SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period ended May 31, 1998
Commission File Number 0-27944
PRIDE AUTOMOTIVE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 98-0157860
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Pride House, Watford Metro Centre, Tolpits Lane, Watford, England WD1 8SB
(Address of principal executive offices) (Zip Code)
(800) 698-6590
(Issuer's telephone number, including area code)
Indicate by (X) whether Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such filing requirements for the
past 90 days. YES X NO
Common Stock, $.001 par value. 2,822,500 shares outstanding as of May 31,
1998.
<PAGE>
PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page(s)
PART I. Financial Information:
ITEM 1. Financial Statements
<S> <C>
Consolidated Condensed Balance Sheets - May 31, 1998 (Unaudited) and
November 30, 1997 3.
Consolidated Condensed Statements of Operations (Unaudited) Six and Three
Months Ended May 31, 1998 and 1997 4.
Consolidated Condensed Statements of Comprehensive Income (Loss)
(Unaudited) - Six and Three Months Ended May 31, 1998 and 1997 5.
Consolidated Condensed Statements of Cash Flows (Unaudited) Six Months
Ended May 31, 1998 and 1997 6.
Notes to Interim Consolidated Condensed Financial Statements (Unaudited) 7.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 10.
PART II. Other Information 13.
SIGNATURES 14.
EXHIBITS: Exhibit 27 - Financial Data Schedule 15.
</TABLE>
<PAGE>
PART 1. Financial Information
ITEM 1. Financial Statements
PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
- ASSETS -
<TABLE>
<CAPTION>
May 31, November 30,
1998 1997
(unaudited)
ASSETS:
<S> <C> <C>
Cash and cash equivalents .......................................................................... $ 6,174 $ 77,354
Accounts receivable ................................................................................ 2,243,787 2,002,365
Inventories ........................................................................................ 25,279 1,248,360
Property, revenue producing vehicles and equipment - net (Note 2) .................................. 25,452,111 27,882,350
Intangible assets - net (Note 3) ................................................................... 8,759,507 9,090,156
Investment in affiliate (Note 1) ................................................................... 4,048,460 --
------------ ------------
TOTAL ASSETS $40,535,318 $ 40,300,585
============ ============
- LIABILITIES AND SHAREHOLDERS' EQUITY -
LIABILITIES (Note 4):
Bank overdraft line of credit ...................................................................... $ 5,689,202 $ 6,976,699
Accounts payable ................................................................................... 849,316 1,758,764
Accrued liabilities and expenses ................................................................... 685,287 865,977
Bank debt .......................................................................................... 659,509 695,782
Obligations under hire purchase contracts .......................................................... 18,171,265 18,341,778
Other loans ........................................................................................ 1,686,000 4,198,500
Other liabilities .................................................................................. 349,605 52,707
------------ ------------
TOTAL LIABILITIES ................................................................................... 28,090,184 32,890,207
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, 2,000,000 shares authorized,
none issued or outstanding -- --
Common stock, $.001 par value, 10,000,000 shares authorized;
2,822,500 shares issued and outstanding at 1998 and 1997,
respectively 2,823 2,823
Additional paid-in capital ......................................................................... 14,122,165 13,582,795
Deferred financing costs ........................................................................... (124,100) (141,500)
Retained earnings (deficit) ........................................................................ (2,508,905) (5,857,987)
Accumulated other comprehensive income (loss) ...................................................... 953,151 (175,753)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY .......................................................................... 12,445,134 7,410,378
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .............................................. $40,535,318 $40,300,585
============ ============
</TABLE>
See notes to interim consolidated condensed financial statements
Page 3.
