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FORM 10-Q CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

Commission File Number: 0-23214

SAMSONITE CORPORATION
(Exact name of registrant as specified in its charter)

(303) 373-2000
(Registrant's telephone number, including area code)

(Former name, if changed since last report)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act) Yes o    No ý

        Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 19,865,573 shares of common stock, par value $0.01 per share, as of June 11, 2003.

FORM 10-Q
CONTENTS

Important Notice:

        This Quarterly Report on Form 10-Q (including documents incorporated by reference herein) contains statements with respect to the Company's expectations or beliefs as to future events. These types of statements are "forward-looking" and are subject to uncertainties. See "Forward-Looking Statements".

PART I—FINANCIAL INFORMATION

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Balance Sheets

as of April 30, 2003 and January 31, 2003

(In thousands)

(Continued)

See accompanying notes to consolidated financial statements

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Balance Sheets

as of April 30, 2003 and January 31, 2003

(In thousands, except share data)

See accompanying notes to consolidated financial statements

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations

for the three months ended April 30, 2003 and 2002

(In thousands, except per share data)

See accompanying notes to consolidated financial statements

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Statement of Stockholders' Equity (Deficit)

and Comprehensive Loss for the three months ended April 30, 2003

(In thousands, except share amounts)

See accompanying notes to consolidated financial statements

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

for the three months ended April 30, 2003 and 2002

(In thousands)

(Continued)

See accompanying notes to consolidated financial statements

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

for the three months ended April 30, 2003 and 2002

(In thousands)

See accompanying notes to consolidated financial statements

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Notes to Consolidated Financial Statements

1.     General

A.

Business

        The principal activity of Samsonite Corporation and subsidiaries (the "Company") is the manufacture and distribution of luggage, casual bags, business cases and travel related products throughout the world, primarily under the Samsonite®, and American Tourister® brand names and other owned and licensed brand names. The principal luggage related product customers of the Company are department/specialty retail stores, mass merchants, catalog showrooms and warehouse clubs. The Company also sells its luggage and other travel-related products through its Company-owned stores. In addition, the Company manufactures and distributes or licenses its name for fashion oriented clothing and footwear in Europe, Asia and the United States.

B.

Interim Financial Statements

        The accompanying unaudited consolidated financial statements reflect all adjustments, which are normal and recurring in nature, and which, in the opinion of management, are necessary to a fair statement of the financial position as of April 30, 2003 and results of operations for the three months ended April 30, 2003 and 2002. These unaudited consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2003.

C.

Use of Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.

D.

Per Share Data

        The Company computes earnings (loss) per share in accordance with the requirements of Statement of Financial Accounting Standards No. 128, Earnings Per Share ("SFAS 128"). SFAS 128 requires the disclosure of "basic" earnings per share and "diluted" earnings per share. Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding increased for potentially dilutive common shares outstanding during the period. The dilutive effect of stock options, warrants, convertible preferred stock and their equivalents is calculated using the treasury stock method.

        Income (loss) per common share and net income (loss) per share for the three months ended April 30, 2003 and 2002 is computed based on a weighted average number of shares of common stock outstanding during the period of 19,865,573 and 19,853,923, respectively. Basic earnings per share and earnings per share—assuming dilution are the same for the three months ended April 30, 2003 and 2002 because of the antidilutive effect of stock options and awards when there is a net loss to common stockholders. There are options to purchase 1,824,952 and 1,927,846 shares outstanding at April 30, 2003 and 2002, respectively.

E.

Royalty Revenues

        The Company licenses its brand names to certain unrelated third parties as well as certain foreign subsidiaries and joint ventures. Net sales include royalties earned of $4,435,000 and $4,541,000 for the three months ended April 30, 2003 and 2002, respectively.

F.

Derivative Financial Instruments

        The Company accounts for derivative financial instruments in accordance with the requirements of Statement of Financial Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), and its corresponding amendments under SFAS No. 138. SFAS 133 requires the Company to measure all derivatives at fair value and to recognize them in the consolidated balance sheet as an asset or liability, depending on the Company's rights or obligations under the applicable derivative contract. For derivatives designated as fair value hedges, the changes in the fair value of both the derivative instrument and the hedged item are recorded in earnings. For derivatives designated as cash flow hedges, the effective portions of changes in fair value of the derivative are reported in other comprehensive income ("OCI") and are subsequently reclassified into earnings when the hedged item affects earnings. Changes in fair value of derivative instruments not designated as hedging instruments and ineffective portions of hedges are recognized in earnings in the current period.

