SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 3, 1999
(Date of earliest event reported)
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GENCOR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
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Delaware 0-3821 59-0933147
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation or No.)
organization)
5201 NORTH ORANGE BLOSSOM TRAIL, ORLANDO, FLORIDA 32810
(Address of principal executive offices, zip code)
(407) 290-6000
(Registrant's telephone number, including area code)
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
(a) Subsequent to the issuance of the Registrant's consolidated financial
statements as of and for the year-ended September 30, 1998, and as publicly
announced on January 28, 1999, management of the Registrant discovered that
certain accounting irregularities and other improprieties may have occurred at
its United Kingdom subsidiary, Gencor ACP, Ltd. ("ACP"). At the direction of
the Registrant's Board of Directors and Audit Committee, immediate inquiry was
made into the financial affairs of ACP. This quickly developed into a full
investigation which over its course confirmed accounting irregularities and
other improprieties by ACP's Managing Director and its Chief Financial Officer,
both of whom were immediately terminated and replaced. The Registrant then
directed that its certified public accountants, Deloitte & Touche LLP, take all
steps necessary to enable the Registrant to complete a re-audit in the U.K. so
that the Registrant would be in a position to file its restated 1998
consolidated financial statements, and further be in a position to file its
quarterly statements for the fiscal year 1999 at the earliest possible date.
The Registrant and Deloitte & Touche LLP diligently worked on revising the
Registrant's consolidated financial statements as of and for the year-ended
September 30, 1998. By the end of January 1999 the Registrant anticipated that
it would be able to disclose its revised financial statements as of and for the
year-ended September 30, 1998, to the public within a short period of time
thereafter. The Registrant received a letter from Deloitte & Touche LLP on
February 1, 1999, to the effect that their report dated November 3, 1998, should
no longer be relied upon or associated with the Registrant's consolidated
financial statements as of and for the year-ended September 30, 1998.
In April 1999, Registrant and Deloitte & Touche LLP had completed the re-
audit. However, during the process of the re-audit, the Registrant learned that
Deloitte & Touche LLP's affiliate in the U.K. ("Deloitte UK") was not in
compliance with US accounting rules regarding accounting independence because
Deloitte UK had charged ACP a fee in connection with rendering certain executive
recruiting services. The Registrant, its counsel and Deloitte & Touche LLP met
with the Securities and Exchange Commission (the "SEC") to discuss the matter in
June of 1999. From that time on, this issue became a protracted matter between
the SEC and Deloitte & Touche LLP. Gencor could only wait on the sidelines for a
resolution of the matter, or directions from the SEC on how to proceed so as to
hasten the day when the Registrant could file financials and resume the trading
of its stock. The Registrant regularly pursued the SEC to learn of the
disposition of the independence matter. However, with no ruling having been
rendered, in September 1999, the Registrant on its own initiative undertook to
have the ACP operation re-audited for the second time by a new, wholly-
independent accounting firm, Grant Thornton, LLP.
The Registrant had presumed that this second re-audit would alleviate any
possible problems that the SEC had with the Deloitte UK audit. Although the
Grant Thornton, LLP re-audit was to be a costly, and time-consuming process, it
was believed
to be the prudent thing to do in order to overcome the SEC/Deloitte & Touche LLP
stalemate. At no time was the Registrant alerted that the SEC might disqualify
Deloitte & Touche LLP also as the consolidating global auditor for all of the
Registrant worldwide. Unfortunately on November 18, 1999, the SEC finally
responded to the Registrant advising that it had determined that Deloitte &
Touche LLP was not independent on a global basis, thus requiring the Registrant
to retain the services of another audit firm to re-audit all of the Registrant's
worldwide operations, not just ACP in England, for the year 1998.
Because of this ruling by the SEC, the Registrant has made the decision to
terminate Deloitte & Touche LLP and informed Deloitte & Touche LLP of this fact
on December 3, 1999.
Deliotte & Touche LLP's report on the Registrant's financial statements for
each of the last two fiscal years, prior to their withdrawal, did not contain an
adverse opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles. The decision to change
accountants was approved by the Board of Directors. During the Registrant's two
most recent fiscal years and in the period since September 30, 1998, there were
no disagreements with Deliotte & Touche LLP on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure which disagreements, if not resolved to the satisfaction of Deliotte &
Touche LLP, would have caused it to make reference to the subject matter of the
disagreements in connection with its report.
The Registrant is in the process of selecting a new nationally-known
independent certified public accountant and at the present expects to have its
worldwide re-audit completed in the Spring of 2000.
Information contained in this Report, other than historical information,
may be considered forward-looking in nature. As such, it is based upon certain
assumptions and is subject to various risks and uncertainties, which may not be
controllable by the Registrant. Some of these assumptions, which relate to the
re-audit, will be that (i) the Registrant is able to timely select new auditors,
and (ii) there will be no delays in the conduct of the re-audit. To the extent
that these assumptions prove to be incorrect, or should any of these risks or
uncertainties materialize, the actual results may vary materially from those
which were anticipated.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
16.1 Letter from Deloitte & Touche LLP (to be filed by amendment)
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.
GENCOR INDUSTRIES, INC.
(Registrant)
Date: December 10, 1999 By: /s/ E.J. Elliott
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E.J. Elliott
Chairman of the Board and President