGES

During 1997, prior to its emergence from bankruptcy, 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.

                                       6


<PAGE>

                             SLM INTERNATIONAL, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)


6. CHAPTER 11 AND DEBT RELATED FEES

As a result of the Company's Filing, Old SLM's continuing operations incurred
significant legal and professional fees totaling $311 and $1,243 for March 30
through April 11, 1997 and January 1 through April 11, 1997, respectively. These
fees include the cost of the Company's legal counselors, financial advisors and
consultants, as well as those of its bankers, senior noteholders and creditors.
The Chapter 11 and debt related fees for March 30 through April 11, 1997 and
January 1 through April 11, 1997 are net of $99 and $500, respectively, of
interest earned on accumulated cash resulting from the Filing. These costs are
included as Chapter 11 and debt related fees in the Unaudited Consolidated
Statements of Operations.

7. EQUITY TRANSACTIONS

As of the Effective Date, New SLM has 15,000,000 shares of New Common Stock
authorized. In addition, in April 1997, New SLM issued 300,000 5-year warrants
to Old SLM's shareholders to purchase an aggregate of 300,000 shares of New
Common Stock at an exercise price of $16.92 per share. During the six months
ended June 27, 1998, New SLM issued 507 shares of New Common Stock with respect
to the exercise of warrants. At June 27, 1998, 6,500,507 shares of New Common
Stock were issued and outstanding.

8. INVENTORIES Net inventories consist of:

                              June 27, 1998   Dec. 31, 1997  June 28, 1997
                              -------------   -------------  -------------
Finished products ...........    $27,032         $20,894       $31,385
Work in process .............      1,793           1,561         1,734
Raw materials and supplies ..      5,814           6,020         6,639
                                 -------         -------       -------
                                 $34,639         $28,475       $39,758
                                 =======         =======       ======= 

9. INDEBTEDNESS

A. 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 could be outstanding under the Credit Agreements was
$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.

During March 1998, the Company amended its Credit Agreements (the "New Credit
Agreements"). The maximum amount of loans that may be outstanding under the New
Credit Agreements is $60,000, consisting of $45,000 revolving credit loans
(subject to collateral availability) and a $15,000 term loan ("New Term Loan").
In completing the amendments, the Company redeemed, in full, its Senior Secured
Notes and all amounts outstanding under the term loan under its U.S. Credit
Agreement. The redemptions were effected by borrowings under the New Credit
Agreements (revolving credit loan and term loan borrowings) and use of the
Company's cash on hand.

Borrowings under the New Credit Agreements bear interest at an alternate base
rate per annum or at an interest rate based on LIBOR plus 1 3/4% per annum on
U.S. revolving credit loans, at Chase Canada's prime rate or at an alternate
base rate per annum on Canadian revolving credit loans, and at an alternate base
rate plus 1/4% per annum or at an interest rate based on LIBOR plus 2% per annum
on the New Term Loan. Under the New Term Loan, interest is payable on a monthly
basis and principal is payable in quarterly installments of $625 through April
2000, beginning in April 1998. 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
loans under the New Credit Agreements and certain other fees.

                                       7

<PAGE>

                             SLM INTERNATIONAL, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)


Borrowings under the New Credit Agreements 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 U.S. Subsidiaries and the Company's
other subsidiaries which are guarantors. Borrowings under the New Canadian
Credit Agreement are further collateralized by a letter of credit amounting to
$7,500 at June 27, 1998. Total amounts outstanding under the New Credit
Agreements and the Credit Agreements were $29,842, $1,790 and $11,696 at June
27, 1998, December 31, 1997 and June 28, 1997, respectively.

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

B. SENIOR SECURED NOTES

On April 11, 1997 the Company issued $29,500 principal amount of 14% Senior
Secured Notes due April 1, 2004 (the "Senior Secured Notes"), pursuant to an
Indenture with The Bank of New York, as trustee. Interest was payable on the
Senior Secured Notes semi-annually at the rate of 14% per annum, with such
interest rate being permanently reduced by up to 4% if the Company met certain
earnings tests.

The Senior Secured Notes were guaranteed by certain subsidiaries and were
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 Senior
Secured Noteholders was junior to the liens of Chase and Chase Canada.

In March 1998, the Company redeemed, in full, the Senior Secured Notes and
incurred a pre-payment charge of approximately $300, which is included in
Interest Expense. (see Note 9A).

10. EARNINGS PER SHARE

The following represents the reconciliation of the basic and dilutive earnings
per share amounts of New SLM for the periods indicated. Amounts presented for
1997 have been restated to conform with the provisions of Statement of Financial
Accounting Standards No. 128.


