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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 2, 1996
DRUG GUILD DISTRIBUTORS, INC.
(Exact Name of Registrant as Specified in its Charter)
New Jersey 2-96510-NY 11-2269958
(State of other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
350 Meadowland Parkway, Secaucus, New Jersey 07096
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number,
including area code, (201) 348-3700
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Item 4: CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
(a) On July 2, 1996, the Executive Committee of Drug Guild Distributors,
Inc. (the "Company") decided to end the engagement of Anchin, Block & Anchin LLP
as the independent auditors of the Company as a result of concerns that the
independence of Anchin, Block & Anchin LLP might be deemed to be impaired by the
Company's investigation of recently discovered defalcations of inventory of the
Company.
The independent auditors' reports on the Company's financial statements
for the past two fiscal years did not contain an adverse opinion or a disclaimer
of opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principles.
The Company believes, and has been advised by Anchin, Block & Anchin
LLP that it concurs in such belief, that during the fiscal years ended July 31,
1994 and July 31, 1995, and from that date to the date of termination of the
services of Anchin, Block & Anchin LLP, the Company and Anchin, Block & Anchin
LLP did not have any disagreement on a matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure.
(b) On July 11, 1996, the Company engaged Richard A. Eisner & Company, LLP
as its independent auditors to audit the Company's financial statements for the
fiscal year ended July 31, 1996.
(c) No reportable events under Regulation S-K Rule 304(a)(5) have
occurred.
Item 5: OTHER EVENTS
On May 22, 1996, based on information obtained from the interim physical
inventory taken during the quarter ending April 30, 1996, the Company determined
that there was a substantial inventory shortage when the physical inventory was
compared to the Company's books. On May 31, 1996, the Company determined that
inventory theft had occurred during each of the fiscal years ending July
31, 1993, 1994, 1995 and 1996.
The Company has therefore restated, in its Form 10-Q for the period ending
April 30, 1996, its statements of operations and cash flows for the three and
nine month periods ended April 30, 1995 to correct the calculation of inventory
based upon the gross profit estimate method previously used and separately
state, as an expense, the amount of the inventory theft. The provision (credit)
for corporate taxes for these periods have been restated accordingly. The
balance sheets as of July 31, 1995, 1994 and 1993, which were based on a
physical inventory count, did not require restatement.
Subsequent to April 30, 1996, the Company estimates an additional $600,000
of inventory theft occurred prior to its being detected. The Company is
reviewing its records to ascertain the full extent of the theft and when it
began, and will reflect the results of that review in future reports.
The Company has engaged a private contractor to investigate the thefts and
is cooperating with federal, state and local law enforcement authorities to
determine the source of the theft.
The Company believes it may have insurance coverage totaling $2,000,000 as
a possible recovery against the inventory theft. The Company has not provided
for any recovery in its most recent financial statements for the period ending
April 30, 1996 since at this time such recovery cannot be assured.
Item 7: FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
16 Letter regarding change in certifying accountants.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amended Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: August 21, 1996
DRUG GUILD DISTRIBUTORS, INC.
By: /s/ Jay Reba
Jay Reba
Chief Financial and Accounting Officer
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[LETTERHEAD OF ANCHIN, BLOCK & ANCHIN LLP
CERTIFIED PUBLIC ACCOUNTANTS]
1375 Broadway
New York, New York 10018
(212) 840-3456
August 8, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
We were previously accountants for Drug Guild Distributors, Inc. (Drug Guild)
and on October 10, 1995, we reported on the financial statements of Drug Guild
as of July 31, 1995 and 1994 and for the two years then ended. On July 2, 1996,
we were dismissed as the independent accountants of Drug Guild. We have read
statements included under Item 4 of its Form 8-K for July 2, 1996, and we agree
with such statements.
Very truly yours,
ANCHIN, BLOCK & ANCHIN LLP
/s/ Ronald Kerstein
Ronald Kerstein
New York, N.Y.
August 8, 1996
