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Previous: EMPIRE STATE MUNICIPAL EXEMPT TRUST GUARANTEED SERIES 55, 497J, 1996-08-05 |
Next: AMERINDO INVESTMENT ADVISORS INC, SC 13D, 1996-08-05 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8--K/A
AMENDMENT NO. 1
CURRENT REPORT
Filed Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported) May 23, 1996
----------------
PONDER INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-18656 75-2268672
- --------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
5005 Riverway, Suite 550, Houston, Texas 77056
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 965-0653
----------------------------
511 Commerce Road, P.O. Drawer 2229, Alice, Texas 78332
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
CONTENTS PAGE
STATEMENT OF DIRECTORS' RESPONSIBILITIES 1
AUDITORS' REPORT 2
COMBINED STATEMENT OF REVENUES AND EXPENSES 3
COMBINED STATEMENT OF ASSETS, LIABILITIES
AND STOCKHOLDERS' EQUITY 4
COMBINED CASH FLOW STATEMENT 5
COMBINED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY 6
NOTES AND ACCOUNTING POLICIES 7 - 14
(b) Pro Forma Financial Information.
The pro forma condensed consolidated balance sheet as of May 31, 1996, required
by this item, has been filed in the Ponder Industries, Inc. (Ponder), Quarterly
Report dated May 31, 1996 on Form 10Q, and is omitted herefrom in reliance upon
general instruction B.3. of this form.
The accompanying pro forma condensed consolidated statements of operations of
Ponder for the nine months ended May 31, 1996, and the fiscal year ended August
31, 1995, give effect to the acquisition by Ponder of all of the outstanding
common shares of Panther Oil Tools (UK) Ltd. (Panther) and certain assets of
Villain Ltd. (Villain), a Jersey company.
(c) Exhibits.
Exhibit 2.1 Stock Purchase Agreement
dated May 23, 1996, among
Ponder Energy Services, Inc.,
Panther Oil Tools (UK) Ltd.
and Panther Oil Tools Ltd.
(incorporated by reference
herein to Exhibit 2.1 to the
Registrant's Current Report
on Form 8-K filed on May 23,
1996).
Exhibit 2.2 Asset Purchase Agreement
dated May 23, 1996, among
Ponder Energy Services, Inc.,
Villain Ltd. and John Le
Seelleur, Mel Maitland and
Wayne Tynen (incorporated by
reference herein to Exhibit
2.2 to the Registrant's
Current Report on Form 8-K
filed on May 23, 1996).
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
PONDER INDUSTRIES, INC.
By /s/ Eugene L. Butler
----------------------------------------------------
Eugene L. Butler
Executive Vice President and Chief Financial Officer
(Principal Accounting Officer)
DATE: August 5, 1996.
<PAGE> 4
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
ANNUAL ACCOUNTS
YEARS ENDED 31 MARCH
<TABLE>
<CAPTION>
CONTENTS PAGE
<S> <C>
STATEMENT OF DIRECTORS' RESPONSIBILITIES 1
AUDITORS' REPORT 2
COMBINED STATEMENT OF REVENUES AND EXPENSES 3
COMBINED STATEMENT OF ASSETS, LIABILITIES
AND STOCKHOLDERS' EQUITY 4
COMBINED CASH FLOW STATEMENT 5
COMBINED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY 6
NOTES AND ACCOUNTING POLICIES 7 - 14
</TABLE>
<PAGE> 5
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Legislation requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that period. In preparing
those financial statements, the directors are required to
* select suitable accounting policies and then apply them consistently;
* make judgments and estimates that are reasonable and prudent;
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and enable them to ensure that the financial statements comply with the
Companies Act 1985. They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
1
<PAGE> 6
AUDITORS' REPORT TO THE SHAREHOLDERS OF
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
We have audited the combined financial statements on pages 3 to 14 of Panther
Oil Tools (UK) Limited and Villain Limited, a Jersey Company, collectively
referred to as the companies, which have been prepared under the accounting
policies set out on page 6.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described on page 1 Panther Oil Tools (UK) Limited's directors are
responsible for the preparation of the financial statements. It is our
responsibility to form an independent opinion, based on our audit, on those
statements and to report our opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards. An audit
includes examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of the
significant estimates and judgments made by the directors in the preparation
of the financial statements, and of whether the accounting policies are
appropriate to the companies combined circumstances, consistently applied and
adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the combined financial
statements are free from material misstatement, whether caused by fraud or
other irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the combined financial
statements.
