May 7, 2012
VIA EDGAR Transmission
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
| Attn: | Megan M. Akst, Staff Accountant |
| RE: | DynaVox Inc. |
| Form 10-K for the Fiscal Year Ended July 1, 2011 |
| Filed September 27, 2011 |
| File No. 001-34716 |
Dear Ms. Akst:
This letter sets forth the response of DynaVox Inc. (the “Company”) to the comment made in the Staff’s letter to Edward L. Donnelly, Jr., dated April 27, 2012. The Company’s response is set forth below, with your comment repeated and our response immediately following.
Form 10-K for the Fiscal Year Ended July 1, 2011
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations, page 31
| 1. | We note from your response to our prior comment 2 that your discussion of the results of operations for the predecessor and successor on a combined basis for the year ended July 2, 2010 is apparently intended to be a non-GAAP presentation. Non-GAAP income statements are generally prohibited considering the Division’s Compliance & Disclosure Interpretations Question 102.10 - Non-GAAP Financial Measures, updated as of July 8, 2011. In this regard your presentation should comply with Article 11 of Regulation S-X. Please tell us the relevant material pro forma adjustments that would be required by Article 11 of Regulation S-X for the presentation of these pro forma statements to comply with guidance. If material relevant adjustments exist, please explain how you determined that inclusion of this information in the filing would not be beneficial to an investor. |
We acknowledge the Staff’s comment and advise the staff that the Company will not include in its Annual Report on Form 10-K for fiscal 2012 the table included on page 37 of its Annual Report on Form 10-K for fiscal 2011. As discussed with the Staff on May 2, 2012, however, the Company would include, accompanied by appropriate textual disclosure and situated proximately
2100 Wharton Street, Suite 400, Pittsburgh, PA 15203— 1.866.396.2869— www.dynavoxtech.com— www.mayer-johnson.com
| RE: | DynaVox Inc. - File No. 001-34716 |
| Response to SEC Comment Letter, dated April 27, 2012 |
Page 2
to the related discussion of such line items, the three tables set forth on the annex attached to this letter. The Company believes that this information is meaningful to investors and does not believe that these tables, which each present only a selected subset of the line items appearing on the Company’s consolidated statement of income, would be viewed by readers of the report as a non-GAAP financial statement.
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The Company is aware of its obligations under the Securities Exchange Act of 1934, as amended, and acknowledges that:
| • | the Company is responsible for the adequacy and accuracy of the disclosure in the filing; |
| • | staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and |
| • | the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
If you need further information prior to our response please contact me at (412) 222-7766 orKen.Misch@dynavoxtech.com.
Sincerely,
/s/ Kenneth D. Misch |
| Kenneth D. Misch |
| Chief Financial Officer |
| (Principal Financial Officer) |
| cc: | Craig D. Wilson |
| Mark Shuman, Esq. |
| Ryan Houseal, Esq. |
| Joshua Ford Bonnie, Esq. |
2100 Wharton Street, Suite 400, Pittsburgh, PA 15203— 1.866.396.2869— www.dynavoxtech.com— www.mayer-johnson.com
ANNEX
Table 1
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Successor | Aggregated(1) | Successor | Predecessor | |||||||||||||||||||||||||||||||||||||||||
Fifty-Two June 29, | % of | Fifty-Two Weeks Ended July 1, | % of | (a + b) Fifty-Two Weeks Ended July 2, | % of | (a) to July 2, | % of | (b) 2009 to April 27, | % of | Fifty-Three Weeks Ended July 3, | % of | |||||||||||||||||||||||||||||||||
