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 Exchange Act of 1934
Date of Report (Date of earliest event reported) January 13, 1998
PONDER INDUSTRIES, INC.
-----------------------
(Exact name of registrant as specified in its charter)
Delaware 0-18656 75-2268672
-------- ------- ----------
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
5005 Riverway Drive, Suite 550, Houston, Texas 77056
----------------------------------------------------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (713) 965-0653
--------------
Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
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Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Businesses Acquired.
Fishing Tools, Inc.
Page
Number
------
1. Report of Independent Public Accountants 3
2. Balance Sheet as of September 30, 1997 4
3. Statement of Operations for the Nine Months Ended September 30, 1997
5
4. Statement of Stockholders' Equity for the Nine Months Ended September 30, 1997
6
5. Statement of Cash Flows for the Nine Months Ended
September 30, 1997 7
6. Notes to Financial Statements 8
(b) Pro Forma Condensed Financial Information (Unaudited).
1. Pro Forma Condensed Financial Statements Introduction 11
2. Pro Forma Condensed Balance Sheet as of August 31, 1997 (Unaudited)
12
3. Pro Forma Condensed Balance Sheet as of November 30, 1997 (Unaudited)
14
4. Pro Forma Condensed Statement of Operations for the Year Ended August 31, 1997
(Unaudited) 16
5. Pro Forma Condensed Statement of Operations for the Three Months Ended
November 30, 1997 (Unaudited) 17
6. Notes to Pro Forma Condensed Financial Statements 18
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders of
Ponder Industries, Inc.:
We have audited the accompanying balance sheet of Fishing Tools, Inc. (a
Louisiana corporation), as of September 30, 1997, and the related statements of
operations, stockholders' equity and cash flows for the nine months then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fishing Tools, Inc., as of
September 30, 1997, and the results of its operations and its cash flows for the
nine months then ended in conformity with generally accepted accounting
principles.
/S/ ARTHUR ANDERSEN LLP
San Antonio, Texas
December 19, 1997
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FISHING TOOLS, INC.
BALANCE SHEET - - SEPTEMBER 30, 1997
(In Thousands, Except Share Information)
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 149
Receivables, net of allowance for doubtful accounts of $73 1,368
Prepaid expenses and other 39
--------
Total current assets 1,556
--------
PROPERTY AND EQUIPMENT 10,033
Less- Accumulated depreciation and amortization (8,243)
--------
1,790
--------
OTHER ASSETS 3
--------
Total assets $ 3,349
========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current maturities of long-term debt $ 68
Accounts payable 436
Accrued liabilities and other 56
--------
Total current liabilities 560
--------
LONG-TERM DEBT, less current maturities 726
--------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par value; authorized 10,000 shares, issued 895 shares as of September 30, 1997,
of which 520 shares are held in treasury 40
Additional paid-in capital 117
Retained earnings 2,908
Treasury stock, at cost (1,002)
--------
Total stockholders' equity 2,063
--------
Total liabilities and stockholders' equity $ 3,349
========
The accompanying notes are an integral part of this financial statement.
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FISHING TOOLS, INC.
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(In Thousands)
TOOL RENTAL AND SALES $ 4,317
COST OF SERVICES AND SALES 2,018
-------
Gross profit 2,299
-------
EXPENSES:
Operating 1,142
General and administrative 669
-------
1,811
-------
OTHER INCOME (EXPENSE):
Interest, net (36)
Gain on sale of assets 2
-------
(34)
-------
NET INCOME $ 454
=======
The accompanying notes are an integral part of this financial statement.
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FISHING TOOLS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(In Thousands, Except Share Information)
Additional
Shares Common Paid-In Retained Treasury
Issued Stock Capital Earnings Stock Total
------- ------- ---------- -------- --------- -------
BALANCE, December 31, 1996 895 $ 40 $ 117 $ 2,886 $(1,002) $ 2,041
Distributions to stockholders -- -- -- (432) -- (432)
Net income -- -- -- 454 -- 454
------- ------- ------- ------- ------- -------
BALANCE, September 30, 1997 895 $ 40 $ 117 $ 2,908 $(1,002) $ 2,063
======= ======= ======= ======= ======= =======
The accompanying notes are an integral part of this financial statement.
