-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, PHYB2AUdI10rbdxiM08+nlCUmho3IMw8CvBRTjO/M1e6BdYdRSygj1o+WzSG3Yxl kQWVI1vE4/k6Xi6a+CYfyg== 0000075149-95-000006.txt : 19950502 0000075149-95-000006.hdr.sgml : 19950502 ACCESSION NUMBER: 0000075149-95-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950501 SROS: MSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OUTBOARD MARINE CORP CENTRAL INDEX KEY: 0000075149 STANDARD INDUSTRIAL CLASSIFICATION: ENGINES & TURBINES [3510] IRS NUMBER: 361589715 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02883 FILM NUMBER: 95533243 BUSINESS ADDRESS: STREET 1: 100 SEA HORSE DR CITY: WAUKEGAN STATE: IL ZIP: 60085 BUSINESS PHONE: 7086896200 MAIL ADDRESS: STREET 1: 100 SEA HORSE DRIVE CITY: WAUKEGAN STATE: IL ZIP: 60085 EX-27 1 ART. 5 FDS FOR 2TH QUARTER 10-Q
5 1,000 6-MOS SEP-30-1995 MAR-31-1995 37,100 0 226,600 15,600 234,400 519,700 548,000 326,500 920,500 324,000 177,300 3,000 0 0 219,300 920,500 318,800 318,800 233,000 233,000 60,100 0 5,400 20,300 2,300 18,000 0 0 0 18,000 .90 .81
10-Q 2 EDGAR OMC 10-Q FILING 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 March 31, 1995. 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: (708) 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 April 28, 1995 were 20,003,740 shares (not including 195,214 treasury shares). Exhibit Index Page 11. -1- 2 OUTBOARD MARINE CORPORATION FORM 10-Q PART I, ITEM 1 FINANCIAL INFORMATION FINANCIAL STATEMENTS March 31, 1995 Financial statements required by this form: Page ---- Statement of Consolidated Earnings 3 Condensed Statement of Consolidated Financial Position 4 Statement of Consolidated Cash Flows 6 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, 1994. -2- 3 OUTBOARD MARINE CORPORATION STATEMENT OF CONSOLIDATED EARNINGS (UNAUDITED)
Three Months Ended Six Months Ended March 31 March 31 ------------------- ------------------- (In millions except amounts per share) 1995 1994 1995 1994 -------- -------- -------- -------- NET SALES $ 318.8 $ 263.5 $ 561.4 $ 454.3 COST OF GOODS SOLD 233.0 198.9 424.4 353.3 -------- -------- -------- -------- Gross earnings 85.8 64.6 137.0 101.0 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 60.9 51.3 111.0 93.1 -------- -------- -------- -------- Earnings from operations 24.9 13.3 26.0 7.9 NON-OPERATING EXPENSE (INCOME): Interest expense 5.4 5.1 10.4 10.1 Other, net ( .8) (11.7) (2.4) (13.6) -------- -------- -------- -------- 4.6 (6.6) 8.0 (3.5) -------- -------- -------- -------- Earnings before provision for income taxes 20.3 19.9 18.0 11.4 PROVISION FOR INCOME TAXES 2.3 .8 3.1 1.6 -------- -------- -------- -------- Net earnings $ 18.0 $ 19.1 $ 14.9 $ 9.8 ======== ======== ======== ======== NET EARNINGS PER SHARE OF COMMON STOCK BASED on weighted average common shares and common stock equivalents outstanding: Primary $ .90 $ .95 $ .74 $ .49 ======== ======== ======== ======== Fully diluted $ .81 $ .85 $ .71 $ .49 ======== ======== ======== ======== DIVIDENDS PAID PER SHARE $ .10 $ .10 $ .20 $ .20 ======== ======== ======== ======== AVERAGE SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS OUTSTANDING (if applicable) 20.1 20.0 20.1 20.0 -3-
4 OUTBOARD MARINE CORPORATION CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION (UNAUDITED)
March 31 September 30 (In millions) 1995 1994 1994 -------- -------- -------- ASSETS - ------ CURRENT ASSETS: Cash and cash equivalents $ 37.1 $ 33.1 $ 80.3 Receivables 211.0 193.5 150.5 Inventories- Finished products 90.5 77.7 58.7 Raw material, work in process and service parts 143.9 102.4 105.0 -------- -------- -------- Total inventory 234.4 180.1 163.7 Other current assets 37.2 31.4 35.3 -------- -------- -------- Total current assets 519.7 438.1 429.8 PRODUCT TOOLING, net 52.4 45.4 48.3 INTANGIBLES 31.5 32.5 32.1 OTHER ASSETS 95.4 85.7 89.8 PLANT AND EQUIPMENT, at cost 548.0 543.3 535.6 Less-Accumulated depreciation 326.5 333.0 318.5 -------- -------- -------- 221.5 210.3 217.1 -------- -------- -------- Total assets $ 920.5 $ 812.0 $ 817.1 ======== ======== ======== -4- 5 LIABILITIES AND SHAREHOLDERS' INVESTMENT - ---------------------------------------- CURRENT LIABILITIES: Notes payable $ 90.0 $ 28.0 $ - Accounts payable 101.7 76.8 102.9 Accrued and other 132.3 167.8 130.7 -------- -------- -------- Total current liabilities 324.0 272.6 233.6 LONG-TERM DEBT 177.3 178.1 178.2 POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 100.8 103.5 102.3 OTHER NON-CURRENT LIABILITIES 96.1 88.2 94.0 SHAREHOLDERS' INVESTMENT: Common stock and capital surplus 110.9 108.3 109.3 Retained earnings 117.2 71.5 106.3 Cumulative translation adjustments (5.8) (10.2) (6.6) -------- -------- -------- Total shareholders' investment 222.3 169.6 209.0 -------- -------- -------- Total liabilities and shareholders' investment $ 920.5 $ 812.0 $ 817.1 ======== ======== ======== SHARES OF COMMON STOCK OUTSTANDING 20.0 19.9 20.0