<TABLE>
<CAPTION>

                                                     1998                   1998                1997
                                                For the three            For the six          April 12
                                                 months ended           months ended           through
                                                   June 27                 June 27             June 28
                                                -------------           -------------         ---------
<S>                                               <C>                   <C>                 <C> 
Net (loss) income ............................    $     (125)           $   (4,097)         $      838
                                                  ----------            ----------          ----------
Weighted average common shares
  outstanding (Basic) ........................     6,500,507             6,500,472           6,500,000
                                                  ----------            ----------          ----------
Common equivalent shares (a) .................                                                  88,082
                                                  ----------            ----------          ----------
Total weighted average common and
  common equivalent
  shares outstanding (Diluted) ...............     6,500,507             6,500,472           6,588,082
                                                  ==========            ==========          ==========
Basic net (loss) income per share ............    $    (0.02)           $    (0.63)         $     0.13
                                                  ==========            ==========          ==========
Diluted net (loss) income per share ..........    $    (0.02)           $    (0.63)         $     0.13
                                                  ==========            ==========          ==========

</TABLE>
------------

(a)  Common stock equivalents, warrants and stock options, are included when
     dilutive. As required by Statement of Financial Accounting Standards No.
     128, the Company used the average market price during the periods in
     determining common equivalent shares. The Company's stock had extremely
     limited trading volume during the periods.


                                       8

<PAGE>

                             SLM INTERNATIONAL, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)


11. CONTINGENCIES AND LITIGATION

A. ENVIRONMENTAL LITIGATION:

In April 1996, Maska U.S., Inc. ("Maska"), a wholly-owned subsidiary of the
Company, 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 its Bradford,
Vermont 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 penalty of $250. Maska undertook an investigation required by the Consent
Decree to determine the extent of contamination, the rate of movement and the
concentration of the contaminants and developed a Corrective Action Plan ("CAP")
which was approved by the Vermont Department of Environmental Conservation in
July 1998. The remediation of the property has begun. The estimated cost of
remediating the property, as detailed in the CAP, is approximately $2,550. These
amounts have and will be paid out over the term of the remediation currently
estimated to be 30 years. The Company believes it has accrued sufficient amounts
for this matter.

In 1992, T. Copeland & Sons, Inc. ("Copeland") 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. In June 1995, Maska settled this action for $1,000 cash, paid in
July 1995, and a $6,000 promissory note. Under the Plan, Copeland received a
distribution of shares of New SLM's New Common Stock to satisfy the note.
Copeland asserted the right to recover from the Company the difference between
the aggregate value of the New Common Stock and the amount of the promissory
note. The Company believes that this claim is without merit and has filed its
objection to this claim which is scheduled to be heard by the Bankruptcy Court
in September 1998.

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. 1:93-CV-309 against its liability insurers seeking coverage for
environmental cleanup costs arising out of claims brought by the State of
Vermont and Copeland for their failure to defend or to indemnify Maska with
respect to these claims. Maska reached settlements with three of the liability
insurers prior to trial. The trial against three remaining liability insurers,
resulted in a jury verdict, in July 1998, in Maska's favor in the amount of
$9,151. The jury verdict compensated Maska for its costs to defend itself
against the claims, and to clean up the soil and groundwater around its
property. The Company will account for the judgment and settlements in its
financial statements when realized.

B. PRODUCT LIABILITY LITIGATION:

The Company is unaware of any personal injury claims for which there is
inadequate insurance coverage. 

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 in an action in Quebec Superior
Court in Montreal, Canada to recover defense costs related to a personal injury
claim filed in 1989. 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.


                                       9

<PAGE>

                             SLM INTERNATIONAL, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)


C.  OTHER LITIGATION:

On October 16, 1997, ZMD Sports Investments Inc. and 2938201 Canada Inc.,
landlords of the Company's properties located in St. Jean, Quebec and St.
Hyacinthe, Quebec, brought motions against the Company requiring the Company to
undertake certain repairs to the properties. The Company believes these motions
to be without merit.

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. 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 New SLM 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 New SLM will
achieve its estimated future operating results in all material respects. If such
results are not achieved, the value of New SLM 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 New SLM is deemed to be April 12,
1997.

The following Unaudited Pro Forma Condensed Consolidated Statement of Operations
for the six months ended June 28, 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 New SLM are not comparable to
financial statements prior to that date for Old SLM. However, for presentation
of this statement, results for the six months ended June 28, 1997 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 New SLM 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.

