-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Kv61aeebCNDuLN9JE7NfhXqutZm4B6TeARnaW6MzxleykVByTNPFgkbTL9lsNViF YQvJF+GroioG6v+ozQAg4w== 0000075149-97-000002.txt : 19970222 0000075149-97-000002.hdr.sgml : 19970222 ACCESSION NUMBER: 0000075149-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970212 SROS: CSX 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: 97527632 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 EXHIBIT 27 (FDS) FILED WITH FORM 10-Q
5 1,000 3-MOS SEP-30-1997 DEC-31-1996 59,900 0 152,900 11,700 175,100 416,900 561,200 346,000 816,600 211,200 177,500 3,000 0 0 219,500 816,600 197,100 197,100 174,400 174,400 31,800 0 4,400 (13,500) 800 (14,300) 0 0 0 (14,300) (0.71) (0.71)
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 December 31, 1996. 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 January 31, 1997 was 20,180,626 shares (not including 129,716 treasury shares). Exhibit Index Page 13. -1- 2 OUTBOARD MARINE CORPORATION FORM 10-Q PART I, ITEM 1 FINANCIAL INFORMATION FINANCIAL STATEMENTS December 31, 1996 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- 3 OUTBOARD MARINE CORPORATION Statements of Consolidated Earnings (Unaudited) Three Months Ended December 31 (In millions except amounts per share) 1996 1995 - -------------------------------------- ---- ---- Net Sales $ 197.1 $ 232.1 Cost of Goods Sold 174.4 192.7 --------------------- Gross earnings 22.7 39.4 Selling, General & Administrative Expense 42.4 45.7 --------------------- Earnings (Loss) from operations (19.7) (6.3) Non-Operating Expense (Income) Interest expense 4.4 5.4 Other, net (10.6) (0.3) --------------------- (6.2) 5.1 --------------------- Earnings (Loss) before provision for income taxes (13.5) (11.4) Provision for Income Taxes 0.8 1.0 --------------------- Net earnings (loss) $ (14.3) $ (12.4) ===================== Net Earnings (Loss) Per Share of Common Stock Primary $ (0.71) $ (0.62) ===================== Fully diluted $ (0.71) $ (0.62) ===================== Dividends Declared Per Share $ 0.10 $ 0.10 Average Shares of Common Stock and Common Stock Equivalents Outstanding (if applicable) 20.2 20.1 -3- 4 OUTBOARD MARINE CORPORATION Condensed Statements of Consolidated Financial Position
(Unaudited) ---------------------------- December 31 December 31 September 30 (In Millions) 1996 1995 1996 - ------------- ----- ----- ----- Assets - ------ Current Assets Cash and cash equivalents $ 59.9 $ 51.5 $ 95.5 Receivables 141.2 139.1 167.6 Inventories Finished products 71.3 79.2 62.6 Raw material, work in process and service parts 103.8 120.7 102.5 ------------------------------------------- Total inventories 175.1 199.9 165.1 Other current assets 40.7 50.6 39.3 ------------------------------------------- Total current assets 416.9 441.1 467.5 Product Tooling, Net 51.5 52.9 51.6 Intangibles 37.4 40.1 38.3 Other Assets 95.6 89.8 97.4 Plant and Equipment, at cost 561.2 563.4 565.1 Less-Accumulated depreciation (346.0) (338.2) (346.2) ------------------------------------------- 215.2 225.2 218.9 ------------------------------------------- Total assets $ 816.6 $ 849.1 $ 873.7 =========================================== -4- 5 Liabilities and Shareholders' Investment - ---------------------------------------- Current Liabilities Accounts payable $ 55.6 $ 65.6 $ 90.0 Accrued and other 155.6 136.8 163.3 ------------------------------------------- Total current liabilities 211.2 202.4 253.3 Long-Term Debt 177.5 177.4 177.6 Postretirement Benefits Other Than Pensions 100.6 102.5 100.7 Other Non-Current Liabilities 104.8 124.2 104.5 Shareholders' Investment Common stock and capital surplus 115.5 113.5 114.8 Retained earnings 115.0 135.3 131.3 Cumulative translation adjustments (8.0) (6.2) (8.5) ------------------------------------------- Total shareholders' investment 222.5 242.6 237.6 ------------------------------------------- Total liabilities and shareholders' investment $ 816.6 $ 849.1 $ 873.7 ===========================================
-5- 6 OUTBOARD MARINE CORPORATION Statements of Consolidated Cash Flows (Unaudited)
Three Months Ended December 31 (In millions) 1996 1995 - ------------- ---- ---- Cash Flows from Operating Activities Net loss $ (14.3) $ (12.4) Adjustments to reconcile net loss to net cash provided by operations: Depreciation and amortization 12.7 11.9 Changes in current accounts excluding the effects of noncash transactions: Decrease in accounts receivable 25.9 61.3 (Increase) in inventory (9.6) (5.6) (Increase) in other current assets (1.5) (1.7) (Decrease) in accounts payable and accrued liabilities (38.9) (46.3) Other, net 0.1 0.6 --------------------- Net cash provided by (used for) operating activities (25.6) 7.8 Cash Flows from Investing Activities Expenditures for plant and equipment, and tooling (12.1) (14.7) Proceeds from sale of plant and equipment 5.5 - Other, net - 0.1 --------------------- Net cash used for investing activities (6.6) (14.6) Cash Flows from Financing Activities Cash dividends paid (4.0) (2.0) Other, net 0.3 2.3 --------------------- Net cash provided by (used for) financing activities (3.7) 0.3 Exchange Rate Effect on Cash 0.3 (0.3) --------------------- Net Increase (Decrease) in Cash and Cash Equivalents (35.6) (6.8) Cash and Cash Equivalents at Beginning of Period 95.5 58.3 --------------------- Cash and Cash Equivalents at End of Period $ 59.9 $ 51.5 ===================== Supplemental Cash Flow Disclosures Interest paid $ 4.2 $ 5.7 Income taxes paid 2.7 5.8
