|
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
|
For
The Quarterly Period Ended September 30,
2007
|
TEXAS
|
76-0509661
|
||
(State
or other jurisdiction
of
incorporation or organization)
|
(I.R.S.
Employer
Identification
Number)
|
||
7272
Pinemont, Houston
TX 77040
|
|||
(Address
of principal executive offices) (Zip
Code)
|
September
30, 2007
|
December
31, 2006
|
||
(Unaudited)
|
|||
ASSETS
|
|||
Current
assets:
|
|||
Cash
|
$ 3,929
|
$ 2,544
|
|
Trade
accounts receivable, net of allowances for doubtful
accounts
of $2,065 in 2007 and $1,482 in 2006
|
80,995
|
40,495
|
|
Inventories,
net
|
70,020
|
37,310
|
|
Prepaid
expenses and other current assets
|
2,095
|
652
|
|
Federal
income taxes recoverable
|
-
|
1,042
|
|
Deferred
income taxes
|
1,474
|
1,087
|
|
Total
current assets
|
158,513
|
83,130
|
|
Property
and equipment, net
|
16,574
|
9,944
|
|
Goodwill
and other intangibles net of amortization of
$1,878
in 2007 and $538 in 2006
|
97,347
|
23,428
|
|
Other
assets
|
802
|
305
|
|
Total
assets
|
$ 273,236
|
$ 116,807
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||
Current
liabilities:
|
|||
Current
portion of long-term debt
|
$ 3,077
|
$ 2,771
|
|
Trade
accounts payable
|
52,926
|
25,706
|
|
Accrued
wages and benefits
|
7,656
|
6,490
|
|
Federal
income taxes payable
|
2,440
|
-
|
|
Customer
advances
|
9,308
|
3,924
|
|
Other
accrued liabilities
|
6,469
|
4,770
|
|
Total
current liabilities
|
81,876
|
43,661
|
|
Long-term
debt, less current portion
|
93,862
|
35,174
|
|
Deferred
income taxes
|
2,056
|
2,242
|
|
Minority
interest in consolidated subsidiary
|
12
|
12
|
|
Shareholders'
equity:
|
|||
Series
A preferred stock, 1/10th
vote per
share; $1.00 par value;
liquidation
preference of $100 per share ($112 at September 30, 2007),
1,000,000
shares authorized; 1,122 shares issued and outstanding
|
1
|
1
|
|
Series
B convertible preferred stock, 1/10th
vote per
share; $1.00
par
value; $100 stated value; liquidation preference of $100 per
share
($1,500 at September 30, 2007); 1,000,000 shares
authorized;
15,000 shares
issued and outstanding
|
15
|
15
|
|
Common
stock, $0.01 par value, 100,000,000 shares authorized;
6,326,089
and 5,124,134 shares issued and outstanding, respectively
|
63
|
51
|
|
Paid-in
capital
|
54,295
|
6,147
|
|
Retained
earnings
|
41,855
|
30,303
|
|
Notes
receivable from David R. Little, CEO
|
(799)
|
(799)
|
|
Total
shareholders' equity
|
95,430
|
35,718
|
|
Total
liabilities and shareholders' equity
|
$ 273,236
|
$ 116,807
|
|
See
notes to condensed consolidated financial
statements.
