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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 Exchange Act of 1934
Date of Report: January 25, 1999
VIDEO UPDATE, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-24346 41-1461110
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(Commission File Number) (I.R.S. Employer Identification No.)
3100 World Trade Center, 30 East Seventh Street, St. Paul, Minnesota 55101
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(Address of Principal Executive Offices) (Zip Code)
(651) 312-2222
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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TABLE OF CONTENTS
FORM 8-K
January 25, 1999
Item Page
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Item 4. Changes in Registrant's Certifying Accountant 1
Item 5. Other Events 1
Item 7. Financial Statements and Exhibits 1
Signature 2
Exhibits
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Effective January 28, 1999, Video Update, Inc. (the "Company") retained
Deloitte & Touche LLP as its independent public accountants. On that same date,
the Company terminated the engagement of Ernst & Young LLP as its independent
public accountants. The engagement of Deloitte & Touche was recommended by the
audit committee of the Company's Board of Directors and approved by the Board of
Directors (the "Board").
The audit reports of Ernst & Young LLP on the Company's financial
statements for each of the past two fiscal years ended April 30, 1997 and 1998
did not contain an adverse opinion or a disclaimer of opinion and were not
qualified or modified 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 April 30, 1997 and 1998, and in the
subsequent interim period, there were no disagreements between the Company and
Ernst & Young LLP on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope and procedures which, 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 on the audited financial statements.
In connection with the audits of the Company's financial statements for
each of the two fiscal years ended April 30, 1997 and 1998, and in the
subsequent interim period, there have been no reportable events (as defined in
Item 304 of Regulation S-K) with Ernst & Young LLP. During such periods the
Company has not consulted Deloitte & Touche regarding either (i) the application
of accounting principles to a specified transaction, either completed or
proposed, or the type of audit opinion that might be rendered on the Company's
financial statements or (ii) any matter that was either the subject of a
disagreement or a reportable event (each as defined in Item 304 of Regulation
S-K).
At the June 23, 1998 meeting of the Board, the Board approved a change
in the Company's Fiscal Year End from April 30 to January 31. In light of the
Company's decision to change its independent public accountants, the Board has
now voted to delay the proposed change in its fiscal year end until January 31,
2000.
A letter from Ernst & Young LLP is attached as Exhibit 16 to this Form
8-K and incorporated herein by reference.
Item 5. Other Events
On a separate note, effective January 25, 1999, F. Andrew Mitchell
resigned as a director of the Company to pursue other interests.
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Item 7. Financial Statements and Exhibits.
a. Financial statements of businesses acquired.
Not applicable.
b. Pro forma financial information.
Not applicable.
c. Exhibits.
The following exhibits are filed with this report:
Exhibit No. Title
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16 Letter of Ernst & Young LLP
99 Press Release
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Video Update, Inc.
Dated: February 3, 1999 By:/s/ Daniel A. Potter
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Daniel A. Potter
Chairman and Chief Executive Officer
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EXHIBIT INDEX
Exhibit
No. Title
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16 Letter of Ernst & Young LLP
99 Press Release
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EXHIBIT 16 TO FORM 8-K
February 3, 1999
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Gentlemen:
We have read Item 4 of Form 8-K dated February 3, 1999, of Video Update, Inc.
and are in agreement with the statements contained in the second sentence of the
first paragraph, the second and third paragraphs and the first sentence of the
fourth paragraph on page one therein. We have no basis to agree or disagree with
other statements of the registrant contained therein.
/s/ Ernst & Young LLP
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Exhibit No. 99
[LETTERHEAD OF VIDEO UPDATE, INC.]
VIDEO UPDATE, INC. RETAINS DELOITTE & TOUCHE
AS INDEPENDENT ACCOUNTANTS;
Fiscal Year End Change to be Effective January 31, 2000
ST. PAUL, Minn. - (BUSINESS WIRE) - January 28, 1999 - Video Update, Inc.
(NASDAQ: VUPDA), an international video chain, announced today that it has
retained Deloitte & Touche LLP as its independent accountants. Deloitte & Touche
replaces Ernst & Young LLP, the Company's independent accountants for the fiscal
year ended April 30, 1998. Deloitte & Touche will assume all auditing functions
previously provided by Ernst & Young for the Company. The audit committee of the
Company's Board of Directors participated in and approved the Company's decision
to retain Deloitte & Touche. In conjunction with the Company's change in
independent accountants, the Company also announced that it will delay the
change of its fiscal year end until January 31, 2000. The Company had previously
announced that it would change its fiscal year end to January 31 effective 1999.
The Company's Chairman and CEO, Daniel A. Potter, stated: "We are pleased
to have Deloitte & Touche on board. The firm has a solid reputation and a
substantial degree of expertise in the retail industry. We look forward to
beginning our relationship with Deloitte & Touche as we approach the new
millennium."
Video Update, Inc. is an international video retail chain with 729 video
specialty stores in North America of which 663 are corporately owned and 66 are
franchised as of January 22, 1999. These stores are located in thirty-two states
in the United States and five provinces in Canada.
CONTACT: Video Update, Inc.
Daniel A. Potter, Chief Executive Officer
Dale E. Lauwagie, Chief Financial Officer
Phone: 651-312-2222
