the cd & r investor and deere received all of the net proceeds and bore all commissions and discounts from the sale of our common stock . we did not receive any proceeds from the ipo . on the day prior to the closing of the ipo , all of our then-outstanding preferred stock converted into shares of common stock , resulting in the issuance by us of an additional 25,303,164 shares of our common stock . the conversion of preferred stock is accounted for from the date of conversion and is not retroactively adjusted in our financial statements and related notes included in this annual report on form 10-k. secondary public offerings on december 5 , 2016 , certain selling stockholders completed a public offering of 10,350,000 shares of our common stock at a price of $ 33.00 per share . we did not receive any of the proceeds from the shares of common stock sold by the selling stockholders . on may 1 , 2017 , certain selling stockholders completed a public offering of 11,500,000 shares of our common stock at a price of $ 47.50 per share . we did not receive any of the proceeds from the shares of common stock sold by the selling stockholders . on july 26 , 2017 , certain selling stockholders completed a public offering of 5,437,502 shares of our common stock at a price to the underwriter of $ 51.63 per share . we did not receive any proceeds from the shares of common stock sold by the selling stockholders . 33 following consummation of the secondary offering on july 26 , 2017 , cd & r and deere no longer have an ownership interest in the company . presentation our financial statements included in this report have been prepared in accordance with generally accepted accounting principles in the united states of america ( “ gaap ” ) . we use a 52/53 week fiscal year with the fiscal year ending on the sunday nearest to december 31 in each year . our fiscal quarters end on the sunday nearest to march 31 , june 30 and september 30 , respectively . this discussion of our financial condition is presented for the 2017 fiscal year , which ended on december 31 , 2017 and included 52 weeks and 252 selling days , the 2016 fiscal year , which ended on january 1 , 2017 and included 52 weeks and 253 selling days , and the 2015 fiscal year , which ended on january 3 , 2016 and included 53 weeks and 256 selling days . “ selling days ” are defined below within the key business and performance metrics section . we manage our business as a single reportable segment . within our organizational framework , the same operational resources support multiple geographic regions and performance is evaluated at a consolidated level . we also evaluate performance based on discrete financial information on a regional basis . since all of our regions have similar operations and share similar economic characteristics , we aggregate regions into a single operating and reportable segment . these similarities include ( 1 ) long-term financial performance , ( 2 ) the nature of products and services , ( 3 ) the types of customers we sell to and ( 4 ) the distribution methods used . key business and performance metrics we focus on a variety of indicators and key operating and financial metrics to monitor the financial condition and performance of our business . these metrics include : net sales . we generate net sales primarily through the sale of landscape supplies , including irrigation systems , fertilizer & control products , landscape accessories , nursery goods , hardscapes and outdoor lighting to our customers who are primarily landscape contractors serving the residential and commercial construction sectors . our net sales include billings for freight and handling charges , and commissions on the sale of control products that we sell as an agent . net sales are presented net of any discounts , returns , customer rebates , and sales or other revenue-based tax . non-gaap organic sales . in managing our business , we consider all growth , including the opening of new greenfield branches , to be organic growth unless it results from an acquisition . when we refer to organic sales growth , we include increases in growth from newly-opened greenfield branches and decreases in growth from closing existing branches but exclude increases in growth from acquired branches until they have been under our ownership for at least four full fiscal quarters at the start of the fiscal reporting period . non-gaap selling days . selling days are defined as business days , excluding saturdays , sundays and holidays , that our branches are open during the year . depending upon the location and the season , our branches may be open on saturdays and sundays ; however for consistency , those days have been excluded from the calculation of selling days . non-gaap organic daily sales . we define