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FISHING TOOLS, INC.
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 454
Adjustments to reconcile net income to net cash provided by operating activities-
Depreciation and amortization 147
Gain on disposal of assets (2)
Net change in operating assets and liabilities-
Receivables (209)
Prepaid expenses and other (32)
Accounts payable 91
Accrued liabilities and other (3)
-----
Net cash provided by operating activities 446
-----
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (379)
Proceeds from asset sales 10
-----
Net cash used in investing activities (369)
-----
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of long-term debt (445)
Proceeds from long-term debt borrowings 800
Distributions to shareholders (432)
-----
Net cash used in financing activities (77)
-----
CASH AND CASH EQUIVALENTS:
Increase (decrease) --
Beginning of period 149
-----
End of period $ 149
=====
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid during the period for-
Interest $ 36
=====
The accompanying notes are an integral part of this financial statement.
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FISHING TOOLS, INC.
NOTES TO FINANCIAL STATEMENTS
(Dollars in Thousands)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Business
Fishing Tools, Inc. (FTI or the Company), specializes in the downhole recovery
of unwanted obstructions in the bore holes of oil and gas wells through the
utilization of specifically designed tools, known as "fishing tools." The
Company is engaged in the business of renting fishing tools as well as providing
supervisory personnel for fishing operations. As of September 30, 1997, the
Company operated out of Harvey, Golden Meadow and New Iberia, Louisiana, and
Alice, Texas.
In November 1997, the Company and Ponder Industries, Inc. (Ponder), entered into
an agreement whereby Ponder agreed to purchase all of the outstanding stock of
FTI (Acquisition) for cash consideration of $6,500 and $1,000 in Ponder common
stock.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents.
Parts and Supplies
Parts and supplies for the manufacturing and repair of rental tools and parts
used in conjunction with the rental of tools are expensed when purchased.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using the
straight-line method at rates based on estimated lives of the respective assets.
When assets are retired or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts and any resulting gain or
loss is recognized in income for the period. The cost of maintenance and repairs
is charged to income as incurred; significant renewals and betterments are
capitalized. (See Note 2.)
Fair Value of Financial Instruments
The estimated fair values of the Company's financial instruments have been
determined by the Company using appropriate valuation methodologies and
approximate their recorded book values. The carrying values of the Company's
cash and cash equivalents, receivables, accounts payable and debt instruments
approximate their fair values.
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Revenue Recognition
Revenues are recorded when services have been provided or products have been
delivered.
Concentration of Credit Risk
The Company provides equipment and services to the oil and gas industry.
Concentration of credit risk with respect to trade receivables is reduced due to
the number of customers comprising the Company's customer base. Ongoing credit
evaluations of customers' financial condition are performed and, generally, no
collateral is required. During the nine months ended September 30, 1997, two
customers accounted for 11 percent and 10 percent, respectively, of the
Company's total sales. At September 30, 1997, two customers accounted for 21
percent and 13 percent, respectively, of the Company's accounts receivable.
Income Taxes
The Company has elected S Corporation status as defined by the Internal Revenue
Code, whereby the Company itself is not subject to taxation for federal
purposes. Under S Corporation status, the stockholders report their share of the
Company's taxable earnings or losses in their personal tax returns.
Consequently, the accompanying financial statements of the Company do not
include a provision for current or deferred federal income taxes. The Company
intends to terminate its S Corporation status concurrent with the effective date
of the Acquisition.