        The Company enters into derivative transactions to hedge interest rates on floating rate debt obligations and forecasted foreign currency transactions. These derivatives are classified as cash flow hedges. The Company also enters into derivative transactions to reduce exposure to the effect of exchange rates on the results of foreign operations (primarily the effect of changes in the euro exchange rate on the results of the Company's significant European operations). These transactions are not allowed hedge accounting treatment under SFAS 133; the Company records these instruments at fair market value and records realized and unrealized gains and losses in Other Income (Expense)—Net.

        Net gains or losses on interest rate hedges are recorded in interest expense when reclassified to earnings. Net gains or losses on hedges of forecasted foreign currency transactions are reclassified to revenues or cost of sales depending on the type of transaction being hedged. Net gains or losses on cash flow hedges are reclassified from other comprehensive income as the underlying hedged transactions occur. At April 30, 2003, cash flow hedges for forecasted foreign currency transactions extend until December 31, 2003. The estimated amount of net losses from interest rate and foreign currency transactions expected to be reclassified into earnings within the next eight months is $1,190,000. The amount ultimately reclassified into earnings is dependent on the effect of changes in interest rates and currency exchange rates over the next eight months.

G.

Stock Based Compensation

        As discussed in Note 1 to the Company's January 31, 2003 financial statements, the Company has adjusted the expected forfeiture rate for all its outstanding options to 100%; therefore, for the three months ended April 30, 2003 there is no pro forma effect on reported net loss for the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation."

2.     Inventories

        Inventories consisted of the following:

3.     Property, Plant and Equipment

        Property, plant and equipment consisted of the following:

4.     Intangible Assets

        Effective February 1, 2002, the Company adopted SFAS 141 and SFAS 142. SFAS 141 requires business combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting. It also specifies the types of acquired intangible assets that are required to be recognized and reported separate from goodwill. SFAS 142 requires that goodwill and certain intangibles no longer be amortized, but instead tested for impairment at least annually. There was no impairment of goodwill upon adoption of SFAS 142.

        Goodwill with a gross book value of $6.2 million ($3.3 million net of accumulated amortization) and the Samsonite and American Tourister tradenames with a gross book value of $107.0 million ($84.1 million net of accumulated amortization) are no longer amortized beginning February 1, 2002. All of the Company's other intangible assets are subject to amortization. There were no significant acquisitions of intangible assets during the three months ended April 30, 2003. Changes in the exchange rate between the U.S. dollar and other foreign currencies, primarily the euro, can affect the reported gross and net book value of the Company's intangible assets. The components of intangible assets, which continue to be amortized, were as follows (in thousands):

        Amortization expense for the net carrying amount of intangible assets at April 30, 2003 is estimated to be $1.0 million for the remainder of fiscal 2004, $1.3 million in fiscal 2005, $1.2 million in fiscal 2006, $1.0 million in fiscal 2007 and $0.9 million in fiscal 2008.

5.     Debt

        Debt consisted of the following:

(a)

The Senior Credit Facility provides for a $70 million credit facility (the "Revolving Credit Facility"), a term loan facility in the amount of $60 million (the "U.S. Term Loan Facility") which was borrowed by Samsonite Corporation, and a term loan facility in the aggregate principal amount of Belgian francs 1,853,750,000 (equivalent to $50 million on the closing date of the facility) (the "European Term Loan Facility"), which was borrowed by Samsonite Europe N.V. The Revolving Credit Facility and European Term Loan Facility originally matured on June 24, 2003. The Company executed an amendment to its senior credit facility which, effective May 29, 2003, extends the maturity date of the facility's revolving credit and European term loans from June 24, 2003 to June 24, 2004. Additionally, the amendment provides that the revolving credit facility amount will be reduced from $70 million to $60 million effective as of June 24, 2003. The amendment provides for a principal payment on the European term loan facility of 7,800,000 euros (equivalent to $8.5 million as of April 30, 2003) in December 2003 with the remainder of the European term loan facility and the balance of the revolving credit facility due in June 2004. The U.S. Term Loan Facility requires principal repayments in each of the first five years of 1.0% of the

original principal balance and a principal repayment of 23.75% and 47.5% of the original principal balance in the sixth and seventh years, respectively, with the remaining unpaid balance due June 24, 2005. As of April 30, 2003, the Company had $4.9 million in letters of credit outstanding under the Senior Credit Facility.

