UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 1997 (June 16, 1997)
WAINOCO OIL CORPORATION
(Exact name of registrant as specified in its charter)
Wyoming 1-7627 74-895085
(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10000 Memorial Drive, Suite 600
Houston, Texas 77024-3411
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 688-9600
Not Applicable
- -------------------------------------------------------------------
(Former name or former address, if changed since last report)
- 2 -
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 16, 1997, Wainoco Oil Corporation and subsidiaries (Wainoco or the
Company) completed the sale of all its Canadian oil and gas properties to Numac
Energy Inc. (the Disposition). The transaction was initiated by the Company
through a negotiated bid process in order to maximize shareholder value. The
oil and gas assets were located in British Columbia and Alberta and included
approximately 94 billion cubic feet of natural gas, 1.7 million barrels of oil,
condensate and natural gas liquids, 121,500 net undeveloped acres and a
significant amount of seismic data. Additionally, value was received for
certain Canadian income tax pools of the Company.
The contract purchase price of C$133.6 million was adjusted from the January 1,
1997 effective date of the sale to June 16, 1997. Net proceeds after these
adjustments, transaction expenses and severance costs are approximately C$126.7
million (US$91.4 million) as of June 16, 1997.
Wainoco intends to use the net proceeds from the Disposition to repay $57.5
million principal amount of debt obligations of the Company. The remaining net
proceeds will be used to fund future growth activities or repay additional debt
obligations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Item Page
---------------------------------------------------- ----
(b) Pro Forma Financial Information 3
Pro Forma Condensed Consolidated Balance
Sheet as of March 31, 1997 4
Pro Forma Condensed Consolidated Statement
of Operations for the Year Ended December 31, 1996 5
Pro Forma Condensed Consolidated Statement
of Operations for the Three Months Ended March 31, 1997 6
Notes to Pro Forma Condensed Consolidated
Financial Statements 7
(c) Exhibit
2.1 Purchase and Sale Agreement, dated May 5, 1997, between
Wainoco Oil Corporation and the buyer, Numac Energy Inc.
- 3 -
ITEM 7(b) UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial information
of Wainoco is based on the historical financial statements of Wainoco, adjusted
to give effect to the Disposition and the intended repayment of $57.5 million
principal amount of debt obligations. The pro forma condensed consolidated
financial information is not necessarily indicative of the results that actually
would have occurred if the Disposition and debt repayment had been in effect on
the dates indicated or which may be obtained in the future. The pro forma
condensed financial information should be read in conjunction with the Wainoco's
annual report on Form 10-K for the year ended December 31, 1996 and Wainoco's
quarterly report on Form 10-Q for the three months ended March 31, 1997. The
pro forma balance sheet as of March 31, 1997 assumes the Disposition and debt
repayment occurred as of March 31, 1997. The pro forma statements of operations
for the year ended December 31, 1996 and the three months ended March 31, 1997
assume the Disposition and debt repayment occurred as of January 1, 1996.
- 4 -
WAINOCO OIL CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1997
(Unaudited, in thousands)
Canadian
Historical Oil and Gas Pro Forma Pro Forma
Wainoco Divested Adjustments Wainoco
----------- ----------- --------------- -----------
ASSETS
Current Assets:
Cash and cash equivalents $ 5,154 $ - $ 90,300 (a) $ 34,836
(60,618) (b)
Receivables 20,394 (2,391) - 18,003
Inventory and other current assets 31,807 (158) - 31,649
----------- ----------- ----------- -----------
Total current assets 57,355 (2,549) 29,682 84,488
----------- ----------- ----------- -----------
Property and Equipment, at cost:
Oil and gas properties, on a full cost basis 170,561 (170,561) - -
Refinery and pipeline 143,595 - - 143,595
Furniture, fixtures and other equipment 3,666 (902) - 2,764
----------- ----------- ----------- -----------
317,822 (171,463) - 146,359
----------- ----------- ----------- -----------
Less - Accumulated depreciation, depletion
and amortization 142,738 (104,000) - 38,738
----------- ----------- ----------- -----------
175,084 (67,463) - 107,621
Other Assets 4,783 - (1,039) (c) 3,744
----------- ----------- ----------- -----------
$ 237,222 $ (70,012) $ 28,643 $ 195,853
=========== =========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Payables $ 35,586 $ (2,430) $ - $ 33,156
Accrued interest 3,564 - (1,403) (b) 2,161
Other accrued liabilities 7,491 - - 7,491
Current maturities of long-term debt 2,500 - (2,500) (b) -
----------- ----------- ----------- -----------
Total current liabilities 49,141 (2,430) (3,903) 42,808
----------- ----------- ----------- -----------
Long-Term Debt, net of current maturities:
Revolving credit facilities 14,600 - - 14,600
12% Senior Notes 97,000 - (50,000) (b) 47,000
7 % Convertible Subordinated Debentures 46,000 - - 46,000
10 % Subordinated Debentures 4,941 - (4,941) (b) -
----------- ----------- ----------- -----------
162,541 - (54,941) 107,600
----------- ----------- ----------- -----------
Other Liabilities 9,453 (120) - 9,333
Commitments and Contingencies
Shareholders' Equity:
Preferred stock
Common stock 57,172 - - 57,172
Paid-in capital 81,767 - - 81,767
Retained earnings (deficit) (113,400) (76,666) 90,300 (a) (102,579)
(1,774) (b)
(1,039) (c)
Cumulative translation adjustment (9,204) 9,204 - -
Treasury stock (248) - - (248)
----------- ----------- ----------- -----------
Total Shareholders' Equity 16,087 (67,462) 87,487 36,112
----------- ----------- ----------- -----------
$ 237,222 $ (70,012) $ 28,643 $ 195,853
=========== =========== =========== ===========
See accompanying notes to pro forma condensed consolidated financial statements.