<PAGE>
PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months For the Three Months
Ended May 31, Ended May 31,
--------------------------------- ----------------------
1998 1997 1998 1997
----------- ---------- -------------- ----------
REVENUE:
<S> <C> <C> <C> <C>
Contract hire income $ 4,901,660 $3,525,059 $2,459,795 $1,872,575
Sale of contract hire vehicles 1,604,359 3,716,495 787,247 1,984,679
Sale of vehicles - AC Cars (Note 1) - 516,506 - 313,943
Fleet management and other income - contract hire 554,455 409,828 232,461 303,408
Other income - AC Cars - 87,714 - 45,714
--------- ---------- --------- ---------
7,060,474 8,255,602 3,479,503 4,520,319
--------- ---------- --------- ---------
EXPENSES:
Cost of sales - contract hire 2,922,537 4,295,023 1,441,950 2,268,866
Cost of sales - AC Cars - 441,972 - 269,794
Depreciation - contract hire 2,252,844 1,664,894 1,180,888 847,840
Depreciation - AC Cars - 218,558 - 109,289
General and administrative expenses - contract hire 881,711 739,996 392,125 363,969
General and administrative expenses - AC Cars - 776,457 - 397,342
Amortization of intangible assets - contract hire 315,360 315,360 157,680 157,680
Amortization of intangible assets - AC Cars - 1,232 - 616
Interest expenses and other - contract hire 1,101,730 624,310 525,921 344,999
Interest expenses and other - AC Cars - 185,964 - 107,582
Research and development costs - AC Cars - 313,922 - 232,010
--------- --------- --------- ---------
7,474,182 9,577,688 3,698,564 5,099,987
--------- --------- --------- ---------
LOSS BEFORE MINORITY INTERESTS (413,708) (1,322,086) (219,061) (579,668)
Minority interests in net loss of consolidated
subsidiaries - 400,166 - 227,093
--------- --------- --------- ----------
LOSS BEFORE PROVISION FOR INCOME
TAXES (413,708) (921,920) (219,061) (352,575)
Provision (credit) for income taxes - - - -
--------- --------- --------- -----------
NET LOSS $ (413,708) $ (921,920) $ (219,061) $ (352,575)
=========== =========== =========== ===========
LOSS PER COMMON SHARE (Note 5a):
Net loss before minority interest $(.15) $(.47) $(.08) $(.20)
Minority interest in net loss of subsidiary - .14 - .08
----------- ---------- ----------- -----------
$(.15) $(.33) $(.08) $(.12)
=========== ========== =========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (Note 5a) 2,822,500 2,790,016 2,822,500 2,820,866
=========== ========== =========== ===========
</TABLE>
See notes to interim consolidated condensed financial statements
Page 4.
<PAGE>
PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months For the Three Months
Ended May 31, Ended May 31,
--------------------------------- -----------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET LOSS $(413,708) $ (921,920) $ (219,061) $ (352,575)
OTHER COMPREHENSIVE INCOME (Note 5b):
Foreign currency translation adjustments 452,243 (388,852) 343,676 (665,182)
----------- ----------- ----------- -----------
COMPREHENSIVE INCOME (LOSS) $ 38,535 $(1,310,772) $ 124,615 $(1,017,757)
=========== =========== =========== ===========
</TABLE>
See notes to interim consolidated condensed financial statements
Page 5.
<PAGE>
PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended
May 31,
1998 1997
---------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss ........................................................................................ $ (413,708) $ (921,920)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Minority interest in net loss of subsidiary ..................................................... - (400,166)
Depreciation and amortization ................................................................... 2,252,844 1,904,595
Amortization of goodwill ........................................................................ 315,360 295,449
Loss (gain) on disposal of fixed assets ......................................................... 128,795 (168,710)
Deferred financing costs ........................................................................ 17,400 -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable ...................................................... (292,212) 341,221
Decrease (increase) in inventories .............................................................. 107,090 (609,131)
(Decrease) increase in accounts payable, accrued expenses and other liabilities (190,552) 850,217
Net cash provided from operating activities ..................................................... 1,925,017 1,291,555
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of revenue producing assets ............................................................ (5,492,212) (6,781,178)
Proceeds from sale of fixed assets .............................................................. 2,147,269 1,030,421
Net cash (utilized) by investing activities ..................................................... (3,344,943) (5,750,757)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from bank lines of credit .......................................................... 391,515 2,323,570
Proceeds from sale of common stock and warrants ................................................. - 92,500
Costs associated with stock/debt offerings ...................................................... - (126,296)
Principal payments of long-term debt ............................................................ (36,273) (7,290)
Payment of other debt ........................................................................... - (824,600)
Proceeds from hire purchase contract funding .................................................... 5,255,114 9,079,975
Principal repayments of hire purchase contract funding .......................................... (4,713,853) (5,927,829)
Net cash provided by financing activities ....................................................... 896,503 4,610,030
EFFECT OF EXCHANGE RATE CHANGES ON CASH ......................................................... 452,243 (388,852)
NET (DECREASE) IN CASH AND CASH EQUIVALENTS ..................................................... (71,180) (238,024)
Cash and cash equivalents, beginning of year .................................................... 77,354 250,699
CASH AND CASH EQUIVALENTS, END OF PERIOD ........................................................ $ 6,174 $ 12,675
</TABLE>
See notes to interim consolidated condensed financial statements
Page 6.