-5- 6 OUTBOARD MARINE CORPORATION STATEMENT OF CONSOLIDATED CASH FLOWS (UNAUDITED)
Six Months Ended March 31 --------------------- (In millions) 1995 1994 ------- ------- CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 14.9 $ 9.8 Adjustments to reconcile net earnings to net cash provided by operations: Depreciation and amortization 21.8 18.3 Gain on transfer of land rights - (10.5) Changes in current accounts excluding the effects of noncash transactions (Increase) in accounts receivable (58.0) (56.5) (Increase) in inventory (68.8) (25.6) (Increase) in other current assets (1.4) (.4) (Decrease) in accounts payable and accrued liabilities (1.6) (12.6) Other, net (3.0) (10.5) ------- ------- Net cash used for operating activities (96.1) (88.0) CASH FLOWS FROM INVESTING ACTIVITIES: Expenditures for plant and equipment, and tooling (31.9) (29.5) Net proceeds on transfer of land rights - 10.5 Other, net (1.5) 7.5 ------- ------- Net cash used for investing activities (33.4) (11.5) CASH FLOWS FROM FINANCING ACTIVITIES: Net increase in short-term debt 90.0 28.0 Cash dividends paid (4.0) (4.0) Other, net .7 1.9 ------- ------- Net cash provided by financing activities 86.7 25.9 EXCHANGE RATE EFFECT ON CASH (.4) 2.3 ------- ------- NET DECREASE IN CASH AND CASH EQUIVALENTS (43.2) (71.3) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 80.3 104.4 ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 37.1 $ 33.1 ======= ======= SUPPLEMENTAL CASH FLOW DISCLOSURES: Interest paid $ 9.4 $ 7.7 Income taxes paid 1.4 4.8
-6- 7 OUTBOARD MARINE CORPORATION FORM 10-Q PART I, ITEM 2 FINANCIAL INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS March 31, 1995 RESULTS OF OPERATIONS The company achieved strong sales and earnings improvement in the second quarter and first half of fiscal 1995. Sales increased by 21 percent to $318.8 million in the second quarter of 1995, up from $263.5 million in the second quarter of 1994. Some of that sales increase came from a larger than usual number of orders that carried over from the first quarter and prior fiscal year. The bulk came from growing demand for the company's products in the United States and in markets around the world. U.S. sales grew by 19 percent. U.S. power products sales increased by 21 percent, fueled by increased loose outboard sales and strong demand for the new V-4 outboards and the popular V-6 models. U.S. boat sales increased nearly 17 percent in the quarter. Outside the United States, sales increased 28 percent. All international operations reported sales gains, with OMC Europe leading the way with a 51 percent sales increase. Outboards drove sales gains in all of OMC's international markets. Sales improvement translated into strong earnings growth for the quarter. Net earnings were $18 million, or 90 cents per share (81 cents, fully diluted), for this year's second quarter. Net earnings were $19.1 million, or 95 cents per share (85 cents, fully diluted), for last year's second quarter. Last year's second quarter earnings, however, benefited from $10.5 million in non-operating income from a real estate transaction in Hong Kong. Removing that gain from last year's results would leave adjusted net earnings of $8.6 million, or 43 cents per share (40 cents, fully diluted), for the 1994 second quarter, a positive earnings swing of $9.4 million, or 47 cents per share, for the second quarter of this year. For the first six months of 1995, the company achieved net earnings of $14.9 million, or 74 cents per share (71 cents, fully diluted), on sales of $561.4 million. Net earnings were $9.8 million, or 49 cents per share, on sales of $454.3 million