<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 83,800
<SECURITIES> 0
<RECEIVABLES> 163,000
<ALLOWANCES> 7,100
<INVENTORY> 161,900
<CURRENT-ASSETS> 439,800
<PP&E> 551,900
<DEPRECIATION> 348,300
<TOTAL-ASSETS> 825,100
<CURRENT-LIABILITIES> 241,000
<BONDS> 172,600
<COMMON> 3,000
0
0
<OTHER-SE> 200,200
<TOTAL-LIABILITY-AND-EQUITY> 825,100
<SALES> 275,800
<TOTAL-REVENUES> 275,800
<CGS> 221,000
<TOTAL-COSTS> 221,000
<OTHER-EXPENSES> 55,200
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,300
<INCOME-PRETAX> (4,700)
<INCOME-TAX> 400
<INCOME-CONTINUING> (5,100)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,100)
<EPS-PRIMARY> (0.25)
<EPS-DILUTED> (0.25)
</TABLE>
<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(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 30, 1997.
or
( ) Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 1-2883
OUTBOARD MARINE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-1589715
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
100 Sea Horse Drive
Waukegan, Illinois 60085
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 847-689-6200
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO
------- -------
Number of shares of Common Stock of $0.15 par value outstanding at July 31,
1997 were 20,221,964 shares (not including 129,716 treasury shares).
Exhibit Index Page 13.
-1-
<PAGE> 2
OUTBOARD MARINE CORPORATION
FORM 10-Q
PART I, ITEM 1
FINANCIAL INFORMATION
FINANCIAL STATEMENTS
June 30, 1997
Financial statements required by this form:
Page
----
Statements of Consolidated Earnings 3
Condensed Statements of Consolidated Financial Position 4
Statements of Consolidated Cash Flows 6
Notes to Consolidated Financial Statements 7
-2-
<PAGE> 3
OUTBOARD MARINE CORPORATION
Statements of Consolidated Earnings
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30 June 30
(In millions except amounts per share) 1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $ 275.8 $ 291.0 $ 709.9 $ 808.6
Cost of Goods Sold 221.0 231.4 595.9 648.3
--------------------- ---------------------
Gross earnings 54.8 59.6 114.0 160.3
Selling, General and Administrative Expenses 59.8 51.5 151.7 151.7
Restructuring Charges - 11.9 - 11.9
--------------------- ---------------------
Earnings (Loss) from operations (5.0) (3.8) (37.7) (3.3)
Non-Operating Expense (Income)
Interest expense 4.3 4.8 12.7 14.3
Other, net (4.6) (3.2) (25.9) (3.7)
--------------------- ---------------------
(0.3) 1.6 (13.2) 10.6
--------------------- ---------------------
Earnings (Loss) before provision for income
taxes (4.7) (5.4) (24.5) (13.9)
Provision (Credit) for Income Taxes 0.4 (1.8) 2.2 1.0
--------------------- ---------------------
Net earnings (loss) $ (5.1) $ (3.6) $ (26.7) $ (14.9)
===================== =====================
Net Earnings (Loss) Per Share of Common Stock
Primary $ (0.25) $ (0.18) $ (1.32) $ (0.74)
===================== =====================
Fully diluted $ (0.25) $ (0.18) $ (1.32) $ (0.74)
===================== =====================
Dividends Declared Per Share $ - $ 0.10 $ 0.20 $ 0.30
===================== =====================
Average Shares of Common Stock and Common
Stock Equivalents Outstanding (if applicable) 20.2 20.1 20.2 20.1
</TABLE>
The accompanying notes are an integral part of these statements.