The balances outstanding under the senior credit facility at April 30, 2003 have been reclassified from the January 31, 2003 presentation as current or noncurrent to reflect the May 29, 2003 amendment.

Obligations under the Senior Credit Facility are secured by (i) property of Samsonite Corporation consisting of inventory, accounts receivable, personal property, selected real estate in Denver, Colorado, intellectual property and other intangibles, (ii) substantially all of the assets of Samsonite Company Stores, Inc. and McGregor II, LLC, and (iii) the pledge of stock or other ownership interest owned by Samsonite Corporation and its direct and indirect subsidiaries, as follows: 100% of the capital stock or other ownership interest in Samsonite Company Stores, Inc., C.V. Holdings, Inc., SC Denmark ApS, Samsonite Europe N.V. and McGregor II, LLC; 66% of the voting interest in SC International Holdings C.V.; and 66% of the voting stock in Samsonite Canada, Inc. and Samsonite Latinoamerica, S.A. de C.V. The Pension Benefit Guaranty Corporation ("PBGC") has an equal and ratable lien in the amount of $17.3 million on the assets pledged under the senior credit facility.

The Senior Credit Facility contains financial covenants which require the Company to maintain certain debt to earnings and interest coverage ratios and limitations on capital expenditures. The Senior Credit Facility also contains covenants that, among other things, limit the ability of the Company (subject to negotiated exceptions) to incur additional liens, incur additional indebtedness, make certain kinds of investments, prepay or purchase subordinate indebtedness and preferred stock, make distributions and dividend payments to its stockholders, engage in affiliate transactions, make certain asset dispositions, make acquisitions, and participate in certain mergers.

(b)

The Senior Subordinated Notes (the "Notes") bear interest at 10³/4% and mature on June 15, 2008. The Notes are redeemable at the option of the Company at various redemption prices as specified in the Notes. The indenture under which the Notes were issued contains certain covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries (as defined in the indenture) to incur additional indebtedness, pay dividends and make certain other distributions, issue capital stock of restricted subsidiaries, make certain investments, repurchase stock, create liens, enter into transactions with affiliates, create dividend or other payment restrictions affecting restricted subsidiaries, merge or consolidate, and transfer or sell assets. The covenants are subject to a number of important exceptions.

(c)

Other obligations consist of various notes payable to banks by foreign subsidiaries.

(d)

The Series B Senior Subordinated Notes bear interest at 11¹/8% and have a maturity date of July 15, 2005.

6.     Other Income (Expense)—Net

        Other income (expense)—net consisted of the following:

7.     Employee Stock Options

        The Company has authorized 2,550,000 shares for the granting of options under the 1995 Stock Option and Award Plan and 750,000 shares for the granting of options under the FY 1999 Stock Option and Incentive Award Plan. See Note 10 to the consolidated financial statements included in the 2003 Form 10-K for a description of such plans.

        At April 30, 2003, the Company had outstanding options for a total of 1,824,952 shares at option prices ranging from $2.62 to $10.00 per share. Options for 1,174,829 shares were exercisable at April 30, 2003 at a weighted average exercise price of $7.04 per share. There were no options exercised during the three months ended April 30, 2003.

8.     Segment Information

        The Company's operations consist of the manufacture and distribution of luggage and other travel-related products, the licensing of the Company's brand names and the design and sale of clothing and footwear. Management of the business and evaluation of operating results is organized primarily along geographic lines dividing responsibility for the Company's operations as follows: Europe, The Americas, which include the United States comprised of wholesale and retail operations and "Other Americas" which include Canada and Latin America; Asia, which includes India, China, Singapore, South Korea, Taiwan, Malaysia and Hong Kong, and Other which primarily includes licensing revenues from luggage and non-luggage brand names owned by the Company, and corporate overhead.

        The Company evaluates the performance of its segments based on operating income of the respective business units. Intersegment sales prices are market based. Because the operations of the U.S. Wholesale and Retail segments are closely related, certain intercompany expense allocations between the two segments are not representative of actual costs to operate those segments. Additionally, certain overhead expenses which benefit the U.S. Wholesale and Retail segments are included in other operations.

        Segment information for the three months ended April 30, 2003 and 2002 is as follows: