-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HaudW3VuszWCaWslAsjw/FYB63f6Go8v5wPu/iU6JW9rkvssemKD2dZkVPObjNaw IDTrwaQlBS1BzC7ePSVjNQ== 0000033002-01-500011.txt : 20010702 0000033002-01-500011.hdr.sgml : 20010702 ACCESSION NUMBER: 0000033002-01-500011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010531 FILED AS OF DATE: 20010629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENNIS BUSINESS FORMS INC CENTRAL INDEX KEY: 0000033002 STANDARD INDUSTRIAL CLASSIFICATION: MANIFOLD BUSINESS FORMS [2761] IRS NUMBER: 750256410 STATE OF INCORPORATION: TX FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05807 FILM NUMBER: 1671932 BUSINESS ADDRESS: STREET 1: 1510 N HAMPTON SUITE 300 CITY: DESOTO STATE: TX ZIP: 75115 BUSINESS PHONE: 9722287801 MAIL ADDRESS: STREET 1: 1510 N HAMPTON SUITE 300 CITY: DESOTO STATE: TX ZIP: 75115 FORMER COMPANY: FORMER CONFORMED NAME: ENNIS TAG & SALESBOOK CO DATE OF NAME CHANGE: 19700805 10-Q 1 kmay2001main.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended MAY 31, 2001 ------------------------------------------------ Commission File Number 1-5807 ------------------------------------------- ENNIS BUSINESS FORMS, INC. - ----------------------------------------------------------------- (Exact name of registrant as specified in its charter) TEXAS 75-0256410 - ----------------------------------------------------------------- (State or other Jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 1510 N. Hampton, Suite 300, DeSoto, TX 75115 - ----------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (972) 228-7801 - ---------------------------------------------------------------- (Registrant's telephone number, including area code) No Change - ----------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) 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 ------ ------ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at May 31, 2001 - ----------------------------- ------------------------------ Common stock, par value 16,270,748 $2.50 per share ENNIS BUSINESS FORMS, INC. INDEX Part I. Financial information - unaudited Condensed Consolidated Balance Sheets -- May 31, 2001 and February 28, 2001 2 - 3 Condensed Consolidated Statements of Earnings -- Three Months Ended May 31, 2001 and 2000 4 Condensed Consolidated Statements of Cash Flows -- Three Months Ended May 31, 2001 and 2000 5 Notes to Condensed Consolidated Financial Statements 6 - 8 Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 10 Part II. Other Information 11 - 12 Signatures 13 PART I. FINANCIAL INFORMATION ENNIS BUSINESS FORMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) (Unaudited) May 31, February 28, 2001 2001 ---- ---- Assets ------- Current assets: Cash and cash equivalents $ 11,403 $ 8,964 Investment securities 1,694 980 Accounts receivable, net 31,280 29,957 Inventories 11,529 13,088 Other current assets 4,277 5,274 -------- -------- Total current assets 60,183 58,263 -------- -------- Investment securities 1,084 2,170 Property, plant and equipment, net 56,140 57,781 Cost of purchased businesses in excess of amounts allocated to tangible net assets 23,220 23,615 Other assets and deferred charges 786 1,025 -------- -------- Total assets $141,413 $142,854 ======== ======== (Continued) 2 ENNIS BUSINESS FORMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) (Dollars in Thousands) (Unaudited) May 31, February 28, 2001 2001 ---- ---- Liabilities and Shareholders' Equity ------------------------------------ Current liabilities: Current installments of long-term debt $ 4,174 $ 4,176 Accounts payable 5,337 6,067 Accrued expenses 9,568 7,665 Federal and state income taxes payable 419 -- -------- -------- Total current liabilities 19,498 17,908 -------- -------- Long-term debt, less current installments 20,297 23,555 Deferred credits, principally Federal income taxes 9,905 9,851 Shareholders' equity: Preferred stock, at par value -- -- Common stock, at par value 53,125 53,125 Additional paid in capital 1,040 1,040 Retained earnings 128,703 127,817 Accumulated other comprehensive loss (713) -- -------- -------- 182,155 181,982 Less: Treasury stock 90,442 90,442 -------- -------- Total shareholders' equity 91,713 91,540 -------- -------- Total liabilities and shareholders' equity $141,413 $142,854 ======== ======== See accompanying notes to condensed consolidated financial statements. 3 ENNIS BUSINESS FORMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Dollars in Thousands Except Per Share Amounts) (Unaudited) Three Months Ended May 31 2001 2000 ---- ---- Net sales $59,823 $49,347 Costs and expenses: Cost of sales 43,742 34,660 Selling, general and administrative expenses 9,854 8,549 ------- ------- 53,596 43,209 ------- ------- Earnings from operations 6,227 6,138 ------- ------- Other income (expense): Interest expense (686) (10) Investment and other income 69 86 ------- ------- (617) 76 ------- ------- Earnings before income taxes 5,610 6,214 Provision for income taxes 2,202 2,360 ------- ------- Net earnings $ 3,408 $ 3,854 ======= ======= Weighted average number of common shares outstanding 16,270,761 16,191,808 ========== ========== Per share amounts: Net earnings per basic and diluted share of common stock $ .21 $ .24 ===== ===== Cash dividends $.155 $.155 ===== ===== See accompanying notes to condensed consolidated financial statements. 