-3-
<PAGE> 4
OUTBOARD MARINE CORPORATION
Condensed Statements of Consolidated Financial Position
<TABLE>
<CAPTION>
(Unaudited)
-------------------
June 30 June 30 September 30
(In Millions) 1997 1996 1996
---- ---- ----
<S> <C> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 83.8 $ 44.8 $ 95.5
Receivables 155.9 159.8 167.6
Inventories
Finished products 62.9 87.0 62.6
Raw material, work in
process and service parts 99.0 111.2 102.5
------------------------------------
Total inventories 161.9 198.2 165.1
Other current assets 38.2 51.0 39.3
------------------------------------
Total current assets 439.8 453.8 467.5
Product Tooling, net 47.0 54.5 51.6
Intangibles 36.0 39.0 38.3
Other Assets 98.7 94.8 97.4
Plant & Equipment, at cost 551.9 566.0 565.1
Less-Accumulated depreciation (348.3) (344.8) (346.2)
------------------------------------
203.6 221.2 218.9
------------------------------------
Total assets $ 825.1 $ 863.3 $ 873.7
====================================
-4-
<PAGE> 5
Liabilities and Shareholders' Investment
Current Liabilities
Accounts payable $ 72.5 $ 64.2 $ 90.0
Accrued and other 168.5 158.1 163.3
------------------------------------
Total current liabilities 241.0 222.3 253.3
Long-Term Debt 172.6 177.5 177.6
Postretirement Benefits Other
Than Pensions 100.1 101.2 100.7
Other Non-Current Liabilities 108.2 127.5 104.5
Shareholders' Investment
Common stock & capital surplus 115.6 114.2 114.8
Retained earnings 100.6 128.8 131.3
Cumulative translation
adjustments (13.0) (8.2) (8.5)
------------------------------------
Total shareholders'
investment 203.2 234.8 237.6
------------------------------------
Total liabilities
and shareholders'
investment $ 825.1 $ 863.3 $ 873.7
====================================
</TABLE>
The accompanying notes are an integral part of these statements.
-5-
<PAGE> 6
OUTBOARD MARINE CORPORATION
Statements of Consolidated Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
June 30
(In millions) 1997 1996
---- ----
<S> <C> <C>
Cash Flows from Operating Activities
Net loss $ (26.7) $ (14.9)
Adjustments to reconcile net earnings to net cash
provided by operations:
Depreciation and amortization 41.2 38.8
Changes in current accounts excluding the
effects of noncash transactions:
Decrease in receivables 8.3 39.8
Decrease (Increase) in inventories 2.0 (5.1)
Decrease (Increase) in other current assets 0.7 (2.4)
(Decrease) in accounts payable and accrued liabilities (13.1) (25.7)
Other, net (0.5) (0.1)
--------------------
Net cash provided by operating activities 11.9 30.4
Cash Flows from Investing Activities
Expenditures for plant and equipment, and tooling (30.1) (40.0)
Proceeds from sale of plant and equipment 14.4 0.5
Other, net (0.6) -
--------------------
Net cash used for investing activities (16.3) (39.5)
Cash Flows from Financing Activities
Cash dividends paid (6.0) (6.1)
Other, net (0.4) 2.6
--------------------
Net cash used for financing activities (6.4) (3.5)
Exchange Rate Effect on Cash (0.9) (0.9)
--------------------
Net Decrease in Cash and Cash Equivalents (11.7) (13.5)
Cash and Cash Equivalents at Beginning of Period 95.5 58.3
--------------------
Cash and Cash Equivalents at End of Period $ 83.8 $ 44.8
====================
Supplemental Cash Flow Disclosures
Interest paid $ 11.7 $ 12.7
Income taxes paid 3.2 8.0
</TABLE>
The accompanying notes are an integral part of these statements.
-6-
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements of
Outboard Marine Corporation and its subsidiaries (the "Company") present
information in accordance with generally accepted accounting principles for
interim financial information and have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, they do
not include all information or footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, the information furnished reflects all adjustments necessary for a
fair statement of the results of the interim periods and all such adjustments
are of a normal recurring nature. These financial statements should be read
in conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended September 30, 1996.
The 1997 interim results are not necessarily indicative of the results which
may be expected for the remainder of the year.
2. SHORT-TERM BORROWINGS AND ACCOUNTS RECEIVABLE
The Company has a revolving credit agreement, which provides for credit of up
to $150 million secured by accounts receivable, inventories, patents and
trademarks. This agreement expires not later than December 31, 1999.
