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UNITED STATES
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): March 22, 1995
----------------------------------
PRIDE PETROLEUM SERVICES, INC.
(Exact name of registrant as specified in its charter)
Louisiana 0-16961 76-0069030
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1500 City West Blvd., Suite 400
Houston, Texas 77042
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (713) 789-1400
=============================================================================
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 22, 1995, Pride Petroleum Services, Inc. (the "Company")
acquired all of the outstanding capital stock of X-Pert Enterprises, Inc.
("X-Pert") from Raymond H. Eaves and Billy B. Cooper for consideration of
approximately $10,000,000 which was negotiated at arms length. The sellers
had no material relationship with the buyer.
X-Pert operates 25 well servicing rigs in New Mexico and also provides
lease maintenance services to oilfield operators. X-Pert generated revenues
of approximately $12,638,000 and earnings from continuing operations before
income taxes of approximately $1,129,000 after taxes), for its fiscal year
ended March 31, 1994. Results of operations have continued at approximately
the same levels during X-Pert's fiscal 1995 year.
The purchase price for the X-Pert acquisition consisted of $3,000,000
cash, a note payable to the selling shareholders in the amount of
approximately $6,000,000, and 200,000 shares of the Company's common stock.
The cash portion of the purchase price was funded from the Company's working
capital. X-Pert had working capital and other monetary assets in excess of
liabilities of approximately $3,000,000 at the date of acquisition.
The Stock Purchase Agreement dated March 22, 1995, by and among the
selling shareholders and the Company is included as an exhibit hereto. The
foregoing discussion is qualified in its entirety by reference to such
exhibit.
2<PAGE>
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following documents are included as part of this report:
(a) Financial Statements of Business Acquired.
X-Pert Enterprises, Inc. and Subsidiaries
Report of Independent Certified Public Accountants. . . . 4
Consolidated Balance Sheets - Assets. . . . . . . . . . . 5
Consolidated Balance Sheets - Liabilities and
Stockholders' Equity. . . . . . . . . . . . . . . . . . 6
Consolidated Statements of Earnings . . . . . . . . . . . 7
Consolidated Statements of Stockholders' Equity . . . . . 8
Consolidated Statements of Cash Flows . . . . . . . . . . 9
Notes to Consolidated Financial Statements. . . . . . . . 11
(b) Pro Forma Financial Information.
Pride Petroleum Services, Inc.
Unaudited Pro Forma Financial Statements. . . . . . . . . 17
Unaudited Pro Forma Statement of Operations . . . . . . . 18
Notes to Unaudited Pro Forma Financial Statements . . . . 19
(c) Exhibits.
Exhibit No. Description
- - ----------- -----------------
2 Stock Purchase Agreement, dated March 22, 1995, by and
among Raymond H. Eaves and Billy B. Cooper and Pride
Petroleum Services, Inc. (incorporated by reference to
Exhibit No. 2 to the Company's Current Report on Form
8-K, dated March 22, 1995, File No. 0-16961).
23 Consent of Johnson, Miller & Co.
3<PAGE>
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
Board of Directors
X-Pert Enterprises, Inc.
Hobbs, New Mexico
We have audited the accompanying consolidated balance sheets of X-Pert
Enterprises, Inc. and Subsidiaries as of February 28, 1995, and March 31,
1994, and the related consolidated statements of earnings, stockholders'
equity, and cash flows for the eleven months and year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of X-Pert
Enterprises, Inc. and Subsidiaries as of February 28, 1995, and March 31,
1994, and the results of their operations and their cash flows for the eleven
months and year then ended in conformity with generally accepted accounting
principles.
JOHNSON, MILLER & CO.