organic daily sales as organic sales divided by the number of selling days in the relevant reporting period . we believe organic sales growth and organic daily sales growth are useful measures for evaluating our performance as we may choose to open or close branches in any given market depending upon the needs of our customers or our strategic growth opportunities . cost of goods sold . our cost of goods sold includes all inventory costs , such as purchase price paid to suppliers , net of any rebates received , as well as inbound freight and handling , and other costs associated with inventory . our cost of goods sold excludes the cost to deliver the products to our customers through our branches , which is included in selling , general and administrative expenses . story_separator_special_tag gross profit and gross margin gross profit for the 2017 fiscal year increased 15 % to $ 595.5 million as compared to $ 515.7 million for the 2016 fiscal year . gross profit growth was driven by the net sales increase resulting from organic sales growth and acquisitions in addition to margin expansion resulting from our operational initiatives . gross margin increased 70 basis points to 32.0 % in the 2017 fiscal year as compared to 31.3 % in the 2016 fiscal year . operational improvement in category management was the primary contributor to the growth . product mix did not have a significant impact on gross margins . acquisitions did not contribute to the margin improvement . selling , general and administrative expenses ( operating expenses ) operating expenses for the 2017 fiscal year increased 12 % to $ 502.2 million from $ 446.5 million for the 2016 fiscal year . the increase in operating expenses was primarily driven by our growth from acquisitions . operating expenses expressed as a percentage of net sales decreased to 27.0 % for the 2017 fiscal year compared to 27.1 % for the 2016 fiscal year . the decrease in operating expenses as a percentage of sales reflects non-recurrence of ipo related costs which occurred in the 2016 fiscal year partially offset by increased 38 investment in marketing , e-commerce and the sales force . depreciation and amortization increased $ 6.1 million to $ 43.1 million primarily as result of our acquisitions . interest expense and other non-operating ( income ) expense interest expense and other non-operating ( income ) expense increased $ 3.1 million to $ 25.2 million in the 2017 fiscal year from $ 22.1 million in the 2016 fiscal year . the increase in interest expense was principally driven by the higher debt levels resulting from the refinancing of the term loan facility in the 2016 fiscal year and the acquisition investments in the 2017 fiscal year . income tax ( benefit ) expense income tax expense was $ 18.0 million during the 2017 fiscal year as compared to income tax expense of $ 21.3 million during the 2016 fiscal year . the effective tax rate was 24.8 % during the 2017 fiscal year as compared to 41.0 % for the 2016 fiscal year . the decrease in the effective tax rate was due primarily to ( i ) the adoption of asu 2016-09 in the first quarter of 2017 , which resulted in the recognition of excess tax benefits as a reduction of income tax expense in the company 's consolidated statements of operations , and ( ii ) the december 2017 enactment of the tax cuts and jobs act ( the “ 2017 tax act ” ) . the 2017 tax act includes a number of changes to existing u.s. tax laws , most notably a reduction of the u.s. corporate income tax rate from 35 % to 21 % , which required us to re-measure certain deferred tax assets and liabilities in the reporting period in which the 2017 tax act was signed into law , and a one-time transition tax on certain foreign earnings that were previously deferred . net income net income for the 2017 fiscal year increased 78 % to $ 54.6 million as compared to $ 30.6 million for the 2016 fiscal year . the increase in net income was primarily attributable to our lower effective tax rate , growth in sales both organically and through acquisitions , and the expansion of gross margin resulting from operational improvements . comparison of the 2016 fiscal year to the 2015 fiscal year net sales net sales for the 2016 fiscal year increased 14 % to $ 1,648.2 million as compared to $ 1,451.6 million for the 2015 fiscal year . organic sales growth contributed 3 % to overall growth , and acquisitions contributed an additional 11 % . net sales growth for the 2016 fiscal year , adjusted for one less week in the 2016 fiscal year compared to the 2015 fiscal year , would have been approximately one percentage point greater , or total net sales growth of 15 % and organic sales growth of 4 % . organic sales growth was driven by growth in the irrigation , nursery , landscape accessories , hardscapes and outdoor lighting categories , which together grew over 6 % as a result of continued growth in residential and commercial construction . organic sales for fertilizer and control products decreased 2 % reflecting modest market demand , fewer selling days , and the negative impact of branch consolidations . acquisitions contributed $ 157.0 million to net sales growth . costs of goods sold cost of goods sold for the 2016 fiscal year increased 11 % to $ 1,132.5 million from $ 1,022.5 million for the 2015 fiscal year . the increase in cost of goods sold was primarily driven by the increased net sales growth , including acquisitions , partially offset by lower material cost , including manufacturing incentives . gross profit and gross margin gross profit for the 2016 fiscal year increased 20 % to $ 515.7 million as compared to $ 429.1 million for the 2015 fiscal year . gross profit growth was driven by the net sales increase resulting from organic sales growth and acquisitions in addition to margin expansion resulting from our operational initiatives . gross margin increased 170 basis points to 31.3 % in the 2016 fiscal year as compared to 29.6 % in the 2015 fiscal year . operational improvements in pricing and category management were the primary contributors , each accounting for approximately half of the increase . product mix did not have a significant impact on gross margins . acquisitions contributed approximately 20 basis points to the margin improvement . selling , general and administrative expenses ( operating expenses ) operating expenses for the 2016 fiscal year increased 20 % to $ 446.5 million from $ 373.3 million for the

liquidity and capital resources our ongoing liquidity needs are expected to be funded by cash on hand , net cash provided by operating activities and , as required , borrowings under the abl facility . we expect that cash provided from operations and available capacity under the abl facility will provide sufficient funds to operate our business , make expected capital expenditures , and meet our liquidity requirements for the following 12 months , including payment of interest and principal on our debt . our borrowing base capacity under the abl facility was $ 162.0 million as of december 31 , 2017 , after giving effect to approximately $ 127.0 million of revolving credit loans under the abl facility , a $ 36.0 million increase from $ 91.0 million of revolving credit loans as of january 1 , 2017. as of december 31 , 2017 , we had total cash and cash equivalents of $ 16.7 million , total debt ( net of debt discounts and issuance costs ) of $ 463.6 million and capital leases of $ 11.7 million . working capital was $ 396.1 million as of december 31 , 2017 , an increase of $ 91.6 million as compared to $ 304.5 million as of january 1 , 2017. the increase in working capital is attributable to growth in the business primarily through acquisitions . capital expenditures were $ 14.5 million for the 2017 fiscal year and represent an average of 0.8 % net sales over the year . capital expenditures have averaged $ 11.3 million annually from the 2015 fiscal year to the 2017 fiscal year and represent an average of 0.7 % net sales over this time period .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources our ongoing liquidity needs are expected to be funded by cash on hand , net cash provided by operating activities and , as required , borrowings under the abl facility . we expect that cash provided from operations and available capacity under the abl facility will provide sufficient funds to operate our business , make expected capital expenditures , and meet our liquidity requirements for the following 12 months , including payment of interest and principal on our debt . our borrowing base capacity under the abl facility was $ 162.0 million as of december 31 , 2017 , after giving effect to approximately $ 127.0 million of revolving credit loans under the abl facility , a $ 36.0 million increase from $ 91.0 million of revolving credit loans as of january 1 , 2017. as of december 31 , 2017 , we had total cash and cash equivalents of $ 16.7 million , total debt ( net of debt discounts and issuance costs ) of $ 463.6 million and capital leases of $ 11.7 million . working capital was $ 396.1 million as of december 31 , 2017 , an increase of $ 91.6 million as compared to $ 304.5 million as of january 1 , 2017. the increase in working capital is attributable to growth in the business primarily through acquisitions . capital expenditures were $ 14.5 million for the 2017 fiscal year and represent an average of 0.8 % net sales over the year . capital expenditures have averaged $ 11.3 million annually from the 2015 fiscal year to the 2017 fiscal year and represent an average of 0.7 % net sales over this time period .
