Mail Stop 04-07
January 7, 2005
Mr. William Slater
Chief Financial Officer
Symmetricom, Inc.
2300 Orchard Parkway,
San Jose, CA 95131-1017
RE: Symmetricom, Inc.
Form 10-K for the fiscal year ended June 30, 2004
Filed September 8, 2004
Form 10-Q for the quarter ended September 30, 2004
File No. 000-02287
Dear Mr. Slater:
We have reviewed your filings and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and will make no further review of your
documents. As such, all persons who are responsible for the
adequacy
and accuracy of the disclosure are urged to be certain that they
have
included all information required pursuant to the Securities
Exchange
Act of 1934. Please address the following comments in future
filings. If you disagree, 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 fiscal year ended June 30, 2004
Management`s Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations, page 20
1. In future filings, revise your results of operations to include
a
discussion of cost of products and services and the other expenses
that comprise your measure of gross profit.
2. It appears that your segments contribute in a disproportionate
way
to your operating results. In future filings, revise to discuss
your
results of operations on a segment basis. Refer to Section 501.06
of
the Codification of Financial Reporting Policies.
Consolidated Statements of Operations, page 43
3. In future filings, separately state revenues from net sales of
tangible products and sales of services, if greater than 10% of
total
revenues. Also, separately state the costs and expenses applicable
to
each category of sales and revenues. Refer to Rule 5-03 of
Regulation S-X.
4. Explain for us your basis for classifying certain integration
and
restructuring charges and the amortization of purchased technology
as
a component of gross profit. In this regard, we note at page 67
that
the integration and restructuring charges include a reduction in
force, severance, lease loss, merger related activities, and
relocation. Explain the nature of these costs in more detail and
tell us how you determined that these costs were costs of sales
and
services.
Note A - Summary of Significant Accounting Policies
Goodwill and Other Intangible Assets
5. We note that your disclosure addresses your impairment policy
for
goodwill. In future filings, expand your disclosure to include a
discussion of your impairment policy for intangible assets subject
to
amortization. In addition, your discussion of your goodwill
impairment policy at page 19 appears inconsistent with the
disclosure
at page 48. In future filings, revise your disclosures to
separately
describe your impairment policy for goodwill and other intangible
assets. Supplementally provide us with your proposed disclosure.
6. Tell us how you identified your reporting units under the
guidance
in SFAS 142 for purposes of performing your goodwill impairment
tests.
Note C - Discontinued Operations, page 54
7. Clarify for us the nature of your plan to dispose of the
Trusted
Time Division. Tell us how you applied the guidance in SFAS 144
in
determining that it was appropriate to present the Trusted Time
Division as discontinued operations as of June 30, 2003. If
this
division is to be disposed of other than by sale, tell us how you
determined the date at which it should be presented as
discontinued
operations. In this regard, we note at page 23 that you expect
operations to cease during fiscal 2005.
Note H - Goodwill and Intangible Assets, page 57
8. In future filings, provide in the notes to your financial
statements the information required by paragraph 46 (a) of SFAS
142
with regard to your impairment losses.
Note O - Integration and Restructuring Charges, page 67
9. It is unclear how your discussion, and particularly your table
on
page 68, reconcile to integration and restructuring charges
reported
in your Statement of Operations. For instance, you reported total
integration and restructuring expense of $8.4 million for fiscal
2003. You mention $1.2 million of lease loss charges expensed
during
that year, however, it is unclear whether there is any discussion
of
the remaining $7.4 million. Additionally, it is unclear how your
expenses reported in your Statement of Operations for integration
and
restructuring charges for either fiscal 2003 or 2004 relate to the
information in your table on page 68. Please advise.
10. Refer to your discussion of $8.3 million in integration and
restructuring charges associated with the acquisitions of Datum
and
TrueTime which you accounted for in accordance with EITF 95-3 and
reflected as an increase in goodwill in 2003. Describe for us in
more
detail the nature of these costs and how you determined that they
should be accounted for under EITF 95-3.
* * * *
Please respond to these comments within 10 business days or
tell us when you will provide us with a response. Please furnish
a
letter that keys your responses to our comments and provides any
requested supplemental information. Please file your response
letter
on EDGAR. 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 the 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 filings; 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 filings or
in
response to our comments on your filings.
You may contact Kenya Wright, Staff Accountant, at (202)
824-
5446 or Melissa Hauber, Senior Accountant, at (202) 942-2858 if
you
have questions regarding comments on the financial statements and
related matters. Please contact me at (202) 942-1990 with any
other
questions.
Sincerely,
Larry M. Spirgel
Assistant Director
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Mr. William Slater
Symmetricom, Inc.
January 7, 2005
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