-----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, GE/aqu2w8b0R1NiIeDJrDMft26QaTVJu/tOhmJt+4pFryfSiXbZIxQrzAwLEf2jd O0JpKCDtjKJXzlo4Xz/M6A== 0000075149-97-000009.txt : 19970808 0000075149-97-000009.hdr.sgml : 19970808 ACCESSION NUMBER: 0000075149-97-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970807 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: 97653051 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 JUN-30-1997 83,800 0 163,000 7,100 161,900 439,800 551,900 348,300 825,100 241,000 172,600 3,000 0 0 200,200 825,100 275,800 275,800 221,000 221,000 55,200 0 4,300 (4,700) 400 (5,100) 0 0 0 (5,100) (0.25) (0.25)
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 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- 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- 3 OUTBOARD MARINE CORPORATION Statements of Consolidated Earnings (Unaudited)
Three Months Ended Nine Months Ended June 30 June 30 (In millions except amounts per share) 1997 1996 1997 1996 ---- ---- ---- ---- 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
The accompanying notes are an integral part of these statements. -3- 4 OUTBOARD MARINE CORPORATION Condensed Statements of Consolidated Financial Position
(Unaudited) ------------------- June 30 June 30 September 30 (In Millions) 1997 1996 1996 ---- ---- ---- 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- 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 ====================================
The accompanying notes are an integral part of these statements. -5- 6 OUTBOARD MARINE CORPORATION Statements of Consolidated Cash Flows (Unaudited)
Nine Months Ended June 30 (In millions) 1997 1996 ---- ---- 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
The accompanying notes are an integral part of these statements. -6- 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- 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- 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- 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- 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- 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- 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- 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- 15 EXHIBIT 11 OUTBOARD MARINE CORPORATION AND SUBSIDIARIES Computation of Per Share Earnings (Unaudited)
Three Months Ended Nine Months Ended June 30 June 30 (In millions except amounts per share) 1997 1996 1997 1996 ----------------------- ---------------------- 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 $ ** $ ** $ ** $ ** ======================= ======================
* 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- -----END PRIVACY-ENHANCED MESSAGE-----