Hobbs, New Mexico
May 19, 1995
4<PAGE>
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X-PERT ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
------
February 28, March 31,
1995 1994
----------- -----------
CURRENT ASSETS
Cash (NOTE J) $ 1,547,873 $ 1,227,480
Accounts receivable (NOTE A) 2,303,964 1,902,864
Other receivables 15,020 112,151
Deferred income tax benefit (NOTE G) 100,370 --
Investment in trading securities (NOTE A) 1,233,574 1,192,540
Inventories (NOTE A) 177,761 208,297
Prepaid expenses 75,236 64,236
----------- -----------
Total current assets 5,453,798 4,707,568
----------- -----------
PROPERTY AND EQUIPMENT AT COST
Property and equipment (NOTE B) 12,800,796 12,391,218
Accumulated depreciation (9,562,728) (8,977,286)
----------- -----------
3,238,068 3,413,932
----------- -----------
OTHER ASSETS
Cash value of life insurance (NOTE C) 649,717 580,952
Prepaid stock options (NOTE D) 28,832 34,948
----------- -----------
678,549 615,900
----------- -----------
$ 9,370,415 $ 8,737,400
=========== ===========
The accompanying notes are an integral part of
the consolidated financial statements.
5<PAGE>
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X-PERT ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
February 28, March 31,
1995 1994
----------- -----------
CURRENT LIABILITIES
Accounts payable $ 364,753 $ 355,943
Salaries and wages payable 328,131 315,034
Other liabilities 321,179 65,283
Income taxes payable - current year 125,052 27,718
Income taxes payable - prior years (NOTE G) -- 358,266
Other taxes payable 129,301 124,290
Notes payable - current portion (NOTE F) 401,940 776,490
Note payable - stockholder (NOTE E) 591,820 156,565
Interest payable 13,506 15,361
Dividends payable -- 100,000
----------- -----------
Total current liabilities 2,275,682 2,294,950
----------- -----------
LONG-TERM LIABILITIES
Notes payable (NOTE F) 166,640 --
Note payable - stockholder (NOTE E) -- 578,230
Deferred income taxes (NOTE A AND G) 334,312 243,968
----------- -----------
500,952 822,198
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $1 par, 100,000
shares authorized and issued 100,000 100,000
Paid in capital 240,725 240,725
Retained earnings 11,542,221 10,485,169
Less common stock in treasury, at
cost (75,265 shares in 1995
and 74,002 shares in 1994) (5,289,165) (5,205,642)
----------- -----------
6,593,781 5,620,252
----------- -----------
$ 9,370,415 $ 8,737,400
=========== ===========
The accompanying notes are an integral part of
the consolidated financial statements.
6<PAGE>
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X-PERT ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
Eleven months
ended Year ended
February 28, March 31,
1995 1994
----------- -----------
SALES $14,818,288 $12,637,971
----------- -----------
COSTS AND EXPENSES
Direct expenses including
depreciation of $561,278 in
1995 and $520,176 in 1994 9,955,573 8,342,172
Indirect expenses including
depreciation of $137,687 in
1995 and $103,632 in 1994 3,132,615 2,557,200
----------- -----------
13,088,188 10,899,372
----------- -----------
Earnings from operations 1,730,100 1,738,599
----------- -----------
OTHER INCOME AND (EXPENSE)
Dividend income 126,577 150,889
Interest income 32,420 44,525
Other income 9,251 28,959
Gain on sale of investments 363 75,115
(Loss) gain on asset disposal (3,813) 4,570
Unrealized holding loss on trading securities (61,483) (20,474)
Interest expense (124,340) (224,351)
----------- -----------
(21,025) 59,233
----------- -----------
Earnings before income taxes 1,709,075 1,797,832
INCOME TAXES (NOTE G) 652,023 669,165
----------- -----------
NET EARNINGS $ 1,057,052 $ 1,128,667
=========== ===========
EARNINGS PER COMMON SHARE (NOTE L) $41.58 $42.16
====== ======
The accompanying notes are an integral part of
the consolidated financial statements.