OPINION
In our opinion the combined financial statements give a true and fair view of
the state of affairs of the companies as at 31 March 1995 and 1996 and of the
net income for the three years ended 31 March 1996.
Chartered Accountants
Registered Auditors
Aberdeen
Date
2
<PAGE> 7
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
COMBINED STATEMENT OF REVENUES AND EXPENSES
YEARS ENDED 31 MARCH
<TABLE>
<CAPTION>
Notes 31/3/96 31/3/95 31/3/94
----- --------- --------- ---------
L. L. L.
<S> <C> <C> <C> <C>
REVENUES 1,751,691 1,715,791 1,282,669
DIRECT COSTS 958,299 1,087,920 837,986
--------- --------- ---------
GROSS PROFIT 793,392 627,871 444,683
ADMINISTRATIVE EXPENSES 418,653 324,342 342,427
--------- --------- ---------
OPERATING INCOME 374,739 303,529 102,256
OTHER (INCOME)/EXPENSE
Interest income - (82) (353)
Interest expense 39,873 59,946 61,045
--------- --------- ---------
INCOME/(LOSS) BEFORE TAX 2 334,866 243,665 41,564
PROVISION FOR TAX 3 45,072 56,261 (30,931)
--------- --------- ---------
NET INCOME/(LOSS) 289,794 187,404 72,495
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
All amounts relate to continuing operations.
There were no recognised gains or losses other than the net income for each
year.
3
<PAGE> 8
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
COMBINED STATEMENT OF ASSETS, LIABILITIES
AND STOCKHOLDERS' EQUITY
YEARS ENDED 31 MARCH
<TABLE>
<CAPTION>
Notes 31/3/96 31/3/95
----- --------- ---------
<S> <C> <C> <C>
ASSETS L. L.
CURRENT ASSETS
Cash and cash equivalents - 78
Accounts receivable 5 440,411 287,848
Prepaid expenses 5 27,145 26,487
--------- ---------
467,556 314,413
--------- ---------
PROPERTY AND EQUIPMENT
Plant and equipment 2,132,157 1,916,866
Motor vehicles 98,837 68,126
--------- ---------
2,230,994 1,984,992
Less Accumulated depreciation 984,823 874,124
--------- ---------
Total property and equipment, net 4 1,246,171 1,110,868
--------- ---------
TOTAL ASSETS 1,713,727 1,425,281
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities 309,557 384,021
Bank overdraft 300,077 214,489
Current obligations under capital leases 123,013 74,142
--------- ---------
Total current liabilities 6 732,647 672,652
--------- ---------
LONG TERM DEBT
Capital leases 57,493 9,779
DEFERRED TAX 9 111,968 72,028
--------- ---------
TOTAL LIABILITIES 902,108 754,459
--------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
10,000 Ordinary shares of L.1 each
issued and fully paid 10 10,000 10,000
375,000 Cumulative redeemable preference
shares of L.1 each 10 375,000 375,000
Retained earnings 426,619 285,822
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 811,619 670,822
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 1,713,727 1,425,281
========= =========
</TABLE>
4
<PAGE> 9
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
COMBINED CASH FLOW STATEMENT
YEARS ENDED 31 MARCH
<TABLE>
<CAPTION>
Notes 1996 1995 1994
----- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
L. L. L. L. L. L.
NET CASH INFLOW/
(OUTFLOW) FROM
OPERATING ACTIVITIES 15 300,389 405,799 320,564
RETURNS ON INVESTMENTS
AND SERVING OF FINANCE
Interest received - 82 353
Interest paid (39,873) (59,946) (61,045)
Profit withheld by Villain Ltd (148,997) (67,065) (138,505)
-------- ------- --------
NET CASH OUTFLOW
FROM RETURNS ON
INVESTMENTS AND
SERVICING OF FINANCE (188,870) (126,929) (199,197)
TAXATION
UK Corporation tax
recovered/(paid) - - (279)
INVESTING ACTIVITIES
Purchase of tangible fixed assets (467,723) (957,971) (91,393)
Sale of tangible fixed assets 394,452 645,056 257,310
-------- ------- --------
NET CASH INFLOW FROM
INVESTING ACTIVITIES (73,271) (312,915) 165,917
-------- -------- --------
NET CASH INFLOW/(OUTFLOW)
BEFORE FINANCING 38,248 (34,045) 287,005
NET CASH INFLOW/(OUTFLOW)
FROM FINANCING
Capital lease payments (123,914) (349,805) (207,422)
Share capital - 200,000 -
-------- ------- --------
(123,914) (149,805) (207,422)
-------- -------- --------
INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS 17 (85,666) (183,850) 79,583
======== ======== ========
</TABLE>
5
<PAGE> 10
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
COMBINED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED 31 MARCH
<TABLE>
<CAPTION>
Share capital
Ordinary Preference Total
Number L. Number L. L.
