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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 4, 1998
SCHLOTZSKY'S, INC.
(Exact name of registrant as specified in its charter)
TEXAS 0-27008 74-2654208
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification Number)
203 Colorado Street
Austin, Texas 78701
(Address of principal executive offices)
(512) 236-3600
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Coopers & Lybrand L.L.P., the registrant's auditors for fiscal years 1994
through 1997, resigned effective May 4, 1998. Their reports on the financial
statements have never contained an adverse opinion, disclaimer of opinion,
and have never been qualified or modified as to uncertainty, audit scope or
accounting principles.
The Company has never been advised by Coopers & Lybrand that (1) internal
controls necessary for the Company to develop reliable financial statements
did not exist; (2) Coopers & Lybrand would no longer be able to rely on
management's representations or that it was unwilling to be associated with
the financial statements prepared by management; (3) Coopers & Lybrand needed
to expand significantly the scope of its audit; (4) Coopers & Lybrand had
received information which did or which might, if further investigated,
impact the fairness or reliability of a report or financial statement
previously issued or to be issued or which did or might cause Coopers &
Lybrand to be unwilling to rely on management's representations or be
associated with the Company's financial statements; or (5) Coopers & Lybrand
did not conduct such further investigation or expanded audit, or was not able
to resolve its concerns about the Company, because of its pending resignation
as the Company's accountant or any other reason.
On April 28, 1998, Coopers & Lybrand informed the registrant that there was a
disagreement with management concerning the timing of the recognition of
revenue from certain of the registrant's Turnkey Program transactions. The
transactions at issue were fiscal year 1997 sales of real estate with leases
to franchisees guarantied by the Company. The issue was resolved to Coopers &
Lybrand's satisfaction before the filing of the Company's Annual Report on
Form 10-K. The issue was discussed with the Audit Committee of the Board of
Directors, and the registrant has authorized Coopers & Lybrand to discuss the
issue with the registrant's successor accountants.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
Exhibit
No.
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16 Letter of Coopers & Lybrand, L.L.P. regarding its concurrence with
the disclosure under Item 4 of this Form 8-K
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SIGNATURE
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.
SCHLOTZSKY'S, INC.
By: /s/ John C. Wooley
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John C. Wooley, President
and Chief Executive Officer
By: /s/ Monica Gill
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Monica Gill
Chief Financial Officer
Austin, Texas
May 7, 1998
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[COOPERS & LYBRAND LETTERHEAD]
May 7, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
We have read the statements made by Schlotzsky's, Inc. (copy attached),
which we understand will be filed with the Commission, pursuant to Item 4
of Form 8-K, as part of the Company's Form 8-K report for the month of
May, 1998. We agree with the statements concerning our Firm in such Form 8-K.
Very truly yours,
/s/ COOPERS & LYBRAND LLP
