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, 1997
Commission File Number 33-24718-A
PRIDE, INC.
(Exact name of registrant as specified in its charter)
Delaware 65-0109088
(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, $.002 par value. 1,995,357 shares outstanding as of May 31,
1997.
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PRIDE INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page(s)
<S> <C> <C>
PART I. Financial Information:
ITEM 1. Financial Statements
Consolidated Condensed Balance Sheets - May 31, 1997 (Unaudited)
and November 30, 1996 3.
Consolidated Condensed Statements of Operations (Unaudited) -
Six and Three Months Ended May 31, 1997 and 1996 4.
Consolidated Condensed Statements of Cash Flows (Unaudited) -
Six Months Ended May 31, 1997 and 1996 5.
Notes to Interim Consolidated Condensed Financial Statements (Unaudited) 6.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 9.
PART II. Other Information 13.
SIGNATURES 14.
EXHIBITS:
Exhibit 11 - Computation of Earnings (Loss) Per Share 15.
Exhibit 27 - Financial Data Schedule 16.
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
PRIDE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
- ASSETS -
<TABLE>
<CAPTION>
May 31, November 30,
1997 1996
(Unaudited) (As restated -
see Note 1)
ASSETS:
<S> <C> <C>
Cash and cash equivalents ........................................................ $ 19,471 $ 255,283
Accounts receivable - net of allowance for doubtful accounts ..................... 1,635,164 1,957,093
Inventories ...................................................................... 1,741,752 1,127,452
Property, revenue producing vehicles and equipment - net (Note 2) ................ 24,670,809 20,671,854
Intangible assets - net (Note 3) ................................................. 9,207,356 9,523,097
------------ ------------
TOTAL ASSETS ....................................................................... $ 37,274,552 $ 33,534,779
============ ============
- LIABILITIES AND SHAREHOLDERS' EQUITY -
LIABILITIES (Note 4):
Bank overdraft line of credit .................................................... $ 5,288,035 $ 3,719,565
Accounts payable ................................................................. 1,527,430 654,920
Accrued liabilities and expenses ................................................. 488,519 517,915
Bank debt ........................................................................ 995,281 1,002,571
Obligations under hire purchase contracts ........................................ 14,187,097 11,034,951
Loans payable - directors ........................................................ 34,610 --
Other loans - acquisition ........................................................ 4,247,500 4,317,000
Other liabilities ................................................................ 14,919 33,560
------------ ------------
TOTAL LIABILITIES .................................................................. 26,783,391 21,280,482
------------ ------------
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES (Note 5) ........................... 5,086,296 5,676,992
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $.001 par value, 5,000,000 shares authorized,
none issued or outstanding ................................................. -- --
Common stock, $.002 par value, 500,000,000 shares authorized,
1,995,357 shares issued and outstanding .................................... 3,991 3,991
Additional paid-in capital ..................................................... 7,938,403 8,425,722
Retained earnings (deficit) .................................................... (2,041,106) (1,555,104)
Foreign currency translation ................................................... (496,423) (297,304)
------------ ------------
5,404,865 6,577,305
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ......................................... $ 37,274,552 $ 33,534,779
============ ============
</TABLE>
See notes to interim consolidated condensed financial statements.
Page 3.