- 5 -
WAINOCO OIL CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited, in thousands except per share)
Canadian
Historical Oil and Gas Pro Forma Pro Forma
Wainoco Divested Adjustments Wainoco
----------- ----------- --------------- -----------
Revenues:
Refined products $ 382,098 $ - $ - $ 382,098
Oil and gas sales 18,738 (18,738) - -
Other 3,116 (854) - 2,262
----------- ----------- ----------- -----------
403,952 (19,592) - 384,360
----------- ----------- ----------- -----------
Costs and expenses:
Refining operating costs 362,485 - - 362,485
Oil and gas operating costs 4,986 (4,986) - -
Selling and general expenses 8,639 (2,056) - 6,583
Depreciation, depletion and amortization 17,141 (8,123) - 9,018
----------- ----------- ----------- -----------
393,251 (15,165) - 378,086
----------- ----------- ----------- -----------
Operating Income (Loss) 10,701 (4,427) - 6,274
Interest Expense, net 17,406 (177) (7,068) (d) 10,161
----------- ----------- ----------- -----------
Income (Loss) Before Income Taxes (6,705) (4,250) 7,068 (3,887)
Provision for Income Taxes 187 (187) - -
----------- ----------- ----------- -----------
Income (Loss) From Continuing Operations $ (6,892) $ (4,063) $ 7,068 $ (3,887)
=========== =========== =========== ===========
Average Number of Common
Shares Outstanding 27,257
===========
Income (Loss) From Continuing
Operations Per Share $ (.14)
===========
See accompanying notes to pro forma condensed consolidated financial statements.
- 6 -
WAINOCO OIL CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 1997
(Unaudited, in thousands except per share)
Canadian
Historical Oil and Gas Pro Forma Pro Forma
Wainoco Divested Adjustments Wainoco
----------- ----------- --------------- -----------
Revenues:
Refined products $ 89,212 $ - $ - $ 89,212
Oil and gas sales 5,544 (5,544) - -
Other 672 (314) - 358
----------- ----------- --------------- -----------
95,428 (5,858) - 89,570
----------- ----------- --------------- -----------
Costs and expenses:
Refining operating costs 91,149 - - 91,149
Oil and gas operating costs 1,104 (1,104) - -
Selling and general expenses 2,344 (552) - 1,792
Depreciation, depletion and amortization 4,746 (2,473) - 2,273
----------- ----------- --------------- -----------
99,343 (4,129) - 95,214
----------- ----------- --------------- -----------
Operating Income (Loss) (3,915) (1,729) - (5,644)
Interest Expense, net 4,525 (66) (1,767) (d) 2,692
----------- ----------- --------------- -----------
Income (Loss) Before Income Taxes (8,440) (1,663) 1,767 (8,336)
Provision for Income Taxes 39 (39) - -
----------- ----------- --------------- -----------
Income (Loss) From Continuing Operations $ (8,479) $ (1,624) $ 1,767 $ (8,336)
=========== =========== =========== ===========
Average Number of Common
Shares Outstanding 27,259
===========
Income (Loss) From Continuing
Operations Per Share $ (.31)
===========
See accompanying notes to pro forma condensed consolidated financial statements.
- 7 -
Wainoco Oil Corporation
Notes to Pro Forma Condensed Consolidated Financial Statements
Pro Forma Adjustments:
(a) To reflect Disposition net proceeds as of March 31, 1997. Actual
proceeds will vary slightly for purchase price adjustments and changes in
the Canadian dollar conversion rate to U.S. dollars after March 31, 1997.
Wainoco estimates Disposition net proceeds and the gain on Disposition as
of June 16, 1997, using the June 16, 1997 currency conversion rate, will
be approximately $91.4 million and $23.2 million, respectively. No
Canadian taxes are estimated to be payable due to available oil and gas
deductions and net operating loss carryforwards. For U.S. federal income
taxes, available net operating loss carryforwards will be utilized to
offset the gain; however, alternative minimum taxes of approximately
$800,000 are estimated to be payable. The estimated gain on the
Disposition has not been presented in the accompanying pro forma
statements of operations.
(b) To reflect the intended repayment of long-term debt, principal amount of
$57.5 million, accrued interest and redemption premium with proceeds from
the Disposition. It is anticipated the actual retirement of 10-3/4%
Subordinated Debentures will occur in October 1997 and repayment of 12%
Senior Notes will occur in August 1997 at a redemption price of 103.43%.
The ultimate amount of debt repayment with Disposition proceeds will
depend upon investment opportunities available to Wainoco during 1997 and
could vary significantly.
(c) To reflect the reduction in debt issuance costs based on the intended
debt repayment of $57.5 million from Disposition proceeds.
(d) To reflect the reduction of interest expense for the intended principal
repayment of $57.5 million of long term debt. Based on the principal
repayment of $57.5 million, the Company will recognize an extraordinary
loss on debt extinguishment of approximately $2.7 million due to the
redemption premium of 103.43% on the 12% Senior Notes and reduction in
debt issuance costs. The extraordinary loss has not been presented in
the accompanying pro forma statements of operations.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
WAINOCO OIL CORPORATION
By: /s/ Julie H. Edwards
-------------------------------
Julie H. Edwards
Senior Vice President - Finance
and Chief Financial Officer
Date: June 30, 1997