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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report: December 8, 1998
OPTION CARE, INC.
(Exact name of registrant as specified in its charter)
Delaware 80-19878 36-3791193
(State or other jurisdiction Comission (IRS Employer
of incorporation) File No. Identification No.)
100 Corporate North
Suite 212
Bannockburn, Illinois 60015
(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (847) 615-1690
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INDEX
OPTION CARE, INC.
ITEM 1. Changes in Control of Registrant Not Applicable
ITEM 2. Acquisition or Disposition of Assets Not Applicable
ITEM 3. Bankruptcy or Receivership Not Applicable
ITEM 4. Changes in Registrant's Certifying Accountant Page 3
ITEM 5. Other Events Not Applicable
ITEM 6. Resignations of Registrant's Directors Not Applicable
ITEM 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired Not Applicable
(b) Pro Forma Financial Information Not Applicable
(c) Exhibit: 16 Page 4
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ITEM 4
As of December 1, 1998, the Board of Directors of Option Care, Inc. (the
"Registrant"), upon recommendation of its Audit Committee, engaged Ernst & Young
LLP ("E&Y") as the Registrant's independent auditors for the year ending
December 31, 1998. The Board of Directors of the Registrant retained E&Y based
upon the Board's determination that the Registrant would benefit from E&Y's
competitive fee structure. The engagement of E&Y arose from the Registrant's
decision to request proposals for audit services from multiple firms, including
KPMG Peat Marwick LLP ("KPMG").
The KPMG audit reports on the consolidated financial statements of the
Registrant as of and for the two years ended December 31, 1997 did not contain
an adverse opinion or disclaimer of opinion, and were not qualified or modified
as to uncertainty, audit scope or accounting principles. During the two year
period ended December 31, 1997 and through the period ended December 1, 1998,
there were no disagreements between the Registrant and KPMG on any matters of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which disagreements if not resolved to the satisfaction of
KPMG, would have caused it to make references to the subject matter of such
disagreements in connection with its report.
In its management letter to the audit committee of the Registrant, dated May 13,
1998, KPMG identified two reportable conditions: (1) excessive turnover in the
Registrant's Chief Financial Officer position and (2) a lack of segregation of
duties between the treasury function and the controllership function of the
Registrant. The Registrant believes it has implemented steps to correct the
deficiencies noted, including (1) the hiring of Michael A. Siri as Chief
Financial Officer, who has 22 years experience in accounting and finance and (2)
the Registrant's recent implementation of alternative internal controls to
mitigate the risk of asset misappropriation.
The Registrant has authorized KPMG to respond to any inquiries of E&Y concerning
its audit. During the two years ended December 31, 1997 and through the dated
appointment, E&Y did not provide any consultations to the Registrant regarding
the application of accounting principles to specific transactions or the type of
opinion that they may have rendered on the financial statements.
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ITEM 7: Exhibit 16
Letter from KPMG Peat Marwick LLP to Securities and Exchange Commission
regarding Item 4 disclosure contained herein, to be filed by amendment.
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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.
Dated: December 8, 1998
OPTION CARE, INC.
By: Michael A. Siri
/s/ Michael A. Siri
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Michael A. Siri
Chief Financial Officer