Under the revolving credit agreement, the Company is required to meet certain
financial covenants. At June 30, 1997, the Company was in compliance with
those financial covenants.
The Company had receivables sales agreements whereby the Company agreed to
sell an ownership interest in a designated pool of domestic trade accounts
receivable ("Receivables"). These receivable sales agreements were terminated
as of April 30, 1997. In order to maintain the balance in the designated pool
of Receivables sold, the Company was obligated to sell undivided percentage
interests in new Receivables as existing Receivables were collected. The
Company retained a residual interest in the Receivables sold, thus receivables
were only reduced by the net outstanding proceeds from the sales. The Company
had net outstanding proceeds of $8 million at June 30, 1996. The Company had
retained the same credit risk as if the Receivables had not been sold. The
costs associated with the receivables sales agreements are included in
non-operating expense - other, net in the Statement of Consolidated Earnings.
3. CONTINGENT LIABILITIES
As a normal business practice, the Company has made arrangements with
financial institutions by which qualified retail dealers may obtain inventory
financing. Under these arrangements, the Company will repurchase products in
the event of repossession upon a retail dealer's default. These arrangements
contain provisions which limit the Company's repurchase obligation to $40
million per model year for a period not to exceed 30 months from the date of
invoice. The Company resells any repurchased products. Losses incurred under
this program have not been material. The Company accrues for losses which are
anticipated in connection with expected repurchases.
-7-
<PAGE> 8
The Company is engaged in a substantial number of legal proceedings arising in
the ordinary course of business. While the result of these proceedings,
including those discussed below, cannot be predicted with any certainty, based
upon the information presently available, management is of the opinion that
the final outcome of all such proceedings should not have a material effect
upon the Company's Consolidated Financial Position or Consolidated Earnings.
Under the requirements of Superfund and certain other laws, the Company is
potentially liable for the cost of clean-up at various contaminated sites
identified by the United States Environmental Protection Agency and other
agencies. The Company has been notified that it is named a potentially
responsible party ("PRP") at various sites for study and clean-up costs. In
some cases there are several named PRPs and in others there are hundreds. The
Company generally participates in the investigation or clean-up of these sites
through cost sharing agreements with terms which vary from site to site.
Costs are typically allocated based upon the volume and nature of the
materials sent to the site. However, under Superfund, and certain other laws,
as a PRP the Company can be held jointly and severally liable for all
environmental costs associated with a site.
Once the Company becomes aware of its potential liability at a particular
site, it uses its experience and its knowledge of the site to determine if it
is probable that a liability has been incurred and whether or not the amount
of the loss can be reasonably estimated. Once the Company has sufficient
information necessary to support a reasonable estimate or range of loss for a
particular site, an amount is added to the Company's aggregate environmental
contingent liability accrual. The amount added to the accrual for the
particular site is determined by analyzing the site as a whole and reviewing
the probable outcome for the remediation of the site. This is not necessarily
the minimum or maximum liability at the site but, based upon the Company's
experience and its knowledge of the site, most accurately reflects the
Company's liability based on the information currently available. The Company
takes into account the number of other participants involved in the site,
their experience in the remediation of sites and the Company's knowledge of
other participants' ability to pay.
As a general rule, the Company accrues remediation costs for continuing
operations on an undiscounted basis and does not accrue for normal operating
and maintenance costs for site monitoring and compliance requirements.
However, the Company does accrue for environmental close-down costs associated
with discontinued operations or facilities, including the environmental costs
of operation and maintenance until disposition. At June 30, 1997, the Company
has an accrued liability of approximately $14 million for costs related to
remediation at contaminated sites including continuing and closed-down
operations. The possible recovery of insurance proceeds has not been
considered in estimating contingent environmental liabilities.
In the first quarter of the current fiscal year, the Company recovered
insurance proceeds of $6.1 million for prior environmental charges. These
insurance proceeds are included in non-operating expense (income) in the
Statement of Consolidated Earnings for the nine months ended June 30, 1997.