7<PAGE>
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X-PERT ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Eleven Months Ended February 28, 1995
and Year Ended March 31, 1994
<TABLE>
<CAPTION>
Common Stock Additional Total
------------------ Paid in Retained Treasury Stockholders'
Shares Par Value Capital Earnings Stock Equity
------- --------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCES AT
APRIL 1, 1993 100,000 $ 100,000 $ 240,725 $ 9,733,437 $(5,099,356) $ 4,974,806
Cash Dividends Paid
$3.8465 per share (100,000) (100,000)
Treasury Stock
Purchased (1,441
shares) (NOTE D) (108,839) (108,839)
Treasury Stock Sold
(14 shares) 2,553 2,553
Prior Period
Adjustment (NOTE H) (276,935) (276,935)
Net Earnings 1,128,667 1,128,667
------- --------- --------- ----------- ----------- -----------
BALANCES AT
MARCH 31, 1994 100,000 100,000 240,725 10,485,169 (5,205,642) 5,620,252
Treasury Stock
Purchased (1,298
shares) (NOTE D) (91,113) (91,113)
Treasury Stock Sold
(35 shares) 7,590 7,590
Net Earnings 1,057,052 1,057,052
------- --------- --------- ----------- ----------- -----------
BALANCES AT
FEBRUARY 28, 1995 100,000 $ 100,000 $ 240,725 $11,542,221 $(5,289,165) $ 6,593,781
======= ========= ========= =========== =========== ===========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
8<PAGE>
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X-PERT ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Eleven months
ended Year ended
February 28, March 31,
1995 1994
----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 1,057,052 $ 1,128,667
Depreciation 698,966 623,808
Loss (gain) on asset disposals 3,813 (4,570)
(Gain) on sale of investments (363) (75,115)
Unrealized holding loss on trading securities 61,483 20,474
Net change in:
Interest payable (1,855) --
Accounts receivable (401,100) (261,804)
Other receivables 97,131 (25,259)
Inventories 30,536 (187,653)
Prepaid expenses (11,000) (8,492)
Interest receivable -- 9,590
Accounts payable 8,810 107,770
Cash surrender value of life insurance (68,765) (88,319)
Salaries and wages payable 13,097 (23,190)
Other taxes payable 5,011 (428)
Income taxes payable (260,932) (16,799)
Deferred income taxes (10,026) 11,095
Other liabilities 255,896 28,959
----------- -----------
Net cash provided from operating activities 1,477,754 1,238,734
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (553,110) (2,152,007)
Proceeds from sale of assets 26,209 29,779
Purchase of investments (332,335) (687,715)
Proceeds from sale of investments 238,230 1,608,154
----------- -----------
Net cash (used) in investing activities (621,006) (1,201,789)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank loans 639,964 850,000
Reduction in note payable (998,911) (216,648)
Payments to acquire Treasury Stock (84,997) (102,165)
Proceeds from sale of Treasury Stock 7,589 2,553
Payment of dividends (100,000) --
----------- -----------
Net cash (used) provided in
financing activities (536,355) 533,740
----------- -----------
Net increase in cash 320,393 570,685
Cash at beginning of year 1,227,480 656,795
----------- -----------
Cash at end of year $ 1,547,873 $ 1,227,480
=========== ===========
The accompanying notes are an integral part of
the consolidated financial statements.
9<PAGE>
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X-PERT ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Eleven months
ended Year ended
February 28, March 31,
1995 1994
----------- -----------
Interest paid $ 126,195 $ 225,122
=========== ===========
Income taxes paid $ 922,981 $ 675,085
=========== ===========
NON-CASH FINANCING ACTIVITY:
A note payable of $8,062 which the Company had guaranteed for a former
employee was assumed by the Company.
The accompanying notes are an integral part of
the consolidated financial statements.
10<PAGE>
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X-PERT ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 1995 and March 31, 1994
NOTE A - SUMMARY OF ACCOUNTING POLICIES
This summary of accounting policies of X-Pert Enterprises, Inc. and
Subsidiaries (the Company) is presented to assist in understanding the
Company's financial statements. These accounting policies conform to
generally accepted accounting principles and have been consistently applied
in the preparation of the financial statements.