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<CAPTION>
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PRIDE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
For the Six Months Ended For the Three Months Ended
May 31, May 31,
--------------------------------------------------------------
1997 1996 1997 1996
REVENUES:
<S> <C> <C> <C> <C>
Contract hire income ......................... $ 3,525,059 $ 2,258,438 $ 1,872,575 $ 1,197,459
Sale of contract hire vehicles ............... 4,233,001 2,496,380 2,298,622 1,355,996
Fleet management and other income ............ 511,542 488,060 358,563 243,699
----------- ----------- ----------- -----------
8,269,602 5,242,878 4,529,760 2,797,154
----------- ----------- ----------- -----------
EXPENSES:
Cost of sales ................................ 6,621,333 3,932,351 3,497,202 2,228,302
General and administrative expenses .......... 1,542,058 679,160 779,424 271,738
Amortization of goodwill and acquisition costs 316,592 315,360 158,296 157,680
Interest expense and other ................... 810,274 459,123 452,580 251,787
Research and development costs ............... 313,922 -- 232,010 --
----------- ----------- -----------
9,604,179 5,385,994 5,119,512 2,909,507
----------- ----------- ----------- -----------
LOSS BEFORE MINORITY INTERESTS ................... (1,334,577) (143,116) (589,752) (112,353)
Minority interests in net loss of consolidated
subsidiaries (Note 4) ..................... 848,575 67,619 369,631 45,348
----------- ----------- ----------- -----------
LOSS BEFORE PROVISION FOR
INCOME TAXES ................................. (486,002) (75,497) (220,121) (67,005)
Provision for income taxes ................... -- -- -- --
----------- ----------- -----------
NET LOSS ......................................... $ (486,002) $ (75,497) $ (220,121) $ (67,005)
=========== =========== =========== ===========
LOSS PER COMMON SHARE (Note 6):
Net loss before minority interest ............ $ (.67) $ (.07) $ (.30) $ (.06)
Minority interests in net loss of subsidiary . .43 .03 .19 .03
----------- ----------- ----------- -----------
LOSS PER COMMON SHARE ............................ $ (.24) $ (.04) $ (.11) $ (.03)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
(Note 6) ..................................... 1,995,357 1,913,717 1,995,357 1,921,987
=========== =========== =========== ===========
</TABLE>
See notes to interim consolidated condensed financial statements.
Page 4.
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PRIDE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended
May 31,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss ...................................................................... $ (486,002) $ (75,497)
Adjustments to reconcile net loss to net cash provided by operating activities:
Minority interests in net loss of subsidiaries .............................. (848,575) (67,619)
Depreciation and amortization ............................................... 1,904,595 1,246,229
Amortization of goodwill .................................................... 295,449 295,449
(Gain) loss on disposal of fixed assets ..................................... (168,710) (9,532)
Provision for maintenance costs ............................................. -- 23,691
Changes in assets and liabilities:
Decrease (increase) in accounts receivable .................................. 321,929 (95,331)
(Increase) in inventories ................................................... (614,299) (171,772)
Increase (decrease) in accounts payable, accrued expenses and
other liabilities ......................................................... 826,117 (1,182,573)
----------- -----------
Net cash provided (utilized) by operating activities ........................ 1,230,504 (36,955)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of revenue producing assets ......................................... (6,781,178) (3,207,506)
Proceeds from sale of fixed assets ............................................ 1,037,985 570,037
----------- -----------
Net cash (utilized) by investing activities ................................. (5,743,193) (2,637,469)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from hire purchase contract funding .................................. 9,079,975 3,795,711
Principal repayments of hire purchase contract funding ........................ (5,927,829) (3,448,679)
Principal payments of long-term debt .......................................... (7,290) (42,436)
Loans received from (repaid to) directors ..................................... 34,610 (123,668)
Net proceeds from subsidiary's sale of stock .................................. 92,500 3,282,500
Costs associated with subsidiary's sale of stock .............................. (126,296) (876,206)
Net proceeds from bank lines of credit ........................................ 1,568,470 467,809
Payment of acquisition debt ................................................... (42,500) --
----------- -----------
Net cash provided by financing activities ................................... 4,671,640 3,055,031
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES IN CASH ............................................. (394,763) 8,623
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ................................ (235,812) 389,230
Cash and cash equivalents, at beginning of year ............................... 255,283 73,946
----------- -----------
CASH AND CASH EQUIVALENTS, AT END OF PERIOD ......................................... $ 19,471 $ 463,176
=========== ===========
</TABLE>
See notes to interim consolidated condensed financial statements.
Page 5.
<PAGE>
PRIDE, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - DESCRIPTION OF COMPANY:
Pride, Inc. (the "Company"), which is a holding company, was
incorporated as International Sportsfest, Inc. in the state of
Delaware on September 11, 1988. The Company was a development
stage company with no operations through January 13, 1994. On
that date, the Company acquired, through an exchange of stock,
Pride Management Services Plc ("PMS"), a consolidated group of
companies located in the United Kingdom. Simultaneously with the
acquisition, the Company changed its name from International
Sportsfest, Inc. to Pride, Inc. and now has its corporate
offices in Watford, England and New York, New York. By acquiring
100% of the issued and outstanding common stock of Pride
Management, PMS became a wholly-owned subsidiary of the Company.
