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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
April 8, 1997
Date of Report (Date of earliest event reported)
AUTHENTIC FITNESS CORPORATION
(Exact name of registrant as specified in its charter)
COMMISSION FILE NUMBER 1-11202
Delaware 95-4268251
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
6040 Bandini Boulevard
Commerce, California 90040
(Address of principal executive offices)
(213) 726-1262
(Registrant's telephone number, including area code)
COPIES OF ALL COMMUNICATIONS TO:
AUTHENTIC FITNESS CORPORATION
90 PARK AVENUE
26TH FLOOR
NEW YORK, NEW YORK 10016
ATTENTION: GENERAL COUNSEL
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
(a) On March 21, 1997, Ernst & Young LLP notified the Company of
its decision to decline to stand for reappointment as the Company's independent
auditors. Ernst & Young LLP and its predecessor firms had served as the
Company's independent auditors since 1991. None of the reports issued by Ernst &
Young LLP on the financial statements for the Company's last two fiscal years
ended July 6, 1996 and July 1, 1995, contained an adverse opinion or disclaimer
of opinion nor were the reports modified or qualified as to any uncertainty,
audit scope or accounting principles.
During the two fiscal years ended July 6, 1996 and through March
21, 1997, the Company has not had any disagreement with Ernst & Young LLP on any
matter of accounting principles or practices, financial statement disclosure,
auditing scope or procedure which disagreements, if not resolved to the
satisfaction of Ernst & Young LLP, would have caused it to make reference to the
subject matter of the disagreement in connection with its reports.
During the two most recent fiscal years ended July 6, 1996 and
July 1, 1995, Ernst & Young LLP informed the Company that it had noted certain
matters involving the Company's internal control structure and its operation
that were, in the opinion of Ernst & Young LLP, a reportable event as defined in
Regulation S-K Item 304(a)(1)(v). These matters involved certain weaknesses in
the Company's internal accounting controls and procedures related primarily to
the the timely analysis of balance sheet and income statement accounts in
connection with the preparation of interim financial statements and specifically
the valuation and adjustment of inventory and other account balances. The
Company has taken actions which it believes have effectively addressed these
matters, including effecting improvements in inventory monitoring systems and
controls, implementing supplemental procedures to review and adjust interim
balance sheets and income statements as well as appointing additional financial
and accounting personnel. In addition, the Company has effected certain
structural changes in its business and operations which the Company believes
eliminates certain inventory control issues including subcontracting its
production control and manufacturing functions and exiting its outlet store
business. While the Company has advised Ernst & Young LLP of the specific
actions taken by the Company, that firm has not been engaged to audit any period
since fiscal 1996 and, therefore, is not in a position to address the Company's
actions.
On March 26, 1997, the Audit Committee of the Board of Directors
of the Company recommended that the Company engage Price Waterhouse LLP as the
Company's independent auditors. The Board of Directors approved the
recommendation of the Audit Committee and the Company engaged Price Waterhouse
LLP as its independent auditors effective March 26, 1997.
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ITEM 7. EXHIBITS
16.1 Letter of Ernst & Young LLP
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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 thereunto duly authorized.
AUTHENTIC FITNESS CORPORATION
Date: April 8, 1997 By: /s/ WALLIS H. BROOKS
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Wallis H. Brooks
Senior Vice President
and Chief Financial Officer
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EXHIBIT 16.1
ERNST & YOUNG LLP
April 8, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Gentlemen:
We have read Item 4 of Form 8-K/A dated April 8, 1997 of Authentic Fitness
Corporation and are in agreement with the statements contained in the first two
paragraphs and the first, second and last sentence of the third paragraph
therein. We have no basis to agree or disagree with the third and fourth
sentences of the third paragraph or with the statements made in the fourth
paragraph contained therein.
Very truly yours,
ERNST & YOUNG LLP
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