Each site, whether or not remediation studies have commenced, is reviewed on a
quarterly basis and the aggregate environmental contingent liability accrual
is adjusted accordingly. Because the sites are reviewed and the accrual
adjusted quarterly, the Company is confident the accrual reflects the
Company's liability based upon the information available at the time.
-8-
<PAGE> 9
4. SUBSEQUENT EVENTS
On July 9, 1997 the Company announced that on July 8, 1997, it had entered
into an Agreement and Plan of Merger (the "Merger Agreement") with Detroit
Diesel Corporation, a Delaware corporation ("DDC") and OMC Acquisition Corp.,
a Delaware corporation (the "Offeror") and a wholly-owned subsidiary of DDC,
pursuant to which the Offeror agreed to purchase 13,842,619 shares of the
Common Stock (the "Shares") at a price of $16.00 per Share net to the selling
shareholder in cash without interest (the "Offer") as set forth in the Merger
Agreement. In the event the Offer is consummated, the Merger Agreement
provides that, subject to the satisfaction or waiver of certain conditions set
forth therein, the Offeror will merge (the "Merger") with and into the
Company, which will continue as the surviving corporation of the Merger.
Pursuant to the Merger, at the effective time thereof (the "Effective Time"),
each then issued and outstanding Share (other than Shares held by the Company
as treasury stock, Shares owned by the Offeror or DDC, or Shares held by
shareholders who perfect their appraisal rights under the Delaware General
Corporation Law, as amended) (the "Exchanged Shares") will be converted into
and represent the right to receive (a) a fractional share of the common stock
of DDC equal to 4,000,000 divided by the number of Exchanged Shares (the
"Exchange Ratio"), plus (b) a cash payment equal to (i) $16.00 minus (ii) the
product of the Exchange Ratio times $25.00, plus (c) in the event the average
closing price of common stock of DDC on the New York Stock Exchange (the
"NYSE") for the 20 consecutive trading days ending on the fifth trading day
prior to the closing date of the Merger (the "Closing Date Market Price") is
less than $25.00, then an additional cash payment equal to the product of the
Exchange Ratio multiplied by the lesser of (i) $25.00 minus the Closing Date
Market Price or (ii) $6.00.
All members of the Board of Directors of the Company (with one director
abstaining due to existing relationships with an affiliate of DDC) have
approved the Merger Agreement, the Offer and the Merger, and determined that
terms of each of the Merger Agreement, the Offer and the Merger are fair to
and in the best interests of shareholders.
-9-
<PAGE> 10
OUTBOARD MARINE CORPORATION
FORM 10-Q
PART I, ITEM 2
FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
June 30, 1997
RESULTS OF OPERATIONS
For the third quarter of fiscal 1997, the Company reported a net loss of
$5.1 million, or 25 cents per share (primary and fully diluted), on sales of
$275.8 million. During the third quarter of 1996, the Company reported a net
loss of $3.6 million, or 18 cents per share (primary and fully diluted), on
sales of $291.0 million. The sales decrease of $15.2 million represented a
5.2% decline compared to a decline of 16.1% for the first six months of the
fiscal year.
For the first nine months of the current fiscal year, the Company reported
sales of $709.9 million compared to $808.6 million in the similar period in
its fiscal 1996 year, a decrease of $98.7 million or 12.2%. A net loss of
$26.7 million for the nine months ended June 30, 1997, compares to a net loss
of $14.9 million in the comparable period in 1996, and resulted in a net loss
per share of $1.32 for the first nine months of 1997 compared to a net loss of
74 cents per share in the comparable period of 1996.
In the current fiscal year, an adjustment to operating income was made in
the third quarter to increase boat warranty reserves $8.0 million due to a
change in an accounting estimate. In the prior fiscal year, the quarter ended
June 30, 1996 was negatively impacted by restructuring charges of $11.9
million for an international restructuring program.