                                       10


<PAGE>


                             SLM INTERNATIONAL, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)

            PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                     For the six months ended June 28, 1997

                           (Unaudited) (in thousands)

<TABLE>
<CAPTION>

                                                           Total Before  
                                                            Adjustments   Adjustments     Pro Forma
                                                           ------------   -----------     ----------
<S>                                                            <C>          <C>             <C>
Net sales ..................................................   $ 53,616    $                $ 53,616
                                                                                            --------
Operating (loss) income ....................................     (4,367)      5,608  a         1,241
Chapter 11 and debt related fees ...........................      1,243      (1,243) b
Other expense, net .........................................        625         210  c           835
Interest expense ...........................................      1,214       1,464  d         2,678
                                                               --------     -------         --------
(Loss) income before income taxes and extraordinary 
     gain on discharge of debt .............................     (7,449)      5,177           (2,272)
Income taxes ...............................................        192       1,856  e         2,048
                                                               --------    --------         --------
(Loss) income before extraordinary gain on discharge of debt     (7,641)      3,321           (4,320)
Extraordinary gain on discharge of debt ....................     58,726     (58,726) f
                                                               --------    --------         --------
Net income (loss) ..........................................   $ 51,085    $(55,405)        $ (4,320)
                                                               ========    ========         ========

</TABLE>


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

a.   To reflect adjustments of $6,315 for restructuring charges, net of $707 for
     amortization of the intangible associated with fresh-start reporting.

b.   To reflect adjustments for costs incurred by Old SLM outside of its
     continuing operations.

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

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

e.   To reflect income taxes associated with adjustments.

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

                                       11


<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
(collectively, "Old SLM") 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. On September 12, 1996, Old SLM filed a Chapter 11 Plan of Reorganization
and, on November 13, 1996, Old SLM 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 Old SLM emerged from bankruptcy ("New
SLM"). Disruptions that occurred prior to and which may have been caused by the
Filing affected the Company's operating performance for a given period and
continued to affect the Company's results in 1997.

Financial comparisons herein are based on the results of New SLM for the six and
three months ended June 27, 1998 as compared to the combined results of New SLM
and Old SLM for the six and three months ended June 28, 1997.

SELECTED FINANCIAL DATA

The following discussion provides an assessment of the Company's results of
continuing operations, financial condition and liquidity and capital resources,
and should be read in conjunction with the Unaudited Consolidated Financial
Statements of the Company and Notes thereto included elsewhere herein. (All
references to "Note(s)" refer to the Notes to Unaudited Consolidated Financial
Statements.) The Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the six months ended June 28, 1997 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 is
provided on page 11 of this Form 10-Q.

<TABLE>
<CAPTION>

                                                  SLM INTERNATIONAL, INC.
                                       COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                        (Unaudited)
                                                       (In thousands)

                                                                For the Three Months Ended          For the Six Months Ended
                                                             -------------------------------     ------------------------------
                                                                                 Combined                            Combined
                                                             June 27, 1998     June 28, 1997     June 27, 1998    June 28, 1997
                                                             -------------     -------------     -------------    -------------
<S>                                                            <C>               <C>               <C>               <C>
Net sales ..............................................       $ 24,458          $ 31,901          $ 42,279          $ 53,616

Cost of goods sold .....................................         14,508            19,320            25,704            32,918
                                                               --------          --------          --------          --------
     Gross profit ......................................          9,950            12,581            16,575            20,698
Selling, general and administrative expenses ...........          9,051             9,533            17,711            18,750
Amortization of excess reorganization value ............            602               528             1,226               528
Restructuring charges ..................................                                                                6,315
                                                               --------          --------          --------          --------
     Operating  income (loss) ..........................            291             2,520            (2,362)           (4,895)
Chapter 11 and debt related fees .......................                              311                               1,243
Other (income) expense, net ............................            (99)               18                 6                97
Interest expense .......................................            492             1,192             1,683             1,214
                                                               --------          --------          --------          --------
     (Loss) income before income taxes and
     extraordinary gain on discharge of debt ...........           (102)              999            (4,051)           (7,449)
Income taxes ...........................................             23             1,399                46             1,399
                                                               --------          --------          --------          --------
     (Loss) before extraordinary gain on
     discharge of debt .................................           (125)             (400)           (4,097)           (8,848)
Extraordinary gain on discharge of debt ................                           58,726                              58,726
                                                               --------          --------          --------          --------
Net (loss)  income .....................................       $   (125)         $ 58,326          $  4,097)         $ 49,878
                                                               ========          ========          ========          ========

