UNITED STATES
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): AUGUST 16, 2004
SOUTHWALL TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State of incorporation or organization)
0-15930 94-2551470
(Commission File Number) (I.R.S. Employer
Identification No.)
3975 EAST BAYSHORE ROAD, PALO ALTO, CALIFORNIA 94303
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (650) 962-9111
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ITEM 4.01 CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
(a)(1)(i) On August 16, 2004, PricewaterhouseCoopers LLP ("PwC") was
dismissed as the independent registered public accounting firm
for Southwall Technologies Inc. (the "Company").
(a)(1)(ii) PwC's reports on the Company's financial statements as of and for
the years ended December 31, 2002 and 2003 included an
explanatory paragraph regarding uncertainty. This explanatory
paragraph noted the Company's incurrence of net losses and
negative cash flows from operating activities during each fiscal
year and its significant debt service and other contractual
obligations at the end of each fiscal year. These factors raised
substantial doubt about the Company's ability to continue as a
going concern. Other than the explanatory paragraph described in
the three preceding sentences, the reports of PwC on the
financial statements as of and for the years ended December 31,
2002 and 2003 contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principle.
(a)(1)(iii) The dismissal of PwC was made with the approval of the audit
committee of the board of directors of the Company.
(a)(1)(iv) During the years ended December 31, 2002 and 2003 and through
August 16, 2004, there were no disagreements between the Company
and PwC 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 PwC,
would have caused PwC to make reference thereto in its reports on
the financial statements of the Company for such years.
(a)(1)(v) During the years ended December 31, 2002 and 2003 and through
August 16, 2004, there were no reportable events (as defined in
Item 304(a)(1)(v) of Regulation S-K) except that, as detailed in
the Company's filings on Form 10-K for the years ended December
31, 2002 and 2003, material weaknesses in the Company's internal
control environment were identified. These material weaknesses
were caused by a reduction in force that occurred during 2002 and
2003 and related to the inadequacy of review and supervision of
the preparation of accounting records and the untimely
reconciliation of certain accounts. The audit committee of the
Company's board of directors discussed such material weaknesses
with PwC. The Company has taken steps to attempt to improve its
internal controls and its control environment. The Company has
hired a new Corporate Controller, a new Director of Financial
Planning and Analysis, a new Senior Cost Accountant, and a new
Senior Accountant for the Company's Germany subsidiary; appointed
a new Plant Manager for the Company's U.S. manufacturing
operations; initiated re-training of personnel on the correct use
of the Company's new ERP system; initiated procedures to attempt
to ensure all accounts are reconciled and reviewed on a timely
basis; and, is in the process of documenting its procedures and
reviewing its internal controls to ensure compliance under
section 404 of the Sarbanes-Oxley Act. The Company has authorized
PwC to respond fully to inquiries of the successor independent
accountants concerning such material weaknesses.
(a)(2) On August 16, 2004, the Company, with the approval of the audit
committee of the board of directors of the Company, engaged Burr,
Pilger & Mayer LLP ("BPM") as its new independent accountants.
Prior to engaging BPM, the Company did not consult with BPM
regarding any matter that was a reportable event or 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, with
respect to which a written report or oral advice was provided to
the Company that BPM concluded was an important factor considered
by the Company in reaching a decision as to the accounting,
auditing or financial reporting issue.
(a)(3) The Company has furnished PwC with a copy of the disclosures
contained in this report and has requested that PwC furnish the
Company with a letter addressed to the Securities and Exchange
Commission stating whether or not it agrees with the statements
made by the Company in Item 4(a)(1). A copy of the PwC letter
furnished in response to such request is filed as Exhibit 16.1 to
this report.
ITEM 9.01 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits
16.1 Letter from PricewaterhouseCoopers LLP addressed to the
Securities and Exchange Commission in accordance with Item
304(a)(3) of Regulation S-K.
99.1 Press Release, dated August 23, 2004, issued by Southwall
Technologies Inc.
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SIGNATURE
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.
SOUTHWALL TECHNOLOGIES INC.
Date: August 23, 2004 By: /s/ Thomas G. Hood
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Thomas G. Hood
President and Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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16.1 Letter from PricewaterhouseCoopers LLP addressed to the
Securities and Exchange Commission in accordance with Item
304(a)(3) of Regulation S-K.
99.1 Press Release, dated August 23, 2004, issued by Southwall
Technologies Inc.
4
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