2. PROPERTY AND EQUIPMENT:
Property and equipment consists of the following
September 30,
1997 Asset Life
---- ----------
Land $ 171
Buildings and improvements 745 20 years
Rental tools and equipment 7,973 10 years
Shop equipment and tools 747 5 years
Transportation equipment 268 3 years
Furniture and fixtures 129 5 years
---------
$ 10,033
=========
3. LONG-TERM DEBT:
As of September 30, 1997, long-term debt consists of the following:
Vehicle note payable to a bank $ 14
Note payable to a bank 780
------
794
Less- Current maturities (68)
------
Long-term debt, excluding current maturities $ 726
======
The vehicle note payable to a bank requires monthly payments of principal and
interest of $2, bears interest at 6.75 percent, matures in June 1998 and is
secured by two vehicles.
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The note payable to a bank requires monthly payments of principal and interest
of $10 through April 2002 with the balance due in May 2002, bears interest at
8.5 percent and is secured by substantially all of the Company's assets.
Maturities of long-term debt as of September 30, 1997, were as follows:
1998 $ 68
1999 59
2000 64
2001 70
2002 533
------
$ 794
======
4. OPERATING LEASES:
The Company leases certain property and equipment under operating leases.
Minimum payments for operating leases having initial or remaining noncancelable
terms in excess of one year as of September 30, 1997, require payments of $26
for 1998. Total rent expense for all operating leases amounted to $36 for the
nine months ended September 30, 1997.
5. EMPLOYEE BENEFIT PLANS:
The Company sponsors a 401(k) plan (the Plan) which qualifies under Section
401(k) of the Internal Revenue Code for eligible employees. Eligible employees
may defer a portion of their annual compensation under the Plan subject to
maximum limitations. The Company will match 50 percent of employee contributions
up to 6 percent of their salary and additional contributions will be at the sole
discretion of the Company. The Company contributed matching funds of $36 in the
nine months ended September 30, 1997.
6. COMMITMENTS AND CONTINGENCIES:
At September 30, 1997, management of the Company is unaware of any pending or
threatened litigation against the Company.
7. SUBSEQUENT EVENTS (Unaudited):
In January 1998, FTI was acquired by Ponder for cash consideration of $6,500 and
the issuance of 644,496 shares of Ponder common stock to the shareholders of
FTI. Concurrent with the acquisition of FTI by Ponder, the indebtedness
described in Note 3 above was paid.
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PONDER INDUSTRIES, INC., AND SUBSIDIARIES
PRO FORMA CONDENSED FINANCIAL STATEMENTS
(Unaudited)
INTRODUCTION
(Dollars in Thousands, Except Per Share Amounts)
The following unaudited pro forma condensed financial statements include the
accounts of Ponder Industries, Inc. (a Delaware corporation), and subsidiaries
(the Company). All significant intercompany accounts and transactions have been
eliminated in consolidation. The pro forma condensed financial statements of the
Company have been adjusted to reflect the effects of the Company's acquisition
of Fishing Tools, Inc. (FTI) (a Louisiana corporation). FTI was acquired through
the issuance of 644,496 shares of the Company's common stock and cash
consideration of $6,500. The cash consideration was provided through an equity
placement consisting of the sale of 11 million shares of the Company's common
stock at $1 per share. Concurrent with this equity placement, the Company's
Senior Convertible Notes, which were placed in October 1997, were converted into
4 million shares of the Company's common stock. The transaction was recorded
using the purchase method of accounting. The purchase was completed in January
1998.
The Fishing Tools, Inc., column in the following condensed financial statements
reflects the preacquisition balance sheet and statement of operations accounts.
The pro forma financial statements do not include pro forma adjustments for
income taxes due to the net operating loss carryforwards available to the
Company.
The pro forma condensed financial statements assume the above-described
acquisition occurred as of September 1, 1996, for the condensed statement of
operations and as of August 31, 1997, for the condensed balance sheet.
Additionally, pro forma condensed statements are presented for the Company's
most recent interim period ended November 30, 1997.
In the opinion of management, all adjustments necessary to present fairly the
pro forma condensed financial statements have been made.