</TABLE>


                                       12


<PAGE>

                             SLM INTERNATIONAL, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS 

FOR THE SIX MONTHS AND THE THREE MONTHS ENDED JUNE 27,  1998

1998 COMPARED TO 1997

Net sales decreased 21.1% to $42.3 million in the six months ended June 27,
1998, as compared to $53.7 million in the six months ended June 28, 1997. The
decline in sales resulted primarily from a severe ice storm that struck the
north eastern parts of North America in January 1998, paralyzing businesses
throughout the affected regions including the Company's Quebec operations during
January and part of February 1998, continued softness of the inline skate
market, including the Company's decision to exit the recreational inline skate
market, the continued softness in the licensed sports apparel industry, and in
licensed hockey apparel in particular, and the unfavorable exchange rates for
the Canadian dollar in comparison to 1997. In addition, sales of discontinued
inventory were significantly below 1997 levels as the Company reduced its excess
inventory during 1997. Finally, net sales in 1997 included $1.2 million of sales
($0.5 million in the three months ended June 28, 1997) from Mitchel & King
Skates Limited which was sold in May 1997. Net sales decreased 23.3% to $24.5
million in the three months ended June 27, 1998 as compared to $31.9 million in
the three months ended June 28, 1997. The decline in sales resulted primarily
from the same factors which affected the six month sales noted above.

Gross profit for the six months ended June 27, 1998 was $16.6 million compared
to $20.7 million in 1997, a decrease of 19.9%. Measured as a percentage of net
sales, gross profit margins increased to 39.2% in 1998 from 38.6% in 1997. Gross
profit for the three months ended June 27, 1998 was $10.0 million compared to
$12.6 million for 1997, a decrease of 20.9%. Measured as a percentage of net
sales, gross profit margins increased to 40.7% in 1998 from 39.4% in 1997. The
higher gross profit margins were the result of favorable product mix and
increased utilization of manufacturing capacity. The decrease in gross profit
resulted primarily from the decreased net sales noted above, and offset in part,
by the improved gross profit margins.

For the six months ended June 27, 1998, selling, general and administrative
expenses decreased 5.5% to $17.7 million from $18.8 million in 1997. Measured as
a percentage of net sales, these expenses were 41.9% in 1998 versus 35.0% in
1997. Selling, general and administrative expenses decreased due to generally
lower operating expenses resulting from the Company's restructuring efforts, and
lower variable expenses associated with the decline in sales mentioned above.
For the three months ended June 27, 1998, selling, general and administrative
expenses decreased 5.1% to $9.1 million from $9.5 million in the same period in
1997 due to the factors noted above. Measured as a percentage of net sales,
these expenses increased to 37.0% from 29.9%.

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 $1.2 million and $0.5 million in the six
months ended June 27, 1998 and June 28, 1997, respectively. This amortization
approximated $0.6 million for the three months ended June 27, 1998 and $0.5
million for the same period in 1997.

During the six months ended June 28, 1997, the Company recorded restructuring
charges of $6.3 million relating to the downsizing of its manufacturing and
distribution operations. These costs consisted 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.

Operating loss for the six months ended June 27, 1998 was $1.1 million primarily
as a result of decreased net sales discussed above, compared to operating income
of $1.9 million for the six months ended June 28, 1997, excluding the
amortization of excess reorganization value and restructuring charges. Including
the amortization of excess reorganization value and restructuring charges, the
operating loss was $2.4 million for the six months ended June 27, 1998, compared
to $4.9 million for the six months ended June 28, 1997. Operating income for the
three months ended June 27, 1998 was $0.3 million compared to $2.5 million for
the same period in 1997.

As a result of Old SLM's Chapter 11 Filing, the Company incurred significant
legal and professional fees totaling $1.2 million and $0.3 million during the
six and three months ended June 28, 1997, respectively. These fees include the
cost of the Company's legal counselors, financial advisors and consultants, as
well as those of its bankers, senior noteholders and creditors. These costs,
which represent approximately 14.0% and 77.8% of the Company's (loss) before
extraordinary gain on discharge of debt for the six and three months ended June
28, 1997,

                                       13

<PAGE>

                             SLM INTERNATIONAL, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

respectively, are included as Chapter 11 and Debt Related Fees in the Unaudited
Consolidated Statements of Operations.

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 interest expense thereafter.

