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 33-24718-A
PRIDE, INC.
(Exact name of registrant as specified in its charter)
Delaw 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,
1998.
<PAGE>
PRIDE INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page(s)
<S> <C> <C> <C>
PART I. Financial Information:
ITEM 1. Financial Statements
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 14.
SIGNATURES 15.
EXHIBITS Exhibit 27 - Financial Data Schedule 16.
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
PRIDE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
- ASSETS -
May 31, November 30,
1998 1997
(Unaudited)
ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 12,852 $ 85,065
Accounts receivable - net of allowance for doubtful accounts 2,143,069 1,959,355
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) 8,581,438 8,912,087
Investment in affiliate (Note 1) 4,048,460 -
------------- --------------
TOTAL ASSETS $40,263,209 $40,087,217
=========== ===========
- LIABILITIES AND SHAREHOLDERS' EQUITY -
LIABILITIES (Note 4):
Bank overdraft line of credit $ 5,689,202 $ 6,976,699
Accounts payable 859,051 1,767,166
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
Acquisition debt payable 1,686,000 4,198,500
Loans payable 78,991 -
Other liabilities 327,927 109,978
-------------- --------------
TOTAL LIABILITIES 28,157,232 32,955,880
------------ ------------
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES (Note 5) 5,833,030 3,473,242
------------- -------------
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 7,996,886 8,063,111
Retained earnings (deficit) (1,896,277) (4,019,828)
Deferred financing costs (65,934) (75,178)
Accumulated other comprehensive income (loss) 234,281 (314,001)
-------------- --------------
6,272,947 3,658,095
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $40,263,209 $40,087,217
=========== ===========
</TABLE>
See notes to interim consolidated condensed financial statements.
Page 3.
<PAGE>
PRIDE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended For the Three Months Ended
May 31, May 31,
1998 1997 1998 1997
---------------- ---------------- ---------------- ---------
REVENUES:
<S> <C> <C> <C> <C>
Contract hire income $ 4,901,659 $ 3,525,059 $2,459,795 $1,872,575
Sale of contract hire vehicles 1,604,359 4,233,001 787,247 2,298,622
Fleet management and other income 554,743 511,542 232,642 358,563
-------------- -------------- ------------ ------------
7,060,761 8,269,602 3,479,684 4,529,760
------------- ------------- ----------- -----------
EXPENSES:
Cost of sales 5,175,381 6,621,333 2,622,838 3,497,212
General and administrative expenses 890,610 1,542,058 399,554 779,424
Amortization of goodwill and acquisition costs 315,359 316,592 157,680 158,296
Interest expense and other 1,101,731 810,274 525,921 452,580
Research and development costs - 313,922 - 232,010
-------------------- -------------------------------- ------------
7,483,081 9,604,179 3,705,993 5,119,522
------------- ------------- ------------ -----------
LOSS BEFORE MINORITY INTERESTS (422,320) (1,334,577) (226,309) (589,762)
Minority interests in net loss of consolidated
subsidiaries (Note 5) 193,906 832,264 102,674 393,421
-------------- -------------- ----------- ------------
LOSS BEFORE PROVISION FOR
INCOME TAXES (228,414) (502,313) (123,635) (196,341)
Provision for income taxes - - - -
-----------------------------------------------------------------------
NET LOSS $ (228,414) $ (502,313) $ (123,635) $ (196,341)
============= ============= =========== ===========
LOSS PER COMMON SHARE (Note 6a):
Net loss before minority interest $(.21) $(.67) $(.11) $(.30)
Minority interests in net loss of subsidiary .10 .42 .05 .20
------ ------ ------ ------
LOSS PER COMMON SHARE $(.11) $(.25) $(.06) $(.10)
===== ===== ===== =====
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (Note 6a) 1,995,357 1,995,357 1,995,357 1,995,357
========= ========= ========= =========
</TABLE>
See notes to interim consolidated condensed financial statements.
Page 4.
<PAGE>
PRIDE, 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 $(228,414) $(502,313) $(123,635) $(196,341)
OTHER COMPREHENSIVE INCOME (Note 5b):
Foreign currency translation adjustments 400,738 (367,763) 57,482 298,769
---------- ---------- ------------ ----------
COMPREHENSIVE INCOME (LOSS) $ 172,324 $(870,076) $ ( 66,153) $ 102,428
========= ========= ========== =========
</TABLE>
See notes to interim consolidated condensed financial statements
Page 5.
