SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) December 14, 1995
DIAMOND SHAMROCK, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 19409 74-2456753
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
9830 Colonnade Blvd., San Antonio, Texas 78230
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (210) 641-6800
<PAGE>
The Registrant, Diamond Shamrock, Inc. ("Diamond Shamrock"), hereby amends
Item 7 of its Current Report on Form 8-K dated December 14, 1995 (the "Form
8-K") to include Pro Forma Financial Information which it was impracticable to
provide at the time the Form 8-K was initially filed, and to include the
Independent Auditors' Report dated September 19, 1995 relating to the audited
financial statements of National Convenience Stores Incorporated ("NCS") and
its subsidiaries incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Businesses Acquired.
Independent Auditors' Report dated September 19, 1995*
Audited Financial Statements of NCS and Subsidiaries:
Consolidated Statement of Operations -- Year Ended
June 30, 1995**
Consolidated Balance Sheet -- June 30, 1995**
Consolidated Statement of Cash Flows -- Year Ended
June 30, 1995**
Consolidated Statement of Stockholders' Equity
(Deficit) -- Year Ended June 30, 1995**
Notes to Consolidated Financial Statements**
Unaudited Interim Condensed Consolidated Financial
Statements of NCS and Subsidiaries:
Condensed Consolidated Statement of Operations --
Three Months Ended September 30, 1995***
Condensed Consolidated Balance Sheet -- September 30,
1995***
Condensed Consolidated Statement of Cash Flows --
Three Months Ended September 30, 1995***
Notes to Condensed Consolidated Financial
Statements***
_________________
* The Independent Auditors' Report of Deloitte & Touche
LLP is incorporated by reference to page 27 of the
Annual Report on Form 10-K for the fiscal year ended
June 30, 1995 of National Convenience Stores
Incorporated (Commission File No. 1-7936) (the "Form
10-K").
** The Audited Financial Statements of NCS and
Subsidiaries, including the Notes thereto, are
incorporated herein by reference to pages 28 through 51
of the Form 10-K.
*** The unaudited interim condensed consolidated financial
statements of NCS and Subsidiaries, including the notes
thereto, are incorporated herein by reference to pages
4 through 13 of the Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1995 of
National Convenience Stores Incorporated (Commission
File No. 1-7936).
(b) Pro Forma Financial Information.
The following pro forma consolidated condensed balance sheet of Diamond
Shamrock at September 30, 1995 gives effect to the Merger and the Loan, as if
such events had occurred at such date. The following pro forma consolidated
condensed statements of operations of Diamond Shamrock for the nine months
ended September 30, 1995 and the year ended December 31, 1994 give effect to
the Merger and the Loan as if such events had occurred at the beginning of such
periods. Interest expense relating to the Loan for such periods has been
calculated based on historical interest rate data, and the amortization of the
excess of cost over the fair value of acquired net assets created as a result
of the Merger has been reflected as an expense for such periods.
The pro forma consolidated condensed financial statements should be read in
conjunction with the historical financial statements of Diamond Shamrock,
including the notes thereto, which are contained in Diamond Shamrock's
Quarterly Report on Form 10-Q for the nine months ended September 30, 1995, and
Diamond Shamrock's Annual Report on Form 10-K for the year ended December 31,
1994, as well as the historical financial statements of NCS (which are
incorporated herein by reference), from which the pro forma consolidated
condensed financial statements of Diamond Shamrock have been derived.
The pro forma consolidated condensed financial statements are presented for
informational purposes only and are not necessarily indicative of the financial
position or operating results that would have occurred if the Merger and the
Loan had been consummated as of the dates indicated, nor are they necessarily
indicative of the future financial condition or operating results of Diamond
Shamrock.
The Merger will be accounted for by the purchase method of accounting for
business combinations and, accordingly, the cost to acquire the assets of NCS
will be allocated to the underlying net assets to the extent of their respective
fair values. The pro forma adjustments below represent estimates of those
adjustments that are expected to be made to reflect fair values at the time of
the Merger.
