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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-2
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 ACQUISTION OR DISPOSITION OF ASSETS
On July 12, 1996, Quaker State Corporation ("Quaker State") filed a current
report on Form 8-K and reported under item 2 the acquisition of all of the
capital stock of Blue Coral, Inc.; on September 11, 1996, Quaker State amended
that report to include financial statements of the business acquired and pro
forma financial information.
On October 10, 1996, Quaker State filed a current report on Form 8-K and
reported under item 2 the acquisition of all of the capital stock of Medo
Industries, Inc. and affiliated companies; on December 17, 1996 Quaker State
amended that report to include pro forma financial information.
Quaker State hereby further amends the current report, Form 8-K/A-1 filed
December 17, 1996, to include additional pro forma financial information listed
in item 7 below.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information:
1. Pro Forma Consolidated Statement of Operations of
Quaker State Corporation and Subsidiaries for the
year ended December 31, 1996.
2. Notes to Pro Forma Consolidated Statement 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: April 3, 1998
By: /s/ Conrad A. Conrad
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Conrad A. Conrad
Vice Chairman and
Chief Financial Officer
1
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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 of Medo Industries
Inc. ("Medo"), respectively, in separate transactions. 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 dates of acquisition. 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 reports on Form 8-K/A-1, filed September
11, 1996, Form 8-K, filed October 10, 1996, Form 8-K/A-1, filed December 17,
1996 and the historical financial statements and other financial information of
Quaker State appearing in its Annual Report on Form 10-K for the year ended
December 31, 1995 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 Statement of Operations of Quaker
State Corporation and Subsidiaries for the year ended December 31, 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, 1996. The unaudited Pro Forma Consolidated Statement of Operations
does not purport to be indicative of the results which actually would have
occurred if the acquisitions had been consummated on January 1, 1996 or which
may occur in the future.
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QUAKER STATE CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)
<TABLE>
<CAPTION>
Quaker Blue Less:
State (1) Coral (2) NicSand (3) Adjustments
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(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUES
Sales and operating revenues $ 1,200,229 $ 55,962 $ 2,282
Other, net 7,470 - -
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TOTAL REVENUES 1,207,699 55,962 2,282
COSTS AND EXPENSES
Cost of sales and operating costs 821,530 30,523 1,474
Selling, general and administrative 296,221 20,485 562
Depreciation and amortization 38,578 696 21 $ 1,232 (6)
Interest 12,640 917 - 704 (7)
Unusual items 14,507 - -
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TOTAL COSTS AND EXPENSES 1,183,476 52,621 2,057 1,937
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Pretax income (loss) from
continuing operations 24,223 3,341 225 (1,937)
Provision for income taxes 10,500 264 109 298 (8)
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Income (loss) from
continuing operations $ 13,723 $ 3,077 $ 116 $ (2,235)
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Weighted average
shares outstanding 34,465 156 (9)
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Per share:
Income from
continuing operations $ 0.40
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<CAPTION>
Pro Forma Medo (4) Adjustments Pro Forma
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(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUES
Sales and operating revenues $ 1,253,909 $ 54,293 $ 1,308,202
Other, net 7,470 - 7,470
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TOTAL REVENUES 1,261,379 54,293 1,315,672
COSTS AND EXPENSES
Cost of sales and operating costs 850,579 26,498 877,077
Selling, general and administrative 316,144 14,867 $ (2,498) (5) 328,513
Depreciation and amortization 40,485 1,306 2,840 (6) 44,631
Interest 14,261 674 6,609 (7) 21,544
Unusual items 14,507 - 14,507
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TOTAL COSTS AND EXPENSES 1,235,977 43,345 6,951 1,286,272
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Pretax income (loss) from
continuing operations 25,402 10,948 (6,951) 29,399
Provision for income taxes 10,953 312 1,287 (8) 12,551
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Income (loss) from
continuing operations $ 14,449 $ 10,636 $ (8,237) $ 16,848
=========== ======== ======== ============
Weighted average
shares outstanding 34,621
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Per share:
Income from
continuing operations $ 0.49
============
</TABLE>
The accompanying notes are an integral part of these statements.
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NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Explanation of adjustments to the Pro Forma Consolidated Statement of Operations
for the year ended December 31, 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, 1996.
(2) Blue Coral's historical data represents activity for 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 six months ended December
31, 1996 is included in Quaker State's historical data for the year ended
December 31, 1996 as this activity was subsequent to the acquisition date.
(3) To record the sale of Blue Coral's interest in NicSand, Inc. effective
October 31, 1996. Amounts represents activity from June 28, 1996 (the date
of acquisition) through September 30, 1996, which are reflected in Quaker s
State's historical data for the year ended December 31, 1996.
(4) Medo's historical data represents activity for the nine months ended
September 30, 1996.
(5) To record a reduction in Medo's salaries as a result of the acquisition for
the year ended December 31, 1996 and to reverse bonuses paid by Medo in
September 1996, in connection with the acquisition.
(6) To record amortization of excess of purchase price over fair market value
of assets acquired by Quaker State ($82.2 million for Blue Coral and $145.9
million for Medo), for the year ended December 31, 1996. Amortization is
calculated on a straight-line basis over periods not exceeding 40 years.
(7) 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, 1996. Calculation of adjustment is as follows:
<TABLE>
<S> <C>
Initial Blue Coral borrowing $ 71,000
Less: Cash received from sale of NicSand 9,471
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Net Blue Coral borrowings $ 61,529
Effective annual interest rate 5.710%
Number of months pro forma interest expense calculated 6
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Gross increase in interest expense $ 1,757
Less:
Blue Coral interest expense on books 917
Interest expense related to NicSand 136
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Net pro forma adjustment for Blue Coral $ 704
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Initial Blue Coral borrowing $165,000
Effective annual interest rate 5.885%
Number of months pro forma interest expense calculated 9
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Gross increase in interest expense $ 7,283
Less: Medo interest expense on books 674
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Net pro forma adjustment for Medo $ 6,609
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</TABLE>
(8) To record an income tax provision (benefit) for the results of operations
of Blue Coral and Medo and the tax effect of pro forma adjustments for the
year ended December 31, 1996.
(9) To increase the number of weighted average shares outstanding due to the
acquisition of Blue Coral. Calculation is as if shares were issued January
1, 1996 and shares repurchased from former Blue Coral stockholder were
repurchased January 1, 1996.
