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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
November 14, 2000
Date of Report (Date of earliest event reported)
PRECISION AUTO CARE, INC.
(Exact name of registrant as specified in its charter)
Virginia 1-14510 54-1847851
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
748 Miller Drive, S.E., Leesburg, Virginia 20175
(Address of principal executive offices) (Zip Code)
703-777-9095
(Registrant's telephone number, including area code)
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
a) Previous independent auditors.
(i) On November 8, 2000, the Registrant dismissed the accounting firm of Ernst &
Young LLP as its independent auditors effective November 8, 2000. On November 9,
2000, the Registrant received a letter from Ernst & Young LLP confirming that
the client-auditor relationship between the Registrant and Ernst & Young LLP had
ceased.
(ii) Ernst & Young LLP's reports on the Registrant's financial statements for
the past two fiscal years have contained no adverse opinions or disclaimers of
opinion and were not qualified or modified as to audit scope or accounting
principles. However, Ernst & Young LLP's report dated October 8, 1999 with
respect to the Registrant's financial statements for the year ended June 30,
1999 was modified as to uncertainty about the Registrant's ability to continue
as a going concern. Ernst & Young LLP noted a material weakness and a
reportable condition in internal
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control in conducting their audit for the year ended June 30, 1999 which it
described in a management letter to the Registrant's Audit Committee dated
October 8, 1999. The letter received from Ernst & Young LLP noted a material
weakness in internal control related to the Registrant's inability to prepare
timely financial statements and a reportable condition in internal control
related to transactions of subsidiaries of the Registrant that were unrecorded
or recorded incorrectly. Ernst & Young LLP did not issue a management letter in
connection with their audit of the Registrant's June 30, 2000 financial
statements.
(iii) In connection with the audits of the Registrant's financial statements for
each of the two fiscal years ended June 30, 2000, and in the subsequent interim
period, there were no disagreements with Ernst & Young LLP on any matter of
accounting principles or practices, financial statement disclosures, or auditing
scope or procedure which would have caused Ernst & Young LLP to make reference
in their report to such disagreements if not resolved to their satisfaction.
(iv) On November 8, 2000, the Registrant's Audit Committee and Board of
Directors approved the decision to change independent auditors from Ernst &
Young LLP to Grant Thornton LLP.
(v) The Registrant has provided Ernst & Young LLP with a copy of this disclosure
and requested that Ernst & Young LLP furnish the Registrant with a letter
addressed to the Securities and Exchange Commission (the "Commission") stating
whether it agrees with the above statements. A copy of the Ernst & Young LLP
letter dated November 13, 2000 addressed to the Commission is filed as Exhibit 1
to this Form 8-K.
(b) New independent accountants.
(i) On November 8, 2000, the Registrant engaged Grant Thornton LLP as its new
independent accountants for the fiscal year ending June 30, 2001.
(ii) Prior to November 8, 2000, the Company had not consulted with Grant
Thornton LLP on items which involved the Company's accounting principles or the
type of audit opinion to be issued on the Company's financial statements, but
did discuss with Grant Thornton LLP its engagement fees and standard engagement
terms for serving as the Registrant's auditors.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 1 Letter from Ernst & Young LLP dated November 14, 2000,
pursuant to Item 304(a)(3)
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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 hereunto duly authorized.
Precision Auto Care, Inc.
Date: November 14, 2000 By: /s/ Louis M. Brown
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Louis M. Brown
Chief Executive Officer
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