|
Three
Months Ended
September
30,
|
Nine
months Ended
September
30,
|
||||||
2007
|
2006
|
2007
|
2006
|
||||
Sales
|
$ 106,785
|
$ 68,189
|
$ 275,739
|
$ 200,469
|
|||
Cost
of sales
|
76,930
|
48,468
|
196,436
|
144,275
|
|||
Gross
profit
|
29,855
|
19,721
|
79,303
|
56,194
|
|||
Selling,
general and administrative expense
|
22,053
|
14,578
|
58,700
|
41,348
|
|||
Operating
income
|
7,802
|
5,143
|
20,603
|
14,846
|
|||
Other
income
|
229
|
220
|
328
|
238
|
|||
Interest
expense
|
(502)
|
(501)
|
(1,609)
|
(1,344)
|
|||
Minority
interest in loss of consolidated subsidiary
|
-
|
-
|
-
|
20
|
|||
Income
before taxes
|
7,529
|
4,862
|
19,322
|
13,760
|
|||
Provision
for income taxes
|
3,052
|
1,881
|
7,701
|
5,327
|
|||
Net
income
|
4,477
|
2,981
|
11,621
|
8,433
|
|||
Preferred
stock dividend
|
(23)
|
(23)
|
(68)
|
(68)
|
|||
Net
income attributable to common shareholders
|
$ 4,454
|
$ 2,958
|
$ 11,553
|
$ 8,365
|
|||
Basic
income per share
|
$ 0.70
|
$ 0.58
|
$ 2.03
|
$ 1.66
|
|||
Weighted
average common shares outstanding
|
6,326
|
5,124
|
5,690
|
5,043
|
|||
Diluted
income per share
|
$ 0.65
|
$ 0.52
|
$ 1.86
|
$ 1.47
|
|||
Weighted
average common and common equivalent shares outstanding
|
6,837
|
5,749
|
6,240
|
5,733
|
|||
See
notes to condensed consolidated financial
statements.
|
NINE
MONTHS ENDED
|
|||
SEPTEMBER
30
|
|||
2007
|
2006
|
||
OPERATING
ACTIVITIES:
|
|||
Net
income
|
$ 11,621
|
$ 8,433
|
|
Adjustments
to reconcile net income to net cash provided
|
|||
by
(used in) operating activities
|
|||
Depreciation
|
1,158
|
860
|
|
Amortization
of intangibles
|
1,340
|
-
|
|
Compensation
expense on stock options and restricted stock
|
410
|
110
|
|
Benefit
from deferred income taxes
|
(574)
|
(248)
|
|
Gain
on sale of property and equipment
|
(8)
|
(186)
|
|
Minority
interest in loss of consolidated subsidiary
|
-
|
(20)
|
|
Tax
benefit related to exercise of stock options
|
(2,968)
|
(2,993)
|
|
Changes
in operating assets and liabilities:
|
|||
Trade
accounts receivable
|
(11,399)
|
(4,424)
|
|
Inventories
|
1,490
|
(9,569)
|
|
Prepaid
expenses and other current assets
|
1,953
|
1,135
|
|
Accounts
payable and accrued liabilities
|
10,122
|
7,279
|
|
Net
cash provided by operating activities
|
13,145
|
377
|
|
INVESTING
ACTIVITIES:
|
|||
Purchase
of property and equipment
|
(1,476)
|
(1,870)
|
|
Purchases
of businesses
|
(116,880)
|
(4,238)
|
|
Proceeds
from the sale of property and equipment
|
8
|
1,656
|
|
Net
cash used in investing activities
|
(118,348)
|
(4,452)
|
|
FINANCING
ACTIVITIES:
|
|||
Proceeds
from debt
|
140,257
|
62,445
|
|
Principal
payments on revolving line of credit and other long-term
debt
|
(81,352)
|
(59,960)
|
|
Dividends
paid in cash
|
(68)
|
(68)
|
|
Proceeds
from exercise of stock options
|
189
|
584
|
|
Payments
for payroll taxes related to exercise of stock options
|
-
|
(146)
|
|
Proceeds
from sale of common stock
|
44,594
|
425
|
|
Tax
benefit related to exercise of stock options
|
2,968
|
2,993
|
|
Net
cash provided by financing activities
|
106,588
|
6,273
|
|
INCREASE
IN CASH
|
1,385
|
2,198
|
|
CASH
AT BEGINNING OF PERIOD
|
2,544
|
570
|
|
CASH
AT END OF PERIOD
|
$ 3,929
|
$ 2,768
|
|
See
notes to condensed consolidated financial
statements.
