Mail Stop 3-5
March 11, 2005
By U.S. Mail and Facsimile
John R. Murphy
Chief Financial Officer
Accuride Corporation
7140 Office Circle
Evansville, Indiana 47715
Re: Accuride Corporation
Form S-1 filed February 23, 2005, as amended
File No. 333-121944
Dear Mr. Murphy:
We have reviewed your amended filing and have the following
comments. Where indicated, we think you should revise your
documents
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.
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 and 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.
General
1. We note your response to our previous comment 1. Please ensure
you give retroactive effect to the stock split to be consummated
immediately prior to the effectiveness of this offering throughout
your document. Refer to the guidance in SAB Topic 4C.
2. We note your response to our prior comment no. 5. However, we
note that the parties subsequently amended the Merger Agreement
due
to TTI`s failure to satisfy a condition previously required under
the
December 24, 2004 agreement. We understand that Accuride reduced
the
amount of common stock to be issued in the Merger Transaction and
revised certain terms of the Merger Agreement. On a supplemental
basis, please provide us with the changes made to the Merger
Agreement. Also, supplementally tell us the condition that TTI
failed to satisfy under the Merger Agreement and how Accuride`s
reduction of common stock and revision of terms in the Agreement
addressed that failure. In your response, you state that TTI
stockholders approved the amendment to the Merger Agreement.
Finally, please describe the consideration that TTI stockholders
gave
to the amendments and the extent to which TTI stockholders were
able
to renegotiate the terms of the amended terms.
Proposed artwork
3. Please clarify your reference to "various markets" next to the
Brillion product. What is the Brillion product?
Prospectus Summary, page 1
4. In the section pertaining to the TTI merger, we advise you to
include a bullet-point on the TTI auditor recognition of a
material
weakness in TTI`s internal controls for the year ended December
31,
2004.
TTI Merger, page 31
5. If the additional shares are issuable upon the closing of an
initial public offering, we assume that they will become issuable
upon effectiveness of this registration statement. Please revise
to
clarify.
Use of Proceeds, page 32
6. Please revise the first bullet to parenthetically include the
current actual interest rate you are paying.
Pro Forma Consolidated Financial Data, page 36
Notes to the Unaudited Pro Forma Consolidated Financial
Statements,
page 39
Note 1. Pro Forma Adjustments, page 39
General
7. Refer to our previous comment 38. We still feel that the level
of
detail included in your explanations is insufficient to allow the
reader to recalculate the adjustments from the information
provided.
Please revise your adjustment explanations to include all
information
necessary for the reader to recalculate each adjustment.
8. Refer to your responses to our previous comments 37 and 70. We
understand, from these responses, that an ownership change could
potentially limit your ability to utilize your net operating
losses.
TTI`s net operating losses will also be subject to a potential
limitation. However, based upon your preliminary calculations you
believe that you will be able to fully utilize the net operating
losses of both Accuride and TTI. For this reason, the pro forma
financial statements do not include any adjustments relating to
these
matters. If our understanding is correct, please expand your
disclosures to state these facts in the notes to the pro forma
financial statements.
(a) TTI Merger Asset Allocation
9. Refer to your response to our previous comment 34. We
understand,
from your augmented disclosure, the methodology used to value TTI.
Please supplementally reconcile the estimated $92 million purchase
price with the value of the consideration you are offering (cash
and
common shares). If practicable, please also advise us as to the
estimated range of the initial public offering price.
10. In addition, please supplementally explain the relationship of
the $92 million purchase price to the "equity value" of TTI. We
see
that you placed a "deemed value" upon both TTI and Accuride. How
did
you determine the total equity value to be allocated? We assume
the
per share value of Accuride common shares on page 34 of your
response
was derived purely as a function of outstanding shares,
predetermined
ownership percentages, and total equity value. If it was not,
please
explain how you determined it.
11. Supplementally explain to us how you have considered the cash
payouts described in your response to our previous comment 74 in
your
pro forma financial statements.
(b) Refinancing Adjustments
b(ii) Deferred Financing Costs, page 41
12. It is unclear how you derived the $9,708 of new financing fees
presented in your explanation b(ii) as the table of fees and
expenses
presented in b(i)(c) appears to indicate different amounts for
these
items. Please revise or advise.
c(iv) Intangible Assets, page 42
13. We note your response to our prior comment 33. We note that
you
have assigned asset lives of 10-15 years and 15-30 years for
Technology and Customer Relationships. Supplementally explain to
us
why you feel the assignment of useful lives of this length is
appropriate. Include in your response the basis for your
assessment
and the reasons behind any changes in useful lives assigned by
TTI.
Describe the specific nature of the customer relationships.
c(vi) Pro Forma Interest Expense, page 43
14. Please revise points (1)-(3) under explanation c(vi) to
indicate
the actual rate used in the calculation of pro forma interest for
each credit facility.