Non-operating income of $4.6 million for the three months ended June 30, 1997
includes non-recurring income of $2.4 million due primarily to gains on sales
of fixed assets. This was coupled with gains of $16.5 million in the first
two quarters due primarily to an insurance recovery in an environmental
matter, a favorable lawsuit settlement and gains on sales of fixed assets, in
the first two quarters, and resulted in $18.9 million of non-recurring income
in the first nine months of fiscal 1997.
The Company's sales decrease was due primarily to reduced market demand
for its products, primarily in the North American markets, coupled with a
managed effort to assist dealers in reducing field inventories and some market
restraint as a result of the Company's announced intention in April to explore
strategic alternatives to maximize shareholder value.
Selling, general and administrative expense for the quarter was up due to
higher marketing and warranty expenses, but was offset year-to-date by lower
expenses resulting from the restructuring programs initiated last year.
The provision for income taxes for the three and nine months ended June
30, 1997 and 1996 resulted from the net of expected taxes payable and benefits
relating to certain international subsidiaries. No tax benefit is allowed for
domestic losses because they are not realizable under Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes."
Effective October 1, 1997, the Company will report earnings per share as
required by the Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 128 (SFAS 128), "Earnings per Share." SFAS 128 will
require restatement of earnings per share for prior periods but such
restatement will not be material for the Company.
-10-
<PAGE> 11
It is not appropriate to compare the results of operations for the current
quarter with those of the preceding quarter because of the seasonal nature of
the Company's business.
FINANCIAL CONDITION
Due to the seasonal nature of OMC's business it is more appropriate to
compare the June 30, 1997 Condensed Statement of Financial Position with the
similar statement of June 30, 1996. The Company's ratio of current assets to
current liabilities was 1.8 at June 30, 1997 compared to 2.0 at June 30, 1996.
Current assets of $439.8 million at June 30, 1997 decreased $14.0 million as
compared to current assets of $453.8 million at June 30, 1996. Cash increased
$38.6 million to $83.8 million at June 30, 1997 as compared to $44.8 million
at June 30, 1996. Due primarily to lower sales, receivables were $11.9
million lower on a proforma basis after including $8.0 million at June 30,
1996 sold through a receivables sales agreement (see Note 2 of Notes to
Consolidated Financial Statements). Inventories decreased $36.3 million to
$161.9 million at June 30, 1997 as compared to $198.2 million at June 30, 1996
due primarily to reduced production in engine plants to bring inventories more
in line with sales. Other current assets decreased due primarily to decreased
deferred income tax benefits.
Current liabilities increased by $18.7 million to $241.0 million as of
June 30, 1997 compared to $222.3 million at June 30, 1996. Accrued
liabilities increased $10.4 million due primarily to reclassification of $5.0
million of debt to short-term, higher warranty accruals, higher accrued income
taxes and a reclassification of interest expense relating to tax settlements
to a current liability offset by lower restructuring reserves. Other
non-current liabilities decreased $19.3 million due primarily to a decrease in
tax liabilities.
The Company's total debt to total capitalization at June 30, 1997 was 47
percent compared to 43 percent at June 30, 1996.
Due to the seasonal nature of OMC's business, receivables, inventory and
accompanying short-term borrowing to satisfy working capital requirements are
usually at their highest levels in the second and third quarters and normally
begin to decline in the third quarter as the Company's products enter their
peak selling season. The Company has a $150 million revolving credit
agreement in place for seasonal working capital requirements.
TRENDS AND FORWARD-LOOKING FACTORS
See Note 4 of Notes to Consolidated Financial Statements relating to the
tender offer commenced by a subsidiary of Detroit Diesel Corporation to
acquire shares of the Company's common stock. Reference is also made to the
Company's Schedule 14D-9 dated July 15, 1997 filed by the Company with the
Securities and Exchange Commission.