|
Options
Outstanding and Exercisable
|
|||||||
Number
of Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining Contractual Term
(in
years)
|
Aggregate
Intrinsic Value
|
||||
Options
outstanding
at
January 1, 2007
|
311,181
|
$ 1.41
|
4.9
|
$
10,156,000
|
|||
Granted
|
-
|
-
|
|||||
Exercised
|
(186,755)
|
.99
|
|||||
Options
outstanding and
exercisable
at March 31, 2007
|
124,426
|
2.05
|
3.81
|
$ 4,497,709
|
|||
Granted
|
-
|
-
|
|||||
Exercised
|
(3,200)
|
$ 1.20
|
|||||
Options
outstanding and
exercisable
at June 30, 2007
|
121,226
|
$ 2.07
|
3.58
|
$ 4,930,877
|
|||
Granted
|
-
|
||||||
Exercised
|
-
|
||||||
Options
outstanding and
exercisable
at September 30, 2007
|
121,226
|
$ 2.07
|
3.33
|
$ 4,053,211
|
Options
Outstanding and Exercisable
|
||||||
Range
of
exercise
prices
|
Number
of Options
Outstanding
|
Weighted
Average Remaining Contractual Life
(in
years)
|
Weighted
Average
Exercise
Price
|
|||
$1.00
- $2.50
|
101,226
|
2.57
|
$ 1.37
|
|||
$4.53
- $6.72
|
20,000
|
7.19
|
5.63
|
|||
121,226
|
3.33
|
$ 2.07
|
Number
of shares authorized for grants
|
300,000
|
Number
of shares outstanding under unvested awards
|
95,996
|
Number
of shares available for future grants
|
192,004
|
Weighted-average
grant price of outstanding shares
|
$ 31.94
|
Number
of
Shares
|
Weighted
Average
Grant
Price
|
||
Outstanding
at December 31, 2006
|
43,698
|
$
24.45
|
|
Granted
|
-
|
-
|
|
Vested
|
3,000
|
$
18.85
|
|
Outstanding
at March 31, 2007
|
40,698
|
$
24.87
|
|
Granted
|
-
|
-
|
|
Vested
|
9,000
|
$
31.07
|
|
Outstanding
at June 30, 2007
|
31,698
|
$
23.39
|
|
Granted
|
64,298
|
$
36.15
|
|
Vested
|
-
|
|
|
Outstanding
at September 30, 2007
|
95,996
|
$
31.94
|
September
30,
2007
|
December
31,
2006
|
||
(in
Thousands)
|
|||
Finished
goods
|
$ 71,283
|
$ 39,204
|
|
Work
in process
|
4,132
|
3,030
|
|
Inventories
at FIFO
|
75,415
|
42,234
|
|
Less
– LIFO allowance
|
(5,395)
|
(4,924)
|
|
Inventories
|
$ 70,020
|
$ 37,310
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||
2007
|
2006
|
2007
|
2006
|
||||
Basic:
|
|||||||
Weighted
average shares outstanding
|
6,326
|
5,124
|
5,690
|
5,043
|
|||
Net
income
|
$
4,477
|
$
2,981
|
$
11,621
|
$
8,433
|
|||
Convertible
preferred stock dividend
|
(23)
|
(23)
|
(68)
|
(68)
|
|||
Net
income attributable to common shareholders
|
$
4,454
|
$
2,958
|
$
11,553
|
$
8,365
|
|||
Per
share amount
|
$ 0.70
|
$ 0.58
|
$ 2.03
|
$ 1.66
|
|||
Diluted:
|
|||||||
Weighted
average shares outstanding
|
6,326
|
5,124
|
5,690
|
5,043
|
|||
Net
effect of dilutive stock options and restricted
stock
- based on the treasury stock method
|
91
|
205
|
130
|
270
|
|||
Assumed
conversion of convertible preferred stock
|
420
|
420
|
420
|
420
|
|||
Total
|
6,837
|
5,749
|
6,240
|
5,733
|
|||
Net
income attributable to common shareholders
|
$
4,454
|
$
2,958
|
$
11,553
|
$
8,365
|
|||
Convertible
preferred stock dividend
|
23
|
23
|
68
|
68
|
|||
Net
income for diluted earnings per share
|
$
4,477
|
$
2,981
|
$