Pro Forma Consolidated Condensed Balance Sheet (Unaudited)
September 30, 1995
(amounts in millions)
Pro Forma
Adjustments
Diamond Increase Pro Forma
Shamrock NCS (Decrease) Combined
ASSETS
Current Assets
Cash and cash equivalents $ 24.4 $ 40.6 $ 3.3(a) $ 68.3
Receivables, less
doubtful receivables 182.6 5.7 (4.9)(e) 183.4
Inventories
Finished products 146.8 35.7 (1.9)(e) 180.6
Raw materials 78.3 0.0 78.3
Supplies 36.0 0.0 36.0
261.1 35.7 (1.9) 294.9
Prepaid expenses and other
current assets 16.5 8.0 24.5
Total Current Assets 484.6 90.0 (3.5) 571.1
Properties and equipment,
less accumulated
depreciation 1,146.2 164.1 (19.0)(e) 1,291.3
Excess of cost over
acquired net assets 0.0 23.6 140.0(b) 163.6
Deferred charges and
other assets 52.7 13.4 (9.7)(e) 56.4
$1,683.5 $291.1 $ 107.8 $2,082.4
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Long-term debt payable
within one year $ 4.0 $ 11.0 $ 15.0
Accounts payable 143.1 36.4 179.5
Accrued taxes 59.7 19.0 78.7
Accrued royalties 6.8 0.0 6.8
Current portion of
Long-term liability 8.0 0.0 8.0
Other accrued liabilities 76.1 10.7 $ 28.0(e) 114.8
Total Current Liabilities 297.7 77.1 28.0 402.8
Long-term Debt 607.3 88.4 191.5(c)(e) 887.2
Deferred Income Taxes 85.5 0.0 (26.4)(e) 59.1
Other Liabilities
and Deferred Credits 75.5 40.3 115.8
Stockholders' Equity
Preferred Stock 0.0 0.0 0.0
Common Stock 0.3 0.0 0.0 0.3
Paid-in Capital 447.7 64.0 (64.0)(d) 447.7
ESOP Stock and Stock
Held in Treasury (39.4) 0.0 (39.4)
Retained Earnings 208.9 21.3 (21.3)(d) 208.9
Total Stockholders' Equity 617.5 85.3 (85.3) 617.5
$1,683.5 $291.1 $107.8 $2,082.4
(a) To record the net increase in cash and cash equivalents provided by the
Loan ($220 million) to fund the purchase of NCS, after deducting the total
cost of the acquisition ($182.2 million) and the amount used to repay
certain existing debt of NCS ($34.5 million) at the time of the
acquisition.
(b) To record the excess of the acquisition cost of NCS over the fair value
of assets acquired less liabilities assumed. The total amount of excess
cost over acquired net assets is expected to be amortized over its useful
life of 20 years.
(c) To record the amount borrowed to fund the acquisition ($220.0 million),
the revaluation of NCS long-term debt to its fair value ($6.0 million), and
the repayment of a portion of NCS debt ($34.5 million). The fair value
revaluation of debt is expected to be amortized over the remaining terms
of the related debt instruments (primarily mortgage notes payable).
(d) To eliminate NCS's equity at September 30, 1995 to consolidate NCS into the
consolidated balance sheet of Diamond Shamrock.
(e) To record the non-recurring costs and expenses related to the acquisition,
and to adjust NCS's assets and liabilities to fair value.
<PAGE>
Pro Forma Consolidated Condensed Statement of Operations (Unaudited)
Twelve Months Ended December 31, 1994
(amounts in millions, except per share data)
Pro Forma
Adjustments
Diamond Increase Pro Forma
Shamrock NCS (Decrease) Combined
REVENUES
Sales and operating revenues $2,606.3 $ 888.2 $(143.8)(d) $3,350.7
Other revenues, net 14.8 5.3 20.1
2,621.1 893.5 (143.8) 3,370.8
COSTS AND EXPENSES
Cost of products sold
and operating expenses 2,269.5 823.9 (143.8)(d) 2,949.6
Depreciation and amortization 70.9 16.3 7.0(a) 94.2
Selling and administrative 71.7 37.0 108.7
Taxes other than income taxes 39.9 0.0 39.9
Interest 43.3 10.5 9.3(b) 63.1
2,495.3 887.7 (127.5) 3,255.5
Income (Loss) Before
Tax Provision 125.8 5.8 (16.3) 115.3
Provision (Benefit) for
Income Taxes 50.0 2.4 (3.3)(c) 49.1
Net Income 75.8 $ 3.4 $ (13.0) 66.2
Dividend Requirement on
Preferred Stock 4.3 4.3
Earnings Applicable to
Common Shares $ 71.5 $ 61.9
Primary Earnings Per Share $ 2.45 $ 2.13
Fully Diluted Earnings
Per Share $ 2.34 $ 2.04
Weighted Average
Common Shares Outstanding
(thousands of shares)
Primary 29,128 29,128
Fully Diluted 32,383 32,383
(a) To reflect additional amortization as a result of the acquisition cost of
NCS exceeding the fair value of the net assets acquired. The amortization
of excess cost is based on a 20-year amortization period. The excess cost
amortized is the same amount recorded as excess cost in the Pro Forma
Consolidated Condensed Balance Sheet as of September 30, 1995.
