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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-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): October 2, 1996
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Quaker State Corporation
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(Exact name of registrant as specified in its charter)
Delaware 1-2677 25-0742820
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(State of incorporation) (Commission File No.) (IRS Employer ID No.)
225 E. John Carpenter Freeway, Irving, Texas 75062
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(Address of principal executive offices) (Zip Code)
(972) 868-0400
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(Registrant's telephone number, including area code)
Not Applicable
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(Former Name or Former Address, If Changed Since Last Report)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 10, 1996, Quaker State Corporation ("Quaker State") filed a current
report on Form 8-K and reported under Item 2 that on October 2, 1996, Quaker
State completed the acquisition of all the capital stock of Medo Industries,
Inc. and its affiliates (Medo). Because it was impracticable to provide the
required pro forma financial information related to the transaction at the time
of filing, such pro forma financial information was not included with that
report on Form 8-K. Quaker State hereby amends Item 7, Financial Statements,
Pro Forma Financial Information, and Exhibits, of its report on Form 8-K filed
on October 10, 1996, as set forth below.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information:
1. Pro Forma Consolidated Statements of Operations of
Quaker State Corporation and Subsidiaries for the
year ended December 31, 1995 and for the nine months
ended September 30, 1996.
2. Pro Forma Consolidated Balance Sheet of Quaker State
Corporation and Subsidiaries as of September 30, 1996.
3. Notes to Pro Forma Consolidated Balance Sheet and
Statements of Operations.
SIGNATURE
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 hereunto duly authorized.
QUAKER STATE CORPORATION
(Registrant)
DATE: December 17, 1996
By: /s/ Conrad A. Conrad
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Conrad A. Conrad
Vice Chairman and
Chief Financial Officer
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Item 7(b) Pro Forma Financial Information
PRO FORMA FINANCIAL INFORMATION
On June 28, 1996 and October 2, 1996, Quaker State Corporation ("Quaker State")
acquired all the stock of Blue Coral, Inc. ("Blue Coral") and Medo Industries
Inc. ("Medo"), respectively. The acquisitions have been accounted for under
the purchase method and, accordingly, the operating results of Blue Coral and
Medo have been included in the consolidated financial statements of Quaker
State from the date of acquisition. The purchase accounting adjustments
presented in the following Pro Forma statements are preliminary estimates and
subsequent revisions may be necessary. The following Pro Forma financial
statements should be read in conjunction with the historical financial
statements and other financial information of Blue Coral and Medo appearing
elsewhere in Quaker State's Form 8-K/A-1, filed September 11, 1996, Form 8- K,
filed October 10, 1996, and the historical financial statements and other
financial information of Quaker State appearing in its 1995 Annual Report on
Form 10-K and its quarterly reports on Form 10-Q for the quarters ended March
31, 1996, June 30, 1996 and September 30, 1996.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
The following unaudited Pro Forma Consolidated Statements of Operations of
Quaker State Corporation and Subsidiaries for the year ended December 31, 1995
and the nine months ended September 30, 1996 present the combined historical
results of Quaker State, Blue Coral (prior to the acquisition date of June 28,
1996) and Medo (prior to the acquisition date of October 2, 1996) and pro forma
results as though such purchases had occurred on January 1, 1995. The
unaudited Pro Forma Consolidated Statements of Operations do not purport to be
indicative of the results which actually would have occurred if the
acquisitions had been consummated on January 1, 1995 or which may occur in the
future.
PRO FORMA CONSOLIDATED BALANCE SHEET
The following unaudited Pro Forma Consolidated Balance Sheet of Quaker State
Corporation and Subsidiaries as of September 30, 1996 presents the combined
financial position of Quaker State and Medo as of September 30, 1996.