for the same period in 1994. Removing the gain from the Hong Kong land transaction would leave an adjusted net loss of $0.7 million, or 4 cents per share for last year's first half. The company is fully participating in the growth of the industry during this cyclical upturn. Full participation in the market's growth, though, is requiring increased spending in the manufacturing and marketing operations, as well as to pay for new product development for a new generation of low-emission outboards that will win sales in the future. That increased spending, along with additional tooling amortization and depreciation expense, will offset the additional cost savings that had been slated for fiscal 1995 as part of our 1993 -7- 8 restructuring program. Profit margins, however, will continue to benefit from the streamlining measures we implemented in 1993 and 1994. Benefits can be seen on our second quarter income statement. Gross margin for this year's second quarter increased to 26.9 percent from 24.5 percent last year. Selling, general and administrative expense increased by $9.6 million, slightly down as a percentage of sales. Operating earnings increased more than 87 percent to $24.9 million from $13.3 million in the second quarter last year. And operating margin increased to 7.8 percent from 5 percent in the second quarter last year. Margin improvement also was significant for the first six months of the year. Gross margin for the first half of this year increased to 24.4 percent from 22.2 percent for the first six months of 1994. Selling, general and administrative expense in this year's first half increased by $17.9 million, but decreased as a percentage of sales. Operating earnings more than tripled to $26 million from $7.9 million in the first half of last year. And operating margin increased to 4.6 percent from 1.7 percent. The company is addressing the engine manufacturing complexities that limited growth last year, and the company is now satisfying market demand with current levels of production. The company is seeing continuing strength in its markets, and the company is working hard to maximize earnings in this cyclical upturn while it, simultaneously, begins the process of developing a new strategic direction that will produce a steady growth in shareholder value. The provision for income taxes of $2.3 million and $3.1 million for the three and six months ended March 31, 1995, respectively, resulted from expected taxes payable relating to certain international subsidiaries. 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. -8- 9 OUTBOARD MARINE CORPORATION FORM 10-Q PART I, ITEM 2 FINANCIAL INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS March 31, 1995 FINANCIAL CONDITION Due to the seasonal nature of the company's business, it is more appropriate to compare the March 31, 1995 Condensed Statement of Financial Position with March 31, 1994. The company's ratio of current assets to current liabilities was 1.6 at both March 31, 1995 and March 31, 1994. Current assets of $519.7 million at March 31, 1995 increased $81.6 million as compared to current assets of $438.1 million at March 31, 1994. Receivables increased $17.5 million due primarily to higher sales in the current quarter and to a miscellaneous receivable in 1995 on a tax interest adjustment. Inventories increased $54.3 million due primarily to higher manufacturing activity. Other current assets increased $5.8 million due primarily to deferred income tax benefits. Product tooling increased $7.0 million due primarily to the introduction of new outboard models. Other assets increased $9.7 million due primarily to reclassifications of joint venture investment and increased pension assets. Current liabilities increased by $51.4 million to $324.0 million as of March 31, 1995 compared to $272.6 million at March 31, 1994. Notes payable increased $62.0 million at March 31, 1995. The $24.9 million increase in accounts payable resulted primarily from increased manufacturing activity. The decrease in accrued and other resulted from higher restructuring accruals and decreased current maturities of long-term debt at March 31, 1995. Other non-current liabilities increased $7.9 million due primarily to higher accruals for contingencies. The company's total