Printer Friendly


 WAUKEGAN, Ill., Nov. 3 /PRNewswire/ -- Outboard Marine Corporation (OMC) (NYSE: OM) said today that restructuring charges it took to implement profit improvement measures, along with mandated accounting charges, greatly expanded the loss it incurred in its 1993 fiscal year, which ended Sept. 30.
 "We have completed a very tough year," said James C. Chapman, chairman, president and chief executive officer of the manufacturer of recreational marine engines and boats. "But we're now better positioned to deliver improved financial performance than we've been since the start of the marine industry's cyclical downturn in 1989. We've chosen this time to implement additional restructuring and streamlining programs that will make us a stronger competitor in our worldwide markets, as well as cut $65 million out of our cost structure and reduce our breakeven point by $250 million when our programs are fully implemented in 1996."
 OMC reported a net loss of $282.5 million, or $14.42 per share, on sales of $1.03 billion for 1993, compared with net earnings of $1.9 million, or 10 cents per share, on sales of $1.06 billion the prior year. OMC said its U.S. sales increased 2.5 percent in 1993, while its international sales decreased 14.6 percent.
 Accounting for the bulk of the company's 1993 net loss were pretax charges of $144.8 million for its restructuring program; $107.5 million to implement accounting rule SFAS No. 106 for retiree health care and life insurance benefits; and $10 million to eliminate deferred tax assets from its balance sheet for the adoption of accounting rule SFAS No. 109. OMC's 1993 results also included a pretax benefit of $12.5 million from a favorable insurance settlement related to an environmental clean-up conducted by the company.
 Excluding one-time events, OMC incurred a pretax loss of $27.6 million and an operating loss of $8.1 million for 1993, compared with a pretax profit of $12.5 million and an operating profit of $31 million in 1992.
 OMC attributed its operating losses to deepening recession in its European markets and continued sluggish sales in the U.S. market. OMC's European sales fell by 30 percent, producing significant losses in its European operations. Domestically, the company's performance was hurt by continued softness in the market for stern drive and inboard boats, as well as by reduced outboard engine sales and strong price competition in its packaged outboard boat lines, which reduced profit margins.
 For its 1993 fourth quarter, OMC incurred a net loss of $43 million, or $2.19 per share, on sales of $286.4 million, compared with net earnings of $3 million, or 16 cents per share, on sales of $315.2 million for the prior year's fourth quarter. U.S. sales decreased 4.3 percent while international sales decreased 21.1 percent.
 The 1993 fourth quarter results included a pre-tax restructuring charge of $37.4 million. Excluding the charge, OMC incurred a pretax loss of $3 million and achieved operating earnings of $2.3 million for the quarter. By comparison, it reported pretax earnings of $9.2 million and operating earnings of $15.8 million for its 1992 fourth quarter.
 OMC said its poorer operating performance in the 1993 fourth quarter was due to the same economic and marketplace factors that diminished its performance for the year, coupled with the absence of dealer sales incentives that significantly boosted the company's 1992 fourth quarter sales.
 Outboard Marine Corporation is a leading marketer of marine engines, boats, accessories and services.
 1993 Fourth Quarter Financial Highlights
 (In millions, except per-share data)
 Three Months Ended Twelve Months Ended
 September 30 September 30
 1993 1992 1993 1992
 Net Sales $286.4 $315.2 $1,034.6$1,064.6
 Gross Earnings 71.9 76.4 218.0 247.6
 Earnings (Loss) from
 Operations (35.1) 15.8 (152.9) 31.0
 Earnings (Loss) before Income
 Taxes and Accounting
 Changes (40.4) 9.2 (159.9) 12.5
 Net Earnings (Loss)
 before Accounting Changes (43.0) 3.0 (165.0) 1.9
 Cumulative Effect on Prior
 Years of Changes in Accounting
 Principles -- -- (117.5) --
 Net Earnings (Loss) $(43.0) $3.0 $(282.5) $1.9
 Per Share (A):
 Before Accounting
 Changes $(2.19) $.16 $(8.42) $.10
 Accounting Changes -- -- (6.00) --
 Net Primary $(2.19) $.16 $(14.42) $.10
 Fully Diluted $(2.19) $.16 $(14.42) $.10
 Average Number of Shares
 Outstanding and Common
 Stock Equivalents
 (if applicable) 19.6 19.8 19.6 19.8
 (A) -- Computed on average number of shares outstanding and common stock equivalents (if applicable) in respective periods.
 -0- 11/3/93
 /CONTACT: Ronald C. Kuykendall, 708-689-5642, or Stan R. Main (investors), 708-689-5254/

CO: Outboard Marine Corporation ST: Illinois IN: SU: ERN

CK -- NY114 -- 0358 11/03/93 17:29 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Nov 3, 1993

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters