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) December 21, 1999
FFP MARKETING COMPANY, INC.
(Exact name of registrant as specified in its charter)
Texas 1-13727 75-2735779
(State or other jurisdiction of (Commission (IRS employer
incorporation or organization) File Number) Identification No.)
2801 Glenda Avenue, Fort Worth, Texas 76117-4391
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 817/838-4700
Not applicable
(Former name or former address, if changed since last report)
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ITEM 4
KPMG LLP ("KPMG") served as the registrant's independent accountant to audit
the consolidated financial statements of the registrant for each of its two most
recent years ended December 27, 1998, and December 28, 1997. In November and
December 1999, the registrant sought proposals from four accounting firms,
including KPMG and Grant Thornton LLP ("Grant Thornton"), with respect to the
audit of the registrant's consolidated financial statements for its fiscal year
ending December 26, 1999.
On December 15, 1999, the registrant vebally advised KMPG that, as part of
the registrant's effort to reduce general and administrative expenses,
management would recommend a dismissal of KPMG as the registrant's outside
accounting firm to audit the registrant's consolidated financial statements for
its fiscal year ending December 26, 1999 and the engagement of Grant Thornton in
that capacity. On December 21, 1999, the audit committee of the registrant's
board of Directors approved these actions.
The reports of KPMG on the financial statements of the registrant for its two
most recent years do not contain an adverse opinion or a disclaimer of opinion,
and were not qualified or modified as to uncertainty, audit scope, or accounting
principles.
There were no disagreements between the registrant and KPMG during the
registrant's two most recent fiscal years or any subsequent interim period
preceding the dismissal as to any matter of accounting principles or practices,
financial statement disclosure, or auditing scope of procedure. After its audit
of the registrant's financial statements for its fiscal year ended December 27,
1998, KPMG advised the registrant that certain internal control matters
constituted material weaknesses and reportable conditions. During its fiscal
year 1999, the registrant has taken remedial action in an attempt to rectify and
improve each of these matters. The audit committee of the board of directors of
the registrant has discussed these matters with KPMG, and the registrant has
authorized KPMG to respond fully to the inquiries of Grant Thornton about these
matters.
On October 15, 1999, FFP Partners, L.P., a Delaware limited partnership,
closed new financing with a 20-year term from a third party lender and repaid in
full its long-term indebtedness then payable to the registrant. As a condition
of that new financing, on the same date, the registrant and FFP Partners, L.P.
both executed a new real estate lease with a 20-year term, and exercised options
to extend the term of prior real estate leases to a 20-year term, for land and
buildings at 63 convenience store locations owned by FFP Partners, L.P. and
operated by the registrant.
At the time of registrant's preparation of Form 10-Q for its third quarter of
1999, which was filed prior to the dismissal of KPMG as registrant's accounting
firm, KPMG concluded that such 20-year real estate leases should be accounted
for as capital leases instead of operating leases. The determination as to
whether these lease should be treated as capital leases or operating leases for
accounting purposes could materially impact the financial statements of
registrant for its 1999 fiscal year. As of the date of the filing of this Form
8-K, registrant has not yet determined the correct accounting treatment of such
leases because it has not yet completed its review of all of the relevant
factual matters necessary to make such a determination. Therefore, this issue
was not resolved to the satisfaction of KPMG prior to its dismissal. As of this
date, registrant has not sought the opinion, advice or views of Grant Thornton
as to this issue or any other accounting principle, and this issue had no
bearing on the registrant's decision to change auditing firms.
Item 7. Financial Statements and Exhibits
(a) Not applicable
(b) Not applicble
(c) Exhibits
16.1 Letter of KPMG LLP dated December 29, 1999
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 29, 1999 FFP Marketing Company, Inc.
(Registrant)
By: /s/ Craig T. Scott
Craig T. Scott
Vice President - Finance
December 29, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
We were previously principal accountants for FFP Marketing Company, Inc. and,
under the date of March 30, 1999, except as to the third paragraph of Note 5,
which was as of April 12, 1999, we reported on the consolidated financial
statements of FFP Marketing Company, Inc. and subsidiaries as of December 27,
1998 and December 28, 1997 and for the years ended December 27, 1998, and
December 28, 1997. On December 15, 1999, our appointment as principal
accountants was terminated. We have read FFP Marketing Company, Inc.'s
statements included under Item 4 of its Form 8-K dated December 29, 1999, and we
agree with such statements except that we are not in a position to agree or
disagree with FFP Marketing Company, Inc.'s stated reason for changing principal
accountants, statement that the change was approved by the audit committee of
the Board of Directors, statement regarding the remedial action taken in fiscal
1999 to address material weaknesses and reportable conditions in internal
controls, statement regarding registrant not yet determining correct accounting
treatment of leases as discussed in the last paragraph of Item 4, and the last
sentence of such Item 4 regarding FFP Marketing Company, Inc.'s contact with
Grant Thornton or the fact that the disclosed unresolved issue had no bearing on
its decision to dismiss us.
KPMG LLP
Fort Worth, Texas