As of March 1, 1995, 100% of the common stock of X-Pert Enterprises, Inc.,
was purchased by Pride Petroleum, Inc. The Company will continue
operations as a wholly owned subsidiary of Pride Petroleum, Inc.
1. CONSOLIDATION
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries, X-Pert Well Service, Inc.
and B & M Service Co., Inc. All material intercompany accounts and
transactions have been eliminated.
2. INVENTORIES
Inventories consist of parts, supplies, fuel, and tires which are
stated at cost. No general administrative or other costs are charged
to inventory.
3. DEPRECIATION
Depreciation is provided for in amounts sufficient to relate the cost
of depreciable assets to operations over their estimated service lives.
The straight-line method of depreciation is utilized for substantially
all assets for financial reporting purposes, while using accelerated
methods for income tax purposes.
4. INCOME TAXES
Deferred income taxes result from utilizing accelerated depreciation
methods for income tax reporting and the straight-line method for
financial reporting and from the accrual of certain expenses for
financial statement purposes which are not deductible until paid for
income tax purposes.
5. ACCOUNTS RECEIVABLE
The majority of the accounts receivable as of February 28, 1995, and
March 31, 1994, and sales for the eleven months and year then ended
were with major oil producing companies involved in the oil and gas
industry in the Permian Basin.
11<PAGE>
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X-PERT ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 1995 and March 31, 1994
NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
The Company considers accounts receivable to be fully collectible;
accordingly, no allowance for doubtful accounts is required. If
amounts become uncollectible, they will be charged to operations when
that determination is made.
6. INVESTMENTS
Investments in trading securities at February 28, 1995, and March 31,
1994, are stated at market value in order to comply with the provisions
of Statement of Financial Accounting Standards No. 115, Accounting for
Certain Investments in Debt and Equity Securities. The cost of the
investments in trading securities was $1,306,911 at February 28, 1995,
and the cost approximated market value at March 31, 1994. $61,483 in
unrealized holding losses on trading securities have been included in
earnings for the eleven months ended February 28, 1995, and $20,474 for
the year ended March 31, 1994.
NOTE B - PROPERTY AND EQUIPMENT (AT COST)
February 28, March 31,
1995 1994
----------- -----------
Land and improvements $ 191,286 $ 191,286
Buildings 730,053 682,988
Well servicing units 7,238,233 7,131,264
Other equipment 1,742,432 1,620,959
Automobiles and trucks 2,171,580 2,057,132
Furniture and equipment 562,599 542,976
Radio equipment 164,613 164,613
----------- -----------
$12,800,796 $12,391,218
=========== ===========
NOTE C - CASH VALUE OF LIFE INSURANCE
The Company maintains approximately $3,000,000 face amount of insurance on
the lives of Harry and Gwendolyn Eaves. The death benefit is payable to
the Company at the death of the second spouse. The policy is security for
the note payable to Harry Eaves for a stock redemption agreement (NOTE E).
The Company borrows against the cash surrender value of the policy, which
loan bears interest at the rate of 8% per annum. The loan balance
outstanding was $185,744 at February 28, 1995, and March 31, 1994. The
cash value of life insurance is presented net of these outstanding loans.
12<PAGE>
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X-PERT ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 1995 and March 31, 1994
NOTE D - PREPAID STOCK OPTIONS
The Company has a stock option agreement with one of its stockholders
(Harry Eaves) which provides for the purchase of common stock from Mr.
Eaves on a monthly basis. The agreement provided for a prepayment of
$100,000 which is being amortized monthly with each stock option purchase.
Any portion of the $100,000 prepayment remaining at the termination of this
agreement due to failure to exercise monthly options shall be forfeited by
the Company. The number of shares remaining under the agreement are 6,157
as of February 28, 1995, and 7,435 as of March 31, 1994, at the option
price of $70.19 per share. The Company has the option to purchase 118 of
these shares per month through March, 2003. Early exercise of the options
is allowed in the agreement and as of February 28, 1995, the Company had
exercised options scheduled through November, 1998.