------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
Balance 1/4/93 10,000 10,000 175,000 175,000 185,000
Change in year - - - - -
------ ------ ------- ------- -------
Balance 31/3/94 10,000 10,000 175,000 175,000 185,000
Issue of shares - - 200,000 200,000 200,000
------ ------ ------- ------- -------
Balance 31/3/95 10,000 10,000 375,000 375,000 385,000
Change in year - - - - -
------ ------ ------- ------- -------
Balance 31/3/96 10,000 10,000 375,000 375,000 385,000
====== ====== ======= ======= =======
Stockholders' equity
</TABLE>
<TABLE>
<CAPTION>
Total
Share Retained Stockholders'
Capital Earnings Equity
------- ------- -------
<S> <C> <C> <C>
L. L. L.
Balance 1/4/93 185,000 231,493 416,493
Net income - 72,495 72,495
Less withheld by Villain - (138,505) (138,505)
---- ------- ------- -------
Balance 31/3/94 185,000 165,483 350,483
Net income - 187,404 187,404
Less withheld by Villain - (67,065) (67,065)
----
Issue of shares 200,000 - 200,000
------- ------- -------
Balance 31/3/95 385,000 285,822 670,822
Net income - 289,794 289,794
Less withheld by Villain - (148,997) (148,997)
---- ------- ------- -------
Balance 31/3/96 385,000 426,619 811,619
======= ======= =======
</TABLE>
6
<PAGE> 11
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
NOTES AND ACCOUNTING POLICIES
YEARS ENDED 31 MARCH
1. ACCOUNTING POLICIES
(a) BASIS OF ACCOUNTING
The combined financial statements have been prepared under the historical
cost convention. Inter company transactions have been eliminated in
preparing the combined statements.
(b) BASIS OF COMBINATION
The combined accounts incorporate the accounts of Panther Oil Tools (UK)
Limited together with the fixed assets, equivalent shareholders funds,
revenues and related direct expenses generated by the aforementioned
assets of Villain Limited. Villain Limited is a company incorporated in
Jersey, Channel Islands whose aforementioned assets have subsequently been
acquired by Ponder Industries, Inc., a Delaware Corporation along with the
whole of the issued share capital of Panther Oil Tools (UK) Limited.
(c) TANGIBLE FIXED ASSETS AND DEPRECIATION
Tangible fixed assets are depreciated by the straight line method over
their anticipated useful lives at the following annual rates:
Plant and Equipment 12.5% and 20%
Motor Vehicles 25%
(d) DEFERRED TAXATION
Provision is made for deferred tax using the liability method, for all
timing differences. Deferred taxation is computed at the rates of tax
estimated to be applicable when the timing differences reverse.
(e) TURNOVER
Turnover represents sales at invoice value less trade discounts allowed
and excluding value added tax.
(f) FOREIGN CURRENCIES
Monetary assets and liabilities denominated in foreign currencies are
translated at the rate of exchange ruling at the balance sheet date.
Transactions in foreign currencies are recorded at the rate ruling at the
date of the transaction.
All exchange differences are taken to the statement of revenues and
expenses.
(g) LEASE AND HIRE PURCHASE AGREEMENTS
Where motor vehicles and rental tools are acquired under hire purchase
agreements and finance leases, the assets are capitalised at an amount
representing the equivalent outright purchase price of such assets and
included in tangible fixed assets. The capital element of future rentals
is treated as a liability. The interest element is charged to the
statement of revenues and expenses account over the period of the lease.
Leasing charges in respect of operating leases are recognised in the
profit and loss account over the lives of the lease agreements as
incurred.