Some of the foregoing statements are forward-looking in nature and made in
reliance upon the Safe Harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements involve risks and uncertainties,
including but not limited to the impact of competitive products and pricing,
product demand and market acceptance, new product development, availability of
raw materials and components, general economic conditions including interest
rates, consumer confidence, activity in the Company's common stock, potential
other offers for the Company's common stock and the outcome of the Detroit
Diesel Corporation and OMC Acquisition Corp. tender offer. Investors are
also directed to risks discussed in documents filed by the Company with the
Securities and Exchange Commission. The Company assumes no obligation to
update the information included in this statement.
-11-
<PAGE> 12
OUTBOARD MARINE CORPORATION
FORM 10-Q
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit reference is made to the Exhibit Index on Page 13.
(b) A current report on Form 8-K relating to "Execution of
Merger Agreement" was filed on July 11, 1997 and is incorporated
herein by reference.
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OUTBOARD MARINE CORPORATION
Signature Title Date
_____________________________ _________________________ _________________
By: /s/: George L. Schueppert Executive Vice President August 7, 1997
& Chief Financial Officer
_____________________________ _________________________ _________________
GEORGE L. SCHUEPPERT
-12-
<PAGE> 13
OUTBOARD MARINE CORPORATION
EXHIBIT INDEX
Exhibit 3: Articles of Incorporation and By-Laws:
(A) With respect to the Registrant's Certificate of Incorporation, reference
is made to Exhibit 4 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended December 31, 1984; to Exhibit 4 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1987 and to Exhibit 4
to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March
31, 1988, all of which are incorporated herein by reference.
(B) With respect to the Registrant's By-Laws as amended April 24, 1997,
reference is made to Exhibit 3(B) of the Registrant's Quarterly Report on Form
10-Q for the quarter ended March 31, 1997, which is incorporated herein by
reference.
Exhibit 4: Instruments defining the rights of security holders including
indentures:
(A) With respect to the Agreement of Outboard Marine Corporation to furnish
copies upon request of the Securities and Exchange Commission covering
unregistered long-term debt, reference is made to Exhibit 4(A) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended September
30, 1996, which is incorporated herein by reference.
(B) With respect to rights of holders of the Registrant's 9-1/8% Sinking Fund
Debentures due 2017, reference is made to Exhibit 4(A) in the Registrant's
Registration Statement Number 33-12759 filed on March 20, 1987, which is
incorporated herein by reference.
(C) With respect to rights of holders of Registrant's 7% Convertible
Subordinated Debentures due 2002, reference is made to Registrant's
Registration Statement Number 33-47354 filed on April 28, 1992, which is
incorporated herein by reference.
(D) With respect to the Rights Agreement dated April 24, 1996, to be effective
June 23, 1996, reference is made to Exhibit 4(E) of the Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1996, which is
incorporated herein by reference.
(E) With respect to Amendment No. 1 to the Rights Agreement dated July 8,
1997, reference is made to the Form 8-A/A filed by the Registrant on July 11,
1997, which is incorporated herein by reference.
Exhibit 10: Material contracts:
(A) With respect to the Registrant's 1987 Stock Option and Performance Unit
Plan, reference is made to Exhibit 10(D) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended September 30, 1987, which is incorporated
herein by reference.
(B) With respect to the OMC Executive Bonus Plan, reference is made to Exhibit
10(C) to the Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1990, which is incorporated herein by reference.
-13-
<PAGE> 14
(C) With respect to the OMC Executive Equity Incentive Plan, reference is made
to Exhibit 10(D) to the Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1990, which is incorporated herein by reference.
(D) With respect to the OMC 1994 Long-Term Incentive Plan, reference is made
to Exhibit C to Outboard Marine Corporation's Notice of Annual Meeting and
Proxy Statement prepared in connection with the January 20, 1994 Annual
Meeting of Shareholders, which is incorporated herein by reference.
(E) With respect to the Employment Agreement for Mr. Bowman, reference is
made to Exhibit 10(F) of the Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1995, which is incorporated herein by
reference.