11,621
|
$
8,433
|
|||
Per
share amount
|
$ 0.65
|
$ 0.52
|
$ 1.86
|
$ 1.47
|
Three
Months ended September 30,
|
Nine
Months ended September 30,
|
||||||||||
MRO
|
Electrical
Contractor
|
Total
|
MRO
|
Electrical
Contractor
|
Total
|
||||||
2007
|
|||||||||||
Sales
|
$ 105,826
|
$ 959
|
$ 106,785
|
$ 273,247
|
$ 2,492
|
$ 275,739
|
|||||
Operating
income
|
7,661
|
141
|
7,802
|
20,303
|
300
|
20,603
|
|||||
Income
before taxes
|
7,416
|
113
|
7,529
|
19,102
|
220
|
19,322
|
|||||
2006
|
|||||||||||
Sales
|
$ 67,423
|
$ 766
|
$ 68,189
|
$ 198,388
|
$ 2,081
|
$ 200,469
|
|||||
Operating
income
|
5,041
|
102
|
5,143
|
14,572
|
274
|
14,846
|
|||||
Income
before taxes
|
4,799
|
63
|
4,862
|
13,603
|
157
|
13,760
|
NOTE
8:
|
ACQUISITIONS
|
2007
|
|
Cash
|
$ 746
|
Accounts
Receivable
|
28,228
|
Inventory
|
34,200
|
Property
and equipment
|
6,312
|
Goodwill
and intangibles
|
73,509
|
Other
assets
|
2,505
|
Assets
acquired
|
145,500
|
Current
liabilities assumed
|
(27,786)
|
Non-current
liabilities assumed
|
(88)
|
Net
assets acquired
|
$117,626
|
Total
|
Goodwill
|
Other
Intangibles
|
|||
Net
balance as of January 1, 2007
|
$ 23,428
|
$ 16,964
|
$ 6,464
|
||
Acquired
during the year
|
75,162
|
50,817
|
24,345
|
||
Adjustments
to prior year estimates
|
97
|
(4,012)
|
4,109
|
||
Amortization
|
(1,340)
|
-
|
(1,340)
|
||
Balance
as of September 30, 2007
|
$ 97,347
|
$ 63,769
|
$ 33,578
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||
2007
|
2006
|
2007
|
2006
|
||
Net
sales
|
$157,471
|
$152,382
|
$472,100
|
$464,516
|
|
Net
income
|
$ 3,885
|
$ 3,253
|
$ 11,520
|
$ 10,184
|
|
Per
share data
|
|||||
Basic
earnings
|
$0.61
|
$0.63
|
$2.03
|
$2.01
|
|
Diluted
earnings
|
$0.57
|
$0.57
|
$1.86
|
$1.78
|
NOTE
9:
|
CREDIT
FACILITY
|
|
ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS
OF OPERATIONS
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
||||||||||||||
2007
|
%
|
2006
|
%
|
2007
|
%
|
2006
|
%
|
||||||||
(in
thousands, except percentages and per share amounts)
|
|||||||||||||||
Sales
|
$106,785
|
100.0
|
$68,189
|
100.0
|
$275,739
|
100.0
|
$200,469
|
100.0
|
|||||||
Cost
of sales
|
76,930
|
72.0
|
48,468
|
71.1
|
196,436
|
71.2
|
144,275
|
72.0
|
|||||||
Gross
profit
|
29,855
|
28.0
|
19,721
|
28.9
|
79,303
|
28.8
|
56,194
|
28.0
|
|||||||
Selling,
general and
Administrative
expense
|
22,053
|
20.7
|
14,578
|
21.4
|
58,700
|
21.3
|
41,348
|
20.6
|
|||||||
Operating
income
|
7,802
|
7.3
|
5,143
|
7.5
|
20,603
|
7.5
|
14,846
|
7.4
|
|||||||
Interest
expense
|
(502)
|
(0.5)
|
(501)
|
(0.7)
|
(1,609)
|
(0.6)
|
(1,344)
|
(0.7)
|
|||||||
Minority
interest
in
loss of consolidated
subsidiary
|
-
|
-
|
-
|
-
|
-
|
-
|
20
|
-
|
|||||||
Other
income
|
229
|
0.2
|
220
|
0.3
|
328
|
0.1
|
238
|
0.1
|
|||||||
Income
before
income
taxes
|
7,529
|
7.0
|
4,862
|
7.1
|
19,322
|
7.0
|
13,760
|
6.8
|
|||||||
Provision
for
income
taxes
|
3,052
|
2.8
|
1,881
|
2.8
|
7,701
|
2.8
|
5,327
|
2.6
|
|||||||
Net
income
|
$ 4,477
|
4.2
|
$ 2,981
