November 5, 2004
Mail Stop 0510
via U.S. mail and facsimile
Mr. Glenn H. Epstein
Chairman and Chief Executive Officer, Intermagnetics General
Corporation
450 Old Niskayuna Road
Latham, NY 12110
RE: Form 10-K for the fiscal year ended May 30, 2004
Form 10-Q for the period ended August 29, 2004
Form 8-K/A dated September 29, 2004
File No. 1-11344
Dear Mr. Epstein:
We have reviewed your response letter dated October 28, 2004
to our letter dated October 14, 2004 and have the following comments.
If you disagree with a comment, we will consider your explanation as
to why our comment is inapplicable or a revision is unnecessary.
Please be as detailed as necessary in your explanation. In some of
our comments, we may ask you to provide us with supplemental
information so we may better understand your disclosure. After
reviewing this information, we may or may not raise additional
comments.
Please understand that the purpose of our review process is to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing. We
look forward to working with you in these respects. We welcome any
questions you may have about our comments or on any other aspect of
our review. Feel free to call us at the telephone numbers listed at
the end of this letter.
Form 10-K for the year ended May 30, 2004
Note A - Significant Accounting Policies - Revenue Recognition
1. You indicate in your response to prior comment number 12 that you
recognize revenue under research and development contracts with the US
Government as well as other customers.
* In future filings revise your income statement captions "net sales"
and "costs of products sold" to "net revenues" and "costs of revenues"
or some other similarly worded captions to clarify that these line
items reflect revenues and costs related to both products and
services.
* Revise your revenue recognition policy to better differentiate
between product sales and revenue earned under research and
development agreements. Your response indicates that all of your
research and development contracts are accounted for in accordance
with SOP 81-1. Your current accounting policies appear to
differentiate between revenues recognized under research and
development contracts with the federal government and other customers.
* You indicate under your product research and development accounting
policy that these costs are included in operating expenses. Based on
your response letter and your disclosures on page 19 (which presents
product research and development costs for 2004, 2003 and 2002 that
are in excess of the amounts reflected under the caption "product
research and development" on your consolidated income statements), we
assume that you have reflected product research and development
expenses incurred under research and development contracts within cost
of products sold. Please revise your future disclosures to clarify.
Form 10-Q for the Quarter ended August 29, 2004 and Form 8-K/A#1 dated
September 29, 2004
2. We note your response to our prior comments 17 and 18 that you will
amend your Form 10-Q for the quarter ended August 29, 2004 and Form 8-
K/A#1 dated September 29, 2004. Please file these reports as soon as
possible.
General
3. As requested in our comment letter dated October 14, 2004, please
provide the three acknowledgements in your next response to us. These
are:
* The Company is responsible for the adequacy and accuracy of the
disclosure in their filings;
* 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.
* * * *
Please respond to these comments within 10 business days, or
tell us when you will provide us with a response. Please file the
amendment to your Form 10-Q and Form 8-K and provide us with a
supplemental response letter that keys your responses to our comments
and provides any requested supplemental information. Detailed letters
greatly facilitate our review. Please file your supplemental response
on EDGAR as a correspondence file. Please understand that we may have
additional comments after reviewing your responses to our comments.
We urge all persons who are responsible for the accuracy and adequacy
of the disclosure in the filings reviewed by the staff to be certain
that they have provided all information investors require for an
informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have
made.
In connection with responding to our comments, please provide, in
writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in their filings;
* 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.
In addition, please be advised that the Division of Enforcement
has access to all information you provide to the staff of the Division
of Corporation Finance in our review of your filing or in response to
our comments on your filing.
If you have any questions regarding these comments, please direct them
to Ryan Rohn, Staff Accountant, at (202) 824-5525 or, in his absence,
to Jeanne Baker, Assistant Chief Accountant at (202) 942-1835, or the
undersigned at (202) 942-1798.
Sincerely,
John Hartz
Senior Assistant Chief Accountant
Intermagnetics General Corporation
November 5, 2004
Page 4 of 4
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0510
DIVISION OF
CORPORATION FINANCE