SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): APRIL 11, 2003
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INVERNESS MEDICAL INNOVATIONS, INC.
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(Exact name of registrant as specified in charter)
DELAWARE 001-16789 04-3565120
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
51 SAWYER ROAD, SUITE 200, WALTHAM, MASSACHUSETTS 02453
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(Address of Principal Executive Offices) (Zip Code)
(781) 647-3900
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(Registrant's telephone number, including area code)
EXPLANATORY NOTE
This Amendment No. 1 to Current Report on Form 8-K is being filed to revise the
disclosure provided in Item 4 of the Form 8-K dated April 11, 2003.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On April 11, 2003, Ernst & Young LLP resigned as our independent auditors. Ernst
& Young LLP had served as our independent auditors since June 2002.
Neither the report of Ernst & Young LLP on our consolidated financial statements
for the fiscal year ended December 31, 2002 nor the report of Arthur Andersen
LLP on our consolidated financial statements for the fiscal year ended December
31, 2001 contained an adverse opinion or a disclaimer of opinion, or was
qualified or modified as to uncertainty, audit scope or accounting principles.
During 2002 and subsequently through the date of Ernst & Young LLP's
resignation, there were no disagreements with Ernst & Young 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
Ernst & Young LLP, would have caused it to make reference to the subject matter
of the disagreements in connection with its report on our consolidated financial
statements.
During the two most recent fiscal years and the subsequent interim period
preceding Ernst & Young LLP's resignation there were no reportable events,
except that Ernst & Young LLP advised the Audit Committee and management that in
connection with Ernst & Young LLP's audit for the year ended December 31, 2002,
it noted certain matters involving internal control that it considered to be
material weaknesses. Ernst & Young LLP has advised the Company that, under
standards established by the American Institute of Certified Public Accountants
("AICPA"), reportable conditions involve matters that come to the attention of
auditors that relate to significant deficiencies in the design or operation of
internal controls of an organization that, in the auditors' judgment, could
adversely affect the organization's ability to record, process, summarize, and
report financial data consistent with the assertions of management in the
consolidated financial statements.
Ernst & Young LLP advised the Company that, in Ernst & Young LLP's opinion the
material weaknesses were: the decentralized nature of the Company's national and
international operations, combined with insufficient corporate financial
oversight at operating locations, especially newly acquired entities, resulted
in accounting errors and the misapplication of accounting principles generally
accepted in the United States; the absence of a chief financial officer or other
individual with the appropriate experience and background to handle accounting
matters arising from the complexity of our operations; the undue reliance on
non-financial personnel to address accounting and control issues, causing a lack
of appropriate segregation of duties; the delay in integrating acquired
businesses into our uniform policies, procedures and controls; and an
ineffective and inefficient financial statement close process. However, Ernst &
Young LLP has advised the Audit Committee that these conditions were considered
in determining the nature, timing, and extent of the procedures performed for
the audit of the
Company's financial statements for the year ended December 31, 2002, but that
these conditions did not affect its report dated February 20, 2003 with respect
to these financial statements.
Our Audit Committee and management are already considering potential
enhancements to the Company's internal controls and procedures which address the
issues raised. For example, we are currently in the process of selecting and
retaining the services of an independent consulting firm to analyze, document
and assist us in testing our internal controls and procedures. Our Audit
Committee will review the reports and findings of the independent consulting
firm and discuss any recommendations that may be made by it with management.
In addition, we have also taken steps, independent of the matters raised by
Ernst & Young LLP, to strengthen our management depth and improve operational
efficiencies that will have the effect of addressing such matters. For example,
late last year we commenced a search for a chief financial officer, and we
expect to hire an experienced person with an appropriate background to manage
the diverse and complex financial issues which may arise in our growing
business. Also, we recently migrated the accounting systems at Wampole, our most
recent acquisition, onto the software platform hosted by our Bedford, England
operation.
We have furnished Ernst & Young LLP with a copy of the foregoing disclosure and
requested Ernst & Young LLP to furnish us with a letter addressed to the
Securities and Exchange Commission stating whether or not it agrees with the
foregoing statements. A copy of that letter is filed as Exhibit 16.1 to this
Form 8-K.
On April 18, 2003 the Company engaged BDO Seidman, LLP as its new independent
certified public accountants. Prior to the engagement of BDO Seidman, LLP, the
Company provided it with information concerning the matters discussed in this
report; including the material weaknesses in internal controls identified in
writing by Ernst & Young LLP. Neither the Company nor anyone else on its behalf
consulted with BDO Seidman, LLP regarding, or otherwise engaged BDO Seidman, LLP
to evaluate specifically, any of these matters prior to the Company's engagement
of BDO Seidman, LLP as its independent certified public accountants. The Company
has authorized Ernst & Young LLP to fully respond to the inquiries of BDO
Seidman, LLP concerning such matters.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
EXHIBIT NO. DESCRIPTION
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16.1 Letter from Ernst & Young LLP to the Securities and
Exchange Commission dated May 29, 2003
2
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 thereunto duly authorized.
INVERNESS MEDICAL INNOVATIONS, INC.
Date: May 29, 2003 By: /S/ DUANE L. JAMES
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Duane L. James
Vice President - Finance
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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16.1 Letter from Ernst & Young LLP to the Securities and Exchange
Commission dated May 29, 2003