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 Suspicious Activity Report : the cd & r investor and deere received all of the net proceeds and bore all commissions and discounts from the sale of our common stock . we did not receive any proceeds from the ipo . on the day prior to the closing of the ipo , all of our then-outstanding preferred stock converted into shares of common stock , resulting in the issuance by us of an additional 25,303,164 shares of our common stock . the conversion of preferred stock is accounted for from the date of conversion and is not retroactively adjusted in our financial statements and related notes included in this annual report on form 10-k. secondary public offerings on december 5 , 2016 , certain selling stockholders completed a public offering of 10,350,000 shares of our common stock at a price of $ 33.00 per share . we did not receive any of the proceeds from the shares of common stock sold by the selling stockholders . on may 1 , 2017 , certain selling stockholders completed a public offering of 11,500,000 shares of our common stock at a price of $ 47.50 per share . we did not receive any of the proceeds from the shares of common stock sold by the selling stockholders . on july 26 , 2017 , certain selling stockholders completed a public offering of 5,437,502 shares of our common stock at a price to the underwriter of $ 51.63 per share . we did not receive any proceeds from the shares of common stock sold by the selling stockholders . 33 following consummation of the secondary offering on july 26 , 2017 , cd & r and deere no longer have an ownership interest in the company . presentation our financial statements included in this report have been prepared in accordance with generally accepted accounting principles in the united states of america ( “ gaap ” ) . we use a 52/53 week fiscal year with the fiscal year ending on the sunday nearest to december 31 in each year . our fiscal quarters end on the sunday nearest to march 31 , june 30 and september 30 , respectively . this discussion of our financial condition is presented for the 2017 fiscal year , which ended on december 31 , 2017 and included 52 weeks and 252 selling days , the 2016 fiscal year , which ended on january 1 , 2017 and included 52 weeks and 253 selling days , and the 2015 fiscal year , which ended on january 3 , 2016 and included 53 weeks and 256 selling days . “ selling days ” are defined below within the key business and performance metrics section . we manage our business as a single reportable segment . within our organizational framework , the same operational resources support multiple geographic regions and performance is evaluated at a consolidated level . we also evaluate performance based on discrete financial information on a regional basis . since all of our regions have similar operations and share similar economic characteristics , we aggregate regions into a single operating and reportable segment . these similarities include ( 1 ) long-term financial performance , ( 2 ) the nature of products and services , ( 3 ) the types of customers we sell to and ( 4 ) the distribution methods used . key business and performance metrics we focus on a variety of indicators and key operating and financial metrics to monitor the financial condition and performance of our business . these metrics include : net sales . we generate net sales primarily through the sale of landscape supplies , including irrigation systems , fertilizer & control products , landscape accessories , nursery goods , hardscapes and outdoor lighting to our customers who are primarily landscape contractors serving the residential and commercial construction sectors . our net sales include billings for freight and handling charges , and commissions on the sale of control products that we sell as an agent . net sales are presented net of any discounts , returns , customer rebates , and sales or other revenue-based tax . non-gaap organic sales . in managing our business , we consider all growth , including the opening of new greenfield branches , to be organic growth unless it results from an acquisition . when we refer to organic sales growth , we include increases in growth from newly-opened greenfield branches and decreases in growth from closing existing branches but exclude increases in growth from acquired branches until they have been under our ownership for at least four full fiscal quarters at the start of the fiscal reporting period . non-gaap selling days . selling days are defined as business days , excluding saturdays , sundays and holidays , that our branches are open during the year . depending upon the location and the season , our branches may be open on saturdays and sundays ; however for consistency , those days have been excluded from the calculation of selling days . non-gaap organic daily sales . we define organic daily sales as organic sales divided by the number of selling days in the relevant reporting period . we believe organic sales growth and organic daily sales growth are useful measures for evaluating our performance as we may choose to open or close branches in any given market depending upon the needs of our customers or our strategic growth opportunities . cost of goods sold . our cost of goods sold includes all inventory costs , such as purchase price paid to suppliers , net of any rebates received , as well as inbound freight and handling , and other costs associated with inventory . our cost of goods sold excludes the cost to deliver the products to our customers through our branches , which is included in selling , general and administrative expenses . story_separator_special_tag