<PAGE>
PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - DESCRIPTION OF COMPANY:
Pride Automotive Group, Inc. (the "Company") was incorporated in
the State of Delaware in March 1995. Pursuant to the terms and
conditions of a reorganization in March 1995, the Company issued
1,500,000 shares of its common stock to Pride, Inc. (an entity
incorporated in the State of Delaware), thereby making the
Company a majority owned subsidiary of Pride, Inc., in exchange
for all of the issued and outstanding shares held by Pride, Inc.
of Pride Management Services, Plc., (PMS) a consolidated group
of operating companies located in the United Kingdom. The PMS
companies are engaged in the leasing of motor vehicles primarily
on contract hire to local authorities and select corporate
customers throughout the United Kingdom. This exchange of stock
resulted in PMS becoming a wholly owned subsidiary of the
Company. The Company, its subsidiary PMS, and PMS's subsidiaries
are referred to as the "Company" unless the context otherwise
requires.
On November 29, 1996, the Company, through a newly formed
majority owned subsidiary, AC Automotive Group Inc., and its
wholly-owned subsidiary AC Car Group Limited (registered in the
United Kingdom), completed the acquisition of certain assets of
AC Cars Limited and Autocraft Limited. These two companies were
engaged in the manufacture and sale of specialty automobiles.
The purchase price of approximately $6,067,000 was financed with
the proceeds of a private offering of the Company's common stock
and by loans.
On February 12, 1998, the Board of Directors of AC Automotive
Group, Inc. authorized the issuance of 6,130,000 shares of its
common stock to Erwood Holdings, Inc., a company affiliated with
Alan Lubinsky, the President and Chief Executive Officer and
director of the Company and AC Automotive Group, Inc., for
aggregate consideration of $6,130. In addition, 441,300 shares
were issued to other unrelated parties for aggregate
consideration of $443. The foregoing issuance of shares has
reduced the ownership of AC Automotive Group, Inc. by the
Company to approximately 16%.
Accordingly, the Company's investment in AC Automotive Group,
Inc., is being reported under the cost method of accounting.
The accounting policies followed by the Company are set forth in
Note 2 to the Company's consolidated financial statements
included in its Annual Report on Form 10-KSB for the year ended
November 30, 1997, which is incorporated herein by reference.
Specific reference is made to this report for a description of
the Company's securities and the notes to consolidated financial
statements included therein.
Page 7.
<PAGE>
PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - DESCRIPTION OF COMPANY (Continued):
In the opinion of management, the accompanying unaudited interim
consolidated condensed financial statements of Pride Automotive
Group, Inc. and its wholly owned subsidiaries, contain all
adjustments necessary to present fairly the Company's financial
position as of May 31, 1998 and the results of its operations
for the six and three month periods ended May 31, 1998 and 1997
and cash flows for the six month periods ended May 31, 1998 and
1997.
The results of operations for the six and three month periods
ended May 31, 1998 and 1997 are not necessarily indicative of
the results to be expected for the full year.
NOTE 2 - FIXED ASSETS:
Fixed assets consists of the following:
<TABLE>
<CAPTION>
May 31, November 30,
1998 1997
(unaudited)
<S> <C> <C>
Building and improvements $ 784,599 $ 820,160
Revenue producing vehicles 29,889,620 27,612,291
Furniture, fixtures and machinery 577,198 4,670,067
-------------- --------------
31,251,417 33,102,518
Less: accumulated depreciation 5,799,306 5,220,168
------------- -------------
$25,452,111 $27,882,350
=========== ===========
</TABLE>
NOTE 3 - INTANGIBLE ASSETS:
Intangible assets consist of goodwill which arose in connection
with the acquisition of certain subsidiaries of PMS. Goodwill is
being amortized over a period of 10 - 20 years on a
straight-line basis. Accumulated amortization as of May 31, 1998
and November 30, 1997 aggregated $3,938,193 and $3,622,833,
respectively.