Management`s Discussion and Analysis, page 49
Results of Operations, page 51
15. We note your revised disclosure in response to our previous
comment 41, but still believe that you`re MD&A disclosures should
be
more specific. Your present disclosures appear to commingle the
impact of surcharges and price increases. We understand the term
"surcharge" to refer to an additional tariff or fee that you have
the
right to pass on to your customers, in full or in part. If you
were
no longer subject to the surcharge, you would correspondingly
reduce
the related fees charged to your customers. If our understanding
is
correct, please revise to specifically disclose the amounts of the
surcharges you incurred and those you received from your
customers.
This disclosure would enable the reader to understand the impact
of
surcharges upon gross margin.
Principal Stockholders and Selling Stockholders, page 100
16. We note your responses to our prior comment nos. 51 and 52.
Please tell us why you believe it is necessary to combine two
separate item requirement sections into one. Your current
presentation makes it difficult to follow key disclosure embedded
in
your footnotes. We suggest that you relocate and separate
disclosure
into a narrative, paragraph format with subheadings. Your selling
shareholders section should, for example, be separate and contain
a
narrative explaining: how the selling shareholders received the
shares to be offered for resale; and any material relationship the
selling stockholders have had with the company over the last three
years. Also, provide a separate table indicating the specific
number
of shares to be offered for resale.
Accuride Corporation Financial Statements
Note 1 - Summary of Significant Accounting Policies
Revenue Recognition, page F-7
17. We note your response to our prior comment 64, but we note
that
you have provided a tabular format that presents the year end
balance
in rebate allowance, but not a table that presents the activity.
Such a table should be in the format suggested in Rule 5-04 of
Regulation S-X. If you consider the activity in this allowance to
be
material, disclosure of the activity in this allowance would be
necessary under Rule 5-04 of Regulation S-X. We may have
additional
comments upon review of this information. Please note that it is
not
necessary to present your schedule of activity by customer.
18. We note your reference to the significance of shipping costs
on
page 5. Consideration should be given to including a related
accounting policies footnote.
Note 2 - Recapitalization of Accuride Corporation, page F-14
19. We note your response to our previous comment 68, but feel
that
the response provided does not provide sufficient detail of the
facts
and circumstances surrounding the 2002 adjustment to the 1998
recapitalization. Please readdress this comment in your next
response. In addition, please explain the extent to which
changes
in a related valuation allowance occurred, if applicable.
Finally,
please supplementally explain the size of this adjustment relative
to
your initial estimate.
Note 7 - Pension and Other Postretirement Benefit Plans, page F-18
20. It appears that additional disclosures are required regarding
the
benefits expected to be paid in each of the next five fiscal
years,
and in the aggregate for the five fiscal years thereafter. Refer
to
the disclosure requirements of SFAS 132(R) and revise or advise.
Note 12 - Segment Reporting, Page F-28
21. We note your response to our prior comment 73. Assuming that
aggregation of two or more operating segments is considered to be
appropriate, please note that this fact should be specifically
disclosed in your subsequent filings. The reasons why aggregation
is
considered to be appropriate should be explained in your
subsequent
filings as well.
22. With regard to the operating segments of TTI, please refer to
their related response letter dated June 16, 2004. In response
76,
TTI identified their operating segments and product categories.
They
also reported a three year average of gross profit margin by
segment.
Please update this information by providing us with a tabular
schedule of gross profit margin by operating segment for each of
the
most recent three fiscal years and on the basis of a three year
average. We may have further comments upon review of your
response.
23. With regard to Accuride`s conclusions regarding the existence
of
a single operating segment prior to the merger, please provide us
with a copy of the monthly financial report to which you refer in
support of your conclusions. In addition, please tell us whether
gross profit margins and/or operating results are reported to the
Board of Directors solely on a consolidated basis. We may have
further comments upon review of your response.
Note 17 - Subsequent Events, page F-32
24. We note the disclosure that the asset allocation presented is
based on preliminary valuation information and that other studies
have not been completed. Supplementally tell us and expand your
disclosure to indicate the specific contingencies that exist.
Include in your response the specific assets and asset valuations
to
which these relate.
Transportation Technologies Industries, Inc. Financial Statements
Note 9 - Shareholder`s Equity, page F-52
25. Refer to our previous comment 74. It is unclear from your
explanation why the revisions to the original agreement resulted
in a
straight reduction of 6.45%, representing the total decrease in
residual equity value of the new organization attributable to the
cash payout of non-accredited holders of TTI preferred stock.
Please
explain to us why the reduction in value of $8.8 million due to
the
payout was not taken directly from the categories of preferred
stock
the non-accredited investors owned, as was done for the Rule 501
non-
accredited investors. Also, your disclosure should be revised to
indicate the reason for the subsequent change in the merger
agreement
as well as the cash payments made for each class of preferred
stock.
Closing
As appropriate, please amend the 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 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 this action 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 connection with 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 Amy Geddes at (202) 824-2885, or Margery
Reich
at (202) 942-1839 if you have questions regarding comments on the
financial statements and related matters. Please contact Johanna
Vega Losert at (202) 942-2931 or me with any other questions.
Sincerely,
Max A. Webb
Assistant Director
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John R. Murphy
Accuride Corporation
March 11, 2005
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