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UNITED STATES
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)
FEBRUARY 13, 1998
UNIVERSAL SEISMIC ASSOCIATES, INC.
Exact Name of Registrant as Specified in its Charter
DELAWARE 0-19971 76-0256086
State of Incorporation or Commission File Number I.R.S. Employer
Organization Identification No.
16420 PARK TEN PLACE 77084-5051
SUITE 300 (Zip Code)
HOUSTON, TEXAS
Address of Principal Executive Offices
(281) 578-8081
Registrant's telephone number,
including area code
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
(a) Commencing in February 1997, the Audit Committee of the Board of
Directors of Universal Seismic Associates, Inc. (the "Company") conducted a
review of the Company's financial statements in response to allegations by a
Company stockholder who also pursued litigation against the Company. In
connection with its review, the Audit Committee engaged its independent
accountants, Coopers & Lybrand L.L.P. ("Coopers"), to review the affected
financial statements. The Audit Committee was also advised by independent legal
counsel and independent accountants engaged by such counsel. Based upon Coopers'
review and the preliminary recommendations of the Audit Committee, the Company
restated its financial statements for the quarters ended September 30, 1996 and
December 31, 1996 in Forms 10-QSB/A filed May 21, 1997. Based on the results of
its review, Coopers notified the Audit Committee that it would no longer accept
the representations of the Company's Chief Financial Officer for the purpose of
reporting on the Company's financial statements.
In August 1997 Joe T. Rye was appointed Chief Accounting Officer of the
Company, and the Company's Chief Financial Officer was removed from the process
of preparing the Company's financial statements. On November 10, 1997 Mr. Rye
was promoted to Chief Executive Officer and elected a director of the Company.
On February 5, 1998, Ron England resigned as Chief Financial Officer and
director of the Company. Mr. Rye is now also serving as acting Chief Financial
Officer. The Board of Directors is seeking to hire a new Chief Financial Officer
for the Company as soon as practicable.
In December 1997 additional facts came to the attention of management
which suggested that the financial statements for fiscal years 1996 and 1997 may
have been misstated. Company management immediately communicated this
information to Coopers, the Company's independent accountants, and the Company's
Audit Committee. The Audit Committee investigated these new items with the
assistance and advice of independent legal counsel and independent accountants
engaged by such counsel. Company management also discussed these new items and a
possible restatement of the Company's 1996 and 1997 financial statements with
Coopers. As a result of its investigation, the Audit Committee determined that
the newly discovered information was likely to result in a restatement of the
Company's financial statements for fiscal years 1996 and 1997.
The Company does not anticipate that any restatement based on the newly
discovered facts will result in an adverse impact on the Company's balance sheet
as of June 30, 1997 or the Company's financial statements for any periods
subsequent to June 30, 1997. In addition, any restatement will not adversely
impact the liquidity of the Company. However, the Company believes that it is
likely that the Company will restate its financial statements for fiscal years
1996 and 1997, and that the restated financial statements will reflect a
negative impact on the Company's net income for fiscal year 1996 and positive
impact on fiscal year 1997 net income. The nature of the possible adjustments to
the financial statements generally relate to timing of revenue recognition.
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In a meeting on February 13, 1998, Coopers verbally advised the Company
that it was unwilling to be associated with the Company's financial statements
and resigned as independent accountants for the Company. Coopers also advised
the Company that, in conjunction with its resignation, its opinions with respect
to the financial statements of the Company as of and for the years ended June
30, 1996 and 1997 should no longer be relied upon. Coopers confirmed its
resignation in a letter dated February 13, 1998, a copy of which is filed as an
exhibit to this report. On February 16, 1998 Coopers discussed its resignation
by telephone with the Chairman of the Audit Committee. On February 17, 1998 and
at the request of the Company, Coopers met with the Company's Chief Executive
Officer and a member of the Audit Committee to discuss its resignation.
Coopers' resignation was not recommended or approved by the Company's
Board of Directors or Audit Committee, and Coopers declined the Company's
invitation to meet with the Audit Committee to discuss its resignation.