Rental tools available for hire are capitalised and income derived
therefrom is credited to the statement of revenues and expenses as it
arises.
7
<PAGE> 12
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
NOTES AND ACCOUNTING POLICIES (Continued)
YEARS ENDED 31 MARCH
<TABLE>
<S> <C> <C> <C> <C>
2. NET INCOME ON ORDINARY ACTIVITIES Combined
BEFORE TAXATION 1996 1995 1994
------- ------- -------
L. L. L.
The net income on ordinary activities
before taxation is after charging:
Auditors' remuneration - audit fee 2,850 2,750 2,500
Depreciation written off tangible
fixed assets 215,331 244,002 281,342
Operating lease rentals - plant and machinery 181,965 131,715 239,708
- buildings 23,200 23,200 18,000
3. TAX ON ORDINARY ACTIVITIES Combined
1996 1995 1994
------- ------- -------
L. L. L.
Corporation tax on the net income
for the year at 25% (1995 25%) 5,132 - -
Deferred taxation 39,940 56,650 (30,931)
Overprovision of tax charge in 1994 - (389) -
------- ------- -------
45,072 56,261 (30,931)
======= ======= =======
U.K. tax losses available for carry forward are now estimated to exceed L.126,000.
These losses can be carried forward indefinitely. The corporation tax charge is made
up as follows:
Gains tax payable on capital 85,000 - -
Offset against trading losses 64,469 - -
------- ------- -------
20,531 - -
======= ======= =======
Payable at 25% 5,132 - -
======= ======= =======
</TABLE>
8
<PAGE> 13
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
NOTES AND ACCOUNTING POLICIES (Continued)
YEARS ENDED 31 MARCH
<TABLE>
<S> <C> <C> <C> <C>
4. FIXED ASSETS - TANGIBLE Plant & Motor
Equipment Vehicles Total
--------- ------- ---------
L. L. L.
COST
At 1/4/94 1,546,127 54,868 1,600,995
Additions 953,147 24,380 977,527
Disposals (582,408) (11,122) (593,530)
--------- ------- ---------
At 31/3/95 1,916,866 68,126 1,984,992
========= ======= =========
At 1/4/95 1,916,866 68,126 1,984,992
Additions 657,511 30,711 688,222
Disposals (442,220) - (442,220)
--------- ------- ---------
At 31/3/96 2,132,157 98,837 2,230,994
========= ======= =========
AGGREGATE DEPRECIATION
At 1/4/94 834,242 34,802 869,044
Charge for year 231,149 12,853 244,002
Eliminated on disposals (230,812) (8,110) (238,922)
--------- ------- ---------
At 31/3/95 834,579 39,545 874,124
========= ======= =========
At 1/4/95 834,579 39,545 874,124
Charge for year 201,898 13,433 215,331
Eliminated on disposals (104,632) - (104,632)
--------- ------- ---------
At 31/3/96 931,845 52,978 984,823
========= ======= =========
NET BOOK VALUE
At 31/3/95 1,082,287 28,581 1,110,868
========= ======= =========
At 31/3/96 1,200,312 45,859 1,246,171
========= ======= =========
5. DEBTORS
1996 1995
------- ---------
L. L.
Accounts receivable
Receivables over 10% thereof
(1996: Candecca Resources Ltd) 85,085
Other 202,763
440,411
Prepayments 27,145 26,487
------- ---------
467,556 314,335
======= =========
</TABLE>
9
<PAGE> 14
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
NOTES AND ACCOUNTING POLICIES (Continued)
YEARS ENDED 31 MARCH
<TABLE>
<S> <C> <C> <C> <C>
6. CREDITORS Combined
1996 1995
------ ------
L. L. L.
Bank overdraft (secured) 300,077 214,489
Accounts payable 156,406 335,097
Corporation tax 5,132 -
Other taxes and social security 43,625 4,530
Other creditors 55,685 14,216
Amounts due to Panther Oil Tools Ltd
(parent undertaking) 48,709 30,178
-------
309,557
Capital leases 123,013 74,142
------- -------
732,647 672,652
======= =======
Amounts falling due after more than
one year:
Capital leases 57,493 9,779
======= =======
</TABLE>
The bank has an overdraft facility of L.300,000 which is secured by a full
mortgage debenture over the whole property and undertaking of Panther Oil
Tools (UK) Limited and a personal guarantee of L.50,000 by John Le
Seelleur and Charles Tynon.