debt to total capitalization at March 31, 1995 was 54.6 percent compared to 56.6 percent at March 31, 1994. Notes payable increased $62.0 million at March 31, 1995 while long-term debt decreased $.8 million and current maturities of long-term debt decreased $15.0 million from the previous year. The company believes with the current capital structure and the use of funds to be generated by operating activities, existing cash and marketable securities, additional funds available from existing worldwide credit lines, and long-term debt and equity sources, it has sufficient resources to meet future capital requirements. -9- 10 OUTBOARD MARINE CORPORATION FORM 10-Q PART II - OTHER INFORMATION Item 1. Legal Proceedings The USEPA issued a Unilateral Administrative Order directing the company to undertake groundwater remediations at the Cadillac Industrial Park in Cadillac, Michigan. The company responded with a conditional offer to proceed in conjunction with other potentially responsible parties. The USEPA accepted the company's offer and issued a notice to proceed. This development will not require the company to expend any additional funds. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits reference is made to the Exhibit Index on Page 11. (b) Reports on Form 8-K. The Registrant did not file any reports on Form 8-K for the fiscal quarter ended March 31, 1995. 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/ James R. Maurice Vice President & Controller May 1, 1995 ________________________ ___________________________ __________________ JAMES R. MAURICE -10- 11 OUTBOARD MARINE CORPORATION EXHIBIT INDEX Exhibit 4: Instruments defining the rights of security holders including indentures: (A) With respect to the Agreement of Outboard Marine Corporation, reference is made to Exhibit 4(A) to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 1994, which is incorporated herein by reference. (B) With respect to rights of Series A Junior Participating Preferred Stock, reference is made to the Registrant's report on Form 8-K filed on October 17, 1990, which is incorporated herein by reference. (C) 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. (D) 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. 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. (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. -11- 12 (E) With respect to Severance Agreements for all elected officers of the Registrant (except Mr. Bowman), reference is made to Exhibit 10(E) of the Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 1988, which is incorporated herein by reference. (F) With respect to the Registrant's Revolving Credit Agreement dated as of December 30, 1994, reference is made to Exhibit 10(G) to the Registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 1994, 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 19: Report furnished to security holders: A copy of the Registrant's Shareholders Report for the fiscal quarter ended March 31, 1995, is attached hereto as Exhibit 19. Exhibit 27: Financial data schedules: This information is filed only in the electronic filing. -12- 13 EXHIBIT 11 OUTBOARD MARINE CORPORATION AND SUBSIDIARIES COMPUTATION OF PER SHARE EARNINGS (In millions except amounts per share)
Three Months Ended Six Months Ended March 31 March 31 -------------------- -------------------- 1995 1994 1995 1994 -------- -------- -------- -------- Primary Earnings Per Share: Net earnings $ 18.0 $ 19.1 $ 14.9 $ 9.8 ======== ======== ======== ======== Weighted average number of shares 20.0 19.8 20.0 19.8 Common stock equivalents (stock options) .1 .2 .1 .2 -------- -------- -------- -------- Average shares outstanding 20.1 20.0 20.1 20.0 ======== ======== ======== ======== Primary earnings per share $ .90 $ .95 $ .74 $ .49 ======== ======== ======== ======== Fully Diluted Earnings per Share: Net earnings $ 18.0 $ 19.1 $ 14.9 $ 9.8 Add: After-tax interest and related expense amortization on 7% convertible subordinated debentures .9 .9 1.7 1.7 -------- -------- -------- -------- Net earnings adjusted $ 18.9 $ 20.0 $ 16.6 $ 11.5 ======== ======== ======== ======== Weighted average number of shares 20.0 19.8 20.0 19.8 Common stock equivalents (stock options) .1 .2 .1 .2 Weighted average common shares assuming conversion of 7% convertible subordinated debentures 3.4 3.4 3.4 3.4 -------- -------- -------- -------- Average shares outstanding 23.5 23.4 23.5 23.4 ======== ======== ======== ======== Fully diluted earnings per share $ .81 $ .85 $ .71 $ * ======== ======== ======== ======== * The computation of fully dilutive earnings per share of common stock is antidilutive; therefore, the amount reported for primary and fully diluted earnings per share is the same. -13-