The Company periodically reviews the valuation and amortization
of goodwill to determine possible impairment by evaluating
events and circumstances that might indicate an inability to
recover the carrying amount. Such evaluation is based on various
analyses, including profitability projections and cash flows
that incorporate the impact on existing Company business.
Page 8.
<PAGE>
PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 - LIABILITIES:
Included in liabilities as of May 31, 1998, are amounts in the
aggregate of $10,402,038 which are not due and payable until
after May 31, 1999. This amount consists of amounts due to trade
creditors, loans payable and equipment notes payable.
NOTE 5 - NEW ACCOUNTING PRONOUNCEMENTS:
(a) Earnings (Loss) per Share:
The Company has adopted SFAS 128 "Earnings Per Share" ("SFAS
128"), which is effective for periods ending after December 15,
1997 and has changed the method of calculating earnings (loss)
per share. SFAS 128 requires the presentation of "basic" and
"diluted" earnings (loss) per share on the face of the income
statement. Prior period earnings (loss) per share data has been
restated in accordance with SFAS 128. Loss per common share is
computed by dividing the net loss by the weighted average number
of common shares outstanding during each period.
(b) Statement of Comprehensive Income:
The Company has adopted SFAS 130 "Reporting Comprehensive
Income", which is effective for years beginning after December
15, 1997 and early adoption is permitted. Comprehensive income
consists of net income or loss and other comprehensive income
(income, expenses, gains and losses that bypass the income
statement and are reported directly as a separate component of
equity).
NOTE 6 - PUBLIC OFFERING:
The Company has filed a Form SB-2 with the Securities and
Exchange Commission, registering for the sale of 1,250,000
shares of common stock, which includes 170,000 shares being sold
by certain selling shareholders. The estimated net proceeds from
this offering, to the Company, is expected to be $3,488,000. The
Company intends to use these proceeds to repay existing debt.
Page 9.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Pride Automotive Group, Inc., (the "Company") was incorporated
in the State of Delaware in March 1995. Pursuant to the terms
and conditions of a reorganization agreement entered into in
March 1995, the Company issued 1,500,000 shares of its common
stock to Pride, Inc. (an entity incorporated in the State of
Delaware), in exchange for all the issued and outstanding shares
of PMS, thereby making the Company a majority owned subsidiary
of Pride and PMS a wholly-owned subsidiary of the Company. PMS
is the holding company for nine wholly-owned subsidiaries,
operating as one unit, located in the United Kingdom. PMS and
its wholly-owned subsidiaries are located in the United Kingdom
and follow generally accepted accounting principles in the
United Kingdom. For purposes of the consolidated financial
statements of the Company, the statements have been converted to
the generally accepted accounting principles in the United
States.
Pride, the Company's parent, is an entity reporting under
the Exchange Act, and its reports may be obtained and reviewed by
either contacting the Company or the Securities and Exchange
Commission. Pride, Inc. on its own has virtually no operations.
As such, its financial viability is represented by the financial
statements of the Company. Pride was incorporated as L.H.M. Corp.
in the State of Delaware on May 10, 1988 as a "blank check"
company, for the purpose of seeking potential business ventures
through acquisitions or merger. In April 1990, L.H.M. Corp.
entered into an Agreement and Plan of Reorganization with
International Sportsfest, Inc. ("ISI"), a company formed to
engage in and establish sports expositions in sports merchandise
such as clothing and equipment. ISI never engaged in any business
operations. In January 1994, ISI entered into an Agreement and
Plan of Reorganization with PMS, whereby PMS became a wholly-
owned subsidiary of ISI and ISI changed its name to Pride, Inc.