The hire purchase instalments due after more than one year are payable
within two to five years and are secured on plant and machinery.
7. LEASE COMMITMENTS
Operating Leases - Property
<TABLE>
<S> <C>
The company has non-cancellable operating
lease commitments to pay during the next five L.
years at L.23,200 per annum as follows:
Inverurie 10,700
Great Yarmouth 12,500
-------
23,200
</TABLE> =======
8. CONCENTRATION OF CREDIT RISK
The companies are heavily dependent on the oil industry for their
business. They are therefore subject to the ups and downs of the oil
industry. The company had one significant trade receivable (Candecca
Resources Limited) at 31 March 1996 as disclosed in note 5 above.
10
<PAGE> 15
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
NOTES AND ACCOUNTING POLICIES (Continued)
YEARS ENDED 31 MARCH
<TABLE>
<S> <C> <C> <C>
9. PROVISION FOR LIABILITIES AND Combined
CHARGES - DEFERRED TAXATION 1996 1995
------- -------
L. L.
At 1 April 1995 72,028 15,378
Charged to profit and loss account 39,940 56,650
------- -------
At 31 March 1996 111,968 72,028
======= =======
Deferred taxation has been fully provided
in respect of:
Accelerated capital allowances 143,675 94,435
Tax losses (31,707) (22,407)
------- -------
111,968 72,028
======= =======
10. SHARE CAPITAL Combined
1996 1995
------- -------
L. L.
Authorised:
10,000 Ordinary shares of L.1 each 10,000 10,000
======= =======
375,000 Cumulative redeemable preference shares 375,000 375,000
======= =======
Allotted, issued and fully paid:
10,000 Ordinary shares of L.1 each 10,000 10,000
======= =======
375,000 Cumulative redeemable preference shares 375,000 375,000
======= =======
</TABLE>
There are no preference dividends in arrears and no restrictions on
retained earnings. The preference shares have no final dividend
entitlement on redemption terms.
11
<PAGE> 16
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
NOTES AND ACCOUNTING POLICIES (Continued)
YEARS ENDED 31 MARCH
11. ULTIMATE PARENT UNDERTAKING
Panther Oil Tools (UK) Limited was a subsidiary of Panther Oil Tools
Limited, a Jersey, Channel Islands registered company as at 31 March 1996.
12. RELATED PARTY TRANSACTIONS
During the period Panther Oil Tools (UK) Limited traded with Oilfield
Consultants Limited, a company in which the director Mr. John Le Seelleur
is a director. All transactions were carried out on an arms length basis.
Those transactions were not material.
The company owed L.48,709 to the parent company at 31/3/96 as disclosed in
note 6.
13. COMMITMENTS
At 31 March 1996, Panther Oil Tools (UK) Limited had contracted to buy
fixed assets to the value of approximately L.320,000.
14. POST BALANCE SHEET EVENTS
After the year end Ponder Industries Limited acquired the whole of the
issued share capital of Panther Oil Tools (UK) Limited for 1,200,000
shares in Ponder Industries Limited (par value of L0.01 per share).
Ponder Industries Limited acquired the assets of Villain Limited for U.S.$
1,250,000.
12
<PAGE> 17
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
NOTES AND ACCOUNTING POLICIES (Continued)
YEARS ENDED 31 MARCH
<TABLE>
<S> <C> <C> <C> <C>
15. NET CASH INFLOW/(OUTFLOW)
FROM OPERATING ACTIVITIES 1996 1995 1994
-------- -------- --------
L. L. L.
Operating income/(loss) 374,739 303,529 102,256
Depreciation of tangible fixed assets 215,331 244,002 281,342
Gain on sale of fixed assets (56,864) (290,448) (108,800)
Decrease/(increase) in trade receivables (125,715) 4,464 49,081
Increase in other receivables (26,848) (43,000) (461)
Decrease in prepayments and accrued income (658) (1,068) -
(Increase)/decrease in amounts owed
by group undertakings - 63,453 (8,148)
(Decrease)/increase in trade payables (178,691) 116,244 1,141
(Decrease)/increase in other payables 5,470 (23,573) 6,777
Increase/(decrease) in amounts owed to
group undertakings 54,530 30,178 -
Increase/(decrease) in other taxation
and social security 39,095 2,018 (2,624)
-------- -------- --------
NET CASH INFLOW/(OUTFLOW) FROM
OPERATING ACTIVITIES 300,389 405,799 320,564
======== ======== ========
16. ANALYSIS OF CHANGES IN FINANCING
DURING THE PERIOD Share
Capital
-------
L.