14 EXHIBIT 19 April 19, 1995 To Our Shareholders: I'm very pleased to tell you that our company achieved strong sales and earnings improvement in the second quarter and first half of fiscal 1995. We increased our sales by 21 percent to $318.8 million in the second quarter of 1995, up from $263.5 million in the second quarter of 1994. Some of that sales increase came from a larger than usual number of orders that we carried over from the first quarter and prior fiscal year. But the bulk of it came from growing demand for our products in the United States and in markets around the world. Our U.S. sales grew by 19 percent. U.S. power products sales increased by 21 percent, fueled by increased loose outboard sales and strong demand for our new V-4 outboards and our popular V-6 models. Our U.S. boat sales increased nearly 17 percent in the quarter. Outside the United States, our sales increased 28 percent. All of our international operations reported sales gains, with OMC Europe leading the way with a 51 percent sales increase. Outboards drove our sales gains in all of our international markets. Our sales improvement translated into strong earnings growth for the quarter. We achieved net earnings of $18 million, or 90 cents per share (81 cents, fully diluted), for this year's second quarter. We reported net earnings of $19.1 million, or 95 cents per share (85 cents, fully diluted), for last year's second quarter. Last year's second quarter earnings, however, benefitted from $10.5 million in non-operating income from a real estate transaction in Hong Kong. Removing that gain from last year's results would leave adjusted net earnings of $ 8.6 million, or 43 cents per share (40 cents, fully diluted), for the 1994 second quarter. That is a positive earnings swing of $ 9.4 million, or 47 cents per share, for the second quarter of this year. For the first six months of 1995, we achieved net earnings of $14.9 million, or 74 cents per share (71 cents fully diluted), on sales of $561.4 million. We reported net earnings of $9.8 million, or 49 cents per share, on sales of $454.3 million for the same period in 1994. Removing the gain from our Hong Kong land transaction would leave an adjusted net loss of $ 0.7 million, or 4 cents per share for last year's first half. We are fully participating in the growth of our industry during this cyclical upturn. Full participation in the market's growth, though, is requiring increased spending in our manufacturing and marketing operations, as well as to pay for new product development for a new generation of low-emission outboards that will win sales for OMC in the future. That increased spending, along with additional tooling amortization and depreciation expense, will offset the additional cost savings that had been slated for fiscal 1995 as part of our 1993 restructuring program. Our profit margins, however, will continue to benefit from the streamlining measures we implemented in 1993 and 1994. You can see some of those benefits on our second quarter income statement. -14- 15 Our gross margin for this year's second quarter increased to 26.9 percent from 24.5 percent last year. Our SG and A expense increased by $9.6 million, but it was flat as a percentage of sales. Our operating earnings increased more than 87 percent to $24.9 million from $13.3 million in the second quarter last year. And our operating margin increased to 7.8 percent from 5 percent in the second quarter last year. Our margin improvement also was significant for the first six months of the year. Our gross margin for the first half of this year increased to 24.4 percent from 22.2 percent for the first six months of 1994. Our SG and A expense in this year's first half increased by $17.9 million, but decreased as a percentage of sales. Operating earnings more than