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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)
May 20, 1998 (May 13, 1998)
INFORMIX CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
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0-15325 94-3011736
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(Commission File Number) (IRS Employer Identification No.)
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4100 BOHANNON DRIVE, MENLO PARK, CALIFORNIA 94025
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (650) 926-6300
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REFERENCE IS MADE TO THE CURRENT REPORT ON FORM 8-K FILED BY THE COMPANY ON
MAY 28, 1998. SUCH REPORT IS HEREBY AMENDED IN ITS ENTIRETY BY THE FOLLOWING:
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On May 12, 1998, the Board of Directors of Informix Corporation (the
"Company") approved a resolution (i) to dismiss Ernst & Young LLP ("E&Y") as the
Company's independent accountants, effective upon management's notification of
E&Y of the dismissal; and (ii) concurrent with such notification, to engage KPMG
Peat Marwick LLP ("KPMG") as the Company's independent accountants upon such
terms as may be negotiated by management.
On May 13, 1998, the Company's management notified E&Y of the dismissal. On
May 19, 1998, the Company engaged KPMG as the Company's independent accountants.
E&Y's reports with respect to the Company's financial statements for the
fiscal years ended December 31, 1996 and 1997 did not contain an adverse opinion
or a disclaimer of opinion and were not qualified as to uncertainty, audit scope
or accounting principles.
In connection with the audits of the Company's financial statements for each
of the two fiscal years ended December 31, 1996 and 1997 and in the subsequent
interim period, except as described in the next paragraph, there were no
disagreements with E&Y on any matter of accounting principles or practices,
financial statement disclosure or auditing scope and procedures which, if not
resolved to the satisfaction of E&Y would have caused E&Y to make reference to
the matter in their report.
E&Y advised the Company that it disagreed with the Company's recognition of
revenue resulting from software license transactions with industrial
manufacturers which occurred during the first quarter ended March 31, 1998. The
disagreement was resolved to the satisfaction of E&Y with the result that
approximately $6.2 million in revenue has been deferred and will be recognized
over a period which the Company expects to be approximately two years. The
Company intends to file immediately an amendment to its quarterly report on Form
10-Q for the quarter ended March 31, 1998 to restate its financial results for
the period. The Audit Committee has discussed the accounting of these
transactions with management and E&Y.
The Company has authorized E&Y to respond fully to the inquiries of KPMG as
the successor independent accountants of the Company. Prior to accepting its
engagement as the Company's successor independent accountants, KPMG had the
opportunity to discuss with E&Y the subject matter of the disagreement described
above and other matters relevant to the Company. KPMG has not offered any report
or advice to the Company concerning such disagreement that was important to the
Company's decision in reaching a resolution.
During the Company's fiscal years ended December 31, 1996 and 1997, and
through March 31, 1998, the following reportable events occurred:
In connection with the restatement of the Company's financial statements for
fiscal years ended December 31, 1996, 1995 and 1994, and the quarter ended March
30, 1997, a number of conditions which collectively represented a material
weakness in the Company's internal accounting controls were identified. These
conditions included a deterioration in the Company's accounting controls at
corporate and regional management levels, and a relative failure to stress the
importance of these controls; an inappropriate level of influence, principally
by the sales organization, over the revenue recognition process; and an apparent
lack of clarity and consistent understanding within the Company of the
application of the Company's revenue recognition policies to large, complex
reseller license transactions. The Company is implementing a plan to strengthen
the Company's internal accounting controls. This plan includes updating the
Company's revenue recognition policies regarding accounting and reporting for
large, complex reseller license transactions, developing and conducting
educational programs to help implement
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such policies, changing the Company's corporate and regional accounting and
reporting structure and re-establishing an internal audit function reporting to
the Company's Board of Directors.
On April 29, 1998, E&Y informed the Audit Committee of the Board that it
considered that, in connection with the audit of the Company's fiscal 1997
consolidated financial statements, the lack of appropriate resources in the
accounting and controlling departments of the Company constituted a reportable
condition.
E&Y has furnished a letter addressed to the Securities and Exchange
Commission concerning the information contained in this Form 8-K. The Company
disagrees with such letter as it relates to the nature of the information
reported by E&Y to the Company's Audit Committee of the Board at its April 29,
1998 meeting. A copy of that letter is filed as Exhibit 16.1 to this Form 8-K.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit 16.1 Letter from Ernst & Young LLP dated May 29, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused the Amendment to this Current Report to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Menlo Park,
State of California, on June 1, 1998.
INFORMIX CORPORATION
By: /s/ JEAN-YVES DEXMIER
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Jean-Yves Dexmier,
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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EXHIBIT DESCRIPTION
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16.1 Letter from Ernst & Young LLP
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EXHIBIT 16.1
[LETTERHEAD OF ERNST & YOUNG LLP]
May 29, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
We have read Item 4 of Form 8-K dated May 20, 1998, of Informix Corporation
and believe it is not complete as to reportable events as described in Item 304
(a)(1)(v) of Regulation S-K. We believe the ninth paragraph of Item 4 included
on page 3 therein should be replaced by the following two sentences. On April
29, 1998, E&Y informed the Audit Committee of the Board that, in connection with
the audit of the Company's fiscal 1977 consolidated financial statements, the
lack of appropriate resources, analyses, and process structure in the accounting
and financial reporting departments of the Company resulted in delays in closing
the books, numerous and material amounts of post-closing entries and audit
adjustments required to be recorded by the Company, and difficulty in
accumulating accurate information necessary for financial statement disclosure
in a timely manner. E&Y considers this condition to be a material weakness.
We are in agreement with the statements contained in the first sentence of
the second paragraph, the third paragraph, the fourth paragraph, the first
sentence of the fifth paragraph, the first part of the second sentence of the
fifth paragraph through and including the words "has been deferred", the fourth
sentence of the fifth paragraph as it relates to our Firm, the first sentence of
the sixth paragraph, the seventh paragraph, the first and second sentence of the
eighth paragraph, and the first sentence of the tenth paragraph on pages 2 and 3
therein. In addition, we have no basis to agree or disagree with other
statements of the registrant contained therein.
Regarding the registrant's statements concerning the lack of internal
controls to prepare financial statements, included in the eighth and ninth
paragraphs of Item 4 on page 2 and 3 therein, we had considered such matters in
determining the nature, timing and extent of procedures performed in our audit
of the registrant's consolidated financial statements for the years ended
December 31, 1997, 1996, 1995, and 1994.
/s/ Ernst & Young