4 ENNIS BUSINESS FORMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited) Three Months Ended May 31 2001 2000 ---- ---- Cash flows from operating activities: Net earnings $ 3,408 $ 3,854 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,612 1,628 Changes in operating assets and liabilities 2,112 612 Other 280 340 ------- ------- Net cash provided by operating activities 8,412 6,434 ------- ------- Cash flows from investing activities: Capital expenditures (563) (667) Redemption of investment securities 372 -- Other -- 53 ------- ------- Net cash used in investing activities (191) (614) ------- ------- Cash flows from financing activities: Repayment of Northstar acquisition (3,200) -- financing Dividends declared (2,522 (2,510) Other (60) (74) ------- ------- Net cash used in financing activities (5,782) (2,584) ------- ------- Net change in cash and cash equivalents 2,439 3,236 Cash and cash equivalents at beginning of period 8,964 2,037 ------- ------- Cash and cash equivalents at end of period $11,403 $ 5,273 ======= ======= See accompanying notes to condensed consolidated financial statements. 5 ENNIS BUSINESS FORMS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation --------------------- These unaudited condensed consolidated financial statements of Ennis Business Forms, Inc. and its subsidiaries (collectively the "Company" or "Ennis"), for the quarter ended May 31, 2001 have been prepared in accordance with generally accepted accounting principles for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Form 10-K for the year ended February 28, 2001, from which the accompanying condensed consolidated balance sheet at February 28, 2001 was derived. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the interim financial information have been included. The results of operations for any interim period are not necessarily indicative of the results of operations for a full year. 2. Stock Option Plans ------------------ As of May 31, 2001, the Company has reserved 980,777 shares of common stock under incentive stock option plans. For the three month periods ended May 31, 2001 and 2000, options, respectively, were not included in the diluted earnings per share computation because their inclusion would not be dilutive. The difference between basic and diluted earnings per share would be due to dilutive stock options. 3. Inventories ----------- The Company uses the Last-In, First-Out (LIFO) method of pricing the raw material content of most of its business forms inventories, and the First-In, First-Out (FIFO) method is used to value the remainder. The following table summarizes the components of inventory at the different stages of production (in thousands of dollars): May 31, February 28, 2001 2001 ---- ---- Raw material $ 5,964 $ 7,159 Work-in-process 1,145 1,220 Finished goods 4,420 4,709 ------- ------- $11,529 $13,088 ======= ======= 4. Accumulated other comprehensive loss ------------------------------------ Accumulated other comprehensive loss consists of the effective unrealized portion of changes in the fair value of the Company's cash flow hedge. Comprehensive income was approximately $2,700,000 for the three months ended May 31, 2001. There were no differences between net income and comprehensive income in fiscal year 2001. 6 5. Segment Data ------------ The Company operates three business segments. The Forms Solutions Group is primarily in the business of manufacturing and selling business forms and other printed business products to customers primarily located in the United States. The Promotional Solutions Group is comprised of Adams McClure (design, production and distribution of printed and electronic media), Admore (presentation products) and Wolfe City (flexographic printing, advertising specialties and Post- it (registered trademark) Notes). On June 6, 2000, the Company acquired Northstar Computer Forms, Inc. (Northstar) which became the Financial Solutions Group. Segment data for the three months ended May 31, 2001 and 2000 were as follows (in thousands):
Forms Promotional Financial Solutions Solutions Solutions Consolidated Group Group Group Corporate Totals ----- ----- ----- --------- ------- Three months ended May 31, 2001: Net sales $28,846 $19,237 $11,740 $ -- $ 59,823 Depreciation and amortization 932 691 853 136 2,612 Segment earnings (loss) before income tax 4,873 1,776 457 (1,496) 5,610 Segment assets 49,737 39,676 46,617 5,383 141,413 Capital expenditures 167 123 -- 273 563 Three months ended May 31, 2000: Net sales $30,118 $19,229 $ -- $ -- $ 49,347 Depreciation and amortization 752 734 -- 142 1,628 Segment earnings (loss) before income tax 5,993 1,744 -- (1,523) 6,214 Segment assets 57,602 43,251 -- 5,450 106,303 Capital expenditures 202 76 -- 389 667
