UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Commission File Number 0-255
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2007
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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GRAYBAR ELECTRIC COMPANY, INC.
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(Exact name of registrant as specified in its charter)
NEW YORK 13 - 0794380
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
34 NORTH MERAMEC AVENUE, ST. LOUIS, MO 63105
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(Address of principal executive offices) (Zip Code)
POST OFFICE BOX 7231, ST. LOUIS, MO 63177
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(Mailing Address) (Zip Code)
Registrant's telephone number, including area code: (314)573-9200
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Indicate by check mark whether the 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 (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO
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Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer (as defined in
Rule 12b-2 of the Exchange Act).
Large Accelerated Filer ( ) Accelerated Filer ( ) Non-Accelerated Filer (X)
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
YES NO X
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Common Stock Outstanding at July 31, 2007: 6,586,011
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(Number of Shares)
GRAYBAR ELECTRIC COMPANY, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
JUNE 30, 2007
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION (UNAUDITED) PAGE(S)
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Income 4
Condensed Consolidated Statements of Cash Flows 5
Condensed Consolidated Statement of Changes in Shareholders' Equity 6
Notes to the Condensed Consolidated Financial Statements 7-10
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 11-17
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 18
ITEM 4. Controls and Procedures 18
PART II. OTHER INFORMATION
ITEM 2. Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities 19
ITEM 4. Submission of Matters to a Vote of Security Holders 19
ITEM 6. Exhibits and Reports on Form 8-K 20
SIGNATURES 21
EXHIBIT INDEX 22
Exhibit (31.1) - Section 302 Certification - CEO
Exhibit (31.2) - Section 302 Certification - CFO
Exhibit (32.1) - Section 906 Certification - CEO
Exhibit (32.2) - Section 906 Certification - CFO
2
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
GRAYBAR ELECTRIC COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Stated in thousands except for share data)
(Unaudited)
JUNE 30, 2007 December 31, 2006
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ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
CURRENT ASSETS
Cash and cash equivalents $ 72,514 $ 52,210
Trade receivables 729,236 698,190
Merchandise inventory 400,834 385,479
Other current assets 20,668 19,302
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Total Current Assets 1,223,252 1,155,181
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PROPERTY, AT COST
Land 44,288 44,135
Buildings 313,858 311,148
Furniture and fixtures 163,094 158,757
Software 76,906 76,906
Capital leases 2,413 2,413
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Total Property, at cost 600,559 593,359
Less - accumulated depreciation and amortization (281,529) (267,013)
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Net Property 319,030 326,346
OTHER NON-CURRENT ASSETS 36,970 26,719
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TOTAL ASSETS $ 1,579,252 $ 1,508,246
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LIABILITIES
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CURRENT LIABILITIES
Short-term borrowings $ 20,210 $ 13,667
Current portion of long-term debt 32,311 32,319
Trade accounts payable 582,843 503,408
Accrued payroll and benefit costs 59,699 112,549
Other accrued taxes 15,259 13,010
Dividends payable --- 6,494
Other current liabilities 57,898 58,269
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Total Current Liabilities 768,220 739,716
POSTRETIREMENT BENEFITS LIABILITY 72,947 74,447
PENSION LIABILITY 43,189 43,449
LONG-TERM DEBT 193,362 203,869
OTHER NON-CURRENT LIABILITIES 14,630 4,042
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TOTAL LIABILITIES 1,092,348 1,065,523
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SHAREHOLDERS' EQUITY
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CAPITAL STOCK SHARES AT
----------------------------
JUNE 30, December 31,
2007 2006
---- ----
Common, stated value $20.00 per share
Authorized 15,000,000 15,000,000
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Issued to voting trust 5,355,258 6,158,008
Issued to shareholders 1,414,126 291,703
In treasury, at cost (143,194) (10,722)
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Outstanding Common Stock 6,626,190 6,438,989 132,524 128,780
ADVANCE PAYMENTS ON SUBSCRIPTIONS TO COMMON STOCK 349 ---
RETAINED EARNINGS 378,174 342,878
ACCUMULATED OTHER COMPREHENSIVE LOSS (24,143) (28,935)
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TOTAL SHAREHOLDERS' EQUITY 486,904 442,723
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,579,252 $ 1,508,246
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The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the Condensed Consolidated Financial Statements.
3
GRAYBAR ELECTRIC COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Stated in thousands except for per share data)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------------ -------------------------------------
2007 2006 2007 2006
---- ---- ---- ----
GROSS SALES $ 1,344,721 $ 1,321,354 $ 2,572,762 $ 2,446,627
Cash Discounts (5,263) (4,879) (9,746) (8,941)
---------------- ---------------- ---------------- ----------------
NET SALES 1,339,458 1,316,475 2,563,016 2,437,686
Cost of merchandise sold (1,076,834) (1,073,948) (2,061,208) (1,972,395)
---------------- ---------------- ---------------- ----------------
GROSS MARGIN 262,624 242,527 501,808 465,291
Selling, general and administrative
expenses (202,716) (199,267) (410,515) (397,049)
Depreciation and amortization (8,873) (8,846) (17,569) (16,818)
Other income, net 539 2,667 2,692 9,468
---------------- ---------------- ---------------- ----------------
INCOME FROM OPERATIONS 51,574 37,081 76,416 60,892
Interest expense (4,460) (6,386) (9,158) (12,560)
---------------- ---------------- ---------------- ----------------
INCOME BEFORE PROVISION FOR
INCOME TAXES 47,114 30,695 67,258 48,332
Provision for income taxes
Current (20,844) (16,187) (29,681) (24,214)
Deferred 1,459 3,973 2,092 4,751
---------------- ---------------- ---------------- ----------------
Total provision for income taxes (19,385) (12,214) (27,589) (19,463)
---------------- ---------------- ---------------- ----------------
NET INCOME $ 27,729 $ 18,481 $ 39,669 $ 28,869
================ ================ ================ ================
NET INCOME PER SHARE OF COMMON
STOCK (A) $ 4.22 $ 2.86 $ 6.05 $ 4.47
---------------- ---------------- ---------------- ----------------
CASH DIVIDENDS PER SHARE OF
COMMON STOCK (B) $ 0.30 $ 0.30 $ 0.60 $ 0.60
---------------- ---------------- ---------------- ----------------
AVERAGE COMMON SHARES
OUTSTANDING (A) 6,567 6,458 6,559 6,454
---------------- ---------------- ---------------- ----------------
<FN>
(A) Adjusted for the declaration of a 10% stock dividend in December 2006.