Interest expense approximated $1.7 million and $0.5 million for the six and
three months ended June 27, 1998 and $1.2 million for both the six and three
months ended June 28, 1997. The six months ended June 28, 1998 includes a
pre-payment charge of $0.3 million associated with the redemption of the Senior
Secured Notes in March 1998.

The Company's loss before extraordinary gain on discharge of debt for the six
months ended June 27, 1998 was $4.1 million compared to $8.8 million in the
comparable prior year period. For the three months ended June 27, 1997, the loss
was $0.1 million compared to $0.4 million for the three months ended June 28,
1997.

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 loss for the six months and three months ended June 27, 1998
was $4.1 million and $0.1 million, respectively, compared to net income of $49.9
million and $58.3 million in the comparable prior year periods.

 LIQUIDITY AND CAPITAL RESOURCES

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 (these facilities were amended in March 1998, see Note
9). 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 could
be outstanding under the Credit Agreements was $74.0 million. Total amounts
outstanding under the Credit Agreements were $1.8 million and $11.7 million at
December 31, 1997 and June 28, 1997, respectively. In addition, on April 11, 197
the Company issued $29.5 million principal amount of 14% Senior Secured Notes
due April 11, 2004 (the "Senior Secured Notes"), pursuant to an Indenture with
the Bank of New York, as trustee.

During March 1998, the Company amended its Credit Agreements (the "New Credit
Agreements") to take advantage of its improved borrowing capacity. The maximum
amount of loans that may be outstanding under the New Credit Agreements is $60.0
million, consisting of $45.0 million revolving credit loans (subject to
collateral availability) and a $15.0 million term loan ("New Term Loan"). In
completing the amendments the Company redeemed, in full, its Senior Secured
Notes and all amounts outstanding under the term loan under its U.S. Credit
Agreement. The redemptions were effected by the New Credit Agreements (revolving
credit loan and term loan borrowings) and use of the Company's cash on hand.
Total amounts outstanding under the New Credit Agreements were $29.8 million at
June 27, 1998. (See Note 9).

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 six months
ended June 27, 1998, the Company's operations used $4.9 million of cash from its
operations as compared to $0.8 million provided by operations in 1997. The
Company's cash used in operations was primarily from the build-up of inventory
for sales during the remainder of the year. The Company incurred a loss of $4.1
million for the six months ended June 27, 1998 compared to a loss of $8.8
million, exclusive of the extraordinary gain on discharge of debt, in 1997;
however, the cash impact was mitigated due to non-cash provisions for
receivables, inventory and certain restructuring charges. Income before
interest, taxes, depreciation, amortization, restructuring charges and Chapter
11 and debt related fees (EBITDA) was $0.5 million for the six months ended June
27, 1998 compared to $3.3 million in 1997.

                                       14


<PAGE>

                             SLM INTERNATIONAL, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Net Cash used in investing activities during the six months ended June 27,1998
of $1.0 million consisted primarily of purchases of fixed assets. Net cash flows
provided by investing activities of $1.3 million during the six months ended
June 28, 1997 included $1.8 million of proceeds from the sale of one of the
Company's subsidiaries, offset, in part, by $0.6 million of purchased of fixed
assets.

 Net cash flows used in financing activities during the six months ended
June 27, 1998 and June 28, 1997 were approximately $2.0 million and $35.8
million, respectively. The use of cash in 1998 resulted primarily from principal
payments on debt ($32.0 million) including the redemption of the Senior Secured
Notes ($29.5 million) and the term loan under the U.S. Credit Agreement ($1.4
million), offset in part by borrowings under the Company's New Credit Agreements
for the redemption of its long-term debt. Net cash flows used in financing
activities during the six months ended June 28, 1997 of $35.8 million, resulted
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 ($2.3 million) including payment on the term loan
under the U.S. Credit Agreement and offset in part by borrowings under the
Company's Credit Agreements ($4.7 million) for its short-term working capital
requirements

The Company follows the customary practice in the sporting goods industry of
offering extended payment terms to creditworthy 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.

This Quarterly Report on Form 10-Q contains forward-looking statements. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, the words "believes", "anticipates", "expects", and similar
expressions are intended to identify forward-looking statements. These
forward-looking statements involve risks and uncertainities that could render
them materially different, including, but not limited to, general economic
conditions, customers and competition. The Company does not intend to update
these forward-looking statements.


                                       15


<PAGE>


                             SLM INTERNATIONAL, INC.
                                     PART II
                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        Reference is made to Note 11 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 on Form 8-K:

            No reports were filed on Form 8-K during the three months
            ended June 27, 1998.


                                       16


<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: August 10, 1998