|
4.3
|
$11,621
|
4.2
|
$ 8,433
|
4.2
|
|||||||
Per
share amounts
|
|||||||||||||||
Basic
earnings
per
share
|
$ 0.70
|
$ 0.58
|
$ 2.03
|
$ 1.66
|
|||||||||||
Diluted
earnings
per
share
|
$ 0.65
|
$ 0.52
|
$ 1.86
|
$ 1.47
|
September
30, 2007
|
December
31, 2006
|
Increase
(Decrease)
|
|||
(in
Thousands)
|
|||||
Current
portion of long-term debt
|
$ 3,077
|
$ 2,771
|
$ 306
|
||
Long-term
debt, less current portion
|
93,862
|
35,174
|
58,688
|
||
Total
long-term debt
|
$ 96,939
|
$ 37,945
|
$ 58,994(2)
|
||
Amount
available
|
$ 25,718(1)
|
$ 13,601(1)
|
$ 12,117(3)
|
||
(1)
Represents amount available to be borrowed at the indicated date
under the
credit facility.
|
|||||
(2)
The increase in long-term debt is the result of using funds to acquire
businesses. Proceeds from the sale of common stock and cash
provided by operating activities were used to pay down
debt.
|
|||||
(3)
The $12.1 million increase in the amount available is primarily a
result
of covenants under our new Credit
Facility.
|
September
30,
|
Increase
|
||||
2007
|
2006
|
(Decrease)
|
|||
(in
Days)
|
|||||
Days
of sales outstanding
|
55.8
|
50.6
|
5.2
|
||
Inventory
turns
|
6.2
|
5.8
|
0.4
|
10.1
|
Stock
Purchase Agreement, dated as of August 19, 2007, whereby DXP Enterprises
acquired all outstanding stock of Precision Industries, Inc. (incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed with the Commission on August 21,
2007).
|
10.2
|
Credit
Agreement by and among DXP Enterprises, Inc. as Borrower, and Wells
Fargo
Bank, National Association, as Lead Arranger and Administrative Agent
for
the Lenders, as Bank, dated as of September 10, 2007 (incorporated
by
reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K
filed with the Commission on September 12,
2007).
|
31.1
|
Certification
of Chief Executive Officer pursuant to Rule 13a-14(a) and rule 15d-14(a)
of the Securities Exchange Act, as amended. (Filed
herewith).
|
31.2
|
Certification
of Chief Financial Officer pursuant to Rule 13a-14(a) and rule 15d-14(a)
of the Securities Exchange Act, as amended. (Filed
herewith).
|
32.1
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted
pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed
herewith).
|
32.2
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted
pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed
herewith).
|
|
1.
|
I
have reviewed this report on Form 10-Q of DXP Enterprises,
Inc.;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
|
5.
|
The
registrant’s other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent
functions):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal
controls over financial reporting.
|
|
1.
|
I
have reviewed this report on Form 10-Q of DXP Enterprises,
Inc.;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
|
5.
|
The
registrant’s other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent
functions):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal
controls over financial reporting.
|