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 August 31, 1998
Commission File Number 33-24718-A
PRIDE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Delaware 65-0109088
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
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 August
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 - August 31, 1998
(Unaudited) and November 30, 1997 3.
Consolidated Condensed Statements of Operations (Unaudited) -
Nine and Three Months Ended August 31, 1998 and 1997 4.
Consolidated Condensed Statements of Comprehensive Income (Loss)
(Unaudited) - Nine and Three Months Ended August 31, 1998 and 1997 5.
Consolidated Condensed Statements of Cash Flows (Unaudited) -
Nine Months Ended August 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 I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
PRIDE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
- ASSETS -
<TABLE>
<CAPTION>
August 31, November 30,
1998 1997
----------------- -------------------
(Unaudited)
ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 54,068 $ 85,065
Accounts receivable - net of allowance for doubtful accounts 2,217,110 1,959,355
Inventories - 1,248,360
Property, revenue producing vehicles and equipment - net (Note 2) 23,855,511 27,882,350
Intangible assets - net (Note 3) 8,423,759 8,912,087
Investment in affiliate (Note 1) 4,048,460 -
------------- --------------------
TOTAL ASSETS $38,598,908 $40,087,217
=========== ===========
- LIABILITIES AND SHAREHOLDERS' EQUITY -
LIABILITIES (Note 4):
Bank overdraft line of credit $ 6,186,168 $ 6,976,699
Accounts payable 714,511 1,767,166
Accrued liabilities and expenses 858,299 865,977
Bank debt 694,501 695,782
Obligations under hire purchase contracts 16,966,515 18,341,778
Acquisition debt payable 1,686,000 4,198,500
Loans payable 34,610 -
Other liabilities 587,155 109,978
-------------- --------------
TOTAL LIABILITIES 27,727,759 32,955,880
------------ ------------
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES (Note 5) 5,340,310 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) (2,173,549) (4,019,828)
Deferred financing costs (56,504) (75,178)
Accumulated other comprehensive income (loss) (239,985) (314,001)
-------------- --------------
5,530,839 3,658,095
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $38,598,908 $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 Nine Months Ended For the Three Months Ended
August 31, August 31,
1998 1997 1998 1997
---------------- ---------------- ---------------- --------------
REVENUES:
<S> <C> <C> <C> <C>
Contract hire income $ 7,344,650 $ 5,571,724 $2,442,991 $2,046,665
Sale of contract hire vehicles 2,733,244 5,343,285 1,128,885 1,626,790
Fleet management and other income 726,254 1,621,414 171,511 593,366
-------------- ------------- ------------ ------------
10,804,148 12,536,423 3,743,387 4,266,821
------------ ------------ ----------- -----------
EXPENSES:
Cost of sales 8,247,221 10,019,382 3,071,840 3,398,049
General and administrative expenses 1,321,386 2,316,820 430,776 774,762
Amortization of goodwill and acquisition costs 473,038 474,887 157,679 158,295
Interest expense and other 1,693,560 1,330,278 591,829 520,004
Research and development costs - 691,166 - 377,244
-------------------- -------------------------------- ------------
11,735,205 14,832,533 4,252,124 5,228,354
------------ ------------ ------------ -----------
LOSS BEFORE MINORITY INTERESTS (931,057) (2,296,110) (508,737) (961,533)
Minority interests in net loss of consolidated
subsidiaries (Note 5) 425,371 1,325,704 231,465 493,440
-------------- ------------- ----------- ------------
LOSS BEFORE PROVISION FOR INCOME
TAXES (505,686) (970,406) (277,272) (468,093)
Provision for income taxes - - - -
----------------------------------------------------------------------------
NET LOSS $ (505,686) $ (970,406) $ (277,272) $ (468,093)
============= ============= =========== ===========
LOSS PER COMMON SHARE (Note 6a):
Net loss before minority interest $(.47) $(1.15) $(.25) $(.48)
Minority interests in net loss of subsidiary .22 .66 .11 .25
------ -------- ------ ------
LOSS PER COMMON SHARE $(.25) $ (.49) $(.14) $(.23)
===== ======= ===== =====
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 Nine Months For the Three Months
Ended August 31, Ended August 31,
------------------------------- -------------------
1998 1997 1998 1997
------------- --------------- ------------- ------------
<S> <C> <C> <C> <C>
NET LOSS $(505,686) $ (970,406) $(277,272) $(468,093)
OTHER COMPREHENSIVE INCOME (Note 5b):
Foreign currency translation adjustments 385,199 (204,457) (15,539) 163,306
---------- ------------- ------------ ----------
COMPREHENSIVE INCOME (LOSS) $(120,487) $(1,174,863) $(292,811) $(304,787)
========= =========== ========= =========
</TABLE>
See notes to interim consolidated condensed financial statements
Page 5.