NOTE E - NOTES PAYABLE - STOCKHOLDER
February 28, March 31,
1995 1994
----------- -----------
Note payable to Harry Eaves, Vice Chairman
of the Company for a stock redemption
agreement entered into in March, 1988. The
note is secured by certain life insurance
policies and common stock of the Company
held in escrow. The note bears interest at
9% and has monthly payments of $18,029
including interest through April 20, 1998.
Note was paid in full subsequent to balance
sheet date. $ 591,820 $ 734,795
Less long-term portion -- 578,230
----------- -----------
$ 591,820 $ 156,565
=========== ===========
NOTE F -NOTES PAYABLE
Note payable to Norwest Bank, Midland, TX,
to pay off a note to Lea County State Bank
which originated on August 20, 1993 for the
purchase of equipment. The note is secured
by accounts receivable (February 28, 1995
value of $2,303,964). The note bears a
variable interest rate of Chase Manhattan
prime rate as published in the Wall Street
Journal and is due October 12, 1997, with
monthly payments of 2.8% of the outstanding
principle balance including interest.
General provisions include a payable on
demand clause. $ 301,920 $ 632,048
13<PAGE>
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X-PERT ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 1995 and March 31, 1994
NOTE F - NOTES PAYABLE (CONTINUED)
February 28, March 31,
1995 1994
----------- -----------
Note payable to Norwest Bank, NM, for the
purchase of equipment. The note is secured
by 11 well servicing units (February 28,
1995 value of $1,026,199) The note bears a
variable interest rate of Chase Manhattan
prime rate as published in the Wall Street
Journal and is due October 10, 1997, with
monthly payments of $8,335 including
interest. 266,660 144,442
----------- -----------
568,580 776,490
Less long-term portion 166,640 --
----------- -----------
$ 401,940 $ 776,490
=========== ===========
Schedule of maturities are:
Year ending February 28,
------------------------
1996 $ 401,940
1997 100,020
1998 66,620
----------
$ 568,580
==========
NOTE G - INCOME TAXES
The provision (benefit) for income taxes on continuing operations consists
of:
Eleven Months
Ended Year Ended
February 28, March 31,
1995 1994
----------- -----------
Current:
Federal $ 569,360 $ 560,576
State 92,689 93,335
Deferred:
Federal (9,213) 14,018
State (813) 1,236
----------- -----------
$ 652,023 $ 669,165
=========== ===========
14<PAGE>
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X-PERT ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 1995 and March 31, 1994
NOTE G -INCOME TAXES (CONTINUED)
The Company's effective income tax rate on continuing operations differed
from the Federal statutory rate as follows:
Eleven Months
Ended Year Ended
February 28, March 31,
1995 1994
----------- -----------
Federal statutory rate 34% 34%
State income taxes, net of Federal tax benefit 3% 3%
Other, net 2% --
----------- -----------
Effective income tax rate 39% 37%
=========== ===========
Deferred income tax benefits and liabilities consist of the following:
February 28, March 31,
1995 1994
----------- -----------
Deferred income tax benefits resulting from:
Unrealized loss on trading securities $ 32,783 $ --
Workers' Compensation 67,587 --
----------- -----------
$ 100,370 $ --
=========== ===========
Deferred income tax liabilities resulting from:
Depreciation of property and equipment $ 334,312 $ 243,968
=========== ===========
During the year ended March 31, 1994, a settlement was reached with
Internal Revenue Service resulting in additional federal and state income
taxes for the years ended March 31, 1990, and 1987, totaling $358,266.
These amounts are reported on the financial statements as part of the prior
period adjustment (NOTE H). An agreement was also reached with the
Internal Revenue Service that there was no additional amount due for the
year ended March 31, 1991.