These pro forma condensed financial statements should be read in conjunction
with the historical financial statements and notes thereto for the fiscal year
ended August 31, 1997, included in the Company's Form 10-K and the Company's
quarterly report on Form 10-Q for the quarterly period ended November 30, 1997.
The pro forma condensed statements of operations are not necessarily indicative
of what actual results of operations would have been had the transaction
occurred at the beginning of the periods presented nor does it purport to
indicate the results of future operations of the Company.
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PONDER INDUSTRIES, INC., AND SUBSIDIARIES
PRO FORMA CONDENSED BALANCE SHEET
AUGUST 31, 1997
(Unaudited)
(In Thousands)
Ponder Pro Forma
Industries, Condensed
Inc., and Fishing Balance
Subsidiaries, Tools, Inc., Sheet,
August 31, September 30, Pro Forma August 31,
ASSETS 1997 1997 Adjustments 1997
------ ------------- ------------- ----------- -----------
CURRENT ASSETS:
Cash and cash equivalents $ 4 $ 149 $ 6,057(a) $ 6,210
Receivables, net 4,134 1,368 - 5,502
Parts and supplies 2,622 - 1,490(b) 4,112
Available for sale securities 800 - - 800
Prepaid expenses and other 46 39 - 85
------- ------- ------- -------
Total current assets 7,606 1,556 7,547 16,709
PROPERTY AND EQUIPMENT, net 17,105 1,790 4,086(c) 22,981
OTHER ASSETS 122 3 10(d) 135
DEFERRED ASSETS, net 423 - - 423
GOODWILL, net 1,361 - - 1,361
------- ------- ------- -------
Total assets $26,617 $ 3,349 $11,643 $41,609
======= ======= ======= =======
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PONDER INDUSTRIES, INC., AND SUBSIDIARIES
PRO FORMA CONDENSED BALANCE SHEET
AUGUST 31, 1997
(Unaudited)
(In Thousands)
Ponder Pro Forma
Industries, Condensed
Inc., and Fishing Balance
Subsidiaries, Tools, Inc., Sheet,
LIABILITIES AND August 31, September 30, Pro Forma August 31,
STOCKHOLDERS' EQUITY 1997 1997 Adjustments 1997
-------------------- ------------ --------------- ----------- -----------
CURRENT LIABILITIES:
Current maturities of long-term debt $ 1,899 $ 68 $ (68) (a) $ 1,899
Accounts and notes payable, trade 5,562 436 - 5,998
Accrued liabilities 2,203 56 - 2,259
--------- -------- --------- ---------
Total current liabilities 9,664 560 (68) 10,156
--------- -------- --------- ---------
LONG-TERM DEBT, less current maturities
7,458 726 (726) (a) 7,458
--------- -------- --------- ---------
OTHER LONG-TERM LIABILITIES 765 - - 765
--------- -------- --------- ---------
DEFERRED TAXES PAYABLE 881 - - 881
--------- -------- --------- ---------
CONVERTIBLE DEBENTURES 6,380 - - 6,380
--------- -------- --------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock 176 40 116 (e) 332
Additional paid-in capital 25,307 117 14,227 (e) 39,651
Cumulative foreign currency translation
adjustment 49 - - 49
Retained earnings (accumulated deficit) (23,696) 2,908 (2,908) (e) (23,696)
Note receivable for common stock (66) - - (66)
Deferred compensation (1) - - (1)
Unrealized loss on available for sale securities
(300) - - (300)
Treasury stock - (1,002) 1,002 (e) -
--------- -------- --------- ---------
Total stockholders' equity 1,469 2,063 12,437 15,969
--------- -------- --------- ---------
Total liabilities and stockholders' equity $ 26,617 $ 3,349 $ 11,643 $ 41,609
========= ======== ========= =========
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PONDER INDUSTRIES, INC., AND SUBSIDIARIES
PRO FORMA CONDENSED BALANCE SHEET
NOVEMBER 30, 1997
(Unaudited)
(In Thousands)
Ponder Pro Forma
Industries, Condensed
Inc., and Fishing Balance
Subsidiaries, Tools, Inc., Sheet,