Balance at 1 April 1993 and 31 March 1994 185,000
Shares issued for cash in 1995 200,000
--------
Balance at 31 March 1995 385,000
========
Balance at 31 March 1996 385,000
========
</TABLE>
13
<PAGE> 18
PANTHER OIL TOOLS (UK) LIMITED AND VILLAIN LIMITED
NOTES AND ACCOUNTING POLICIES (Continued)
YEARS ENDED 31 MARCH
<TABLE>
<S> <C> <C> <C> <C>
1996
17. ANALYSIS OF CHANGES IN CASH AND CASH --------
EQUIVALENTS DURING THE PERIOD L.
Balance at 1 April 1993 (110,144)
Net Cash inflow/outflow 79,583
--------
Balance at 31 March 1994 (30,561)
Net cash inflow/outflow (183,850)
--------
Balance at 31 March 1995 (214,411)
Net cash inflow/outflow (85,666)
--------
Balance at 31 March 1996 (300,077)
========
18. ANALYSIS OF THE BALANCE OF CASH AND
CASH EQUIVALENTS AS SHOWN IN THE
BALANCE SHEET 1996 1995 1994
-------- ------- -------
L. L. L.
Cash at bank and in hand - 78 7,981
Bank overdrafts (300,077) (214,489) (38,542)
-------- ------- -------
(300,077) (214,411) (30,561)
======== ======= =======
Change in year (85,666) (183,850) 79,583
======== ======= =======
</TABLE>
14
<PAGE> 19
PONDER INDUSTRIES, INC., AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
The accompanying pro forma condensed consolidated statements of operations of
Ponder for the nine months ended May 31, 1996, and the fiscal year ended August
31, 1995, give effect to the acquisition by Ponder of all of the outstanding
common shares of Panther Oil Tools (UK) Ltd. (Panther) and certain assets of
Villain Ltd. (Villain), a Jersey company. The acquisition was effective as of
April 1, 1996, for $1,250,000 and 1,200,000 shares of Ponder's restricted
stock. The cash portion of the purchase price and the acquisition related
expenses were funded by a portion of the net proceeds totaling $9,855,000 of a
$10,950,000 placement of convertible debentures completed on April 26, 1996.
The remainder of the net proceeds will be used to fund subsequent future
acquisitions, working capital and for general corporate purposes. The
acquisition has been accounted for as a purchase. The pro forma condensed
consolidated statements of operations are based on the historical consolidated
statements of operations of Ponder for the nine months ended May 31, 1996
(which includes the operations of Panther and Villain for the two months ended
May 31, 1996), and for the fiscal year ended August 31, 1995, and on the
historical combined financial statements of Panther and Villain for the seven
months ended March 31, 1996, and for the year ended August 31, 1995. The pro
forma condensed consolidated statements of operations include the adjustments
described below. The pro forma condensed consolidated statements of operations
assume that the above-described acquisition and the portion of the net proceeds
of the convertible debentures related to the above acquisition occurred at the
beginning of each period presented.
The pro forma condensed consolidated statements of operations and the notes
thereto are based upon available information and certain estimates and
assumptions related to the accounting for the above-described acquisition that
is subject to final determination. The pro forma financial information is not
necessarily indicative of the results that would have occurred had such
transactions actually taken place at the beginning of the periods specified nor
does such information purport to project the results of operations for any
future date or period.