-6- 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION The accompanying unaudited consolidated condensed financial statements 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's Second Amended and Restated Revolving Credit Agreement, as amended, provides for loans of up to $200 million and has been extended to December 31, 1999. In December 1995, the Company entered into receivables sales agreements, as amended and expiring June 30, 1997, whereby the Company agreed to sell an ownership interest in a designated pool of domestic trade accounts receivable ("Receivables"). In order to maintain the balance in the designated pool of Receivables sold, the Company is obligated to sell undivided percentage interests in new Receivables as existing Receivables are collected. The Company retains a residual interest in the Receivables sold, thus receivables are only reduced by the net outstanding proceeds from the sales. At December 31, 1996, the Company had no outstanding proceeds and had available up to $55 million. At December 31, 1995, the Company had net outstanding proceeds of $20 million. The Company has 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 for the three months ended December 31, 1995. Under both the revolving credit agreement, as amended, and the receivable sales agreements, as amended, the Company is required to meet certain financial covenants throughout the year. The Company is in compliance with these financial covenants. 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 its 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 potential repurchases. -7- 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, as well as 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 the Consolidated Earnings of the Company. 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 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, 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 December 31, 1996, the Company has accrued 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 quarter ended December 31, 1996, the Company recovered insurance proceeds of $6.1 million for prior environmental charges which is included in non-operating expense (income) in the Statement of Consolidated Earnings. 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 accurately reflects the Company's liability based upon the information available at the time. -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 December 31, 1996 RESULTS OF OPERATIONS Outboard Marine Corporation (OMC) reported a net loss of $14.3 million, or 71 cents per share (primary and fully diluted), on sales of $197.1 million for this year's first quarter. During the first quarter of fiscal 1996, the Company had a net loss of $12.4 million, or 62 cents per share (primary and fully diluted), on sales of $232.1 million. The continuing softness in marine engine and boat sales in the fall months kept dealer inventories relatively high and resulted in a decline in OMC's sales and operating results in the quarter just ended. Given the industry's retail market environment, coupled with the Company's commitment to work with its dealers to bring inventories more in line with market conditions, these results had been expected. In addition, the Company suspended production of many of its larger engines for nearly a month during the quarter in order to make changes to equipment and processes the Company felt were necessary in order to significantly improve the quality of those engines. This resulted in sales decreases and unabsorbed costs which constituted the largest part of the negative comparison to results for the comparative quarter last year. At the same time, the Company has eliminated some of its boat brands and models, an initiative which resulted in higher promotional expenditures in the quarter just ended. As a result of factors outlined above, the Company's gross margin during the quarter fell to 11.5% compared to 17.0% in the previous year's first quarter. Selling, general and administrative expenses, reflecting OMC's continuing efforts to reduce such costs, were $42.4 million during the quarter, a 7.2% decline from the $45.7 million recorded in the same quarter last year. Expenditures on marketing and promotion were up on a comparable basis as the Company began programs to communicate the features of its new FICHT TM fuel injection Johnson TM and Evinrude TM outboard engines. Production of these new engines began during the quarter and they were introduced to the retail marine market on schedule and in the planned volume in early January. An operating loss of $19.7 million, however, was realized during the quarter compared to a loss of $6.3 million in 1996's first quarter. After taking into account $1.6 million in gains from the sale of assets during the quarter and an insurance recovery of $6.1 million in an environmental matter, OMC posted a first quarter pre-tax loss of $13.5 million compared to a pre-tax loss of $11.4 million for the first quarter of 1996. The provision for income taxes for the three months ended December 31, 1996 and 1995 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." 