"Post-it" is a registered trademark of 3M. 6. Purchase of Northstar --------------------- On June 6, 2000, the Company completed its acquisition of Northstar Computer Forms, Inc. (Northstar). The following table presents certain operating information on a pro forma basis as though Northstar had been acquired as of March 1, 2000, after including the estimated impact of adjustments such as amortization of goodwill and depreciation, interest expense, reduced interest income and related tax effects (in thousands, except per share amounts): For the Three Months Ended May 31, 2000 Net sales 60,406 Net earnings 3,769 Earnings per share - basic and 0.24 diluted 7 7. Derivative Financial Instruments and Hedging Activities ------------------------------------------------------- The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by SFAS No. 138, on March 1, 2001. SFAS No. 133 establishes standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. It establishes conditions under which a derivative may be designated as a hedge, and establishes standards for reporting changes in the fair value of a derivative. The Company uses principally floating-rate debt to finance its operations. These debt obligations expose the Company to variability in interest payments due to changes in interest rates. Management believes it is prudent to limit the variability of its interest payments. To meet this objective and in accordance with the Company's hedging policy, the Company utilizes interest rate swaps to manage overall borrowing costs and reduce exposure to adverse fluctuations in interest rates. The Company does not enter into derivative instruments for any purpose other than cash flow hedging purposes. That is, the Company does not speculate using derivative instruments. The Company assesses interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. The Company has entered into an interest rate swap agreement with a notional amount of $22,450,000 at May 31, 2001. The interest rate swap agreement expires in fiscal 2003 and effectively converts the floating rate debt under the term loan and revolving credit facility to fixed rate debt. The estimated fair value of the swap agreement at May 31, 2001 was a liability of approximately $713,000, which is included in accrued expenses in the accompanying condensed consolidated balance sheet. The transition adjustment recorded upon adoption of SFAS No. 133 was $825,000 and the change during the three months ended May 31, 2001 was due to the early extinguishments of a portion of the hedged debt obligation and amounts reclassified into interest expense. Changes in the fair value of interest rate swaps designed as hedging instruments of the variability of cash flows associated with floating rate obligations are reported in accumulated other comprehensive income. These amounts subsequently are reclassified into interest expense as a yield adjustment in the same period in which the related interest on the floating-rate debt obligations affects earnings. During the next twelve months, approximately $400,000 of losses in accumulated other comprehensive income related to the interest rate swap are expected to be reclassified into interest expense as a yield adjustment of the hedged debt obligation. 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources - ------------------------------ At May 31, 2001, the Company's financial position continues to be strong. Working capital increased marginally from $40,355,000 at February 28, 2001 to $40,685,000 at May 31, 2001. The Company has $11,403,000 in cash and cash equivalents, $1,694,000 in short term investments, $1,084,000 in long term investments and $20,297,000 in long-term debt, less current installments. The Company expects to generate sufficient cash flow to more than cover its operating and capital requirements for the foreseeable future. Results of Operations - --------------------- Net sales for the first quarter ended May 31, 2001 increased 21.2% from the corresponding period in the prior year. The increase in the first quarter resulted from Northstar Computer Forms, Inc. (Northstar), which we acquired in June 2000 and accounted for an increase of 23.8%. This was mitigated by a 2.6% decline in revenue in the Forms Solutions Group which was a result of weakness in the general economy. The Promotional Solutions Group remained relatively unchanged. Gross profit margins decreased from 29.8% in the first quarter ended May 31, 2000 to 26.9% in the first quarter ended May 31, 2001. The decrease is the result of a combination of factors, primarily margin pressures in the Forms Solutions Group, which are due to economic conditions and accounted for approximately 1.4 percentage points of the reduction. In addition, the Promotional Solutions Group accounted for approximately 1.1 percentage points of the reduction due to higher cost of sales from the prior year. Finally, the inclusion of the Financial Solutions Group (Northstar) accounted for an approximate reduction of .4 percentage points, as this group's normal margins are generally lower than the Forms Solutions Group. Selling, general and administrative expenses for the first quarter ended May 31, 2001 increased 15.3% compared to the corresponding period in the prior year. This increase was mainly attributable to the acquisition of Northstar in June 2000 which accounted for an increase of 26%. This was mitigated by cost reductions in the Forms Solutions Group of 3.4%, the Promotional Solutions Group of 6.5% and in Corporate of .8%. Interest expense increased from $10,000 in the first quarter ended May 31, 2000 to $686,000 in the first quarter ended May 31, 2001 as a result of the $36,500,000 debt incurred on June 6, 2000 to finance the Northstar Acquisition. Investment and other income decreased in the first quarter ended May 31, 2000 from the same period in the prior year due to decreased amounts of funds available for investment. The effective rate of the Federal and state income tax expense was 39.3% and 37.8% for the first quarter ended May 31, 2001 and May 31, 2000, respectively. The primary reason for the increase is due to non-deductible goodwill from the acquisition of Northstar. 