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QUAKER STATE CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)
<TABLE>
<CAPTION>
Quaker* Blue
State (1) Coral (2) Adjustments Pro Forma Medo (3) Adjustments Pro Forma
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(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Sales and operating revenues $1,035,570 $81,336 $1,116,906 $60,125 $1,177,031
Other, net 9,894 - 9,894 4 9,898
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TOTAL REVENUES 1,045,464 81,336 1,126,800 60,129 1,186,929
COSTS AND EXPENSES
Cost of sales and operating costs 718,996 45,406 764,402 30,228 794,630
Selling, general and administrative 255,271 32,508 287,779 14,337 ($980)(8) 301,136
Depreciation and amortization 32,919 1,359 $2,612 (4) 36,890 1,268 4,793 (4) 42,951
Interest 7,228 1,691 1,822 (5) 10,741 728 8,982 (5) 20,451
Unusual items 27,000 - 27,000 85 27,085
Net gain on sale of product line and
closure of manufacturing facility - (2,306) (2,306) - (2,306)
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TOTAL COSTS AND EXPENSES 1,041,414 78,658 4,434 1,124,506 46,646 12,795 1,183,947
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Pretax income (loss) from continuing
operations 4,050 2,678 (4,434) 2,294 13,483 (12,795) 2,982
Provision for (benefit from) income taxes 2,300 (253) (450)(6) 1,597 142 133 (6) 1,872
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Income (loss) from continuing operations $1,750 $2,931 ($3,984) $697 $13,341 ($12,928) $1,110
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Weighted average shares outstanding 32,226 2,956 (7) 35,182 35,182
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Per share:
Income from continuing operations $0.06 $0.02 $0.03
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</TABLE>
* In July 1995, Quaker State acquired all of the stock of Slick 50, Inc.
(Slick 50). A Form 8-K was filed regarding Quaker State's acquisition of Slick
50. However, as the acquired business did not meet the definition of the term
"significant" as set out in Item 2, Instruction 4 to Form 8-K and as provided
in Rule 1-02(v) of Regulation S-X, no Pro Forma financial statements were
filed. Therefore, the Pro Forma statements presented herein only include the
results of operations of Slick 50 from the date of acquisition.
The accompanying notes are an integral part of these statements.
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QUAKER STATE CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)
<TABLE>
<CAPTION>
Quaker Blue Less:
State (1) Coral (2) NicSand (9) Adjustments
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(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
REVENUES
Sales and operating revenues $890,595 $ 55,962 $ 2,282
Other, net 5,790 - -
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TOTAL REVENUES 896,385 55,962 2,282
COSTS AND EXPENSES
Cost of sales and operating costs 611,329 30,523 1,474
Selling, general and administrative 219,030 20,485 562
Depreciation and amortization 26,234 696 21 $1,306 (4)
Interest 7,059 917 - 704 (5)
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TOTAL COSTS AND EXPENSES 863,652 52,621 2,057 2,010
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Pretax income (loss) from continuing operations 32,733 3,341 225 (2,010)
Provision for income taxes 13,100 264 109 268 (6)
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Income (loss) from continuing operations $19,633 $ 3,077 $ 116 ($2,278)
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Weighted average shares outstanding 34,002 1,981 (7)
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Per share:
Income from continuing operations $0.58
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</TABLE>
<TABLE>
<CAPTION>
Pro Forma Medo (3) Adjustments Pro Forma
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(in thousands except per share data)
<S> <C> <C> <C> <C>
Revenues
Sales and operating revenues $ 944,275 $ 54,293 $ 998,568
Other, net 5,790 - 5,790
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Total revenues 950,065 54,293 1,004,358
Costs and expenses
Cost of sales and operating costs 640,378 26,498 666,876
Selling, general and administrative 238,953 14,867 ($2,498)(8) 251,322
Depreciation and amortization 28,215 1,306 3,595 (4) 33,116
Interest 8,680 674 6,609 (5) 15,963
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Total costs and expenses 916,226 43,345 7,706 967,277
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Pretax income (loss) from continuing operations 33,839 10,948 (7,706) 37,081
Provision for income taxes 13,523 312 985 (6) 14,820
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Income (loss) from continuing operations $ 20,316 $ 10,636 ($8,691) $ 22,261
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Weighted average shares outstanding 35,983 35,983
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Per share:
Income from continuing operations $ 0.56 $ 0.62
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