For accounting purposes the acquisition was treated as a
recapitalization of Pride Management with PMS as the acquiror in
a reverse acquisition. In March 1995, pursuant to the terms and
conditions of a reorganization, the Company exchanged all its
shares in Pride Management Services, Plc. for 1,500,000 shares
of common stock in Pride Automotive Group, Inc. (a newly formed
Delaware corporation). As a result of this exchange, Pride
Automotive Group, Inc. ("PAG") became a majority owned
subsidiary of the Company and the parent of PMS. See also Note 5
re: Minority Interest in Subsidiaries.
Pride Management Services Plc ("PMS") is a holding company of
six subsidiaries which are engaged in the leasing of motor
vehicles, primarily on contract hire, to local authorities and
selected corporate customers throughout the United Kingdom.
On November 29, 1996, the Company, through PAG's 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 net assets of AC
Cars Limited and Autokraft Limited. These two companies were
engaged in the manufacture and sale of specialty automobiles.
The purchase price of $6,067,000 was financed with the proceeds
of a private debt offering which was completed, by PAG, in
December 1996 and by loans. The acquisition was recorded using
the purchase method of accounting. Fixed assets recorded as a
result of this acquisition aggregated $3,038,182. In April 1997,
the Company, through the services of an independent third-party
expert, determined that the value of such fixed assets acquired
was actually $6,643,365 at the date of acquisition. A portion of
this increase ($1,990,215) was previously reflected as an
intangible asset, which has now been reclassified. The balance
of the increase of $1,614,968, recorded as negative goodwill,
has been offset against non-current assets acquired. The balance
sheet as of November 30, 1996 (year end) included herein has
therefore been restated to reflect this corrected valuation as
follows: Fixed Assets has been increased by $1,990,215 and
Intangible Assets has been reduced by $1,990,215. In addition
financial statements for the year ended November 30, 1996 have
been restated to correct an error in the method by which the
Company was reflecting the minority shareholders' interest in AC
Automotive Group, Inc.
The effect of this restatement was to increase the minority
interest liability and decrease additional paid-in capital as of
November 30, 1996 in the amount of $307,919. The Company is in
the process of preparing an amended Form 10-KSB to be filed with
the Securities and Exchange Commission to reflect such
restatements.
Page 6.
<PAGE>
PRIDE, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - DESCRIPTION OF COMPANY (Continued):
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, 1996, 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.
In the opinion of management, the accompanying unaudited interim
consolidated condensed financial statements of Pride, Inc. and
its wholly-owned subsidiaries, contain all adjustments necessary
to present fairly the Company's financial position as of May 31,
1997 and the results of its operations for the six and three
month periods ended May 31, 1997 and 1996, and its cash flows
for the six month periods ended May 31, 1997 and 1996.
The results of operations for the six and three month periods
ended May 31, 1997 and 1996 are not necessarily indicative of
the results to be expected for the full year.
NOTE 2 - FIXED ASSETS:
<TABLE>
<CAPTION>
Fixed assets consists of the following:
May 31, November 30,
1997 1996
<S> <C> <C>
Building and improvements $ 1,719,415 $ 1,719,415
Revenue producing vehicles 22,218,436 17,282,095
Furniture, fixtures and machinery 4,739,322 4,641,388
Aircraft 927,751 927,751
-------------- --------------
29,604,924 24,570,649
Less: accumulated depreciation 4,934,115 3,898,795
------------- -------------
$24,670,809 $20,671,854
=========== ===========
</TABLE>
NOTE 3 - INTANGIBLE ASSETS:
Intangible assets include goodwill which arose in connection
with the acquisition of certain subsidiaries of PMS. Acquisition
costs representing organization type expenditures have also been
capitalized as intangible assets. These assets and costs are
being amortized on a straight-line basis over 20 and 10 year
periods, respectively.
The Company periodically reviews the valuation and amortization
of goodwill to determine possible impairment by comparing the
carrying value to the undiscounted future cash flows of the
related assets.
Page 7.
<PAGE>
PRIDE, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 - LIABILITIES:
Included in liabilities as of May 31, 1997, are amounts in the
aggregate of $13,140,301 which are not due and payable until
after May 31, 1998. This amount consists of amounts due to trade
creditors, loans payable and equipment notes payable.