November 30, December 31, Pro Forma November 30,
ASSETS 1997 1997 Adjustments 1997
------ -------------- --------------- ----------- --------------
CURRENT ASSETS:
Cash and cash equivalents $ 3 $ 16 $ 3,642(a) $ 3,661
Receivables, net 4,588 1,524 - 6,112
Parts and supplies 2,752 - 1,490(b) 4,242
Available for sale securities 800 - - 800
Prepaid expenses and other 546 13 - 559
-------- ------ ------- ---------
Total current assets 8,689 1,553 5,132 15,374
PROPERTY AND EQUIPMENT, net 16,955 1,743 3,983(c) 22,681
OTHER ASSETS 178 1 10(d) 189
DEFERRED ASSETS, net 77 - - 77
GOODWILL, net 1,341 - - 1,341
-------- ------ ------- ---------
Total assets $ 27,240 $3,297 $ 9,125 $ 39,662
======== ====== ======= =========
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PONDER INDUSTRIES, INC., AND SUBSIDIARIES
PRO FORMA CONDENSED BALANCE SHEET
NOVEMBER 30, 1997
(Unaudited)
(In Thousands)
Ponder Pro Forma
Industries, Condensed
Inc., and Fishing Balance
Subsidiaries, Tools, Inc., Sheet,
LIABILITIES AND November 30, December 31, Pro Forma November 30,
STOCKHOLDERS' EQUITY 1997 1997 Adjustments 1997
-------------------- -------------- ------------ ----------- -----------
CURRENT LIABILITIES:
Current maturities of long-term debt $ 1,878 $ 842 $ (842)(a) $ 1,878
Accounts and notes payable, trade 4,585 364 - 4,949
Accrued liabilities 1,876 58 - 1,934
--------- ------- --------- ---------
Total current liabilities 8,339 1,264 (842) 8,761
--------- ------- --------- ---------
LONG-TERM DEBT, less current maturities
7,635 - - 7,635
--------- ------- --------- ---------
OTHER LONG-TERM LIABILITIES 76 - - 76
--------- ------- --------- ---------
DEFERRED TAXES PAYABLE 830 - - 830
--------- ------- --------- ---------
SENIOR CONVERTIBLE NOTES 2,266 - (2,266)(a) -
--------- ------- --------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock 287 40 116 (e) 443
Additional paid-in capital 32,210 117 13,993 (e) 46,320
Cumulative foreign currency translation
adjustment 83 - - 83
Retained earnings (accumulated deficit)
(24,120) 2,878 (2,878)(e) (24,120)
Note receivable for common stock (66) - - (66)
Unrealized loss on available for sale
securities (300) - - (300)
Treasury stock - (1,002) 1,002 (e) -
--------- ------- --------- ---------
Total stockholders' equity 8,094 2,033 12,233 22,360
--------- ------- --------- ---------
Total liabilities and stockholders' equity
$ 27,240 $ 3,297 $ 9,125 $ 39,662
========= ======= ========= =========
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PONDER INDUSTRIES, INC., AND SUBSIDIARIES
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1997
(Unaudited)
(In Thousands, Except Share Information)
Ponder Pro Forma
Industries, Condensed
Inc., and Fishing Statement of
Subsidiaries, Tools, Inc., Operations,
for the for the For the
Year Ended Year Ended Year Ended
August 31, September 30, Pro Forma August 31,
1997 1997 Adjustments 1997
------------ ------------- ----------- ------------
TOOL RENTALS AND SALES $ 21,875 $ 5,782 $ - $ 27,657
COSTS OF SERVICE AND SALES 9,555 2,748 614 (f) 12,917
---------- ------- --------- ---------
Gross profit 12,320 3,034 (614) 14,740
---------- ------- --------- ---------
EXPENSES:
Operating 10,900 1,568 - 12,468
General and administrative 6,250 831 5 (g) 7,086
---------- ------- --------- ---------
17,150 2,399 5 19,554
---------- ------- --------- ---------
Operating income (loss) (4,830) 635 (619) (4,814)
OTHER INCOME (EXPENSE):
Interest, net (2,402) (44) 44 (h) (2,402)
Gain (loss) on sale of assets (534) 2 - (532)
Loss on write-down of assets (2,178) - - (2,178)
Other 23 - - 23