tripled to $26 million from $7.9 million in the first half of last year. And our operating margin increased to 4.6 percent from 1.7 percent. I certainly can't tell you that our business is performing at the level at which we want it to perform. But we are addressing the engine manufacturing complexities that limited our growth last year, and we are now satisfying market demand with our current levels of production. We're seeing continuing strength in our markets, and we're working hard to maximize our earnings in this cyclical upturn while we, simultaneously, begin the process of developing a new strategic direction for our company that will produce steady growth in shareholder value. I'm looking forward to working to increase the value of your investment, and I am pleased to advise you that our board of directors has declared a cash dividend of 10 cents per share payable May 26, 1995, to shareholders of record May 12, 1995. HARRY W. BOWMAN - ---------------- Harry W. Bowman Chairman, President and Chief Executive Officer -15- 16 OUTBOARD MARINE CORPORATION STATEMENT OF CONSOLIDATED EARNINGS (UNAUDITED)
Three Months Ended Six Months Ended March 31 March 31 ------------------- ------------------- (In millions except amounts per share) 1995 1994 1995 1994 -------- -------- -------- -------- NET SALES $ 318.8 $ 263.5 $ 561.4 $ 454.3 COST OF GOODS SOLD 233.0 198.9 424.4 353.3 -------- -------- -------- -------- Gross earnings 85.8 64.6 137.0 101.0 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 60.9 51.3 111.0 93.1 -------- -------- -------- -------- Earnings from operations 24.9 13.3 26.0 7.9 NON-OPERATING EXPENSE (INCOME): Interest expense 5.4 5.1 10.4 10.1 Other, net ( .8) (11.7) (2.4) (13.6) -------- -------- -------- -------- 4.6 (6.6) 8.0 (3.5) -------- -------- -------- -------- Earnings before provision for income taxes 20.3 19.9 18.0 11.4 PROVISION FOR INCOME TAXES 2.3 .8 3.1 1.6 -------- -------- -------- -------- Net earnings $ 18.0 $ 19.1 $ 14.9 $ 9.8 ======== ======== ======== ======== NET EARNINGS PER SHARE OF COMMON STOCK BASED on weighted average common shares and common stock equivalents outstanding: Primary $ .90 $ .95 $ .74 $ .49 ======== ======== ======== ======== Fully diluted $ .81 $ .85 $ .71 $ .49 ======== ======== ======== ======== DIVIDENDS PAID PER SHARE $ .10 $ .10 $ .20 $ .20 ======== ======== ======== ======== AVERAGE SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS OUTSTANDING (if applicable) 20.1 20.0 20.1 20.0 -16-
17 OUTBOARD MARINE CORPORATION CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION (UNAUDITED)
March 31 September 30 (In millions) 1995 1994 1994 -------- -------- -------- ASSETS - ------ CURRENT ASSETS: Cash and cash equivalents $ 37.1 $ 33.1 $ 80.3 Receivables 211.0 193.5 150.5 Inventories- Finished products 90.5 77.7 58.7 Raw material, work in process and service parts 143.9 102.4 105.0 -------- -------- -------- Total inventory 234.4 180.1 163.7 Other current assets 37.2 31.4 35.3 -------- -------- -------- Total current assets 519.7 438.1 429.8 PRODUCT TOOLING, net 52.4 45.4 48.3 INTANGIBLES 31.5 32.5 32.1 OTHER ASSETS 95.4 85.7 89.8 PLANT AND EQUIPMENT, at cost 548.0 543.3 535.6 Less-Accumulated depreciation 326.5 333.0 318.5 -------- -------- -------- 221.5 210.3 217.1 -------- -------- -------- Total assets $ 920.5 $ 812.0 $ 817.1 ======== ======== ======== -17- 18 LIABILITIES AND SHAREHOLDERS' INVESTMENT - ---------------------------------------- CURRENT LIABILITIES: Notes payable $ 90.0 $ 28.0 $ - Accounts payable 101.7 76.8 102.9 Accrued and other 132.3 167.8 130.7 -------- -------- -------- Total current liabilities 324.0 272.6 233.6 LONG-TERM DEBT 177.3 178.1 178.2 POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 100.8 103.5 102.3 OTHER NON-CURRENT LIABILITIES 96.1 88.2 94.0 SHAREHOLDERS' INVESTMENT: Common stock and capital surplus 110.9 108.3 109.3 Retained earnings 117.2 71.5 106.3 Cumulative translation adjustments (5.8) (10.2) (6.6) -------- -------- -------- Total shareholders' investment 222.3 169.6 209.0 -------- -------- -------- Total liabilities and shareholders' investment $ 920.5 $ 812.0 $ 817.1 ======== ======== ======== SHARES OF COMMON STOCK OUTSTANDING 20.0 19.9 20.0
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