<PAGE>
PRIDE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
August 31,
1998 1997
---------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (505,686) $ (970,406)
Adjustments to reconcile net loss to net cash provided by operating activities:
Minority interests in net loss of subsidiaries (425,371) (1,325,704)
Depreciation and amortization 3,510,813 2,909,949
Amortization of goodwill 473,037 474,424
Loss (gain) on disposal of assets 229,059 (193,752)
Deferred financing costs 26,830 -
Changes in assets and liabilities:
(Increase) in accounts receivable (308,545) (74,689)
Decrease (increase) in inventories 132,369 (564,489)
Increase in accounts payable, accrued expenses and other liabilities 54,142 2,085,956
-------------- -------------
Net cash provided by operating activities 3,186,648 2,341,289
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of revenue producing assets (6,393,018) (10,162,619)
Proceeds from sale of assets 2,923,088 1,443,250
------------ -------------
Net cash (utilized) by investing activities (3,469,930) (8,719,369)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from hire purchase contract funding 6,492,373 14,438,622
Principal repayments of hire purchase contract funding (7,512,487) (10,147,407)
Principal payments of long-term debt (1,281) (53,789)
Loans received from officers - 34,610
Net proceeds from subsidiary's sale of stock - 92,500
Costs associated with subsidiary's sale of stock - (180,137)
Net proceeds from bank lines of credit 888,481 3,008,278
Payment of acquisition debt - (823,970)
------------------- --------------
Net cash (utilized) provided by financing activities (132,914) 6,368,707
------------- -------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 385,199 (204,457)
------------- --------------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (30,997) (213,830)
Cash and cash equivalents, at beginning of year 85,065 255,283
-------------- --------------
CASH AND CASH EQUIVALENTS, AT END OF PERIOD $ 54,068 $ 41,453
============= ==============
</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
nine 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 August 31, 1998 and the results of its operations for the
nine and three month periods ended August 31, 1998 and 1997 and
cash flows for the nine month periods ended August 31, 1998 and
1997.
The results of operations for the nine and three month periods
ended August 31, 1998 and 1997 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:
August 31, November 30,
1998 1997
(unaudited)
<S> <C> <C>
Building and improvements $ 784,599 $ 820,160
Revenue producing vehicles 28,682,375 27,612,291
Furniture, fixtures and machinery 577,198 4,670,067
-------------- --------------
30,044,172 33,102,518
Less: accumulated depreciation 6,188,661 5,220,168
------------- -------------
$23,855,511 $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 August 31, 1998, are amounts in
the aggregate of $9,223,729 which are not due and payable until
after August 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%. In August
1998, the Company sold 35,000 shares of PAG common stock for
net proceeds of $109,555, realizing a loss of $27,006. As a
result of this transaction the Company now holds 1,357,500
shares of PAG common stock which represents a 48.1% investment
and still maintains control. 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%. In August 1998, the
Company sold 35,000 shares of PAG common stock for net
proceeds of $109,555, realizing a loss of $27,006. As a result
of this transaction the Company now holds 1,357,500 shares of
PAG common stock which represents a 48.1% investment.
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 foregoing 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
nine 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 August 31, 1998
and November 30, 1997; (ii) Consolidated Condensed Statements
of Operations for the Nine and Three Month Periods Ended
August 31, 1998 and 1997, (iii) Consolidated Condensed
Statements of Comprehensive Income (Loss) for the Nine and
Three Month Periods Ended August 31, 1998 and 1997 and (iv)
Consolidated Condensed Statements of Cash Flows for the Nine
Month Periods Ended August 31, 1998 and 1997.
Results of Operations
The numbers for the prior year which appear below are
exclusive of the AC Automotive Group.