NOTE H - PRIOR PERIOD ADJUSTMENT
The statements of stockholders' equity include a prior period adjustment to
report the Company's agreement with the Internal Revenue Service on income
taxes receivable and payable related to prior years (NOTE G). Amended tax
returns have been filed for the years ended March 31, 1987, 1990, and 1993.
The taxes receivable and payable were charged against retained earnings
resulting in a net reduction in retained earnings of $276,935.
15<PAGE>
<PAGE>
X-PERT ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 1995 and March 31, 1994
NOTE I - LEASE COMMITMENTS
The Company leases vehicles under three year operating leases expiring at
various dates through March 31, 1997. Total future minimum lease
commitments are as follows:
Year ending February 28,
1996 $ 89,992
1997 61,100
1998 10,779
---------
$ 161,871
=========
NOTE J - CASH
The Company maintains most of its cash balances at financial institutions
located in Hobbs, New Mexico. These balances are insured by the Federal
Deposit Insurance Corporation up to $100,000. Balances in excess of
insured amounts are approximately $161,000 as of February 28, 1995, and
$1,000,000 as of March 31, 1994.
NOTE K - WORKERS' COMPENSATION SELF-INSURANCE
Effective August 1, 1992, the Company became self-insured under provisions
of the New Mexico Workers' Compensation Act. The Company is required to
maintain a level of reserves sufficient to pay all claims in full.
Liability for claims and estimated losses are recorded monthly. The
Company self-insures up to $250,000 on individual claims and carries an
insurance policy for claims and losses in excess of this amount up to
$20,000,000 per year. The Company maintains a standby letter of credit
with a local financial institution in the amount of $300,000. The
estimated self-insurance liability is based on a review by the Company and
an independent insurance broker of claims filed and claims incurred but not
reported.
NOTE L - EARNINGS PER SHARE
Primary earnings per common share are based upon the weighted average
number of common shares outstanding.
NOTE M - CERTAIN RECLASSIFICATIONS
Certain reclassifications have been made to conform to the February 28,
1995, presentation.
16<PAGE>
<PAGE>
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
In March 1995, Pride Petroleum Services, Inc. (the "Company" or
"Pride") acquired all of the outstanding capital stock of X-Pert Enterprises,
Inc. ("X-Pert")for aggregate consideration of approximately $10,000,000,
consisting of $3,000,000 cash, a note payable to the selling shareholders in
the amount of approximately $6,000,000, and 200,000 shares of the Company's
common stock. The acquisition of X-Pert by the Company has been recorded
using the purchase method of accounting, pursuant to which the operating
results of X-Pert will be included in the Company's consolidated results of
operations from the date of acquisition.
The accompanying unaudited pro forma statement of operations for the
year ended December 31, 1994 presents the results of operations of the
Company as if the acquisition of X-Pert had occurred on January 1, 1994.
The unaudited pro forma statement of operations is based on available
information and certain assumptions and estimates described in the notes to
unaudited pro forma statement of operations, and are subject to change. This
statement does not purport to be indicative of the results of operations of
the Company that might have occurred nor are they indicative of future
results. Furthermore, the unaudited pro forma statement of operations does
not reflect changes which may occur as the result of post-combination
activities and other matters.
The unaudited pro forma financial statements should be read in
conjunction with the (i) the historical financial statements of the Company
as of December 31, 1994 and 1993, and for the years ended December 31, 1994,
1993 and 1992, which are included in the Company's annual report on Form 10-K
for the year ended December 31, 1994, previously filed with the Commission
and (ii) the historical financial statements of X-Pert as of February 28,
1995 and March 31, 1994, and for the eleven months ended February 28, 1995
and the year ended March 31, 1994, included herein.