Prior to the adjustment, the average common shares outstanding were 5,871
and 5,867 for the three and six month periods ended June 30, 2006.
(B) Cash dividends were $1,992 and $1,768 for the three months ended June 30,
2007 and 2006 respectively. Cash dividends were $3,967 and $3,537 for the
six months ended June 30, 2007 and 2006, respectively.
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the Condensed Consolidated Financial Statements.
4
GRAYBAR ELECTRIC COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in thousands)
(Unaudited)
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FOR THE SIX MONTHS ENDED JUNE 30, 2007 2006
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CASH FLOWS FROM OPERATIONS
Net Income $39,669 $28,869
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Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization 17,569 16,818
Deferred income taxes (2,092) (4,751)
Net gain on disposal of property (737) (9,189)
Loss on impairment of property 422 1,336
Changes in assets and liabilities:
Trade receivables (31,046) (103,306)
Merchandise inventory (15,355) (15,943)
Other current assets (1,366) (3,735)
Other non-current assets (10,251) (334)
Trade accounts payable 79,435 105,579
Accrued payroll and benefit costs (52,850) (8,539)
Other current liabilities 8,528 21,722
Other non-current liabilities 8,168 (1,527)
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Total adjustments to net income 425 (1,869)
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Net cash flow provided by operations 40,094 27,000
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CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of property 1,556 11,122
Capital expenditures for property (10,648) (15,539)
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Net cash flow used by investing activities (9,092) (4,417)
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CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in short-term borrowings 6,543 7,519
Repayment of long-term debt (10,665) (10,464)
Principal payments under capital leases (208) ---
Sale of common stock 6,742 5,002
Purchases of treasury stock (2,649) (2,881)
Dividends paid (10,461) (9,675)
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Net cash flow used by financing activities (10,698) (10,499)
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NET INCREASE IN CASH 20,304 12,084
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CASH, BEGINNING OF YEAR 52,210 9,074
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CASH, END OF PERIOD $72,514 $21,158
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The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the Condensed Consolidated Financial Statements.
5
GRAYBAR ELECTRIC COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006
(Stated in thousands)
(Unaudited)
COMMON ACCUMULATED
STOCK OTHER
COMMON SUBSCRIBED, RETAINED COMPREHENSIVE
STOCK UNISSUED EARNINGS LOSS TOTAL
---------------- ----------------- ----------------- ----------------- -----------------
DECEMBER 31, 2005 $ 115,848 $ --- $ 308,935 $ (43,348) $ 381,435
-----------------
Net income --- --- 28,869 --- 28,869
Currency translation adjustments --- --- --- 1,389 1,389
Unrealized gain from
interest rate swap (net of tax
of $636) --- --- --- 1,000 1,000
-----------------
Comprehensive income 31,258
-----------------
Stock issued 4,759 --- --- --- 4,759
Stock redeemed (2,881) --- --- --- (2,881)
Advance payments --- 243 --- --- 243
Dividends declared --- --- (3,537) --- (3,537)
---------------- ----------------- ----------------- ----------------- -----------------
JUNE 30, 2006 $ 117,726 $ 243 $ 334,267 $ (40,959) $ 411,277
================ ================= ================= ================= =================
COMMON ACCUMULATED
STOCK OTHER
COMMON SUBSCRIBED, RETAINED COMPREHENSIVE
STOCK UNISSUED EARNINGS LOSS TOTAL
---------------- ----------------- ----------------- ----------------- -----------------
DECEMBER 31, 2006 $ 128,780 $ --- $ 342,878 $ (28,935) $ 442,723
-----------------
Cumulative impact of change in
accounting for uncertainties in income
taxes (Note 7) --- --- (406) --- (406)
---------------- ----------------- ----------------- ----------------- -----------------
January 1, 2007, as adjusted 128,780 --- 342,472 (28,935) 442,317
---------------- ----------------- ----------------- ----------------- -----------------
Net income --- --- 39,669 --- 39,669
Currency translation adjustments --- --- --- 4,285 4,285
Unrealized gain from
interest rate swap (net of tax
of $323) --- --- --- 507 507
-----------------
Comprehensive income 44,461
-----------------
Stock issued 6,393 --- --- --- 6,393
Stock redeemed (2,649) --- --- --- (2,649)
Advance payments --- 349 --- --- 349
Dividends declared --- --- (3,967) --- (3,967)
---------------- ----------------- ----------------- ----------------- -----------------
JUNE 30, 2007 $ 132,524 $ 349 $ 378,174 $ (24,143) $ 486,904
================ ================= ================= ================= =================
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the Condensed Consolidated Financial Statements.
6
GRAYBAR ELECTRIC COMPANY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands except for Share and Per Share Data)
(Unaudited)
Note 1
- ------
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the U.S. Securities and Exchange Commission applicable to interim financial
reporting. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America (U.S. GAAP) have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. The preparation of financial statements in
accordance with U.S. GAAP requires the use of estimates and assumptions that
affect reported amounts. The Company's condensed consolidated financial
statements include amounts that are based on management's best estimates and
judgments. Actual results could differ from those estimates. Certain
reclassifications were made to prior year amounts to conform to the 2007
presentation. It is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements and the notes
thereto included in the Company's latest annual report on Form 10-K.
