UNITED STATES ~~SECURITIES AND EXCHANGE COMMISSION~~ ~~WASHINGTON, D.C. 20549~~

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT ~~PURSUANT TO SECTION 13 OR 15(d)~~ ~~OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~DATE~~PURSUANT OFTO ~~REPORT~~SECTION ~~(DATE~~13 OFOR ~~EARLIEST EVENT REPORTED~~15(d): ~~OCTOBER~~OF ~~18, 2002~~THE

~~MTS,~~SECURITIES ~~INCORPORATED (Exact~~EXCHANGE ~~name~~ACT ofOF ~~registrant as specified in its charter)~~1934

~~CALIFORNIA~~February 3, ~~(State~~2003 Date ~~or other jurisdiction~~ of ~~incorporation~~report ~~or organization) 333-54035~~ (~~Commission~~Date ~~File~~of ~~Number)~~Earliest ~~94-1500342~~Event ~~(I.R.S. Employer Identification No.~~Reported)

~~2500 DEL MONTE STREET WEST SACRAMENTO~~MTS, ~~CALIFORNIA~~ INCORPORATED (~~Address~~Exact Name of ~~principal~~Registrant ~~executive~~as ~~offices)~~Specified ~~95691~~in ~~(Zip~~its ~~Code~~Charter)

~~Registrant’s~~Commission ~~telephone~~File ~~number, including area code: (916) 373~~Number 333-~~2502~~54035


California		94-1500342
(State of Other Jurisdiction		(I.R.S. Employer
of Incorporation)		Identification No.)

2500 Del Monte Street
West Sacramento, CA 95691
(Address of Principal Executive Offices)

916-373-2500
(Registrant’s Telephone Number, Including Area Code)

TABLE OF CONTENTS

	ITEM 5. OTHER EVENTS
	ITEM 4. CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT
	ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
	ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
SIGNATURES
SIGNATURE
INDEX TO EXHIBITS
EXHIBIT 10.19
EXHIBIT 16.1
EXHIBIT 10.20

ITEM 54. ~~OTHER~~CHANGES ~~EVENTS~~IN REGISTRANT’S CERTIFYING ACCOUNTANT

On ~~October~~January 1128, ~~2002~~2003, MTS, Incorporated (the “Company”) ~~completed~~dismissed KPMG LLP (“KPMG”) as the ~~sale~~Company’s ~~of its~~independent ~~Japanese~~auditor. ~~operations~~The decision to ~~Nikko~~dismiss ~~Principal~~KPMG and ~~Investments~~to ~~Japan~~seek ~~Ltd.,~~a ~~and~~new ~~the simultaneous~~independent ~~refinancing~~auditor ofwas approved by the Company’s ~~bank~~board ~~credit~~of directors ~~facility~~(the “Board of Directors”).

InKPMG ~~connection~~served ~~with~~as the ~~refinancing, the~~ Company’s ~~entered~~independent ~~into~~auditor afor ~~Loan~~the ~~and Security~~fiscal ~~Agreement~~year ~~dated~~ended ~~October 9~~July 31, 2002. byKPMG’s ~~and~~report ~~among~~on the Company~~, Three A~~’s ~~Holdings,~~ ~~L.L.C.,~~financial ~~the~~statements ~~lenders~~for ~~party~~the ~~thereto~~year ended ~~and The CIT Group/Business Credit~~July 31, ~~Inc.,~~ as2002 ~~administrative and collateral agent~~ (the “~~CIT Agreement~~Report”). ~~The~~did ~~CIT Agreement~~not ~~provides~~contain ~~the~~an ~~Company~~adverse ~~with~~opinion aor disclaimer ~~revolving~~of ~~line~~opinion ofand ~~credit~~was ofnot upqualified or modified as to ~~$110 million~~uncertainty, audit ~~which~~scope ~~matures~~or onaccounting ~~April 1, 2005~~principles.