For the nine month period ended August 31, 1998, contract hire
and fleet management revenue increased by $1,772,164 or
28.14%, when compared with the same period in 1997. This
increase is mainly due to the growth of the fleet since the
beginning of 1997.
During this period, 185 new contracts were written as against
403 for the same period during 1997. For the nine month
period, 194 vehicles were disposed of on termination of
contracts as against 92 vehicles disposed during the same
period in 1997.
Contract hire income increased by $396,326 or 19.36% when
comparing the three month period ended August 31, 1998 to the
three months ended August 31, 1997. This increase is as a
result of the growth in the fleet over the past two years.
Lease vehicle sales decreased by $497,905 when comparing the
two quarters. Although more contracts terminated than in 1997,
the amount of vehicle sales is dependent on the type of
vehicle sold and the market value.
During the quarter, 100 vehicles were disposed of, 32 at an
average profit of $644 and 68 at an average loss of $335. The
average profit per vehicle on disposal is dependent on the
type of vehicle sold and the current market value of vehicles.
During the same quarter in 1997, 32 vehicles were disposed of
at an average profit of $1,076.
During the quarter, 22 new contracts were acquired as against
158 in the previous year. The average monthly rental of new
contracts written was $571 as against $582 per vehicle during
the same quarter in 1997.
For the three month period ended August 31, 1998, cost of
sales including depreciation decreased from $3,237,169 to
$3,071,840. As a percent of contract hire income and sale of
vehicles, this percentage increased marginally from 79.76% to
82.08%.
Page 11.
<PAGE>
Cost of sales including depreciation, decreased for the nine
month period ended August 31, 1998 and 1997, respectively. The
decrease from $9,197,972 to $8,247,221 is in line with the
decrease in contract hire and vehicle sale revenue of
$10,915,009 to $10,077,895. As a percent of sales, the
percentage decreased from 84.27% to 81.83% when comparing the
nine month period ended August 31, 1998 and 1997,
respectively.
General and administrative expenses increased by $282,443, or
27.43% when comparing the nine month periods ending August 31,
1998 and 1997, respectively. This increase is in line with the
$1,772,164 increase in contract hire and fleet management
income of 28.14% ,when comparing the nine month period ended
August 31, 1998 and 1997, respectively.
For the nine months ended August 31, 1998 and 1997, interest
expense increased by $622,851. Interest expense increased by
$145,431 when comparing the three month periods ended August
31, 1998 and 1997. 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 to fund increased
working capital requirements.
For the nine months ended August 31, 1998 and 1997, the
Company reported, after amortization of goodwill of ($473,040
for both periods), and before minority interests and other
non-recurring items, a loss of $904,051 and $136,933,
respectively.
For the three months ended August 31, 1998 and 1997, the
Company reported, after amortization of goodwill of ($157,680
for both periods), and before minority interests and other
non-recurring items, a loss of $481,731 and $134,394,
respectively.
Liquidity and Capital Resources
Net cash provided from operating activities for the nine month
periods ended August 31, 1998 and 1997 aggregated $3,186,648
and $2,341,289, respectively. The Company utilized net cash
for investing activities (for the purchase of revenue
producing assets) of $3,469,930 and $8,719,369 for the nine
month periods ended August 31, 1998 and 1997, respectively.
Net cash utilized by financing activities was $132,914 for the
nine-month period ended August 31, 1998. Net cash provided by
financing activities aggregated $6,368,707 for the nine-month
period ended August 31, 1997.
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.
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 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
Exhibit 11 - Computation of Earnings Per Share - not required,
no dilutive common stock equivalents
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: October 14, 1998 PRIDE, INC.
By: /s/ Alan Lubinsky
Chief Executive Officer and
Principal Accounting Officer
Page 14.
<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 nine months ended August 31, 1998 and
is qualified in its entirety by reference to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> nov-30-1998
<PERIOD-END> aug-31-1998
<CASH> 54,068
<SECURITIES> 0
<RECEIVABLES> 2,217,110
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 30,044,172
<DEPRECIATION> 6,188,661
<TOTAL-ASSETS> 38,598,908
<CURRENT-LIABILITIES> 18,504,030
<BONDS> 9,223,729
0
0
<COMMON> 3,991
<OTHER-SE> 5,526,848
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</TABLE>
