SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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)
February 29, 2000
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Monarch Services, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-8512 52-1073628
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
4517 Harford Road, Baltimore, Maryland 21214
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code, (410) 254-9200
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
(a)
Monarch Services, Inc. (the "Company") has had a long and beneficial
relationship with Deloitte & Touche, LLP ("Deloitte") and has relied upon
Deloitte for ongoing accounting services and for extraordinary events such as
the sale in October 1998 of the Company's games division, the Avalon Hill Game
Company. Throughout such engagement the Company has been impressed with the
service, performance and professionalism of the accountants assigned to the
engagement. Since the sale of the games division, however, the Board of
Directors and the Audit Committee have emphasized a cost-cutting strategy
designed to lower expenses and increase profitability on the Company's reduced
revenues. Accordingly, the Audit Committee determined that sound business
practice requires the Company to consider whether it can reduce its overall
accounting costs, while maintaining the effectiveness of the audit process, by
seeking competitive proposals on its accounting work. After reviewing the
proposals obtained, including a proposal from Deloitte, the Audit Committee
determined that the Company would realize a significant cost savings by using an
accounting firm that is not included in the "Big 5." Accordingly, on the
recommendation of the Audit Committee, the Board of Directors has dismissed
Deloitte as the Company's independent public accountants effective February 29,
2000.
Deloitte's audit reports on the Company's financial statements for each of
the Company's fiscal years ended April 30, 1999 and 1998 did not contain an
adverse opinion or a disclaimer of opinion and was not qualified or modified as
to uncertainty, audit scope or accounting principles.
In connection with the audits of the Company's consolidated financial
statements for each of the two fiscal years ended April 30, 1999 and 1998, and
in the interim period subsequent to April 30, 1999, preceding the date of
Deloitte's dismissal, there were no "reportable events," as that term is defined
in the instructions to Form 8-K and the regulations applicable to Item 4 of Form
8-K.
In connection with the audits of the Company's consolidated financial
statements for each of the two fiscal years ended April 30, 1999 and 1998, and
in the interim period subsequent to April 30, 1999, preceding the date of
Deloitte's dismissal, there were no "disagreements," as that term is defined
in the instructions to Form 8-K and the regulations applicable to Item 4 of
Form 8-K, with Deloitte on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure which
"disagreement", if not resolved to the satisfaction of Deloitte, would have
caused Deloitte to make reference to the matter in their report.
(b) The Audit Committee has recommended and the Board of Directors of the
Company has approved the firm of Stegman & Company, Baltimore, Maryland as the
Company's independent accountants for the fiscal year ending April 30, 2000.
The Company will authorize its former accountants to respond fully to any
inquiries of Stegman & Company.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
Exhibit 16.1 Letter dated March 6, 2000 from Deloitte & Touche LLP. (filed
herewith)
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Exhibit 16.1
March 6, 2000
Securities and Exchange Commission
Mail Stop 11-3
450 5th Street, N.W.
Washington, D.C. 20549
Dear Sirs/Madams:
We have read and agree with the comments in Item 4(a) of Form 8-K of Monarch
Services, Inc. dated March 6, 2000, except that we have no basis for agreeing
or disagreeing with the statements contained in the first paragraph.
Yours truly,
/s/ DELOITTE & TOUCHE LLP
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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 thereunto duly authorized.
MONARCH AVALON, INC.
Date: March 6, 2000 By:/S/ A. ERIC DOTT
A. Eric Dott, Chairman of the Board
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Exhibit Index
Exhibit Number Description Page
16.1 Letter dated March 6, 2000 from Deloitte & Touche LLP.
