Business Context and Reporting Period
This Form 8-K is filed by Dex Media, Inc. (formerly Dex One Corporation) on May 15, 2013. The report details a change in the company's certifying accountant following a merger completed on April 30, 2013, between Dex One Corporation and SuperMedia Inc. The company is currently operating under a Chapter 11 Bankruptcy filing initiated on March 18, 2013.
Key Financial Metrics
The filing does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity for the current period. However, it references prior financial statements which noted a highly leveraged capital structure and a decline in operating results and cash flows.
Material Changes
- Accountant Change: The Audit Committee engaged Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2013, dismissing KPMG LLP from that role.
- Corporate Structure: Dex One merged with Newdex (surviving as Dex Media, Inc.) and SuperMedia merged with Spruce Acquisition Sub, Inc. (surviving as a subsidiary).
- Bankruptcy Status: The company voluntarily filed for Chapter 11 Bankruptcy on March 18, 2013.
Outlook, Risks, and Contingencies
Going Concern Uncertainty: KPMG's prior audit reports for the years ended December 31, 2012, and 2011, included a separate paragraph stating that the financial statements were prepared assuming the company would continue as a going concern. The reports highlighted that the Chapter 11 filing, highly leveraged capital structure, and decline in operating results raised substantial doubt about the company's ability to continue as a going concern.
Disagreements: The company reported no disagreements or reportable events with KPMG regarding accounting principles, financial statement disclosure, or auditing scope during the relevant periods.
Investor Verification Checklist
- Verify the terms of the Amended and Restated Agreement and Plan of Merger dated December 5, 2013 (noted in text as the merger agreement date, though the merger occurred April 30, 2013).
- Review the Chapter 11 Bankruptcy filing details from March 18, 2013, to understand the current capital structure and debt obligations.
- Examine the letter from KPMG LLP (Exhibit 16.1) to confirm their stance on the disclosures made in this report.
- Monitor future filings for the first financial statements audited by Ernst & Young LLP to assess the post-merger financial health.