February 17, 2005
Mail Stop 0510
By U.S. Mail and facsimile to (918) 245-9343
James Nolan
President and Chief Executive Officer
Sheffield Steel Corporation
220 N. Jefferson Street
Sand Springs, Oklahoma 74063
Re: Sheffield Steel Corporation
Amendment No. 2 to Form S-4, filed February 8, 2005
File No. 333-121176
Dear Mr. Nolan:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. 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.
Inside Front Cover
1. We note your response to comment 3 in our letter of January 7,
2005. Please note that you must also state that to obtain timely
delivery, security holders must request the information no later
than
five business days before the date they must make their investment
decision. Please provide this disclosure. See Form S-4, Item
2(2).
Where you can find more information, page i
2. Please identify which filings you are incorporating by
reference.
See Rule 411(d) under the Securities Act of 1933.
Summary of Historical Financial Data, page 12
3. We note your response to prior comment 10. Please revise your
registration statement to provide the information requested in the
third and fourth bullet points of that comment, the material
limitations associated with your use of EBITA as compared to net
income and how you compensate for these limitations.
4. We note your revised disclosure. Please disclose the
circumstances surrounding your use of EBITDA to demonstrate
compliance with financial covenants contained in your credit
facility. For example, please:
* describe the EBITDA requirements under your credit facility;
* compare the non-GAAP measure you disclosed with the required
EBITDA
metric under the financial covenant, if calculated in a different
manner from the amount you disclose as EBITDA; and
* disclose whether or not you were in compliance with the
financial
covenant.
Liquidity and Capital Resources, page 36
5. We read your response to comment 44 and the changes you made in
your financial statement footnotes. However, additional
disclosure
should be included here as well. Please disclose when each waiver
was obtained. Also, the specific debt covenants that you were not
in
compliance with, the duration of each waiver, and the amounts and
forms of consideration that you paid, if any, to obtain the
waivers.
Disclose whether each of your various debt arrangements have cross
default provisions. Disclose whether you believe that you will be
able to comply with each covenant that was violated for the next
twelve months without the need to obtain additional waivers.
Please
also explain how additional future violations of these debt
covenants
would impact your liquidity.
Critical Accounting Policies and Estimates, page 41
6. We have reviewed your response to comment 24. Please tell us
how
you concluded that your critical accounting assumptions and
estimates
are not expected to have a material impact on your financial
statements given that the aim of these disclosures is to highlight
the degree of potential variability in financial results arising
from
estimates inherent in your significant accounting policies.
Please
refer to SEC Releases 33-8040 and 33-8098.
Conditions to the Exchange Offer, page 66
7. We note your response to prior comment 31. This response is
inconsistent with the preceding and proceeding sentences, which
both
state that you may assert or waive conditions and rights at any
time.
Please revise this paragraph to unambiguously convey the statement
constituting your response to our previous comment.
Financial Statements
8. We have reviewed your response to comment 35. Please provide
your
revenues from customers for each product or service as required by
paragraph 37 of SFAS 131. We assume that the product
classifications
will be similar to those shown in the tonnage shipped data on page
30.
Note 20. Stock Based Compensation, page F-15
9. We have reviewed your response to comment 36. Please disclose
the
number of restricted shares issued, the vesting period of your
restricted stock, the amount of unearned compensation, the
amortization period of the unearned compensation, the total
compensation expense recognized in income from stock based
compensation and other disclosures required by SFAS 123, as
amended
by SFAS 148. Please also tell us how you determined that the
value
of the shares were $.01.
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter that is filed on EDGAR with your amendment that keys
your responses to our comments and provides any requested
supplemental information. Detailed cover letters greatly
facilitate
our review. Please understand that we may have additional
comments
after reviewing your amendment and 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.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in 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.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Gus Rodriguez, Staff Accountant, at (202)
824-
5524 or Rufus Decker, Accounting Branch Chief, if you have
questions
regarding comments on the financial statements and related
matters.
Please contact Matt Franker, Staff Attorney, at (202) 824-5495 or
me
at (202) 942-2864 with any other questions.
Sincerely,
Jennifer Hardy
Branch Chief
cc: Matthew J. Gardella, Esq. (via facsimile 617/316-8306)
Stacie Aarestad, Esq.
Palmer & Dodge LLP
111 Huntington Avenue
At Prudential Center
Boston, Massachusetts 02199-7613
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James Nolan
Sheffield Steel Corporation
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0404
DIVISION OF
CORPORATION FINANCE