(b) To reflect additional interest expense for the debt incurred for the
acquisition of NCS, less the reduction in interest expense because of the
repayment of certain NCS debt.
(c) Income tax benefit is calculated as the deductible pro forma adjustments
multiplied by the federal statutory income tax rate (35%).
(d) To conform to Diamond Shamrock's practice of reporting sales and cost of
products sold by excluding federal excise and state motor fuels taxes.
<PAGE>
Pro Forma Consolidated Condensed Statement of Operations (Unaudited)
Nine Months Ended September 30, 1995
(amounts in millions, except per share data)
Pro Forma
Adjustments
Diamond Increase Pro Forma
Shamrock NCS (Decrease) Combined
REVENUES
Sales and operating revenues $2,212.7 $687.0 $(107.8)(d) $2,791.9
Other revenues, net 13.0 1.2 14.2
2,225.7 688.2 (107.8) 2,806.1
COSTS AND EXPENSES
Cost of products sold
and operating expenses 1,981.0 635.3 (107.8)(d) 2,508.5
Depreciation and amortization 57.5 4.0 5.2(a) 66.7
Selling and administrative 61.5 29.5 91.0
Taxes other than income taxes 30.6 0.0 30.6
Interest 34.0 6.7 9.7(b) 50.4
2,164.6 675.5 (92.9) 2,747.2
Income (Loss) Before
Tax Provision 61.1 12.7 (14.9) 58.9
Provision (Benefit) for
Income Taxes 21.9 5.3 (3.5)(c) 23.7
Net Income 39.2 $ 7.4 $ (11.4) 35.2
Dividend Requirement on
Preferred Stock 3.2 3.2
Earnings Applicable to
Common Shares $ 36.0 $ 32.0
Primary Earnings Per Share $ 1.24 $ 1.10
Fully Diluted Earnings
Per Share $ 1.22 $ 1.08
Weighted Average
Common Shares Outstanding
(thousands of shares)
Primary 29,103 29,103
Fully Diluted 32,376 32,376
(a) To reflect additional amortization as a result of the acquisition cost of
NCS exceeding the fair value of the net assets acquired. The amortization
amount of excess cost is based on a 20-year amortization period. The
excess cost amortized is the same amount recorded as excess cost in the
Pro Forma Consolidated Condensed Balance Sheet as of September 30, 1995.
(b) To reflect additional interest expense for the debt used to provide funds
for the acquisition of NCS, less the reduction in interest expense because
of the payoff of certain NCS debt.
(c) Income tax benefit is calculated as the deductible pro forma adjustments
multiplied by the federal statutory income tax rate (35%).
(d) To conform to Diamond Shamrock's practice of reporting sales and cost of
products sold by excluding federal excise and state motor fuels taxes.
<PAGE>
(c) Exhibits.
2.1 -- Agreement and Plan of Merger, dated November 8, 1995,
among Diamond Shamrock, Inc., Shamrock Acquisition
Corp. and National Convenience Stores Incorporated
(incorporated by reference to Exhibit (c)(1) to
Diamond Shamrock Inc.'s Schedule 14D-1 Tender Offer
Statement filed with the Securities and Exchange
Commission on November 14, 1995)
4.1 -- Credit Agreement, dated December 11, 1995, among
Diamond Shamrock, Inc. and the banks named therein
(previously filed)
23.1 -- Consent of Independent Accountants
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Diamond Shamrock, Inc. has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
DIAMOND SHAMROCK, INC.
By:/s/Gary E. Johnson
GARY E. JOHNSON
Vice President and Controller
Date: February 14, 1996
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
2.1 -- Agreement and Plan of Merger, dated November
8, 1995, among Diamond Shamrock, Inc.,
Shamrock Acquisition Corp. and National
Convenience Stores Incorporated
(incorporated by reference to Exhibit (c)(1)
to Diamond Shamrock Inc.'s Schedule 14D-1
Tender Offer Statement filed with the
Securities and Exchange Commission on
November 14, 1995)
4.1 -- Credit Agreement, dated December 11, 1995,
among Diamond Shamrock, Inc. and the banks
named therein (previously filed)
23.1 -- Consent of Independent Accountants
W3093a.TW
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Form 8-K/A of Diamond
Shamrock, Inc. and in the Registration Statements of Diamond Shamrock, Inc. on
Form S-3 (Nos. 33-67166 and 33-67556) and on Form S-8 (Nos. 33-15268, 33-34306,
33-50573, 33-47761, 33-59025 and 33-64645) of our report dated September 19,
1995 appearing in the Annual Report on Form 10-K of National Convenience Stores
Incorporated for the year ended June 30, 1995.
/s/Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Houston, Texas
February 14, 1996
