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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. 224,834,708 shares of common stock, par value $0.86 per share, as of December 7, 2004.

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" in Item 2.

PART I—FINANCIAL INFORMATION

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Balance Sheets

as of October 31, 2004 and January 31, 2004

(In thousands)

(Continued)

See accompanying notes to consolidated financial statements

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Balance Sheets

as of October 31, 2004 and January 31, 2004

(In thousands)

See accompanying notes to consolidated financial statements

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations

for the three months ended October 31, 2004 and 2003

(In thousands, except per share data)

*

Less than $.01.

See accompanying notes to consolidated financial statements

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations

for the nine months ended October 31, 2004 and 2003

(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 nine months ended October 31, 2004

(In thousands, except share amounts)

(1)

$.01 par value; 2,000,000 shares authorized; 159,932 and 159,982 shares issued and outstanding at October 31, 2004 and January 31, 2004, respectively, convertible at a price of $0.42 per share.

(2)

$.01 par value; 1,000,000,000 shares authorized; 235, 334,708 and 235,205,324 shares issued at October 31, 2004 and January 31, 2004, respectively, and 224,834,708 and 224,705,324 shares outstanding at October 31, 2004 and January 31, 2004, respectively.

See accompanying notes to consolidated financial statements

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

for the nine months ended October 31, 2004 and 2003

(In thousands)

(Continued)

See accompanying notes to consolidated financial statements

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

for the nine months ended October 31, 2004 and 2003

(In thousands)

See accompanying notes to consolidated financial statements

SAMSONITE CORPORATION AND SUBSIDIARIES

Unaudited Notes to Consolidated Financial Statements

Dollars and Euros in Thousands

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 customers of the Company are department and specialty retail stores, mass merchants, catalog showrooms, warehouse clubs and office superstores. The Company also sells its luggage and other travel related products through its Company-owned stores. In addition, the Company designs and sells or licenses 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 for a fair presentation of the financial position as of October 31, 2004 and results of operations for the three and nine month periods ended October 31, 2004 and 2003. 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, 2004.

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 and 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 (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing income (loss) 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.

        Net income (loss) per common share for the three months ended October 31, 2004 and 2003 and the nine months ended October 31, 2004 and 2003 is computed based on a weighted average number of shares of common stock outstanding during the period. Basic earnings (loss) per share and earnings (loss) per share—assuming dilution are the same for the three and nine month periods ended October 31, 2004 and 2003. There are options to purchase 55,265,471 and 1,787,711 shares outstanding at October 31, 2004 and 2003, respectively; warrants to purchase approximately 15.5 million shares of common stock at an exercise price of $.75 per share at October 31, 2004; and warrants to purchase 828,356 shares of common stock at an exercise price of $13.02 per share at October 31, 2004.

E. Royalty Revenues

        The Company licenses its brand names to certain unrelated third parties as well as to certain joint ventures. Net sales include royalties earned of $4,149 and $6,831 for the three months ended October 31, 2004 and 2003, respectively, and $12,549 and $15,833 for the nine months ended October 31, 2004 and 2003, respectively.

F. Reclassifications

        Certain reclassifications were made to the consolidated financial statements for prior periods to conform to October 31, 2004 presentation.

G. Derivative Financial Instruments

        The Company accounts for derivative financial instruments in accordance with the requirements of Statement of Financial Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), and its corresponding amendments. 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.

        From time to time, 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 earnings 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 value and records realized and unrealized gains 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 "OCI" as the underlying hedged transactions occur. At October 31, 2004, cash flow hedges for forecasted foreign currency transactions extend until October 2005. The estimated amount of net gains from foreign currency hedges expected to be reclassified into earnings within the next twelve months is $409, net of taxes. The amount ultimately reclassified into earnings is dependent on the effect of changes in interest rates and currency exchange rates over the next twelve months.

H. Stock-Based Compensation

        As permitted by SFAS No. 123, "Accounting for Stock-Based Compensation," ("SFAS 123"), the Company applies the intrinsic value method of recognition and measurement of stock option expense under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and related interpretations. The following table presents the effect on net income (loss) and income (loss) per share as if the Company had applied the fair value recognition provisions of SFAS No. 123, to stock-based employee compensation.

*

Less than $.01

        For stock options granted during the three months ended October 31, 2004, the fair value was estimated using the Black-Scholes option pricing model with the following assumptions: no dividend yield; volatility of 52%; risk-free interest rate of 3.24%; and expected life of 5 years. There were no stock option grants during the three months ended October 31, 2003.

2.     Asset Impairment and Provision for Restructuring Operations

        During the second quarter of fiscal 2005, the Company recorded a provision for restructuring of $684 related to the closure of the Nogales, Mexico production facility in July 2004. During the first quarter of fiscal 2005, the Company recorded a restructuring provision of $3,390 for the closure of the Tres Cantos, Spain manufacturing plant and severance costs recorded associated with approximately 40 positions that were eliminated. An asset impairment provision of $671 was also recorded to write-down costs related to a project to convert an idle U.S. factory to a warehouse during the first quarter of fiscal 2005. The following is a summary of restructuring accruals for the nine months ended October 31, 2004.