In the opinion of the Company, this quarterly report includes all
adjustments, consisting of normal recurring accruals and adjustments,
necessary for the fair presentation of the financial statements presented.
Such interim financial information is subject to year-end adjustments. Results
for interim periods are not necessarily indicative of results to be expected
for the full year.
Note 2
- ------
At June 30, 2007 and December 31, 2006, the Company had a $215,000 trade
receivable securitization program that expires in October 2009.
The trade receivable securitization program provides for the sale of
certain of the Company's trade receivables on a revolving basis to Graybar
Commerce Corporation (GCC), a wholly-owned, bankruptcy-remote, special-purpose
subsidiary. GCC sells an undivided interest in the trade receivables to an
unrelated multi-seller commercial paper conduit. The Company accounts for the
securitization as an on-balance sheet financing arrangement because the
Company has maintained effective control of the trade receivables through a
call option that gives GCC the unilateral right to repurchase the undivided
interests. Accordingly, the trade receivables and related debt are included in
the accompanying condensed consolidated balance sheets. GCC has granted a
security interest in its trade receivables to the commercial paper conduit.
There were no borrowings outstanding under the trade receivable securitization
program at June 30, 2007 and December 31, 2006, respectively.
Note 3
- ------
The Company has two lease arrangements with an independent lessor, which
provide $58,777 of financing for eight of the Company's distribution
facilities as of June 30, 2007. The agreements carry five-year terms expiring
July 2008 and December 2009. The Company has the option, with the consent of
the lenders to the lessor, to renew the leases for an additional five-year
term or to purchase the property for a price including the outstanding lease
balance.
7
If the Company elects not to renew the lease or purchase the
property, or such lenders refuse to consent to a renewal, the Company may
elect to remarket the property and arrange for its sale to a third party.
The financing structures used in these two lease arrangements qualify as
silos of a variable interest entity and therefore are accounted for under
Financial Accounting Standards Board (FASB) Interpretation No. 46,
"Consolidation of Variable Interest Entities--an interpretation of ARB No.
51".
Under the terms of the lease arrangements, the Company's maximum exposure
to loss at June 30, 2007 and December 31, 2006, in respect of the properties
subject to the two lease agreements, is $49,961, the amount guaranteed by the
Company as the residual fair value of the property.
Note 4
- ------
The Company made contributions to its qualified defined benefit pension
plan totaling $10,000 and $17,500 during the three month and six month periods
ended June 30, 2007, respectively. Contributions made during the three and six
month periods ended June 30, 2006 totaled $7,500 and $15,000, respectively.
Additional contributions totaling $48,000 are expected to be paid during the
remainder of 2007.
Note 5
- ------
The 1997 Voting Trust Agreement expired on March 31, 2007 and was
succeeded by the 2007 Voting Trust Agreement, which expires on March 15, 2017.
Approximately 79.1% of the Company's issued and outstanding shares of Common
Stock had been deposited with the Voting Trustees to be held under the 2007
Voting Trust Agreement by their beneficial owners as of June 30, 2007.
Note 6
- ------
Comprehensive income for the quarters ended June 30, 2007 and 2006 was
$31,848 and $20,282, respectively. Comprehensive income for the six months
ended June 30, 2007 and 2006 was $44,461 and $31,258, respectively and is
reported in the Condensed Consolidated Statements of Changes in Shareholders'
Equity for the Six Months Ended June 30, 2007 and 2006. Comprehensive income
is comprised of net income, currency translation adjustments related to the
Company's operations in Canada and Mexico and changes in the value of the
Company's interest rate swap agreement.
Note 7
- ------
The Company adopted the provisions of FASB Interpretation No. 48,
"Accounting for Uncertainty in Income Taxes - an interpretation of FASB
Statement No. 109" (FIN 48), on January 1, 2007. Under FIN 48, the Company had
$6,980 of unrecognized tax benefits recorded in its statement of financial
position as of January 1, 2007. Of this amount, $406 was recorded as a
reduction to the January 1, 2007 balance of retained earnings. The Company's
unrecognized tax benefits of $6,966 as of June 30, 2007 are uncertain tax
positions that would impact the Company's effective tax rate if recognized.
The Company does not expect any significant increases or decreases in its
unrecognized tax benefits within one year of this reporting date.
The Company classifies interest expense and penalties as part of its
provision for income taxes based upon applicable federal and state
interest/underpayment percentages. The Company has accrued $2,312 in interest
and penalties in its statement of financial position at
8
June 30, 2007. Interest is computed on the difference between the provision
for income taxes recognized in accordance with FIN 48 and the amount of
benefit previously taken or expected to be taken in the Company's federal,
state and local income tax returns.
The Company's federal income tax returns for the tax years 2003 and
forward are available for examination by the United States Internal Revenue
Service. The Company has not agreed to extend its federal statute of
limitations for the 2003 tax year as of June 30, 2007. The federal statute of
limitations for the 2003 tax year will expire on September 15, 2007. The
Company's state income tax returns for 2002 through 2005 remain subject to
examination by various state authorities with the latest closing period on
October 15, 2010. The Company has not extended the statutes of limitations for
any state jurisdictions with respect to years prior to 2002. Such state
statutes will expire on or before October 15, 2007 unless otherwise extended.
Note 8
- ------
The FASB issued SFAS No. 157, "Fair Value Instruments" (SFAS 157), in
September 2006. SFAS 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles and expands
disclosures about fair value measurements. This Statement applies under other
accounting pronouncements that require or permit fair value measurements, the
FASB having previously concluded in those accounting pronouncements that fair
value is the relevant measurement attribute. Accordingly, this Statement does
not require any new fair value measurements. This Statement is effective for
financial statements issued for fiscal years beginning after November 15,
2007, and interim periods within those fiscal years. The Company does not
expect that its adoption of SFAS 157 will have a material impact on its
financial statements.
The FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit
Pension and Other Postretirement Plans, an amendment of FASB Statements No.
87, 88, 106, and 132(R)" (SFAS 158), in September 2006. Among other items,
SFAS 158 requires recognition of the over- or under-funded status of an
entity's defined benefit postretirement plan(s) as an asset or liability in
its financial statements, requires the measurement of defined benefit
postretirement plan assets and obligations as of the end of the employer's
fiscal year, and requires recognition of the funded status of defined benefit
postretirement plans in other comprehensive income. SFAS 158 is effective for
fiscal years ending after December 15, 2007 for employers, such as the
Company, that do not issue publicly-traded equity securities.
The Company believes that the adoption of SFAS 158 will have a material
impact on its statement of financial position, as the unfunded portion of the
Company's pension plan at December 31, 2006 was approximately $102,533. The
unfunded portion related to other postretirement benefit obligations was
$91,061 at December 31, 2006. The liabilities recognized in the consolidated
balance sheet for the Company's pension plan and postretirement benefit
obligations are $43,189 and $72,947, respectively, as of June 30, 2007,
compared to $43,449 and $74,447, respectively, at December 31, 2006.
The FASB issued SFAS No.159, "The Fair Value Option for Financial Assets
and Financial Liabilities" (SFAS 159), in February 2007. SFAS 159 permits the
Company to choose to measure many financial instruments and certain other
items at fair value. The fair value option established by SFAS 159 permits the
Company to choose to measure eligible items at fair value at specified
election dates and report unrealized gains and losses on items for which the
fair value option has been elected in earnings at each subsequent reporting
date. The fair
9
value option may be applied instrument by instrument, with a few exceptions,
such as investments otherwise accounted for by the equity method or interest
in a variable interest entity that the entity is required to consolidate. The
application is irrevocable unless a new election date occurs and is applied
only to entire instruments and not to portions of instruments. This Statement
is effective as of the beginning of the Company's first fiscal year that
begins after November 15, 2007. Early adoption is permitted as of the
beginning of a fiscal year that begins on or before November 15, 2007,
provided the Company also elects to apply the provisions of SFAS 157. The
Company is not permitted to apply SFAS 159 retrospectively to fiscal years
preceding the effective date unless it chooses early adoption. The Company
does not expect the provisions of SFAS 159 to have a material impact on its
financial statements.
Note 9
- ------
The Company and its subsidiaries are subject to various claims, disputes,
administrative, and legal matters incidental to the Company's past and current
business activities. As a result, contingencies arise resulting from an
existing condition, situation, or set of circumstances involving an
uncertainty as to the realization of a possible loss.
The Company accounts for loss contingencies in accordance with the
provisions of SFAS No. 5, "Accounting for Contingencies". Estimated loss
contingencies are accrued only if the loss is probable and the amount of the
loss can be reasonably estimated. With respect to a particular loss
contingency, it may be probable that a loss has occurred but the estimate of
the loss is a wide range. If the Company deems some amount within the range to
be a better estimate than any other amount within the range, that amount would
be accrued. However, if no amount within the range is a better estimate than
any other amount, the minimum amount in the range is accrued. While the
Company believes that none of these claims, disputes, administrative, and
legal matters will have a material adverse effect on its financial position,
these matters are uncertain and the Company cannot at this time determine
whether the financial impact, if any, of these matters will be material to its
results of operations in the period in which such matters are resolved or a
better estimate becomes available.
Note 10
- -------
The Company had an unsecured Credit Agreement with a group of banks at an
interest rate based on the London Interbank Offered Rate (LIBOR) that
consisted of a $150,000, 364-day facility that was to expire in July 2007.
On May 8, 2007, the Company executed a new unsecured, LIBOR-based Credit
Agreement with a group of banks that consists of a $200,000, five-year
facility that expires in May 2012 and canceled the $150,000, 364-day facility
previously in place.
10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Dollars Stated in Thousands)
The following discussion should be read in conjunction with our
accompanying unaudited condensed consolidated financial statements and notes
thereto, and our audited consolidated financial statements, notes thereto and
Management's Discussion and Analysis of Financial Condition and Results of
Operations as of and for the year ended December 31, 2006, included in our
Annual Report on Form 10-K for such period as filed with the U.S. Securities
and Exchange Commission. The results shown herein are not necessarily
indicative of the results to be expected in any future periods. This
discussion contains forward-looking statements (as such term is defined in the
federal securities laws) and is based on current expectations, which involve
risks and uncertainties. Actual results and the timing of events could differ
materially from the forward-looking statements as a result of certain factors,
a number of which are outlined in Item 1A., "Risk Factors", of our Annual
Report on Form 10-K for the year ended December 31, 2006.
OVERVIEW
- --------
Graybar Electric Company, Inc. (the "Company") is engaged in the
distribution of electrical, telecommunications and networking products and the
provision of related supply chain management and logistics services, primarily
to contractors, industrial plants, telephone companies, power utilities,
federal, state and municipal governments, and commercial users in North
America. All products sold by the Company are purchased by the Company from
others. The Company's business activity is primarily with customers in the
United States. The Company also has subsidiary operations with distribution
facilities in Canada, Puerto Rico and Mexico. The Company is 100% owned by its
active and retired employees, and there is no public trading market for its
common stock.