9 Forward looking statement - ------------------------- Management's result of operations contains forward-looking statements that reflect the Company's current view with respect to future revenues and earnings. These statements are subject to numerous uncertainties, including (but not limited to) the rate at which the business forms market is contracting, the application of technology to the production of business forms, demand for the Company's products in the context of a contracting market, variability in the prices of paper and other raw materials, and competitive conditions in the business forms market. Because of such uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of June 29, 2001. 10 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ (a) The Company held its Annual Meeting of Shareholders on June 21, 2001. (b) Proxies for the meeting were solicited pursuant to Regulation 14; there was no solicitation in opposition to management's nominees for directors listed in the Proxy Statement and all such nominee's were elected. Directors elected were: Nominees for Director Votes Cast for Votes Withheld --------------------- ------------- -------------- Harold W. Hartley 14,377,952 311,263 Kenneth G. Pritchett 14,450,562 238,653 James C. Taylor 14,423,098 266,117 (c) Briefly described below are the other matters voted upon at the Annual Meeting and the number of affirmative votes and negatives votes respectively. (1) Selection of KPMG LLP as independent auditors of the Company for the fiscal year ending February 28, 2002. For 14,484,523 Against 144,526 Abstain 60,166 Broker-non votes -- (2) Authorization of the proxies to vote, in their discretion, upon such other business as may properly come before the meeting For 13,150,959 Against 980,091 Abstain 558,165 Broker-non-votes -- Item 5. Other Information - ---------------------------- One June 21, 2001, The Company's Audit Committee of the Board of Directors amended the Company's Audit Charter. A copy of the amended charter is included as Exhibit 99. 11 Item 6. Exhibits and Reports on Form 8-K - ------------------------------------------ (a) Exhibit 99 Charter of the Audit Committee of The Board of Directors of Ennis Business Forms, Inc. as amended June 21, 2001 (b) Reports on Form 8-K None 12 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. ENNIS BUSINESS FORMS, INC. Date June 29, 2001 /s/Robert M. Halowec ------------- ---------------------------- Robert M. Halowec Vice President Finance and Chief Financial Officer Date June 29, 2001 /s/Harve Cathey ------------- ---------------------------- Harve Cathey Secretary and Treasurer Principal Accounting Officer 13 EX-99 2 ex99.txt Exhibit 99 CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF ENNIS BUSINESS FORMS, INC. AS AMENDED JUNE 21, 2001 I. Audit Committee Purpose The Audit Committee is appointed by the Board of Directors to assist the Board in fulfilling its oversight responsibilities. The Audit Committee's primary duties and responsibilities are to: Monitor the integrity of the Company's financial reporting process and systems of internal controls regarding finance, accounting and legal compliance. Monitor the independence and performance of the Company's independent auditors and internal auditing activities. Provide an avenue of communication among the independent auditors, management, the internal auditor and the Board of Directors. Encourage adherence to, and continuous improvement of, the Company's policies, procedures, and practices at all levels. The Audit Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities, and it has direct access to the independent auditors as well as anyone in the organization. The Audit Committee has the authority (after advising the Board to do so) to retain, at the Company's expense, special legal, accounting, or other consultants or experts it deems necessary in the performance of its duties. II. Audit Committee Composition and Meetings Audit committee members shall meet the requirements of the New York Stock Exchange. The Audit Committee shall be comprised of three or more directors as determined by the Board each of whom shall be independent nonexecutive directors, free from any relationship that would interfere with the exercise of his or her independent judgment. All members of the Committee shall have a basic understanding of finance and accounting and be able to read and understand fundamental financial statements, and at least one member of the Committee shall have accounting or related financial management expertise. Page 2 Audit Committee members shall be appointed by the Board on recommendation of the Executive Committee. If an audit committee Chair is not designated or present, the