NOTE 5 - MINORITY INTERESTS IN SUBSIDIARIES:
In April 1996, PAG successfully completed an initial public
offering of its common stock, as a result of which the Company's
investment in PAG was reduced to 56.55%. PAG owns 70% of a newly
formed subsidiary AC Automotive Group, Inc., ("AC Group"). The
minority interests liabilities represent the minority
shareholders' portion of the equity in these two subsidiaries.
In 1997, PAG completed a private placement of its common stock,
as a result of which the Company's investment in PAG was reduced
to 52.85%.
NOTE 6 - COMMON STOCK / EARNINGS (LOSS) PER SHARE:
Earnings (loss) per share has been computed on the basis of the
weighted average number of common shares and common equivalent
shares outstanding during each period presented.
Page 8.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Pride, Inc. (the "Company"), which is a holding company, was
incorporated as International Sportsfest, Inc. in the state of
Delaware on September 11, 1988. The Company was a development
stage company with no operations through January 13, 1994. On
that date, the Company acquired, through an exchange of stock,
Pride Management Services Plc ("PMS"), a consolidated group of
companies located in the United Kingdom. Simultaneously with
the acquisition, the Company changed its name from
International Sportsfest, Inc. to Pride, Inc. and now has its
corporate offices in Watford, England and New York, New York.
By acquiring 100% of the issued and outstanding common stock
of Pride Management, PMS became a wholly-owned subsidiary of
the Company. For accounting purposes the acquisition was
treated as a recapitalization of Pride Management with PMS as
the acquiror in a reverse acquisition. In March 1995, pursuant
to the terms and conditions of a reorganization, the Company
exchanged all its shares in Pride Management Services, Plc.
for 1,500,000 shares of common stock in Pride Automotive
Group, Inc. (a newly formed Delaware corporation). As a result
of this exchange, Pride Automotive Group, Inc. ("PAG") became
a majority owned subsidiary of the Company and the parent of
PMS.
In December 1995, Pride Automotive Group, Inc. consummated a
private placement offering of common stock of 500,000 shares,
which reduced the Company's ownership interest to 72.8%. In
April 1996, Pride Automotive Group, Inc. 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
the Company's ownership interest to 56.55%. In 1997, PAG
completed a private placement of its common stock, as a result
of which the Company's investment in PAG was reduced to
52.85%.
On November 29, 1996, PAG, through its 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 Autokraft 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 PAG's common stock and by loans. Fixed assets
recorded as a result of this acquisition aggregated
$3,038,182. In April 1997, the Company, through the services
of an independent third-party expert, determined that the
value of such fixed assets acquired was actually $6,643,365 at
the date of acquisition. A portion of this increase
($1,990,215) was previously reflected as an intangible asset,
which has now been reclassified. The balance of the increase
of $1,614,968, recorded as negative goodwill, has been offset
against non-current assets acquired. The balance sheet as of
November 30, 1996 (year end) included herein has therefore
been restated to reflect this corrected valuation as follows:
Fixed Assets has been increased by $1,990,215 and Intangible
Assets has been reduced by $1,990,215. In addition financial
statements for the year ended November 30, 1996 have been
restated to correct an error in the method by which the
Company was reflecting the minority shareholders' interest in
AC Automotive Group, Inc. The effect of this restatement was
to increase the minority interest liability and decrease
additional paid-in capital as of November 30, 1996 in the
amount of $307,919. The Company is in the process of preparing
an amended Form 10-KSB to be filed with the Securities and
Exchange Commission to reflect such restatements.
Page 9.
Pride Management Services Plc. ("PMS") is a holding
company of six subsidiaries which are
<PAGE>
engaged in the leasing of motor vehicles, primarily on
contract hire, to local authorities and selected corporate
customers throughout the United Kingdom.
Prior to the aforementioned reorganization PMS prepared its
financial statements in accordance with generally accepted
accounting principles of the United Kingdom. The Company is
now preparing its financial statements in accordance with
generally accepted accounting principles in the U.S.
The financial information presented herein include: (i)
Consolidated Condensed Balance Sheets as of May 31, 1997 and
November 30, 1996 (as restated); (ii) Consolidated Condensed
Statements of Operations for the Six and Three Month Periods
Ended May 31, 1997 and 1996 and (iii) Consolidated Condensed
Statements of Cash Flows for the Six Month Periods Ended May
31, 1997 and 1996.
