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): May 14, 1996
BT OFFICE PRODUCTS INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-13858 13-3245865
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
215O E. Lake Cook Road, Buffalo Grove, Illinois 60089-1877
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 793-7500
Exhibit Index on Page 5
in Sequentially Numbered Copy
Page 1 of 6 Pages
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Item 4. Changes in Registrant's Certifying Accountant.
Upon recommendation of the Audit Committee, the Board of
Directors on May 14, 1996 replaced Ernst & Young LLP, who served as the
Company's independent auditors for the fiscal year ended December 31, 1995, and
appointed Coopers & Lybrand L.L.P. as the Company's independent auditors for the
fiscal year ending December 31, 1996.
Ernst & Young LLP's reports on the financial statements of the
Company for the fiscal years ended December 31, 1995 and 1994 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 December 31, 1995 and 1994,
and in the subsequent interim period, there were no disagreements with 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 Ernst & Young LLP to
make reference to the matter in its report.
In a letter to the Company dated January 30, 1996, Ernst &
Young LLP advised the Company that based on the status of the audit it noted no
material weaknesses in the Company's internal controls. In March 1996, the
Company discovered certain irregularities at the New York Division involving
misstatements in the reporting of gross profit margins and operating expenses as
well as concealment in the accounting records of a theft of Company assets.
Ernst & Young LLP advised the Company in a letter dated April 5, 1996 that a
material weakness in internal controls existed at the New York Division,
relating to such irregularities. The irregularities led to the Company's
reduction of previously reported unaudited operating income for 1995 and the
Company's restatement of operating income for 1994.
On March 26, 1996, the Audit Committee discussed the foregoing
irregularities with Ernst & Young LLP and authorized the Company's legal
counsel, Winthrop, Stimson, Putnam & Roberts, to investigate the irregularities
and pursue recoveries. Based on the Company's internal investigation and the
preliminary results of such counsel's investigation, the Company believes that
the discovered irregularities were due primarily to the misconduct of a few
individuals at a single unit. Key financial management personnel at the New York
Division were suspended from their duties and the Company has hired new
personnel and is in the process of hiring additional new personnel at such unit.
Page 2 of 6 Pages
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The Company has authorized Ernst & Young LLP to respond fully
to any inquiries of Coopers & Lybrand L.L.P. concerning the foregoing internal
control issues.
The Company has requested Ernst & Young LLP to furnish it with
a letter addressed to the Commission stating whether it agrees with the above
statements. A copy of that letter, dated May 20, 1996, is filed as Exhibit 16 to
this Form 8-K.
Page 3 of 6 Pages
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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.
BT OFFICE PRODUCTS INTERNATIONAL,
INC.
By: /s/ John J. McKiernan
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John J. McKiernan
Vice President-Finance and
Administration, Chief
Financial Officer and
Secretary
DATE: May 20, 1996
Page 4 of 6 Pages
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INDEX TO EXHIBITS
Page in Sequentially
Exhibit No. Description Numbered Copy
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16 Letter re: Change in 6
Certifying Accountant
Page 5 of 6 Pages
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EXHIBIT 16
May 20, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
We have read Item 4 of Form 8-K dated May 14, 1996, of BT Office Products
International, Inc. and are in agreement with the statements contained in the
second through fourth paragraphs and the first sentence in the fifth paragraph
of page 2 and the two paragraphs on page 3 therein. We have no basis to agree or
disagree with other statements of the registrant contained therein.
Regarding the registrant's statement concerning our having advised the
registrant of a material weakness in internal controls at the registrant's New
York Division included in the fourth paragraph under Item 4 therein, we had
considered such matter in determining the nature, timing and extent of
procedures performed in our audit of the registrant's 1995 financial statements.
/s/ Ernst & Young LLP
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