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QUAKER STATE CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(IN THOUSANDS, UNAUDITED)
<TABLE>
<CAPTION>
Quaker Less:
State Medo NicSand (9) Adjustments Pro Forma
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(IN THOUSANDS EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,498 $ 54 $ 226 $ 1,326
Accounts and notes receivable, net 163,020 14,078 2,548 174,550
Inventories 98,259 6,658 2,332 102,585
Other current assets 44,429 3,299 650 47,078
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Total current assets 307,206 24,089 5,756 325,539
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Property, plant and equipment, net of
accumulated depreciation 228,596 5,027 326 233,297
Other assets 325,777 2,513 5,269 $ 143,792 (10) 466,813
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TOTAL ASSETS $861,579 $31,629 $11,351 $ 143,792 $1,025,649
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LIABILITIES
Current liabilities:
Accounts payable $ 62,081 $ 3,872 $ 595 $ 65,358
Accrued liabilities 95,605 3,718 216 ($77)(10) 99,030
Installments on long-term debt, payable within one year 13,024 8,035 - (7,891)(10) 13,168
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Total current liabilities 170,710 15,625 811 (7,968) 177,556
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Long-term debt, less current installments 184,258 10,372 - 157,392 (10)
(9,471)(11) 342,551
Other long-term liabilities 179,991 - 1,069 178,922
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Total liabilities 534,959 25,997 1,880 139,953 699,029
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STOCKHOLDERS' EQUITY
Capital stock 35,929 78 - (78)(10) 35,929
Additional capital 181,404 - - 181,404
Retained earnings 112,982 5,554 - (5,554)(10) 112,982
Other, net (3,695) - - (3,695)
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Total stockholders' equity 326,620 5,632 - (5,632) 326,620
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $861,579 $31,629 $ 1,880 $ 134,321 $1,025,649
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
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NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Explanation of adjustments to the Pro Forma Consolidated Statements of
Operations for the year ended December 31, 1995 and for the nine months ended
September 30, 1996 and the Pro Forma Consolidated Balance Sheet as of September
30, 1996, in connection with the acquisitions of Blue Coral and Medo are
presented below:
(1) Quaker State's historical data represents reported results for the year
ended December 31, 1995 and for the nine months ended September 30, 1996.
(2) Blue Coral's historical data represents activity for the year ended
December 31, 1995 and the six months ended June 28, 1996 adjusted for the
sale of its interest in NicSand, Inc., on October 31, 1996. Blue Coral's
activity for the three months ended September 30, 1996 is included in
Quaker State's historical data for the nine months ended September 30,
1996, as this activity was subsequent to the acquisition date.
(3) Medo's historical data represents activity for the year ended December
31, 1995 and the nine months ended September 30, 1996.
(4) To record amortization of excess of purchase price over fair market value
of assets acquired by Quaker State, for the year ended December 31, 1995
and the nine months ended September 30, 1996. Amortization is calculated
on a straight-line basis over periods not exceeding 40 years.
(5) To record the net effect on interest expense of the payment of Blue Coral
and Medo indebtedness and the increase in debt due to Quaker State's
borrowings in connection with the acquisitions for the year ended
December 31, 1995 and the nine months ended September 30, 1996.
(6) To record an income tax provision (benefit) for the results of operations
of Blue Coral and Medo and the income tax effect of pro forma adjustments
for the year ended December 31, 1995 and the nine months ended September
30, 1996.
(7) To increase the number of weighted average shares outstanding due to the
acquisition of Blue Coral.
(8) To record a reduction in Medo's salaries as a result of the acquisition
for the year ended December 31, 1995 and the nine months ended September
30, 1996 and to reverse bonuses paid by Medo in September 1996, in
connection with the acquisition, for the nine months ended September 30,
1996.
(9) To record the sale of Blue Coral's interest in NicSand, Inc. effective
October 31, 1996. Amounts represent activity from June 28, 1996 (the
date of acquisition) through September 30, 1996 and balances as of
September 30, 1996, which are reflected in Quaker State's historical data
as of and for the nine months ended September 30, 1996.
(10) To record excess of purchase price over fair market value of assets
acquired by Quaker State and payment of $17.7 million of indebtedness and
related accrued interest.
(11) To record reduction of debt as a result of the proceeds from the sale of
NicSand, Inc.
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