In December 1995, the Company consummated a private placement
offering of common stock of 500,000 shares, which reduced
Pride's ownership interest to 72.8%. In April 1996, the Company
completed an initial public offering of 592,500 shares of common
stock at $5.00 per share and 2,000,000 redeemable common stock
warrants at a price of $.10 each. The effect of the offering was
to reduce Pride's ownership interest to 56.55%.
On November 29, 1996, the Company, through a newly formed
majority owned subsidiary, AC Automotive Group Inc., and its
wholly-owned subsidiary AC Car Group Limited (registered in the
United Kingdom), completed the acquisition of certain assets of
AC Cars Limited and Autocraft Limited. These two companies were
engaged in the manufacture and sale of speciality automobiles.
The purchase price of approximately $6,067,000 was financed with
the proceeds of a private offering of the Company's common stock
and by loans.
On February 12, 1998, the Board of Directors of AC Automotive
Group, Inc. authorized the issuance of 6,130,000 shares of its
common stock to Erwood Holdings, Inc., a company affiliated with
Alan Lubinsky, the President and Chief Executive Officer and
director of the Company and AC Automotive Group, Inc., for
aggregate consideration of $6,130. In addition, 441,300 shares
were issued to other unrelated parties for aggregate
consideration of $443. The foregoing issuance of shares has
reduced the ownership of AC Automotive Group, Inc. by the
Company to approximately 16%.
Page 10.
<PAGE>
Accordingly, the Company's investment in AC Automotive Group,
Inc., is being reported under the cost method of accounting.
The financial information presented herein include: (i)
Consolidated Condensed Balance Sheets as of May 31, 1998 and
November 30, 1997; (ii) Consolidated Condensed Statements of
Operations for the Six and Three Month Periods Ended May 31,
1998 and 1997 (iii) Consolidated Condensed Statements of
Comprehensive Income (Loss)for the Six and Three Month Periods
Ended May 31, 1998 and 1997 and (iv) Consolidated Condensed
Statements of Cash Flows for the Six Month Periods Ended May 31,
1998 and 1997.
Results of Operations - Contract Hire
For the six-month period ended May 31, 1998, contract hire and
fleet management revenue increased by $1,521,228 or 38.7%, when
compared to the same period in 1997.
During this period, 163 new leasing contracts were written as
against 245 for the same period during 1997. For the six month
period 94 vehicles were disposed of on termination of contracts
as against 60 vehicles disposed during the same period in 1997.
Contract hire income increased by $516,273 when comparing the
three-month period ended May 31, 1998 to the three months ended
May 31, 1997. This 23.7% increase is due to the net growth in
the fleet of 281 vehicles over the past year.
Leased vehicle sales decreased by $1,197,432 when comparing the
two quarters due to less contracts terminating and accordingly
less sales of vehicles.
During the quarter, 67 new contracts were acquired as against
128 in the previous year. The average monthly rental of new
contracts written was $667 as against $608 per vehicle during
the same quarter in 1997.
During the quarter, 57 vehicles were disposed on termination of
contracts at an average profit of $1,249 per vehicle. During the
same quarter in 1997, 20 vehicles were disposed of at an average
profit of $3,275 per vehicle. The average profit per vehicle on
disposal is dependent on the type of vehicle sold and current
market value of vehicles.
Costs of sales relating to sales of leased vehicles decreased
from $3,415,975 to $1,506,008 when comparing the six months
ended May 31, 1998 with the six months ended May 31, 1997. Costs
of sales relating to sales of leased vehicles decreased from
$1,703,318 to $716,054 when comparing the quarter ended May 31,
1998 with the quarter ended May 31, 1997. This decrease is due
to a decrease in the sales of vehicles at low margins to take
advantage of dealer bonuses.
For the six-month period ended May 31, 1998 and 1997, cost of
sales, including depreciation, relating to contract hire and
fleet management income increased from $2,543,942 to $3,669,273,
an increase of $1,125,431or 44.2% which is in line with the
increase in contract hire and fleet management income of 38.7%.
Cost of sales, including depreciation, increased from $1,413,388
to $1,906,784, an increase of $493,396 or 34.9%, when comparing
the quarters ended May 31, 1998 and 1997, respectively. This
increase is in line with the increase in contract hire revenue
of 31.3%.