| 2012 | Net sales | 2011 | Net sales | 2010 | Net sales | 2010 | Net sales | 2010 | Net sales | 2009 | Net sales | |||||||||||||||||||||||||||||||||
Net sales | $ | 108,103 | 100.0 | % | $ | 114,299 | 100.0 | % | $ | 25,803 | 100.0 | % | $ | 88,496 | 100.0 | % | $ | 91,160 | 100.0 | % | ||||||||||||||||||||||||
Cost of sales | 32,251 | 29.8 | % | 27,933 | 24.4 | % | 6,178 | 23.9 | % | 21,755 | 24.6 | % | 24,366 | 26.7 | % | |||||||||||||||||||||||||||||
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Gross profit | 75,852 | 70.2 | % | 86,366 | 75.6 | % | 19,625 | 76.1 | % | 66,741 | 75.4 | % | 66,794 | 73.3 | % | |||||||||||||||||||||||||||||
| (1) | Represents aggregated Predecessor and Successor results for the period presented. The combined results should not be used in isolation or substitution of Successor and Predecessor results. |
Table 2
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Successor | Aggregated(1) | Successor | Predecessor | |||||||||||||||||||||||||||||||||||||||||
Fifty-Two June 29, | % of | Fifty-Two Weeks Ended July 1, | % of | (a + b) Fifty-Two Weeks Ended July 2, | % of | (a) to July 2, | % of | (b) 2009 to April 27, | % of | Fifty-Three Weeks Ended July 3, | % of | |||||||||||||||||||||||||||||||||
| 2012 | Net sales | 2011 | Net sales | 2010 | Net sales | 2010 | Net sales | 2010 | Net sales | 2009 | Net sales | |||||||||||||||||||||||||||||||||
Selling and marketing | $ | 35,567 | 32.9 | % | $ | 34,127 | 29.9 | % | $ | 5,342 | 20.7 | % | $ | 28,785 | 32.5 | % | $ | 28,152 | 30.9 | % | ||||||||||||||||||||||||
Research and development | 9,888 | 9.1 | % | 10,106 | 8.8 | % | 2,194 | 8.5 | % | 7,912 | 8.9 | % | 6,886 | 7.6 | % | |||||||||||||||||||||||||||||
General and administrative | 18,480 | 17.1 | % | 17,841 | 15.6 | % | 5,542 | 21.5 | % | 12,299 | 13.9 | % | 11,854 | 13.0 | % | |||||||||||||||||||||||||||||
Amortization of certain intangibles | 445 | 0.4 | % | 1,078 | 0.9 | % | 87 | 0.3 | % | 991 | 1.1 | % | 468 | 0.5 | % | |||||||||||||||||||||||||||||
Impairment loss | 1,262 | 1.2 | % | — | 0.0 | % | — | 0.0 | % | — | 0.0 | % | — | 0.0 | % | |||||||||||||||||||||||||||||
| (1) | Represents aggregated Predecessor and Successor results for the period presented. The combined results should not be used in isolation or substitution of Successor and Predecessor results. |
A-1
Table 3
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Successor | Aggregated(1) | Successor | Predecessor | |||||||||||||||||||||||||||||||||||||||||
Fifty-Two June 29, | % of | Fifty-Two Weeks Ended July 1, | % of | (a + b) Fifty-Two Weeks Ended July 2, | % of | (a) to July 2, | % of | (b) 2009 to April 27, | % of | Fifty-Three Weeks Ended July 3, | % of | |||||||||||||||||||||||||||||||||
| 2012 | Net sales | 2011 | Net sales | 2010 | Net sales | 2010 | Net sales | 2010 | Net sales | 2009 | Net sales | |||||||||||||||||||||||||||||||||
Interest expense | (2,650 | ) | (2.5 | )% | (6,801 | ) | (6.0 | )% | (440 | ) | (1.7 | )% | (6,361 | ) | (7.2 | )% | (8,420 | ) | (9.2 | )% | ||||||||||||||||||||||||
Change in fair value and net loss on interest rate swap agreement | (81 | ) | (0.1 | )% | (746 | ) | (0.7 | )% | (87 | ) | (0.3 | )% | (659 | ) | (0.7 | )% | (1,588 | ) | (1.7 | )% | ||||||||||||||||||||||||
Loss on extinguishment of debt | — | 0.0 | % | (2,441 | ) | (2.1 | )% | (2,441 | ) | (9.5 | )% | — | 0.0 | % | — | 0.0 | % | |||||||||||||||||||||||||||
Other (expense) income—net | 513 | 0.5 | % | (95 | ) | (0.1 | )% | (10 | ) | 0.0 | % | (85 | ) | (0.1 | )% | (518 | ) | (0.6 | )% | |||||||||||||||||||||||||
| (1) | Represents aggregated Predecessor and Successor results for the period presented. The combined results should not be used in isolation or substitution of Successor and Predecessor results. |
A-2