members of the Committee may designate a Chair by majority vote of the Committee membership. The Committee shall meet at least three times annually, or more frequently as circumstances dictate. The Audit Committee Chair shall prepare and/or approve an agenda in advance of each meeting. The Committee should meet privately in executive session at least annually with management, the independent auditors, and as a committee to discuss any matters that the Committee or each of these groups believe should be discussed. In addition, the Committee, or at least its Chair, should communicate with management and the independent auditors quarterly to review the Company's financial statements and significant findings based up on the auditors limited review procedures. III. Audit Committee Responsibilities and Duties. Review Procedures ----------------- 1. Review and reassess the adequacy of the Charter at least annually. Submit the charter to the Board of Directors for approval and have the document published at least every three years in accordance with SEC regulations. 2. Review the Company's annual audited financial statements prior to filing or distribution. Review should include discussion with management and independent auditors of significant issues regarding accounting principles, practices, and judgments. 3. In consultation with management, the independent auditors, and by review of internal audit activities consider the integrity of the Company's financial reporting processes and controls. Discuss significant financial risk exposures and the steps management has taken to monitor, control, and report such exposures. Review significant findings prepared by the independent auditors together with management's responses. 4. Review with financial management and the independent auditors the company's quarterly financial results prior to the release of earnings and the company's quarterly financial statements prior to filing or distribution. Discuss any significant changes to the Company's accounting principles and any items required to be communicated by the independent auditors in accordance with SAS 61. The Chair of the Committee or his designate may represent the entire Audit Committee for purposes of this review. Page 3 Independent Auditors -------------------- 5. The independent auditors are ultimately accountable to the Audit Committee and the Board of Directors. The Audit Committee shall review the independence and performance of the auditors and annually recommend to the Board of Directors the appointment of the independent auditors or approve any discharge of auditors when circumstances warrant. 6. Approve the fees and other significant compensation to be paid to the independent auditors as needed. 7. On an annual basis, the Committee should review and discuss with the independent auditors all significant relationships they have with the Company that could impair the auditors' independence. 8. Review the independent auditors audit plan - discuss scope, staffing, locations, reliance upon management, and internal audit and general audit approach. 9. Prior to releasing the year-end earnings, discuss the results of the audit with the independent auditors. Discuss certain matters required to be communicated to audit committees in accordance with AICPA SAS 61. The Chair of the Committee or his designate may represent the entire Audit Committee for purposes of this review. 10. Consider the independent auditors' judgments about the quality and appropriateness of the Company's accounting principles as applied in its financial reporting. Internal Audit Activities and Legal Compliance ---------------------------------------------- 11. Review the budget, plan, changes in plan, activities, organizational structure, and qualifications of the internal audit function, as needed. 12. Review significant reports prepared resulting from internal audit activities together with management's response and follow-up to these reports. 13. On at least an annual basis, review with the Company's counsel, any legal matters that could have a significant impact on the organization's financial statements, the Company's compliance with applicable laws and regulations, and inquiries received from regulators or governmental agencies. Other Audit Committee Responsibilities -------------------------------------- 14. Annually prepare a report to shareholders as required by the Securities and Exchange Commission. The report should be included in the Company's annual proxy statement. Page 4 15. Perform any other activities consistent with this Charter, the Company's by-laws, and governing law, as the Committee or the Board deems necessary or appropriate. 16. Establish, review, and update periodically a Code of Ethical conduct and ensure that management has established a system to enforce this code. 17. Annually review policies and procedures as well as audit results associated with directors and officers expense accounts and perquisites. Annually review a summary of director and officers' related party transactions and potential conflicts of interest. 18. Maintain minutes of meetings and periodically report to the Board of Directors on significant results of the foregoing activities. -----END PRIVACY-ENHANCED MESSAGE-----