Cost of sales as a percent of contract hire and fleet management
revenue increased from 64.6% to 67.2% for the six months ended
May 31, 1998 and 1997, respectively. This increase is due to a
reduction in margin as a result of more competitive trading
conditions in the industry. For the three month periods ended
May 31, 1998 and 1997, this percentage has increased from 64.9%
to 70.8%.
Page 11.
<PAGE>
For the six months ended May 31, 1998 and 1997, respectively,
general and administrative expenses increased by $141,715 or
19%, which is in line with the increase in revenues and normal
increases in overhead and business operating costs. General and
administrative expenses increased marginally by $28,157 when
comparing the quarters ended May 31, 1998 and 1997,
respectively.
For the six months ended May 31, 1998 and 1997, respectively,
interest expense increased by $477,420. Interest expense
increased by $180,922 when comparing the three month periods
ended May 31, 1998 and 1997, respectively. This increase is as a
result of the increase in hire purchase funding to finance new
business and the increase in the bank line of credit over the
past year to fund increased working capital requirements.
For the six months ended May 31, 1998 and 1997, the Company
reported, after amortization of goodwill ($315,360 for both
periods) a (loss) profit of $413,708 and $11,799, respectively,
for the contract hire operations. For the three months ended May
31, 1998 and 1997, the Company reported, after amortization of
goodwill ($157,680 for both periods) a (loss) profit of $219,061
and $177,318, respectively, for the contract hire operations.
Liquidity and Capital Resources
Net cash provided from operating activities for the six month
periods ended May 31, 1998 and 1997 aggregated $1,925,017 and
$1,291,555, respectively. The Company utilized net cash for
investing activities (for the purchase of revenue producing
assets) of $3,344,943 and $5,750,757 for the six month periods
ended May 31, 1998 and 1997, respectively. Net cash provided
through financing activities aggregated $896,503 and $4,610,030
for the six month periods ended May 31, 1998 and 1997,
respectively.
The Company believes that its financial resources from funds
provided from operations and its funding lines will be adequate
to meet its requirements for the next twelve-month period.
The Company has filed a Form SB-2 with the Securities and
Exchange Commission, registering for the sale of 1,250,000
shares of common stock, which includes 170,000 shares being sold
by certain selling shareholders. The estimated net proceeds from
this offering, to the Company, is expected to be $3,488,000. The
Company intends to use these proceeds to repay existing debt.
Page 12.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1 - Legal Proceedings.
None.
ITEM 2 - Changes in Securities.
None.
ITEM 3 - Defaults Upon Senior Securities.
None.
ITEM 4 - Submission of Matters to a Vote of Security Holders.
None.
ITEM 5 - Other Information.
None.
ITEM 6 - Exhibits or Reports on Form 8-K.
Exhibit 27 - Financial Data Schedule.
Page 13.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: July 13, 1998 PRIDE AUTOMOTIVE GROUP, INC.
By: /s/ Alan Lubinsky
Chief Executive Officer
Page 14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
EXHIBIT 27
FINANCIAL DATA SCHEDULE
ARTICLE 5 OF REGULATION S-X
The schedule contains summary financial information extracted from the
consolidated financial statements for the six months ended May 31, 1998 and is
qualified in its entirety by reference to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> nov-30-1998
<PERIOD-START> dec-01-1998
<PERIOD-END> may-31-1998
<CASH> 6,174
<SECURITIES> 0
<RECEIVABLES> 2,243,787
<ALLOWANCES> 0
<INVENTORY> 25,279
<CURRENT-ASSETS> 0
<PP&E> 31,251,417
<DEPRECIATION> 5,799,306
<TOTAL-ASSETS> 40,535,318
<CURRENT-LIABILITIES> 17,688,146
<BONDS> 10,402,038
0
0
<COMMON> 2,833
<OTHER-SE> 12,442,311
<TOTAL-LIABILITY-AND-EQUITY> 40,535,318
<SALES> 7,060,474
<TOTAL-REVENUES> 7,060,474
<CGS> 2,922,537
<TOTAL-COSTS> 6,372,452
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,101,730
<INCOME-PRETAX> (413,708)
<INCOME-TAX> 0
<INCOME-CONTINUING> (413,708)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (413,708)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> (.15)
</TABLE>