The Company experienced moderate growth in both sales and gross margin in
the first six months of 2007, compared to the first six months of 2006, which
more than offset an increase in total expense and lower other income, net. As
a result, income from operations for the three and six months ended June 30,
2007, increased 39.1% and 25.5%, respectively when compared to the three and
six months ended June 30, 2006. The combination of higher income from
operations and lower interest expense resulted in an increase in net income
for the three and six months ended June 30, 2007, of 50.0% and 37.4% when
compared to the three and six months ended June 30, 2006. Continued profitable
sales growth is expected for the balance of 2007.
11
CONSOLIDATED RESULTS OF OPERATIONS
- ----------------------------------
The following tables set forth certain information relating to the
operations of the Company stated in thousands of dollars and as a percentage
of net sales for the three and six month periods ended June 30, 2007 and 2006:
THREE MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 2007 JUNE 30, 2006
----------------------------------- ----------------------------------
(Dollars stated in thousands) DOLLARS PERCENT DOLLARS PERCENT
------------------ ------------- ----------------- -------------
Net sales $ 1,339,458 100.0% $ 1,316,475 100.0%
Cost of merchandise sold (1,076,834) (80.4) (1,073,948) (81.6)
------------------ ------------- ----------------- -------------
Gross margin 262,624 19.6 242,527 18.4
Selling, general and administrative expenses (202,716) (15.1) (199,267) (15.1)
Depreciation and amortization (8,873) (0.7) (8,846) (0.7)
Other income, net 539 0.1 2,667 0.2
------------------ ------------- ----------------- -------------
Income from operations 51,574 3.9 37,081 2.8
Interest expense (4,460) (0.3) (6,386) (0.5)
------------------ ------------- ----------------- -------------
Income before provision for income taxes 47,114 3.6 30,695 2.3
Provision for income taxes (19,385) (1.5) (12,214) (0.9)
------------------ ------------- ----------------- -------------
Net income $ 27,729 2.1% $ 18,481 1.4%
================== ============= ================= =============
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 2007 JUNE 30, 2006
----------------------------------- ----------------------------------
(Dollars stated in thousands) DOLLARS PERCENT DOLLARS PERCENT
------------------ ------------- ----------------- -------------
Net sales $ 2,563,016 100.0% $ 2,437,686 100.0%
Cost of merchandise sold (2,061,208) (80.4) (1,972,395) (80.9)
------------------ ------------- ----------------- -------------
Gross margin 501,808 19.6 465,291 19.1
Selling, general and administrative expenses (410,515) (16.0) (397,049) (16.3)
Depreciation and amortization (17,569) (0.7) (16,818) (0.7)
Other income, net 2,692 0.1 9,468 0.4
------------------ ------------- ----------------- -------------
Income from operations 76,416 3.0 60,892 2.5
Interest expense (9,158) (0.4) (12,560) (0.5)
------------------ ------------- ----------------- -------------
Income before provision for income taxes 67,258 2.6 48,332 2.0
Provision for income taxes (27,589) (1.1) (19,463) (0.8)
------------------ ------------- ----------------- -------------
Net income $ 39,669 1.5% $ 28,869 1.2%
================== ============= ================= =============
The Company continued to benefit from positive, though slowing, general
economic conditions in North America during the six month period ended June
30, 2007. Growth in electrical market sales was moderate, though negatively
impacted by the continued decline in residential construction throughout much
of North America. Higher sales to the comm/data market resulted from the
Company's improved competitive performance in this market, coupled with
moderate growth in the overall comm/data market.
THREE MONTHS ENDED JUNE 30, 2007 COMPARED TO THREE MONTHS ENDED JUNE 30, 2006
Net sales totaled $1,339,458 for the three months ended June 30, 2007, an
increase of $22,983, or 1.7%, when compared to net sales of $1,316,475 for the
three months ended June 30, 2006. Increases in net sales were recorded in both
of the primary market sectors in which the Company operates. Net sales to the
both the electrical and comm/data market for the three months ended June 30,
2007 increased 1.8%, when compared to the three months ended June 30, 2006.
12
Gross margin increased $20,097, or 8.3%, to $262,624 from $242,527 due
mainly to the higher net sales volume in the second quarter of 2007 compared
to the same period in 2006. In addition, the Company's gross margin rate on
net sales increased to 19.6% during the three months ended June 30, 2007, up
from 18.4% for the same three month period in 2006, primarily due to a return
to a more stable product cost environment compared to the three months ended
June 30, 2006 and the Company's ongoing gross margin rate improvement
initiatives.
Selling, general and administrative expenses increased $3,449, or 1.7%,
in the second quarter of 2007 to $202,716 from $199,267 in the second quarter
of 2006 mainly due to increased compensation costs resulting from a moderate
increase in the number of employees, partially offset by reduced employee
benefit, legal, and professional expenses. Selling, general and administrative
expenses as a percentage of net sales remained at 15.1% in the second quarter
of 2007, unchanged from the second quarter of 2006.
Depreciation and amortization expenses in the second quarter of 2007
increased $27, or 0.3%, to $8,873 from $8,846 in the second quarter of 2006,
due to higher average balances of property, at cost, for the three months
ended June 30, 2007.
Other income, net of $539 in the second quarter of 2007 included net
losses on the disposal of property of $(187) and a property impairment loss of
$(422). Trade receivables interest charges to customers and other interest
income together accounted for $1,148 of other income, net in the second
quarter of 2007. Net gains on the disposal of property of $1,977 accounted for
the majority of other income, net in the second quarter of 2006. Trade
receivable interest charges to customers and other interest income accounted
for the remaining $690 of other income, net for the second quarter of 2006.
Income from operations totaled $51,574 in the second quarter of 2007, an
increase of $14,493, or 39.1%, from $37,081 for the same period in 2006. The
increase was due to higher gross margin, partially offset by higher selling,
general, and administrative expenses, higher depreciation and amortization
expenses, and lower other income, net.
Interest expense declined $1,926, or 30.2%, to $4,460 in the second
quarter of 2007 from $6,386 in the second quarter of 2006. This reduction was
due to lower levels of outstanding short-and long-term debt in the second
quarter of 2007, compared to the same period in 2006.