(F) With respect to the Second Amended and Restated Revolving Credit Agreement
dated as of March 29, 1996, reference is made to Exhibit 10(H) of the
Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31,
1996, which is incorporated herein by reference. With respect to the
Amendment No. One to the Second Amended and Restated Revolving Credit
Agreement, reference is made to Exhibit 10(H) of the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1996, which is incorporated
herein by reference. With respect to the Extension Letter to the Second
Amended and Restated Revolving Credit Agreement , reference is made to Exhibit
10(H) of the Registrant's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1996, which is incorporated herein by reference. With respect to
the Third Amended and Restated Revolving Credit Agreement dated as April 30,
1997, reference is made to Exhibit 10(H) of the Registrant's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1997, which is incorporated
herein by reference.
(G) With respect to the Registrant's Receivables Purchase Agreement dated as
of December 22, 1995, reference is made to Exhibit 10(I) of the Registrant's
Quarterly Report on Form 10-Q for the quarter ended December 31, 1995, which
is incorporated herein by reference. With respect to the Amendment No. 1 and
Waiver and the Amendment No. 2 and Waiver to the Registrant's Receivables
Purchase Agreement dated as of December 22, 1995, reference is made to Exhibit
10(I) of the Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996, which is incorporated herein by reference.
(H) With respect to Severance Agreements between the Registrant and Mr.
Bowman, certain elected and appointed officers and certain other executives of
the Registrant, reference is made to Exhibits 99.2, 99.3 and 99.4 of the
Registrant's Schedule 14D-9 filed with the Securities and Exchange Commission
on July 15, 1997, which is incorporated herein by reference.
(I) With respect to the Agreement and Plan of Merger among Detroit Diesel
Corporation, OMC Acquisition Corp. and the Registrant, reference is made to
Exhibit 99.1 of the Registrant's Schedule 14D-9 filed with the Securities and
Exchange Commission on July 15, 1997, which is incorporated herein by
reference.
Exhibit 11: Statements regarding computation of per share earnings:
A statement regarding the computation of per share earnings is
attached hereto as Exhibit 11.
Exhibit 27: Financial data schedule:
This information is filed only in the electronic filing.
-14-
<PAGE> 15
EXHIBIT 11
OUTBOARD MARINE CORPORATION AND SUBSIDIARIES
Computation of Per Share Earnings
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30 June 30
(In millions except amounts per share) 1997 1996 1997 1996
----------------------- ----------------------
<S> <C> <C> <C> <C>
Primary Earnings Per Share:
Net Earnings (Loss) $ (5.1) $ (3.6) $ (26.7) $ (14.9)
======================= ======================
Weighted Average Number of Shares 20.2 20.1 20.2 20.1
Common Stock Equivalents (Stock Options) * * * *
----------------------- ----------------------
Average Shares Outstanding 20.2 20.1 20.2 20.1
======================= ======================
Primary Earnings (Loss) Per Share $ (0.25) $ (0.18) $ (1.32) $ (0.74)
======================= ======================
Fully Diluted Earnings Per Share:
Net Earnings (Loss) $ (5.1) $ (3.6) $ (26.7) $ (14.9)
Add: After-Tax Interest and Related
Expense Amortization on 7%
Convertible Subordinated Debentures 0.8 0.8 2.5 2.5
----------------------- ----------------------
Net Earnings (Loss) Adjusted $ (4.3) $ (2.8) $ (24.2) $ (12.4)
======================= ======================
Weighted Average Number of Shares 20.2 20.1 20.2 20.1
Common Stock Equivalents (Stock Options) - 0.1 - 0.1
Weighted Average Common Shares Assuming
Conversion of 7% Convertible
Subordinated Debentures 3.4 3.4 3.4 3.4
----------------------- ----------------------
Average Shares Outstanding 23.6 23.6 23.6 23.6
======================= ======================
Fully Diluted Earnings (Loss) Per Share $ ** $ ** $ ** $ **
======================= ======================
</TABLE>
* The computation of primary earnings per share of common stock is computed
without common stock equivalents because inclusion of common stock
equivalents is antidilutive.
** The computation of fully diluted earnings per share of common stock is
antidilutive; therefore, the amount reported for primary and fully diluted
earnings per share is the same.
-15-