<PAGE> 20
PONDER INDUSTRIES, INC., AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED MAY 31, 1996
<TABLE>
<CAPTION>
Panther and
Ponder Villain,
Industries, Combined
Inc., Nine for the Seven
Months Ended Months Ended Pro Forma Ponder
May 31, 1996 March 31, 1996 Adjustments Pro Forma
------------ -------------- ----------- ------------
<S> <C> <C> <C> <C>
TOOL RENTALS AND SALES $ 7,184,421 $ 1,982,439 $ - $ 9,166,860
COSTS OF SERVICE AND SALES 3,120,126 907,342 - 4,027,468
------------ ----------- ---------- ------------
Gross profit 4,064,295 1,075,097 - 5,139,392
GENERAL, ADMINISTRATIVE AND OPERATING
EXPENSES 4,644,697 428,077 - 5,072,774
DEPRECIATION 520,329 194,232 171,976(2) 886,537
INTEREST 444,251 37,974 103,543(3) 585,768
OTHER (199,699) - - (199,699)
INCOME TAX - 54,312 - 54,312
------------ ----------- ---------- ------------
Income (loss) from continuing
operations $ (1,345,283) $ 360,502 $ (275,519) $ (1,260,300)
============ =========== ========== ============
EARNINGS (LOSS) PER SHARE FROM CONTINUING
OPERATIONS $ (.13)
============
WEIGHTED AVERAGE SHARES OUTSTANDING
9,450,998
============
</TABLE>
<PAGE> 21
PONDER INDUSTRIES, INC., AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1995
<TABLE>
<CAPTION>
Ponder Panther and
Industries, Villain,
Inc., Combined
Year Ended Year Ended Pro Forma Ponder
August 31, 1995 August 31, 1995 Adjustments Pro Forma
--------------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
TOOL RENTALS AND SALES $ 6,756,738 $ 2,316,053 $ - $ 9,072,791
COSTS OF SERVICE AND SALES 3,360,918 1,076,572 - 4,437,490
------------ ----------- ---------- -------------
Gross profit 3,395,820 1,239,481 - 4,635,301
GENERAL, ADMINISTRATIVE AND OPERATING
EXPENSES 4,280,496 472,621 - 4,753,117
DEPRECIATION 552,944 368,148 294,816(2) 1,215,908
INTEREST 470,903 79,699 157,405(3) 708,007
GAIN ON DISPOSAL OF ASSETS (1,319,637) - - (1,319,637)
OTHER (148,354) - - (148,354)
INCOME TAX - 67,852 - 67,852
------------ ----------- ---------- -------------
Income (loss) from continuing
operations $ (440,532) $ 251,161 $ (452,221) $ (641,592)
============ =========== ========== =============
EARNINGS (LOSS) PER SHARE FROM CONTINUING
OPERATIONS $ (.08)
=============
WEIGHTED AVERAGE SHARES OUTSTANDING 7,867,437
=============
</TABLE>
<PAGE> 22
PONDER INDUSTRIES, INC., AND SUBSIDIARIES
NOTES TO THE PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 1996
1. GENERAL:
The accompanying pro forma condensed consolidated statements of operations of
Ponder for the nine months ended May 31, 1996, and the fiscal year ended August
31, 1995, give effect to the acquisition by Ponder of all of the outstanding
common shares of Panther and certain assets of Villain. The acquisition was
effective as of April 1, 1996, for $1,250,000 and 1,200,000 shares of Ponder's
restricted stock. The cash portion of the purchase price and the acquisition
related expenses were funded by a portion of the net proceeds totaling
$9,855,000 of a $10,950,000 placement of convertible debentures completed on
April 26, 1996. The remainder of the net proceeds will be used to fund
subsequent future acquisitions, working capital and for general corporate
purposes. The acquisition has been accounted for as a purchase. The pro forma
condensed consolidated statements of operations are based on the historical
consolidated statements of operations of Ponder for the nine months ended May
31, 1996 (which includes the operations of Panther and Villain for the two
months ended May 31, 1996), and for the fiscal year ended August 31, 1995, and
on the historical combined financial statements of Panther and Villain for the
seven months ended March 31, 1996, and for the year ended August 31, 1995. The
pro forma condensed consolidated statements of operations include the
adjustments described below. The pro forma condensed consolidated statements
of operations assume that the above-described acquisition and the portion of
the net proceeds of the convertible debentures related to the above acquisition
occurred at the beginning of each period presented.
2. FAIR VALUE ADJUSTMENTS:
Adjustment to reflect the effect on depreciation expense of recording the fair
value of property and equipment acquired.
3. CONVERTIBLE DEBENTURES:
Adjustment to reflect the pro rata portion of interest expense and amortization
of the discount on the convertible debentures related to the pro rata portion
of the net proceeds associated with the Panther and Villain acquisition.
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