InDuring ~~addition,~~the inmost ~~connection~~recent ~~with~~fiscal year of the ~~refinancing~~Company ended July 31, 2002, and the subsequent ~~Company~~interim ~~entered~~period ~~into~~through anJanuary 28, 2003, there were no disagreements ~~Amended~~with ~~and~~KPMG ~~Restated~~within ~~Term~~the ~~Loan~~meaning ~~Agreement~~of ~~dated~~Instruction as4 of ~~October~~Item 9,304 ~~2002~~of Regulation S-K on any matter of accounting principles or practices, ~~among~~financial ~~the~~statement ~~Company~~disclosure, ~~the~~or ~~lenders~~auditing ~~party~~scope ~~thereto~~or ~~and~~procedure, ~~JPMorgan~~which ~~Chase~~disagreements ~~Bank,~~if asnot ~~administrative~~resolved ~~agent~~to ~~and~~KPMG’s ~~collateral~~satisfaction ~~agent~~would ~~(the~~have ~~“JPMorgan~~caused ~~Chase~~KPMG ~~Agreement”).~~to ~~The~~make ~~JPMorgan Chase~~reference ~~Agreement~~to ~~provides~~the subject matter of the ~~Company~~disagreements in connection with aits ~~$26 million~~Report. ~~term~~During ~~loan~~the ~~with~~term aof ~~maturity~~KPMG’s ~~date~~engagement, ofthere ~~April~~were no “reportable events” (as such term is defined in Item 304(a)(1,)(v) ~~2005~~of Regulation S-K).

~~The~~In ~~Company~~accordance ~~expects~~with ~~proceeds~~Item 304 ~~from~~(a) ~~both~~(3) of ~~the~~Regulation S-K, ~~CIT~~a ~~line~~letter offrom ~~credit~~KPMG addressed ~~and~~to ~~JPMorgan Chase~~the ~~loan~~Securities ~~will~~and beExchange ~~used~~Commission ~~for~~is ~~working~~included ~~capital~~as ~~and~~Exhibit 16.1 to ~~general~~this ~~corporate~~Current ~~purposes~~Report on Form 8-K.

The ~~CIT~~Board ~~Agreement~~of ~~and~~Directors ~~JPMorgan~~has ~~Chase~~appointed ~~Agreement~~the ~~attached~~firm ~~hereto~~of PricewaterhouseCoopers LLP (“PwC”) to serve as ~~EXHIBIT~~the ~~10.19~~Company’s independent auditor for the Company’s fiscal ~~and~~year ~~EXHIBIT~~ending 10July 31, 2003.20 PwC’s engagement commenced effective January 28, 2003. ~~respectively~~During the Company’s fiscal years ended July 31, 2002 and ~~are~~2001, ~~incorporated~~and ~~herein~~the subsequent byinterim ~~reference~~period through January 28, 2003, the Company did not consult with PwC regarding (i) either the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements; or (ii) any matter that was either the subject of a “disagreement” with KPMG (as defined in Item 304(a)(1)(iv) of Regulation S-K) or a reportable event with respect to KPMG (as defined in Item 304(a)(1)(v) of Regulation S-K).

ITEM 7. FINANCIAL STATEMENTS, ~~PRO FORMA FINANCIAL INFORMATION~~ AND EXHIBITS.

Exhibit No.		Description
10.19		Loan and Security Agreement, dated October 9, 2002, by and among the registrant, Three A’s Holdings, L.L.C., the lenders party thereto and The CIT Group/Business Credit, Inc., as administrative and collateral agent
16.1		Letter from KPMG to the Securities and Exchange Commission dated February 3, 2003 pursuant to Item 304(a)(3) of Regulation S-K.
10.20		Amended and Restated Term Loan Agreement, dated as of October 9, 2002, among the registrant, the lenders party thereto and JPMorgan Chase Bank, as administrative agent and collateral agent

~~SIGNATURES~~SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~registrant~~Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MTS, Incorporated
October 18, 2002	By:	/s/ DeVaughn D. Searson
		DeVaughn D. Searson Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

Date: February 3, 2003


		By:		/s/ Jim S. Bain

				Jim S. Bain, Chief Financial Officer

INDEX TO EXHIBITS

Exhibit No.		Description
10.19		Loan and Security Agreement, dated October 9, 2002, by and among the registrant, Three A’s Holdings, L.L.C., the lenders party thereto and The CIT Group/Business Credit, Inc., as administrative and collateral agent
16.1		Letter from KPMG to the Securities and Exchange Commission dated February 3, 2003 pursuant to Item 304(a)(3) of Regulation S-K.
10.20		Amended and Restated Term Loan Agreement, dated as of October 9, 2002, among the registrant, the lenders party thereto and JPMorgan Chase Bank, as administrative agent and collateral agent

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