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. -9- 10 FINANCIAL CONDITION Due to the seasonal nature of OMC's business it is more appropriate to compare the December 31, 1996 Condensed Statement of Financial Position with December 31, 1995. The Company's ratio of current assets to current liabilities was 2.0 at December 31, 1996 compared to 2.2 at December 31, 1995. Current assets of $416.9 million at December 31, 1996 decreased $24.2 million as compared to current assets of $441.1 million at December 31, 1995. Due primarily to lower sales, receivables were $17.9 million lower on a proforma basis after reflecting $20.0 million at December 31, 1995 sold through a receivables sales agreement (see Note 2 of Notes to Consolidated Financial Statements). Inventories decreased $24.8 million to $175.1 million at December 31, 1996 as compared to $199.9 million at December 31, 1995 due primarily to reduced production in engine plants to bring inventories more in line with sales. Other current assets and other assets increased due primarily to increases in deferred income tax benefits. Current liabilities increased by $8.8 million to $211.2 million as of December 31, 1996 compared to $202.4 million at December 31, 1995. The $10.0 million decrease in accounts payable resulted primarily from decreased manufacturing activity. Accrued liabilities increased $18.8 million due primarily to higher accrued income taxes, a higher restructuring accrual balance and a reclassification of interest expense relating to tax settlements to a current liability. Other non-current liabilities decreased $19.4 million due primarily to a decrease in tax liabilities. The Company's total debt to total capitalization at December 31, 1996 was 44 percent compared to 42 percent at December 31, 1995. Based on the Company's current expectations of financial performance, the flexibility which comes with an improved balance sheet, a $200 million revolving credit agreement, the receivables sales agreements and other available sources of capital, the Company believes it has available sufficient internal and external financial resources to invest in low emission engines and to continue making long-term investments for future growth through the next few years. -10- 11 TRENDS AND FORWARD-LOOKING FACTORS Despite weak market conditions heading into the winter boat show season, the Company continues to believe that industry retail sales will modestly improve in 1997. The Company expects its retail pull-through programs to assist dealers in reducing inventories which continue to be high. However, this is not expected to translate to increased sales for the Company and it, therefore, expects a modest-to-no increase in sales for the year. Any increase would currently be expected to come from growth in international engine sales. In addition, the decline in gross margins in the first quarter as a result of suspended production to improve engine quality could result in only a modest gross profit or operating income improvement in fiscal 1997. The Company has begun to see benefits from its 1996 reengineering projects and the initial phases of the larger scale earnings improvement initiatives it has undertaken this year. As part of this reengineering, the Company is reviewing the consolidation of distribution, the integration of administration and distribution of boats, increasing commonality of components, reducing its warranty costs, the Company's core competencies, and the reduction of engine models and of some boat brands and models. The Company expects these projects to ultimately result in improvements of $75 to $100 million by the end of fiscal year 2000. At the same time the Company is continuing to make internal cultural and operational changes in marketing, engineering, manufacturing and information systems necessary to make it a strong global competitor. Finally, the FICHT TM fuel injected engines are being delivered on schedule, and are receiving innovation awards and very positive reviews from dealers, boat magazine editors and consumers. 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, general economic conditions including interest rates and consumer confidence. 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- 12 OUTBOARD MARINE CORPORATION FORM 10-Q PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders At the Registrant's Annual Meeting of Shareholders held on January 16, 1997, there were 20,165,574 shares outstanding and entitled to notice of and to vote at the meeting. The following matters were voted on, with the results indicated: Frank Borman, Harry W. Bowman, and J. Willard Marriott, Jr., were each elected a Director for a three year term expiring at the Company's year 2000 Annual Meeting of Shareholders with votes of 14,247,123 "FOR" and 1,513,312 "WITHHELD", 14,262,217 "FOR" and 1,897,723 "WITHHELD" and 14,281,323 "FOR" and 1,879,117 "WITHHELD", respectively. The term of office as director continued after the Annual Meeting of Shareholders for William C. France, Ilene S. Gordon, Richard T. Lindgren, Donald L. Runkle, Richard J. Stegemeier, and Richard F. Teerlink. The Outboard Marine Corporation Non-Employee Directors Equity Compensation Plan was approved with 16,264,418 shares voting "FOR" the approval, 454,427 shares voting "AGAINST" the approval and 63,678 shares abstaining from voting. The appointment of Arthur Andersen LLP as the Registrant's independent accountants was confirmed with 16,711,597 shares voting "FOR" the confirmation, 38,702 shares voting "AGAINST" the confirmation and 32,224 shares abstaining from voting. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits reference is made to the Exhibit Index on Page 13. (b) Reports on Form 8-K. The Registrant did not file any reports on Form 8-K for the fiscal quarter ended December 31, 1996. 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 February 12, 1997 & Chief Financial Officer _____________________________ _________________________ _________________ GEORGE L. SCHUEPPERT -12- 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 September 20, 1995, reference is made to Exhibit 3(B) to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 1995, 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, 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 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. -13- 14 (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 Severance Agreements for all elected officers of the Registrant (except Harry W. 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 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. (G) With respect to the Severance Agreement for Mr. Bowman, reference is made to Exhibit 10(G) of the Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 1995, which is incorporated herein by reference. (H) 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 , a copy is attached hereto as Exhibit 10(H). (I) 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. 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 schedules: This information is filed only in the electronic filing. -14- 15 EXHIBIT 10(H) EXTENSION LETTER Outboard Marine Corporation 100 Sea Horse Drive Waukegan, IL 60085 The First National Bank of Chicago, as Agent under the Credit Agreement referred to below One First National Plaza, Suite 0324 Chicago, Illinois 60670 Gentlemen: We hereby agree to extend, effective November 29, 1996 our respective Termination Date under the Credit Agreement dated as of March 29, 1996 among Outboard Marine Corporation, the banks listed therein, and The First National Bank of Chicago, as Agent (as amended from time to time, the "Credit Agreement"), for one year to December 31, 1999. Terms defined in the Credit Agreement are used herein as therein defined. This Extension Agreement shall be construed in accordance with and governed by the law of the State of Illinois. OUTBOARD MARINE CORPORATION ABN AMBRO BANK N.V. By: THOMAS G. GOODMAN By: DAVID C. SAGERS ----------------- --------------- Thomas G. Goodman David C. Sagers Title: Treasurer Title: Vice President By: CHRISTINE E. HOLMES THE FIRST NATIONAL BANK OF CHICAGO ------------------- Christine E. Holmes By: DEBORAH E. STEVENS Title: Vice President ------------------ Deborah E. Stevens Title: Authorized Agent THE BANK OF NOVA SCOTIA By: F.C.H. ASHBY BANK OF AMERICA ILLINOIS ------------ F.C.H. Ashby By: MIKE HEALY Title: Senior Manager Loan Operations ---------- Mike Healy Title: Vice President FIRSTAR BANK MILWAUKEE, N.A. By: F.R. DENGEL ROYAL BANK OF CANADA ----------- F.R. Dengel By: KAREN T. HULL Title: Vice President ------------- Karen T. Hull Title: Manager, Corporate Banking THE NORTHERN TRUST COMPANY By: MICHELLE M. TETEAK THE BANK OF NEW YORK ------------------ Michelle M. Teteak By: MARK R. FAWCETT Title: Vice President --------------- Mark R. Fawcett Title: Assistant Treasurer -15- 16 EXHIBIT 11 OUTBOARD MARINE CORPORATION AND SUBSIDIARIES Computation of Per Share Earnings (UNAUDITED) Three Months Ended Dec. 31 (In millions except amounts per share) 1996 1995 - -------------------------------------- ---- ---- Primary Earnings Per Share Net Earnings (Loss) $ (14.3) $ (12.4) ====================== Weighted Average Number of Shares 20.2 20.1 Common Stock Equivalents * * ---------------------- Average Shares Outstanding 20.2 20.1 ====================== Primary Earnings (Loss) Per Share $ (0.71) $ (0.62) ====================== Fully Diluted Earnings Per Share Net Earnings (Loss) $ (14.3) $ (12.4) Add: After-Tax Interest and Related Expense Amortization on 7% Convertible Subordinated Debentures 0.9 0.9 ---------------------- Net Earnings (Loss) Adjusted $ (13.4) $ (11.5) ====================== Weighted Average Number of Shares 20.2 20.1 Common Stock Equivalents - 0.1 Weighted Average Common Shares Assuming Conversion of 7% Convertible Subordinated Debentures 3.4 3.4 ---------------------- Average Shares Outstanding 23.6 23.6 ====================== Fully Diluted Earnings (Loss) Per Share $ ** $ ** ====================== * 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. -16- -----END PRIVACY-ENHANCED MESSAGE-----