There were no disagreements with Coopers on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which, if not resolved to Coopers' satisfaction, would have caused it
to make reference to the subject matter of the disagreement in connection with
its report on the Company's financial statements.
It will be necessary for the Company to engage new independent
accountants to audit the Company's financial statements for fiscal years 1996
and 1997 and subsequent years. The Company has authorized Coopers to respond
fully to the inquiries of any successor independent accountant concerning the
above events.
The Company provided Coopers with a copy of the foregoing disclosures
and requested in writing that Coopers furnish it with a letter addressed to the
Securities and Exchange Commission stating whether or not it agrees with such
disclosures and, if not, stating the respects in which it does not agree. A copy
of such letter will be filed as an exhibit to this report in accordance with
Item 601 of Regulation S-B.
The above contains forward-looking information based on certain
assumptions and contingencies that involve risks and uncertainties. The
forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and relate to the effects
of a possible restatement of the Company's financial statements. In making these
forward-looking statements, the Company assumes, among other things, that there
are no additional facts that will impact the Company's financial statements.
There can be no assurance that any of the Company's assumptions are accurate.
(b) The Company has not yet engaged a successor independent accounting
firm.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
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(c) Exhibits. The following exhibits are filed as part of this report:
16.1 Letter, dated February 13, 1998, from Coopers & Lybrand L.L.P.
to Universal Seismic Associates, Inc. resigning as independent
accountants.
16.2 The letter of Coopers & Lybrand L.L.P. to the Securities and
Exchange Commission will be filed as an exhibit to this report
in accordance with the provisions of Item 601 of Regulation
S-B.
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SIGNATURE
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: February 23, 1998
UNIVERSAL SEISMIC ASSOCIATES, INC.
By: /s/ Joe T. Rye
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Joe T. Rye, President and Chief
Executive Officer
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EXHIBIT INDEX
16.1 Letter, dated February 13, 1998, from Coopers & Lybrand L.L.P.
to Universal Seismic Associates, Inc. resigning as independent
accountants.
16.2 The letter of Coopers & Lybrand L.L.P. to the Securities and
Exchange Commission will be filed as an exhibit to this report
in accordance with the provisions of Item 601 of Regulation
S-B.
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EXHIBIT 16.1
February 13, 1998
Mr. Joe T. Rye
Universal Seismic Associates, Inc.
16420 Park Ten Place, Suite 300
Houston, Texas 77084-5051
Dear Mr. Rye:
As discussed today, Coopers & Lybrand L.L.P. has resigned effective February 13,
1998 as the independent accountants of Universal Seismic Associates, Inc. and
subsidiaries (the "Company"). In conjunction with such resignation, our reports
with respect to the financial statements of the Company as of and for the years
ended June 30, 1997 and 1996 should no longer be relied upon.
The Company should promptly notify the Securities and Exchange Commission on
Form 8-K that our reports cited above should not be relied upon or are
withdrawn. Prompt notification of this action should also be given to the
appropriate stock exchanges, other regulatory agencies and other persons known
to or which you believe have relied upon or who are presently relying upon our
reports. Enclosed is a letter that is required by the SEC Practice Section
Executive Committee of the American Institute of Certified Public Accountants.
We will fax this letter on February 17, 1998.
Please keep us advised of all such communications and actions taken in this
regard.
Very truly yours,
/s/ Coopers & Lybrand L.L.P.
Enclosure
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February 17, 1998
Mr. Joe T. Rye
Universal Seismic Associates, Inc.
16420 Park Ten Place, Suite 300
Houston, Texas 77084-5051
Dear Mr. Rye:
This is to confirm that the client-auditor relationship between Universal
Seismic Associates, Inc. (Commission File Number 0-19971) and Coopers &
Lybrand L.L.P. has ceased.
Very truly yours,
/s/ Coopers & Lybrand L.L.P.
cc: Office of the Chief Accountant
SECPS Letter File
Securities and Exchange Commission
Mail Stop 11-3
450 Fifth Street, N.W.
Washington, D.C. 20549
