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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): June 5, 1997
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River Oaks Furniture, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Mississippi 0-22188 64-0749510
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification
Incorporation) Number)
3350 McCullough Blvd.
Belden, Mississippi 38826
(Address of Principal Executive Offices) (Zip Code)
601-891-4550
(Registrant's Telephone Number, including Area Code)
Not Applicable
(Former Name)
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THIS CURRENT REPORT ON FORM 8-K CONTAINS FORWARD-LOOKING STATEMENTS.
FORWARD-LOOKING STATEMENTS MAY BE SIGNIFICANTLY AFFECTED BY CERTAIN RISKS AND
UNCERTAINTIES DESCRIBED IN THE COMPANY'S QUARTERLY AND ANNUAL REPORTS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION, WHICH ARE INCORPORATED HEREIN BY
REFERENCE (COMMISSION FILE NO. 0-22188).
Item 4. Changes in Registrant's Certifying Accountant.
By letter dated June 5, 1997, BDO Seidman, LLP ("BDO") resigned as the
Company's independent certified public accountants. The reports of BDO on the
Company's financial statements for the past two years did not contain an adverse
opinion or disclaimer of an opinion, nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles. During the Company's two
most recent fiscal years, and the subsequent interim period preceding the
resignation of BDO, there were no disagreements with BDO on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure.
On June 10, 1997, the Company retained Horne CPA Group, PA ("Horne") as
the Company's independent certified public accountants and, by letter dated such
date, also authorized BDO to respond fully to the informational requests of
Horne. In addition, the Company intends to seek access to the work
papers of BDO regarding the Company and to any records of the Company that may
be in the possession of BDO. The Company currently believes that the audit work
to be conducted by Horne will be completed within the next few months. Upon the
completion of such work, the Company will make its financial statements
available, and will complete all required filings with applicable regulatory
agencies.
As previously reported, following the Company's discovery that certain of
the Company's accounts were out of balance, the Board of Directors of the
Company, together with its outside legal counsel and BDO, undertook a
comprehensive analysis of certain of the Company's accounts and its accounting
reconciliation procedures for the fiscal year ended December 31, 1996, and prior
fiscal years. The Company believes that the adjustments resulting from this
analysis will materially impact the reliability of audit reports previously
issued by BDO with respect to the Company's financial statements, and the
reliability of the underlying financial statements. The Company has determined
that the substantial majority of these adjustments relate to certain of the
Company's account receivables arising during the periods 1992 through 1996.
Such receivables were not properly recorded on the subsidiary ledger and,
consequently, were not subject to collection efforts. These accounts receivable
will be charged off by the Company. In early 1997, the Company implemented a
new integrated financial information system designed to prevent the reocurrance
of this type of error in the future.
During this analysis, the Board of Directors instructed the Company's
management to make freely available to BDO all of the Company's books, records
and employees. No restrictions were placed on BDO's access to the Company's
books, records or employees. In this regard, the Company believes that it has
worked diligently to provide BDO with all information requested by BDO in
connection with the ongoing comprehensive analysis of the Company's accounts and
accounting reconciliation procedures. The Company has made available to BDO all
of its books, records and employees.
Prior to BDO's resignation, on May 29, 1997, the Board of Directors,
through its outside counsel, requested, in writing, information from BDO
regarding any accounting issues that BDO believed should be resolved before the
Company could receive BDO's audit report on the Company's financial statements.
By letter dated June 4, 1997, BDO responded in part that "[t]hese matters raise
grave concerns about the integrity of the accounting records. . . All of the
above puts us in a position making it impossible for us to get comfortable with
the systems, the books and records, or the people involved with the systems at
this point."
In the course of this analysis, an accounting employee of the Company
admitted to irregularities with respect to certain financial records of the
Company and to supplying such erroneous records to BDO
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during the course of BDO's audits of the Company's financial statements for the
years ended December 31, 1995, 1994, 1993, 1992 and 1991. This employee is no
longer employed by the Company. Based on its review, the Company has concluded
that these actions were not taken to conceal any misappropriation of the
Company's assets, and that no other employees were involved.
The Company has provided a copy of this report to BDO and has requested a
letter from them addressing these disclosures. Such letter shall be filed
subsequently as an exhibit to this report.
ITEM 5. OTHER EVENTS.
As a result of facts previously reported and described in further detail
above under Item 4, the Company has not filed with the Securities and Exchange
Commission (the "Commission") or with The Nasdaq National Market, Inc. (the
"Nasdaq National Market") the Company's Annual Report on Form 10-K for its
fiscal year ended December 31, 1996 or its Quarterly Report on Form 10-Q for the
period ended March 31, 1997. The Company is, therefore, in violation of the
requirements of the Securities Exchange Act of 1934, as amended, and the listing
requirements of the Nasdaq National Market. The Company has been contacted
regarding these violations by each of the Commission and the Nasdaq National
Market. Such violations could cause the Company to be subject to various
penalties, including enforcement proceedings by the Commission and delisting
proceedings by the Nasdaq National Market. No assurance can be given that such
proceedings, or other actions, will not be commenced against the Company.
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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 hereunto duly authorized.
RIVER OAKS FURNITURE, INC.
By: /s/ Johnny C. Walker
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Johnny C. Walker
Chief Operating Officer and Chief
Financial Officer
Date: June 11, 1997
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