The combination of higher gross margin, increased selling, general and
administrative expenses and higher depreciation and amortization expenses,
partially offset by lower interest expenses, resulted in pre-tax earnings of
$47,114 for the three months ended June 30, 2007, an increase of $16,419, or
53.5%, over pre-tax earnings of $30,695 for the three months ended June 30,
2006.
As a result of higher pre-tax earnings, the Company's total provision for
income taxes increased $7,171, or 58.7%, to $19,385 for the three months ended
June 30, 2007 from $12,214 for the three months ended June 30, 2006. The
Company's effective tax rate increased to 41.1% for the three months ended
June 30, 2007, up from 39.8% in the same three month period in 2006. The 2007
and 2006 effective tax rates were higher than the 35.0% U.S. federal statutory
rate primarily due to state and local income taxes.
Net income for the three months ended June 30, 2007 increased $9,248, or
50.0%, to $27,729 from $18,481 for the three months ended June 30, 2006.
13
SIX MONTHS ENDED JUNE 30, 2007 COMPARED TO SIX MONTHS ENDED JUNE 30, 2006
Net sales totaled $2,563,016 for the six months ended June 30, 2007, an
increase of $125,330, or 5.1%, when compared to net sales of $2,437,686 for
the six months ended June 30, 2006. Increases in net sales were recorded in
both of the primary market sectors in which the Company operates. Net sales to
the electrical market for the six months ended June 30, 2006 increased 4.9%,
when compared to the six months ended June 30, 2006, while net sales to the
comm/data market rose 6.2% during the period.
Gross margin increased $36,517, or 7.8%, to $501,808 from $465,291 due
mainly to the higher net sales volume recorded for the six months ended June
30, 2007 compared to the same period in 2006. In addition, the Company's gross
margin rate on net sales increased to 19.6% during the six months ended June
30, 2007, up from 19.1% for the same six month period in 2006, primarily due
to a return to a more stable product cost environment compared to the six
months ended June 30, 2006 and the Company's ongoing gross margin rate
improvement initiatives.
Selling, general and administrative expenses increased $13,466, or 3.4%,
for the six months ended June 30, 2007 to $410,515 from $397,049, compared to
the six months ended June 30, 2006, mainly due to increased compensation costs
resulting from a moderate increase in the number of employees, partially
offset by reduced employee benefit, bad debt, legal, and professional
expenses. Selling, general and administrative expenses as a percentage of net
sales decreased to 16.0% for the six months ended June 30, 2007 from 16.3% in
the same period of 2006.
Depreciation and amortization expenses increased $751, or 4.5%, to
$17,569 from $16,818 for the six months ended June 30, 2007 compared to the
same six months in 2006. The increase is due to higher average balances of
property, at cost, and higher amortization on capital leases.
Other income, net totaled $2,692 for the six months ended June 30, 2007,
compared to $9,468 for the six months ended June 30, 2006. Other income, net
for the six months ended June 30, 2007 included net gains on the disposal of
property of $737, a property impairment loss of $(422) and interest income and
trade receivable interest charges to customers of $2,377. Other income, net
for the six months ended June 30, 2006, included net gains on disposal of
property of $9,189 and a property impairment loss of $(1,336). Trade receivable
interest charges to customers and other interest income accounted for the
remaining $1,615 of other income, net for the six months ended June 30, 2006.
Income from operations totaled $76,416 for the six months ended June 30,
2007, an increase of $15,524, or 25.5%, from $60,892 for the same period in
2006. The increase was due to higher gross margin, partially offset by higher
selling, general, and administrative expenses, higher depreciation and
amortization expenses, and lower other income, net.
Interest expense declined $3,402, or 27.1%, to $9,158 for the six months
ended June 30, 2007 from $12,560 for the same six month period in 2006. This
reduction was due to lower levels of outstanding short-and long-term debt in
2007, compared to 2006.
The combination of higher gross margin, increased selling, general and
administrative expenses, and higher depreciation and amortization expenses,
partially offset by lower interest expenses, resulted in pre-tax earnings of
$67,258 for the six months ended June 30, 2007, an increase of $18,926, or
39.2%, compared to pre-tax earnings of $48,332 for the six months ended June
30, 2006.
14
As a result of higher pre-tax earnings, the Company's total provision for
income taxes increased $8,126, or 41.8%, to $27,589 for the three months ended
June 30, 2007 from $19,463 for the six months ended June 30, 2006. The
Company's effective tax rate increased to 41.0% for the six months ended June
30, 2007, up from 40.3% in the same six month period in 2006. The 2007 and
2006 effective tax rates were higher than the 35.0% U.S. federal statutory
rate primarily due to state and local income taxes.
Net income for the six months ended June 30, 2007 increased $10,800, or
37.4%, to $39,669 from $28,869 for the six months ended June 30, 2006.
FINANCIAL CONDITION AND LIQUIDITY
- ---------------------------------
The Company has historically funded its capital requirements using cash
flow provided by operations, stock issuances to its employees, and long-term
debt.
Operating Activities
- --------------------
Cash provided by operations was $40,094 for the six months ended June 30,
2007, compared to $27,000 for the six months ended June 30, 2006. Positive
cash flows from operations for the six months ended June 30, 2007 were
primarily due to net income of $39,669, an increase in trade accounts payable
of $79,435, and increases in other current- and non-current liabilities
totaling $16,696, partially offset by an increase in trade receivables of
$31,046, a $15,355 increase in merchandise inventory, and a $52,850 decrease
in accrued payroll and benefit costs.
The average number of days of sales in trade receivables at June 30, 2007
decreased moderately from the average number of days at June 30, 2006.