17<PAGE>
<PAGE>
PRIDE PETROLEUM SERVICES, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(In thousands, except per share amounts)
HISTORICAL
-------------------- PRO FORMA
PRIDE X-PERT ADJUSTMENTS PRO FORMA
--------- --------- --------- ---------
REVENUES $ 182,336 $ 14,818 $ 197,154
COSTS AND EXPENSES
Operating costs. . . . . . 139,653 9,394 149,047
Depreciation and
amortization . . . . . . 9,550 699 10,249
Selling, general and
administrative . . . . . 25,105 2,995 $ (250)(a) 27,850
--------- --------- ---------
EARNINGS FROM OPERATIONS . . 8,028 1,730 10,008
OTHER INCOME (EXPENSE)
Other income (expense) . . (305) 71 (234)
Interest income. . . . . . 618 32 650
Interest expense . . . . . (207) (124) (507)(b) (838)
--------- --------- ---------
Total other income . . . 106 (21) (422)
--------- --------- ---------
EARNINGS BEFORE INCOME TAXES 8,134 1,709 9,586
INCOME TAX PROVISION . . . . 1,920 652 (98)(C) 2,474
--------- --------- ---------
NET EARNINGS . . . . . . . . 6,214 1,057 7,112
========= ========= =========
NET EARNINGS PER SHARE . . . $ .30 $ .34
========= =========
WEIGHTED AVERAGE COMMON
SHARES AND COMMON SHARE
EQUIVALENTS OUTSTANDING. . 20,795 200(D) 20,995
========= =========
The accompanying notes are an integral part of
the pro forma financial statements.
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PRIDE PETROLEUM SERVICE, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
NOTE 1. BACKGROUND
In March 1995, Pride Petroleum Services, Inc. (the "Company" or
"Pride") acquired all of the outstanding capital stock of X-Pert Enterprises,
Inc. ("X-Pert")for aggregate consideration of approximately $10,000,000,
consisting of $3,000,000 cash, a note payable to the selling shareholders in
the amount of approximately $6,000,000, and 200,000 shares of the Company's
common stock. The acquisition of X-Pert by the Company has been recorded
using the purchase method of accounting, pursuant to which the operating
results of X-Pert will be included in the Company's consolidated results of
operations from the date of acquisition.
NOTE 2. BASIS OF PRESENTATION
The accompanying unaudited pro forma statement of operations for the
year ended December 31, 1994 presents the results of operations of the
Company as if the acquisition of X-Pert had occurred on January 1, 1994.
The accompanying unaudited pro forma statement of operations has been
prepared using the results of operations of X-Pert for the eleven month
period ended February 28, 1995. In the opinion of management, results for a
twelve month period would not be materially different.
Net earnings per share have been computed based on the weighted average
number of common shares and common share equivalents outstanding during the
year ended December 31, 1994, assuming the acquisition of X-Pert by the
Company was completed on January 1, 1994. Common share equivalents include
the number of shares issuable upon the exercise of stock options and
warrants, less the number of shares that could have been repurchased with the
exercise proceeds, using the treasury stock method. Fully diluted net
earnings per share have not been presented as the results are not materially
different.
NOTE 3. MANAGEMENT ASSUMPTIONS
The unaudited pro forma statement of operations reflects the following
pro forma adjustments related to the acquisition of X-Pert by the Company:
(a) Estimated reduction in selling, general and administrative
expenses resulting from combination of duplicate administrative functions,
reduction in personnel and other factors.
(b) Estimated increase in interest expense resulting from the issuance
of a note payable to the selling shareholders.
(c) Estimated income tax effects of the pro forma adjustments included
herein, based on an estimated combined effective federal and state income tax
rate of 37.96%.
(d) To reflect the issuance of 200,000 shares of the Company's common
stock in connection with the acquisition.
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SIGNATURES
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.
PRIDE PETROLEUM SERVICES, INC.
By: PAUL A. BRAGG
-------------------------------
(Paul A. Bragg)
Vice President, Treasurer and
Chief Financial Officer
Date: June 2, 1995
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EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation of our report included in the Form 8-K into Pride Petroleum
Services, Inc.'s previously filed registration statements on Form S-8
(Registration No's. 33-26854 and 33-44823).
JOHNSON, MILLER & CO.
Hobbs, New Mexico
June 2, 1995
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