<PAGE>
PRIDE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
For the Six Months Ended
May 31,
1998 1997
---------------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (228,414) $ (502,313)
Adjustments to reconcile net loss to net cash provided by operating activities:
Minority interests in net loss of subsidiaries (193,906) (832,264)
Depreciation and amortization 2,252,844 1,904,595
Amortization of goodwill 315,359 295,449
Loss (gain) on disposal of fixed assets 128,797 (168,710)
Deferred financing costs 17,400 -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (234,504) 301,002
Decrease (increase) in inventories 107,090 (614,299)
(Decrease) increase in accounts payable, accrued expenses and other liabilities (189,177) 847,044
------------ --------------
Net cash provided by operating activities 1,975,489 1,230,504
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of revenue producing assets (5,492,212) (6,781,178)
Proceeds from sale of fixed assets 2,147,269 1,037,985
------------ ------------
Net cash (utilized) by investing activities (3,344,943) (5,743,193)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
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)
Principal payments of long-term debt (36,273) (7,290)
Loans received from officers - 34,610
Net proceeds from subsidiary's sale of stock - 92,500
Costs associated with subsidiary's sale of stock - (126,296)
Net proceeds from bank lines of credit 391,515 2,323,570
Payment of acquisition debt - (824,600)
------------------- --------------
Net cash provided by financing activities 896,503 4,644,640
------------- -------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 400,738 (367,763)
------------- --------------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (72,213) (235,812)
Cash and cash equivalents, at beginning of year 85,065 255,283
-------------- --------------
CASH AND CASH EQUIVALENTS, AT END OF PERIOD $ 12,852 $ 19,471
============= ==============
</TABLE>
See notes to interim consolidated condensed financial statements.
Page 6.
<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. 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, PAG's investment in AC Automotive Group, Inc., is
now reported under the cost method of accounting.
Page 7.
<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, 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.
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,
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 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 8.
<PAGE>
PRIDE, 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 - 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 53.32%. In November
1996, PAG completed a private placement of 17 units, each unit
consisting of a 10% promissory note in the amount of $95,000
and 10,000 shares of the Company's common stock for the
aggregate price of $100,000. The effect of this placement has
reduced the Company's investment in PAG to 46.87%. The minority
interests liabilities represent the minority shareholders'
portion of the equity in this subsidiary.
PAG 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, is expected to be $3,488,000 which PAG intends
to use to repay existing debt. The successful consummation of
this offering will further reduce the Company's percentage
ownership in PAG.
NOTE 6 - 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).
Page 9.
<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. This offering reduced the Company's
ownership interest to 53.32%. In November 1996, PAG completed
a private placement of 17 units, each unit consisting of a 10%
promissory note in the amount of $95,000 and 10,000 shares of
the Company's common stock for the aggregate price of
$100,000. The effect of this placement has reduced the
Company's investment in PAG to 46.87%.
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. 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 fore- going issuance of shares has
reduced the ownership of AC Automotive Group, Inc., by PAG to
approximately 16%. Accordingly, PAG's investment in AC
Automotive Group, Inc., is being reported under the cost
method of accounting.
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.
Page 10.
<PAGE>
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, 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
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 contracts were written as against
245 for the same period during 1997. For the six months period
ending May 31, 1998, 94 vehicles have being 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 months 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.
Vehicles sales decreased by $1,197,422 when comparing the two
quarters, due to less contracts terminating and less sale of
vehicles.
During this quarter, 67 new vehicles were acquired as against
128 in the previous year. The average monthly rental of new
contracts written was $687 per vehicle as against $608 per
vehicle during the same quarter in 1997.
During this quarter, 57 vehicles were disposed of 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.
Cost of sales relating to sale of 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.
Cost of sales relating to sale of vehicles decreased form
$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
respectively, cost of sales including depreciation increased
from $2,544,828 to $3,669,273, an increase of $1,124,445 or
44.2% which is in line with the increase in contract hire and
fleet management income of 38.7%.
Page 11.
<PAGE>
Cost of sales including depreciation, relating to contract
hire and fleet management income increased from $1,414,807 to
$1,906,784, an increase of $491,983 or 34.8% 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%.
Costs 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 31,1 998 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
months ended May 31, 1998 and 1997, this percentage has
increased from 64.9% to 70.8%.
For the six months ended May 31, 1998 and 1997, respectively
these expenses increased by $125,009 or 16.3%, which is in the
line with the increase in revenues and normal increases in
overhead and business operating costs.
General and administration expenses increased marginally by
$17,472 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 period 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 also as result of 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 ($315,300 for both
periods), a loss of $413,421 and $692, 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) of ($226,309) and a profit of $167,213,
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 $1,975,489 and
$1,230,504, respectively. The Company utilized net cash for
investing activities (for the purchase of revenue producing
assets) of $3,344,943 and $5,743,193 for the six month periods
ended May 31, 1998 and 1997, respectively. Net cash provided
through financing activities aggregated $896,503 and
$4,644,640 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.
In 1997, PAG completed a private placement of 18.5 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.
Page 12.
<PAGE>
PAG 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, is expected to be $3,488,000 with which PAG
intends to repay existing debt.
Page 13.
<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, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: July 20, 1998 PRIDE, INC.
By: /s/ Alan Lubinsky
Alan Lubinsky
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
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> 12,852
<SECURITIES> 0
<RECEIVABLES> 2,143,069
<ALLOWANCES> 0
<INVENTORY> 25,279
<CURRENT-ASSETS> 0
<PP&E> 31,251,417
<DEPRECIATION> 5,799,306
<TOTAL-ASSETS> 40,263,209
<CURRENT-LIABILITIES> 17,755,194
<BONDS> 10,402,038
0
0
<COMMON> 3,991
<OTHER-SE> 6,268,956
<TOTAL-LIABILITY-AND-EQUITY> 40,263,209
<SALES> 7,060,761
<TOTAL-REVENUES> 7,060,761
<CGS> 5,175,381
<TOTAL-COSTS> 6,381,350
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
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