Mail Stop 0510
April 28, 2005
Via U.S. mail and facsimile
Mr. Laurie Tugman
President and Chief Executive Officer, Marsulex, Inc.
111 Gordon Baker Road, Suite 300,
Toronto, Ontario, Canada M2H 3R1
RE: Form 20-F for the fiscal year ended December 31, 2004
File No. 333-09410
Dear Mr. Tugman:
We have reviewed this filing 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 20-F FOR THE YEAR ENDED DECEMBER 31, 2004
Selected Financial Data, page 1
1. It appears to us that your presentation of the non-GAAP
performance measure, Earnings from operations before the
undernoted
(EBITDA), does not fully comply with Item 10(e) of Regulation S-K
and
that certain adjustments do not comply with Item 10(e)(1)(ii)(B).
We
point you to the guidance set forth in the "Frequently Asked
Questions Regarding the Use of Non-GAAP Financial Measures" (FAQ)
prepared by the Staff Members in the Division of Corporation
Finance.
The following comments are not meant to be an all-inclusive list
of
the deficiencies in your disclosures.
* You indicate that EBITDA is a measure used to indicate your
operating profitability and performance. Since this performance
measure eliminates recurring charges you must fully comply with
all
the disclosure requirements set forth in the five bullet points to
Question 8 of the FAQ.
* Address each item you have included as "unusual items". To the
extent they are recurring items, address them as requested in the
above bullet. To the extent they are nonrecurring items, address
for
us the appropriateness of eliminating them from your non-GAAP
performance measure.
* Rename your acronym, EBITDA, as it eliminates items other than
interest, taxes, depreciation and amortization.
* You must reconcile EBITDA to net income.
Tell us how you intend to revise the non-GAAP performance measure
you
present or explain why you believe the current measure is
appropriate.
Controls and Procedures, page 33
2. You indicate "Disclosure controls and procedures are defined by
the Securities and Exchange Commission as those controls and other
procedures that are designed to ensure that information required
to
be disclosed by the Company in reports filed or submitted by it
under
the Securities Exchange At of 1934 is recorded, processed,
summarized
and reported within the time periods specified in the Securities
and
Exchange Commission`s rules and forms." In future flings, if you
choose to disclose such definition, ensure that you disclose the
entire definition of disclosure controls and procedures as defined
by
the Section 240.13a.-15(e) or 240.15d-15(e) of the Exchange Act.
Management`s Discussion and Analysis
Results of Operations, page MDA-2
3. Please disclose the extent to which each business reason
discussed
for the changes between periods in your revenue and your selling,
general, administrative and other costs sections contributed to
the
overall change in those line items. See Item 303 of Regulation S-
K
and SEC Release 33-8350.
Contractual Commitments, page MDA-11
4. Please revise your table of contractual commitments in future
filings to include the following:
* Estimated interest payments on your debt; and
* Planned funding of pension and other postretirement benefit
obligations.
Because the table is aimed at increasing transparency of cash
flow,
we believe these payments should be included in the table. Please
also disclose any assumptions you made to derive these amounts.
If
you choose not to include these payments, a footnote to the table
should clearly identify the excluded items and provide any
additional
information that is material to an understanding of your cash
requirements.
* * * *
Please respond to these comments within 10 business
days,
or tell us when you will provide us with a response. Please
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 Marie Trimeloni, Staff Accountant, at (202) 942-
1860
or Jeanne Baker, Assistant Chief Accountant, at (202) 942-1835, in
their absence, to the undersigned at (202) 942-1774.
Sincerely,
Rufus Decker
Accounting Branch Chief
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Mr. Laurie Tugman
April 28, 2005
Page 4 of 4
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0510
DIVISION OF
CORPORATION FINANCE