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 (Date of earliest event reported)
May 20, 1998 (May 13, 1998)
INFORMIX CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
0-15325 94-3011736
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(Commission File Number) (IRS Employer Identification No.)
4100 BOHANNON DRIVE, MENLO PARK, CALIFORNIA 94025
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (650) 926-6300
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On May 12, 1998, the Board of Directors of Informix Corporation (the
"Company") approved a resolution (i) to dismiss Ernst & Young LLP ("E&Y") as the
Company's independent accountants, effective upon management's notification of
E&Y of the dismissal; and (ii) concurrent with such notification, to engage KPMG
Peat Marwick LLP ("KPMG") as the Company's independent accountants upon such
terms as may be negotiated by management.
On May 13, 1998, the Company's management notified E&Y of the dismissal. On
May 19, 1998, the Company engaged KPMG as the Company's independent accountants.
E&Y's reports with respect to the Company's financial statements for the
fiscal years ended December 31, 1996 and 1997 did not contain an adverse opinion
or a disclaimer of opinion and were not qualified 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, 1996 and 1997 and in the subsequent
interim period, except as described in the next paragraph, there were no
disagreements with E&Y on any matter of accounting principles or practices,
financial statement disclosure or auditing scope and procedures which, if not
resolved to the satisfaction of E&Y would have caused E&Y to make reference to
the matter in their report.
E&Y advised the Company that it disagreed with the Company's recognition of
revenue resulting from software license transactions with industrial
manufacturers which occurred during the first quarter ended March 31, 1998. The
disagreement was resolved to the satisfaction of E&Y with the result that
approximately $6.2 million in revenue has been deferred and will be recognized
over a period which the Company expects to be approximately two years. The
Company intends to file immediately an amendment to its quarterly report on Form
10-Q for the quarter ended March 31, 1998 to restate its financial results for
the period. The Audit Committee has discussed the accounting of these
transactions with management and E&Y.
The Company has authorized E&Y to respond fully to the inquiries of KPMG as
the successor independent accountants of the Company. Prior to accepting its
engagement as the Company's successor independent accountants, KPMG had the
opportunity to discuss with E&Y the subject matter of the disagreement described
above and other matters relevant to the Company. KPMG has not offered any report
or advice to the Company concerning such disagreement that was important to the
Company's decision in reaching a resolution.
During the Company's fiscal years ended December 31, 1996 and 1997, and
through March 31, 1998, the following reportable events occurred:
In connection with the restatement of the Company's financial statements for
fiscal years ended December 31, 1996, 1995 and 1994, and the quarter ended March
30, 1997, a number of conditions which collectively represented a material
weakness in the Company's internal accounting controls were identified. These
conditions included a deterioration in the Company's accounting controls at
corporate and regional management levels, and a relative failure to stress the
importance of these controls; an inappropriate level of influence, principally
by the sales organization, over the revenue recognition process; and an apparent
lack of clarity and consistent understanding within the Company of the
application of the Company's revenue recognition policies to large, complex
reseller license transactions. The Company is implementing a plan to strengthen
the Company's internal accounting controls. This plan includes updating the
Company's revenue recognition policies regarding accounting and reporting for
large, complex reseller license transactions, developing and conducting
educational programs to help implement such policies, changing the Company's
corporate and regional accounting and reporting structure and re-establishing an
internal audit function reporting to the Company's Board of Directors.
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On April 29, 1998, E&Y informed the Audit Committee of the Board that it
considered that, in connection with the audit of the Company's fiscal 1997
consolidated financial statements, the lack of appropriate resources in the
accounting and controlling departments of the Company constituted a reportable
condition.
The Company has requested that E&Y furnish a letter addressed to the
Commission stating whether E&Y agrees with the above statements. A copy of that
letter, when received by the Company, will be promptly filed with the Commission
as Exhibit 16.1 to this Form 8-K.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
*Exhibit 16.1 Letter from Ernst & Young LLP
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* To be filed by amendment when such letter is received by the Company.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this Current Report to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Menlo Park, State of
California, on May 20, 1998.
INFORMIX CORPORATION
By: /s/ JEAN-YVES DEXMIER
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Jean-Yves Dexmier,
Executive Vice President and
Chief Financial Officer
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