Mail Stop 0306
April 6, 2005
Via Facsimile and U.S. Mail
Jeffrey M. McCormick
Corporate Controller
Thoratec Corporation
6035 Stoneridge Drive
Pleasanton, CA 94588
Re: Thoratec Corporation
Form 10-K for the fiscal year ended January 1, 2005
Filed March 16, 2005
Form 8-K as of February 1, 2005
File No. 0-49798
Dear Mr. McCormick:
We have reviewed your filings and have the following
comments.
We have limited our review to matters related to the issues raised
in
our 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.
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 comment or on any other
aspects
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 January 1, 2005
Item 9A. Controls and Procedures - Page 70
1. We note your statement included in your disclosure that
management
has concluded that your disclosure controls and procedures "were
effective in providing reasonable assurance that information
required
to be disclosed by the company in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized
and
reported within the time periods specified in the SEC`s rules and
forms." We have the following comments:
a) It does not appear that your certifying officers have reached a
conclusion that your disclosure controls and procedures are
effective. Please revise to state, in clear and unqualified
language, your officers` conclusions regarding the effectiveness
of
your disclosure controls and procedures.
b) The language that is currently included after the word
"effective"
in your disclosure appears to be superfluous, since the meaning of
"disclosure controls and procedures" is established by Rule 13a-
15(e)
of the Exchange Act. Please revise to limit your conclusion to
state
simply whether the disclosure controls and procedures were
effective.
However, if you elect to retain qualifying language in your
disclosure, revise so that the language is fully consistent with
the
definition of disclosure controls and procedures contained in Rule
13a-15(e). In this regard, please note that the term "reasonable
assurance" does not appear in the definition of disclosure
controls
and procedures as set forth in the rule.
2. We note your statement that a "control system, no matter how
well
conceived and operated, can provide only reasonable assurances
that
the objectives of the control system are met." Please revise to
state clearly, if true, that your disclosure controls and
procedures
are designed to provide reasonable assurance of achieving their
objectives and that your principal executive officer and principal
financial officer concluded that your disclosure controls and
procedures are effective at that reasonable assurance level. In
the
alternative, remove the reference to the level of assurance of
your
disclosure controls and procedures. Please refer to Section
II.F.4
of Management`s Reports on Internal Control Over Financial
Reporting
and Certification of Disclosure in Exchange Act Periodic Reports,
SEC
Release No. 33-8238, available on our website at
<http://www.sec.gov/rules/final/33-8238.htm>.
Form 8-K dated February 1, 2005
Exhibit 99.1 - Press Release, dated February 1, 2005, regarding
year
ended 2004 results
Management`s Reasons for Presenting Non-GAAP Financial Measures -
Page 3
3. We note you present a measure of taxed cash earnings. You
indicate that you use this measure in part for forecasting and
budgeting. Based on the title of the measure and your discussion
regarding the use of the measure, it appears that this measure is
both a performance measure and a liquidity measure. However, we
note
you have only reconciled the measure to net income.
a) Revise future filings to present a separate reconciliation of
the
measure to the most directly comparable liquidity measure
calculated
in accordance with GAAP, or supplementally tell us why you believe
your current disclosures and reconciliation comply with Regulation
G.
b) Alternatively, revise future filings to clarify how you use the
measure and use a descriptive title that clearly indicates how the
non-GAAP measure is used and derived.
c) Please supplementally provide us with your proposed revised
disclosures.
4. We note that you also present the measure "taxed cash earnings
per
share." SFAS 95 prohibits the presentation of cash flow
information
per share. In addition, the SEC staff indicated in Question 11 of
the Frequently Asked Questions Regarding the Use of Non-GAAP
Financial Measures that the GAAP prohibition on presenting cash
flow
per share is maintained and per share measures of liquidity
continue
to be prohibited. Revise future filings to remove this measure or
tell us why you believe presentation of this measure is
appropriate.
* * * * * * * *
As appropriate, please amend your January 1, 2005 Form 10-K
and
respond to these comments within 10 business days or tell us when
you
will provide us with a response. 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 file
your cover letter on EDGAR. 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.
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 in the filings reviewed by the staff 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.
You may contact Kevin Vaughn, Staff Accountant, at (202)
824-
5387 or me at (202) 942-1984 if you have questions regarding these
comments.
Sincerely,
Martin James
Senior Assistant Chief Accountant
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Jeffrey M. McCormick
Thoratec Corporation
April 6, 2005
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