gross profit and gross margin gross profit for the 2017 fiscal year increased 15 % to $ 595.5 million as compared to $ 515.7 million for the 2016 fiscal year . gross profit growth was driven by the net sales increase resulting from organic sales growth and acquisitions in addition to margin expansion resulting from our operational initiatives . gross margin increased 70 basis points to 32.0 % in the 2017 fiscal year as compared to 31.3 % in the 2016 fiscal year . operational improvement in category management was the primary contributor to the growth . product mix did not have a significant impact on gross margins . acquisitions did not contribute to the margin improvement . selling , general and administrative expenses ( operating expenses ) operating expenses for the 2017 fiscal year increased 12 % to $ 502.2 million from $ 446.5 million for the 2016 fiscal year . the increase in operating expenses was primarily driven by our growth from acquisitions . operating expenses expressed as a percentage of net sales decreased to 27.0 % for the 2017 fiscal year compared to 27.1 % for the 2016 fiscal year . the decrease in operating expenses as a percentage of sales reflects non-recurrence of ipo related costs which occurred in the 2016 fiscal year partially offset by increased 38 investment in marketing , e-commerce and the sales force . depreciation and amortization increased $ 6.1 million to $ 43.1 million primarily as result of our acquisitions . interest expense and other non-operating ( income ) expense interest expense and other non-operating ( income ) expense increased $ 3.1 million to $ 25.2 million in the 2017 fiscal year from $ 22.1 million in the 2016 fiscal year . the increase in interest expense was principally driven by the higher debt levels resulting from the refinancing of the term loan facility in the 2016 fiscal year and the acquisition investments in the 2017 fiscal year . income tax ( benefit ) expense income tax expense was $ 18.0 million during the 2017 fiscal year as compared to income tax expense of $ 21.3 million during the 2016 fiscal year . the effective tax rate was 24.8 % during the 2017 fiscal year as compared to 41.0 % for the 2016 fiscal year . the decrease in the effective tax rate was due primarily to ( i ) the adoption of asu 2016-09 in the first quarter of 2017 , which resulted in the recognition of excess tax benefits as a reduction of income tax expense in the company 's consolidated statements of operations , and ( ii ) the december 2017 enactment of the tax cuts and jobs act ( the “ 2017 tax act ” ) . the 2017 tax act includes a number of changes to existing u.s. tax laws , most notably a reduction of the u.s. corporate income tax rate from 35 % to 21 % , which required us to re-measure certain deferred tax assets and liabilities in the reporting period in which the 2017 tax act was signed into law , and a one-time transition tax on certain foreign earnings that were previously deferred . net income net income for the 2017 fiscal year increased 78 % to $ 54.6 million as compared to $ 30.6 million for the 2016 fiscal year . the increase in net income was primarily attributable to our lower effective tax rate , growth in sales both organically and through acquisitions , and the expansion of gross margin resulting from operational improvements . comparison of the 2016 fiscal year to the 2015 fiscal year net sales net sales for the 2016 fiscal year increased 14 % to $ 1,648.2 million as compared to $ 1,451.6 million for the 2015 fiscal year . organic sales growth contributed 3 % to overall growth , and acquisitions contributed an additional 11 % . net sales growth for the 2016 fiscal year , adjusted for one less week in the 2016 fiscal year compared to the 2015 fiscal year , would have been approximately one percentage point greater , or total net sales growth of 15 % and organic sales growth of 4 % . organic sales growth was driven by growth in the irrigation , nursery , landscape accessories , hardscapes and outdoor lighting categories , which together grew over 6 % as a result of continued growth in residential and commercial construction . organic sales for fertilizer and control products decreased 2 % reflecting modest market demand , fewer selling days , and the negative impact of branch consolidations . acquisitions contributed $ 157.0 million to net sales growth . costs of goods sold cost of goods sold for the 2016 fiscal year increased 11 % to $ 1,132.5 million from $ 1,022.5 million for the 2015 fiscal year . the increase in cost of goods sold was primarily driven by the increased net sales growth , including acquisitions , partially offset by lower material cost , including manufacturing incentives . gross profit and gross margin gross profit for the 2016 fiscal year increased 20 % to $ 515.7 million as compared to $ 429.1 million for the 2015 fiscal year . gross profit growth was driven by the net sales increase resulting from organic sales growth and acquisitions in addition to margin expansion resulting from our operational initiatives . gross margin increased 170 basis points to 31.3 % in the 2016 fiscal year as compared to 29.6 % in the 2015 fiscal year . operational improvements in pricing and category management were the primary contributors , each accounting for approximately half of the increase . product mix did not have a significant impact on gross margins . acquisitions contributed approximately 20 basis points to the margin improvement . selling , general and administrative expenses ( operating expenses ) operating expenses for the 2016 fiscal year increased 20 % to $ 446.5 million from $ 373.3 million for the