Merchandise inventory levels were higher at June 30, 2007 when compared to
December 31, 2006 to support the growth in net sales. Average inventory
turnover improved moderately, when comparing the six months ended June 30,
2007 and 2006, respectively.
Current assets exceeded current liabilities by $455,032 at June 30, 2007,
an increase of $39,567, or 9.5%, from $415,465 at December 31, 2006.
Investing Activities
- --------------------
Capital expenditures for property were $10,648, and $15,539, and proceeds
from the disposal of property were $1,556, and $11,122, for the six months
ended June 30, 2007 and 2006, respectively. The proceeds received resulted
primarily from the sale of real property.
Financing Activities
- --------------------
The excess of cash provided by operations over investing activities, as
well as an increase in short-term borrowings for the six months ended June 30,
2007 of $6,543, was used by the Company to reduce long-term debt by $10,665
and capital lease obligations by $208 for the six months ended June 30, 2007.
During the six months ended June 30, 2006, the Company's cash flow used by
financing activities resulted from a decrease in long-term debt of $10,464
partially offset by an increase in short-term debt of $7,519.
Cash provided by the sale of common stock amounted to $6,742 and $5,002,
and purchases of treasury stock were $2,649 and $2,881 for the six months
ended June 30, 2007 and 2006, respectively. Dividends paid were $10,461 and
$9,675 for the six months ended June 30, 2007 and 2006, respectively.
15
Liquidity
- ---------
On May 8, 2007, the Company executed a new unsecured, LIBOR-based Credit
Agreement with a group of banks that consists of a $200,000, five-year
facility that expires May 2012 and cancelled the $150,000, 364-day facility
previously in place. There were no borrowings outstanding under this facility
at June 30, 2007.
At June 30, 2007 and December 31, 2006, the Company had a $215,000 trade
receivable securitization program that expires in October 2009. There were no
borrowings outstanding under the securitization program at June 30, 2007 and
December 31, 2006 compared to borrowings outstanding under the securitization
program at June 30, 2006 of $30,000.
At June 30, 2007, the Company had available to it unused lines of credit
amounting to $432,562, compared to $377,076 at December 31, 2006. These lines
are available to meet the short-term cash requirements of the Company.
Short-term borrowings outstanding during the six months ended June 30, 2007
and 2006 ranged from a minimum of $12,994 and $28,630 to a maximum of $48,193
and $140,924, respectively. The Company also reduced its outstanding long-term
debt (including current portion and capital lease obligations) to $225,673 at
June 30, 2007 from $236,188 at December 31, 2006, compared to a reduction of
$10,464 in long-term debt (including current portion) to $255,196 at
June 30, 2006 from $265,660 at December 31, 2005.
NEW ACCOUNTING PRONOUNCEMENTS
- -----------------------------
The Company adopted the provisions of FASB Interpretation No. 48,
"Accounting for Uncertainty in Income Taxes - an interpretation of FASB
Statement No. 109" (FIN 48), on January 1, 2007. Under FIN 48, the Company had
$6,980 of unrecognized tax benefits recorded in its statement of financial
position as of January 1, 2007. Of this amount, $406 was recorded as a
reduction to the January 1, 2007 balance of retained earnings. The Company's
unrecognized tax benefits of $6,966 as of June 30, 2007 are uncertain tax
positions that would impact the Company's effective tax rate if recognized.
The Company does not expect any significant increases or decreases in its
unrecognized tax benefits within one year of this reporting date.
The Company classifies interest expense and penalties as part of its
provision for income taxes based upon applicable federal and state
interest/underpayment percentages. The Company has accrued $2,312 in interest
and penalties in its statement of financial position at June 30, 2007.
Interest is computed on the difference between the provision for income taxes
recognized in accordance with FIN 48 and the amount of benefit previously
taken or expected to be taken in the Company's federal, state and local income
tax returns.
The Company's federal income tax returns for the tax years 2003 and
forward are available for examination by the United States Internal Revenue
Service. The Company has not agreed to extend its federal statute of
limitations for the 2003 tax year as of June 30, 2007. The federal statute of
limitations for the 2003 tax year will expire on September 15, 2007. The
Company's state income tax returns for 2002 through 2005 remain subject to
examination by various state authorities with the latest closing period on
October 15, 2010. The Company has not extended the statutes of limitations for
any state jurisdictions with respect to years prior to 2002. Such state
statutes will expire on or before October 15, 2007 unless otherwise extended.
16
The FASB issued Statement of Financial Accounting Standards (SFAS) No.
157, "Fair Value Instruments" (SFAS 157), in September 2006. SFAS 157 defines
fair value, establishes a framework for measuring fair value in generally
accepted accounting principles and expands disclosures about fair value
measurements. This Statement applies under other accounting pronouncements
that require or permit fair value measurements, the FASB having previously
concluded in those accounting pronouncements that fair value is the relevant
measurement attribute. Accordingly, this Statement does not require any new
fair value measurements. This Statement is effective for financial statements
issued for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years. The Company does not expect that its adoption of
SFAS 157 will have a material impact on its financial statements.
The FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit
Pension and Other Postretirement Plans, an amendment of FASB Statements No.
87, 88, 106, and 132(R)" (SFAS 158), in September 2006. Among other items,
SFAS 158 requires recognition of the over- or under-funded status of an
entity's defined benefit postretirement plan(s) as an asset or liability in
its financial statements, requires the measurement of defined benefit
postretirement plan assets and obligations as of the end of the employer's
fiscal year, and requires recognition of the funded status of defined benefit
postretirement plans in other comprehensive income. SFAS 158 is effective for
fiscal years ending after December 15, 2007 for employers, such as the
Company, that do not issue publicly-traded equity securities.