Results of Operations
Revenues increased by $1,732,606 when comparing the three
months ended May 31, 1997 and 1996; $359,657 of this increase
relates to AC Cars, which commenced operations in December
1996. Contract hire revenues increased by $1,372,949 when
comparing the three months period May 31, 1997 to the three
months ended May 31, 1996. The primary reason for this 49%
increase was due to an increase in revenues from contract
hire, sale of vehicles at lease maturity and the selling of
vehicles at low margins to take advantage of dealer bonuses.
During this quarter, 128 new contracts were written as against
85 in the previous year. The average monthly rental of new
contracts written was $608 per vehicle as against $512 per
vehicle during the same quarter in 1996. During this quarter,
20 vehicles were disposed of on termination of contracts at an
average profit of $3,275 per vehicle. During the same quarter
in 1996, 30 vehicles were disposed of at an average profit of
$2,910 per vehicle.
For the six month period May 31, 1997, revenues increased by
$3,026,724 or 58%, when compared to the same period in 1996.
$604,220 of this increase is attributable to AC Cars, which
commenced operations in December 1996, an increase in revenues
from contract hire, sale of vehicles at lease maturity and the
selling of vehicles at low margins to take advantage of dealer
bonuses. During this period, 245 new contracts were written at
an average rental of $586 per vehicle as against 126 contracts
in the corresponding period in 1996 at an average rental of
$498 per vehicle. For the six months period ending May 31,
1997, 60 vehicles were disposed of on termination of contracts
at an average profit of $2,759 per vehicle as against 45
vehicles being disposed in the corresponding period in 1996 at
an average profit of $2,658 per vehicle. As of May 31, 1997,
1,528 vehicles were under lease and management compared to
1,220 vehicles as at May 31, 1997.
Cost of sales, including depreciation, as of percent of sales,
decreased from 79% to 75% when comparing the three months
ended May 31, 1997 and 1996, respectively. Management
attributes this decrease mainly to the increased profitability
on sale of vehicles on termination of contracts during the
quarter and the writing of more profitable contracts.
Page 10.
<PAGE>
Cost of sales, including depreciation, increased from 75% to
77% as a percent of revenue, when comparing the six months
ended May 31, 1997 and 1996. Management attributes this
increase primarily to the increase in buying and selling of
vehicles and selling onto third parties at low margins to take
advantage of dealer bonuses, adopting a more prudent approach
to estimating residual values of vehicles, thereby increasing
the depreciation expense and cost of sales and reducing the
residual risk, and the inclusion of the AC Cars operations.
General and administrative expenses increased by $507,686 when
comparing the three month periods May 31, 1997 and 1996. This
increase is mainly due to increase in staff as result of
growth of business, normal increase in running costs of the
business, and administration costs of $387,342 attributable to
AC Cars. For the six month period ending May 31, 1997, general
and administrative expenses increased by $862,898. This
increase is mainly due to the inclusion of the administration
costs of AC Cars of $776,457 and the increase in staff and
normal running costs associated with increase in business.
Interest expense increased by 80% when comparing the three
months ended May 31, 1997 and 1996. 54% or $107,581 of this
increase is attributed to funding AC Cars while the balance is
the result of the increased cost of funding new contract hire
business. Interest expense increased by 76% when comparing the
six months ended May 31, 1997 and 1996. 53% or $185,964 of
this increase is attributed to funding of AC Cars while the
balance is the result of the increased cost of funding new
contract hire business.
Certain costs incurred by AC Cars have been classified as
research and development costs. These costs relate to research
and development incurred on the manufacture and distribution
of the AC Cobra and AC Ace and are separately disclosed.
Research and development costs amounted to $313,922 and
$232,010 for the six months and three months ended May 31,
1997, respectively.
The shortfall in the working capital requirements of AC Cars
has being funded by the contract hire operations which have
obtained increased bank lines of credit for this purpose. This
will continue in the future until AC Cars is self supportive
and able to fund its own working capital requirements. The
repayment of the monies to the contract hire operations will
be funded out proceeds of vehicle sales.
Consolidated
For the three months ended May 31, 1997, the Company reported
a loss of $431,456 before amortization and minority interests,
as compared to a profit of $45,327 for the same period in
1996. The reason for this, is that this quarter includes the
trading losses of AC Cars. The quarter loss comprises a loss
of $860,870 before amortization and minority interests in AC
Cars.