---------- ------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES (9,921) 593 (575) (9,903)
INCOME TAX EXPENSE - - - -
---------- ------- --------- ---------
NET INCOME (LOSS) $ (9,921) $ 593 $ (575) $ (9,903)
========== ======= ========= =========
BASIC LOSS PER SHARE $ (.73) $ (.34)
========== =========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
13,641,558 15,644,496 (e) 29,286,054
========== ========== ==========
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PONDER INDUSTRIES, INC., AND SUBSIDIARIES
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 1997
(Unaudited)
(In Thousands, Except Share Information)
Ponder Pro Forma
Industries, Condensed
Inc., and Fishing Statement of
Subsidiaries, Tools, Inc., Operations,
for the Three for the Three for the Three
Months Ended Months Ended Months Ended
November 30, December 31, Pro Forma November 30,
1997 1997 Adjustments 1997
------------- ----------------- ----------- ------------
TOOL RENTALS AND SALES $ 5,101 $ 1,598 $ - $ 6,699
COSTS OF SERVICE AND SALES 1,814 1,201 154 (f) 3,169
--------- ------- --------- ----------
Gross profit 3,287 397 (154) 3,530
--------- ------- --------- ----------
EXPENSES:
Operating 2,287 128 - 2,415
General and administrative 947 243 1 (g) 1,191
--------- ------- --------- ----------
3,234 371 1 3,606
--------- ------- --------- ----------
Operating income (loss) 53 26 (155) (76)
OTHER INCOME (EXPENSE):
Interest, net (443) (11) 11 (h) (443)
Gain (loss) on sale of assets (34) (1) - (35)
--------- ------- --------- ----------
INCOME (LOSS) BEFORE INCOME TAXES
(424) 14 (144) (554)
INCOME TAX EXPENSE - - - -
--------- ------- --------- ----------
NET INCOME (LOSS) $ (424) $ 14 $ (144) $ (554)
========= ======= ========= ==========
BASIC LOSS PER SHARE $ (.02) $ (.01)
========= =========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 25,029,799 15,644,496 (e) 40,674,295
========== ========== ==========
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PONDER INDUSTRIES, INC., AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 1997, AND AUGUST 31, 1997
(Unaudited)
(Dollars in Thousands, Except Share Information)
PRO FORMA BALANCE SHEET AND STATEMENT
OF OPERATIONS ADJUSTMENTS:
(a) Reflects proceeds of $2,500 in October 1997 for senior convertible notes
subsequently converted in January 1998 into 4 million shares of the
Company's common stock, proceeds of $11,000 from the sale of 11 million
shares of the Company's common stock, the cash consideration payment of
$6,500 for FTI (plus cash acquired) and the payment of acquired FTI debt.
(b) Reflects the estimated fair market value of acquired parts and supplies
which are capitalized by the Company and expensed when purchased by FTI.
(c) Reflects the consideration paid for FTI in excess of net working capital
acquired, assumed indebtedness and intangibles.
(d) Reflects two-year noncompetition agreement.
(e) Reflects the equity transactions discussed in (a) above, the elimination of
FTI's stockholders' equity accounts and the issuance of 644,496 shares of
the Company's common stock at approximately $1.55 per share to the
shareholders of FTI.
(f) Reflects depreciation on purchase price allocated to property and
equipment acquired.
(g) Reflects amortization of noncompetition agreement.
(h) Reflects interest expense reduction on payment of acquired FTI debt.
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SIGNATURE
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/ Gerald A. Slaughter
------------------------------
Senior Vice President and
Chief Financial Officer
DATE: March 19, 1998
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