The Company believes that the adoption of SFAS 158 will have a material
impact on its statement of financial position, as the unfunded portion of the
Company's pension plan at December 31, 2006 was approximately $102,533. The
unfunded portion related to other postretirement benefit obligations was
$91,061 at December 31, 2006. The liabilities recognized in the consolidated
balance sheet for the Company's pension plan and postretirement benefit
obligations are $43,189 and $72,947, respectively, as of June 30, 2007,
compared to $43,449 and $74,447, respectively, at December 31, 2006.
The FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets
and Financial Liabilities" (SFAS 159), in February 2007. SFAS 159 permits the
Company to choose to measure many financial instruments and certain other
items at fair value. The fair value option established by SFAS 159 permits the
Company to choose to measure eligible items at fair value at specified
election dates and report unrealized gains and losses on items for which the
fair value option has been elected in earnings at each subsequent reporting
date. The fair value option may be applied instrument by instrument, with a
few exceptions, such as investments otherwise accounted for by the equity
method or interest in a variable interest entity that the entity is required
to consolidate. The application is irrevocable unless a new election date
occurs and is applied only to entire instruments and not to portions of
instruments. This Statement is effective as of the beginning of the Company's
first fiscal year that begins after November 15, 2007. Early adoption is
permitted as of the beginning of a fiscal year that begins on or before
November 15, 2007, provided the Company also elects to apply the provisions of
SFAS 157. The Company is not permitted to apply SFAS 159 retrospectively to
fiscal years preceding the effective date unless the Company chooses early
adoption. The Company does not expect the provisions of SFAS 159 to have a
material impact on its financial statements.
17
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in the policies, procedures, controls
or risk profile from that provided in Item 7A., "Quantitative and Qualitative
Disclosures About Market Risk", of the Company's Annual Report on Form 10-K
for the year ended December 31, 2006.
Item 4. Controls and Procedures
An evaluation of the effectiveness of the design and operation of the
Company's disclosure controls and procedures was performed under the
supervision and with the participation of the Company's management as of June
30, 2007. Based on that evaluation, the Company's management, including the
Chief Executive Officer and Chief Financial Officer, concluded that the
Company's disclosure controls and procedures were effective.
18
PART II: OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
No shareholder may sell, transfer or otherwise dispose of shares of
Common Stock (or the Voting Trust Interests issued with respect thereto)
without first offering the Company the option to purchase such shares (or
Voting Trust Interests issued with respect thereto) at the price at which the
shares were issued. The Company also has the option to purchase at the issue
price, the Common Stock (or Voting Trust Interests issued with respect
thereto) of any shareholder who dies or ceases to be an employee of the
Company for any cause other than retirement on a Company pension. In the past,
all shares have been issued at $20.00 per share. The Company has always
exercised its repurchase option and expects to continue to do so.
The following table sets forth information regarding purchases of Common
Stock (and Voting Trust Interests issued with respect thereto) by the Company
pursuant to the foregoing provisions:
ISSUER PURCHASES OF EQUITY SECURITIES
Total
Number Average Total Number of Shares
of Price Purchased as Part of Publicly
Shares Paid Announced Plans or
Period Purchased per Share Programs
------ --------- --------- --------
April 1 to April 30, 2007 19,222 $20.00 N/A
May 1 to May 31, 2007 20,181 $20.00 N/A
June 1 to June 30, 2007 12,114 $20.00 N/A
------ ------ ---
Total 51,517 $20.00 N/A
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of shareholders was held on June 14, 2007. All of the
nominees named in the Information Statement filed with the Commission and
mailed to shareholders in accordance with the provisions of Regulation 14-C
were elected. The names of the nominees elected follow; all received 5,177,445
votes, no negative votes were cast.
1. R. A. Cole 8. R. C. Lyons
2. D. B. D'Alessandro 9. K. M. Mazarrella
3. D. E. DeSousa 10. R. L. Nowak
4. T. F. Dowd 11. R. D. Offenbacher
5. L. R. Giglio 12. R. A. Reynolds, Jr.
6. T. S. Gurganous 13. K. B. Sparks
7. F. H. Hughes
The Three-Year Common Stock Purchase Plan, attached to the Information
Statement as Exhibit A, was approved. The proposal received 5,177,445 votes;
no negative votes were cast.
19
Item 6. Exhibits and Reports On Form 8-K
(a) Exhibits furnished in accordance with provisions of Item 601 of Regulation
S-K.
(31) Rule 13a-14(a)/15d-14(a) Certifications
31.1 - Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 - Principal Executive Officer.
31.2 - Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 - Principal Financial Officer.
(32) Section 1350 Certifications
32.1 - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 -
Principal Executive Officer.
32.2 - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 -
Principal Financial Officer
(b) Reports on Form 8-K.
Form 8-K was filed with the Commission on May 8, 2007, reporting the
Company's entry into and an exit from Material Definitive Agreements.
Form 8-K was filed with the Commission on June 14, 2007, reporting
the Company's amendments to its Bylaws.
20
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.
August 10, 2007 GRAYBAR ELECTRIC COMPANY, INC.
- -------------------------
(Date)
/s/ R. A. Reynolds, Jr.
-------------------------------------------
R. A. REYNOLDS, JR.
PRESIDENT AND
PRINCIPAL EXECUTIVE OFFICER
/s/ D. B. D'Alessandro
-------------------------------------------
D. B. D'ALESSANDRO
SENIOR VICE PRESIDENT AND
PRINCIPAL FINANCIAL OFFICER
/s/ Martin J. Beagen
-------------------------------------------
MARTIN J. BEAGEN
VICE PRESIDENT AND CONTROLLER
AND PRINCIPAL ACCOUNTING OFFICER
21
EXHIBIT INDEX
-------------
31.1 - Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 - Principal Executive Officer.
31.2 - Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 - Principal Financial Officer.
32.1 - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 -
Principal Executive Officer.
32.2 - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 -
Principal Financial Officer.
22