For the six month period ended May 31, 1997, the Company
reported a loss of $1,017,985 before amortization and minority
interests as compared to a profit of $172,244 for the same
period in 1996. The loss comprises of $1,332,653 before
amortization and minority interests in AC Cars.
Page 11.
<PAGE>
Liquidity and Capital Resources
In December 1997, PAG completed a private placement of 18 1/2
units, each unit consisting of a 10% promissory note in the
amount of $95,000 and 10,000 shares of PAG's common stock for
an aggregate price of $100,000 per unit. The proceeds have
been used to satisfy a portion of the debt owed for the
acquisition of AC Car Group Limited.
The Company acquires new vehicles as required. There are no
material planned capital expenditures at the present time.
Other
Except for historical information contained herein, the
matters set forth above may be forward-looking statements that
involve certain risks and uncertainties that could cause
actual results to differ from those in the forward-looking
statements. Potential risks and uncertainties include such
factors as the level of business and consumer spending in the
Company's industry, the competitive environment, the ability
to the Company to expand its operations, the level of costs
incurred in connection with the Company's expansion efforts
and economic conditions. Investors are also directed to
consider other risks and uncertainties discussed in documents
filed by the Company with the Securities and Exchange
Commission.
Page 12.
<PAGE>
PART II. OTHER INFORMATION
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. None.
ITEM 5. Other Information. None.
ITEM 6. Exhibit and Reports on Form 8-k.
(a) Exhibit 27 Financial Data Schedule.
(b) None.
<PAGE>
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 thereunto duly authorized
Dated: July 17, 1997
Pride, Inc.
by: \s\ Alan Lubinsky
Alan Lubinsky
<PAGE>
<TABLE>
<CAPTION>
PRIDE, INC. AND SUBSIDIARIES
EXHIBIT 11
COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE
(Unaudited)
For the Six Months Ended For the Three Months Ended
May 31, May 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
LOSS BEFORE MINORITY INTERESTS ............... $(1,334,577) $ (143,116) $ (589,752) $ (112,353)
Minority interests in net loss of consolidated
subsidiaries (Note 4) ....................... 848,575 67,619 369,631 45,348
----------- ----------- ----------- -----------
LOSS BEFORE PROVISION FOR INCOME
TAXES ........................................ (486,002) (75,497) (220,121) (67,005)
Provision for income taxes ................... -- -- -- --
----------- -----------
NET LOSS ..................................... $ (486,002) $ (75,497) $ (220,121) $ (67,005)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING .................... 1,995,357 1,913,717 1,995,357 1,921,987
=========== =========== =========== ===========
LOSS PER COMMON SHARE:
Net loss before minority interest ............ $ (.67) $ (.07) $ (.30) $ (.06)
Minority interests in net loss of subsidiary . .43 .03 .19 .03
----------- ----------- ----------- -----------
LOSS PER COMMON SHARE ........................ $ (.24) $ (.04) $ (.11) $ (.03)
=========== =========== =========== ===========
</TABLE>
- Exhibit 11 -
Page 15.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
PRIDE, INC. AND SUBSIDIARIES
EXHIBIT 27
FINANCIAL DATA SCHEDULE
ARTICLE 5 OF REGULATION S-X
The schedule contains summary financial information extracted from the condensed
consolidated financial statements for the six months ended May 31, 1997 and is
qualified in its entirety by reference to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-Mos
<FISCAL-YEAR-END> Nov-30-1997
<PERIOD-START> Dec-01-1996
<PERIOD-END> may-31-1997
<CASH> 19,471
<SECURITIES> 0
<RECEIVABLES> 1,635,164
<ALLOWANCES> 0
<INVENTORY> 1,741,752
<CURRENT-ASSETS> 0
<PP&E> 29,604,924
<DEPRECIATION> 4,934,115
<TOTAL-ASSETS> 37,274,552
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 3,991
<OTHER-SE> 5,400,874
<TOTAL-LIABILITY-AND-EQUITY> 37,274,552
<SALES> 7,758,060
<TOTAL-REVENUES> 8,269,602
<CGS> 6,621,333
<TOTAL-COSTS> 6,621,333
<OTHER-EXPENSES> 316,592
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 810,274
<INCOME-PRETAX> (486,002)
<INCOME-TAX> 0
<INCOME-CONTINUING> (486,002)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (486,002)
<EPS-PRIMARY> (.24)
<EPS-DILUTED> (.24)
<PAGE>
</TABLE>
