June 2, 2005
Mail Stop 0306
Stephen G. Daly
Hittite Microwave Corporation
20 Alpha Road
Chelmford, Massachussets 01824
Re: Hittite Microwave Corporation
Registration Statement on Form S-1
Filed May 5, 2005
File No. 333-124664
Dear Mr. Daly:
We have the following comments to your filing. 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.
General
1. Please confirm that any preliminary prospectus you circulate
will
include all non-Rule 430A information. This includes the price
range
and related information based on a bona fide estimate of the
public
offering within that range. Also note that we may have additional
comments after you include this information.
Graphics
2. Your inside cover page graphics depicts the finished products
of
other companies rather than your products. Please revise to
clarify
that that the graphics do not show your products.
3. Your graphics on the inside back cover of the prospectus are
confusing. Please revise to explain the graphics more clearly.
Summary, page 1
4. In the second paragraph of your overview you describe the
breath
and diversity of your customer base, as well as identifying your
more
than 2,300 customers. Please balance this disclosure with the
fact
that you rely on a small number of customers for a significant
percentage of your revenue, as identified in your risk factor on
page
9. Also, balance the similar disclosure in the fourth bullet
point
on page 2.
5. In the third paragraph of your overview you identify the
increase
in your annual revenue from $28.5 million in 2000 to $61.7 million
in
2004. Please balance this disclosure with the fact that in 2001
and
2002 you experienced a "period of relatively flat year-over-year
growth" and that you do not expect that your revenue will continue
to
grow at rates as high as those you have experienced in recent
years
as described on page 8.
The Offering, page 4
6. Please describe the business purpose for paying a dividend to
your
existing stockholders prior to the offering, and estimate the
amount
of the dividend per share and in the aggregate. Please clarify
whether the holders of Series A preferred stockholders will be
eligible for such dividend, as their shares will not convert until
the closing of the offering.
Risk Factors, page 6
We may be unable to sustain our historical revenue growth rate...,
page 7
7. You state that you do not expect that you will continue to grow
at
rates as high as those you have experienced in recent years in
establishing planned levels of operating expenses. Please expand
to
explain why you expect lower growth rates.
We design and manufacture products in our standard product
line...,
page 8
8. Please expand this risk factor to describe any instances where
your estimates of your customer`s requirements were materially
incorrect.
Our business could be adversely affected..., page 12
9. Please quantify the costs associated with the defect you
describe
in this risk factor and whether you continue to do business with
this
foundry.
If we fail to comply with export control..., page 15
10. Please identify the country or countries where the products at
issue in the investigation were shipped.
Use of Proceeds - Page 22
11. Since presumably some of the proceeds will be used to replace
the
"cash and cash equivalents" currently on the balance sheet that
will
be paid to your existing common stockholders before this offering,
discuss the dividend distribution and quantify the amount to be
paid.
Dividend Policy, page 22
12. Please revise to discuss the business purpose for the
distribution to your current stockholders prior to the closing of
this offering. Disclose whether your Series A preferred holders
will
receive any dividend.
Capitalization, page 23
13. Please revise to remove the caption relating to cash and cash
equivalents from your presentation of capitalization since this is
not part of your capitalization.
Dilution, page 24
14. We note the two bullet points on page 25 will include the
options
to be issued immediately prior to the closing. In addition to
such
disclosure also show these amounts using only the options
outstanding
at December 31, 2004.
Management`s Discussion and Analysis, page 28
Overview, page 28
15. Please revise the overview to provide a balanced, executive-
level
discussion that identifies the most important themes or other
significant matters with which management is concerned primarily
in
evaluating the company`s financial condition and operating
results.
For example, discuss material business opportunities, challenges
and
risks, such as those presented by known material trends and
uncertainties, on which the company`s executives are most focused,
and the actions they are taking in response to them. Delete
repetitive disclosure, such as the first two paragraphs that also
appear in the summary. For further guidance on the content and
purpose of the "Overview," see Interpretive Release No. 33-8350 on
our website.
Liquidity and Capital Resources, page 39
16. Please revise to discuss the business purpose for the
distribution to your current stockholders prior to the closing of
this offering and how that distribution relates to the company`s
cash
and debt management policies.
17. Please discuss the Term Note described on page F-14.
Business, page 42
18. Please eliminate repetitive disclosure. We note, for example,
that the first three paragraphs in the business section are
identical
to the first three paragraphs in the summary.
Management, page 61
19. Please confirm that you have provided business experience for
the
past five years for each of your directors.
20. We note that you have not included any disclosure required by
Item 404 of Regulation S-K, although we note various references in
the disclosure to loan forgiveness, securities issuances, and the
entry into agreements with officers and/or directors. Please
confirm
to us that there are no relationships or related party
transactions
that have taken place that should be disclosed, or revise the
disclosure to discuss.
Principal and Selling Stockholders, page 70
21. The footnotes reference numbers that are not included in the
table. Please revise.
22. Please identify the five members of the of the investment
committee of Summit Partners, LLC, who share voting and investment
power over the shares.
Financial Statements, page F-1
23. Please update your financial statements in accordance with
Rule
3-12 of Regulation S-X.
Consolidated Balance Sheets, page F-3
24. We see you present redeemable convertible preferred stock in
your
balance sheet between liabilities and equity. Please tell us why
your current presentation is appropriate and compliant with SFAS
150.
It is not clear to us why the security is not required to be
classified and presented as a liability. Please clarify
supplementally and revise the filing as necessary based on our
comment.
25. We see your board of directors has declared a cash dividend in
an
aggregate amount equal to the amount of your cash and cash
equivalents at the close of business on the date preceding the
date
of effectiveness of the registration statement which will be paid
immediately prior to, and contingent upon, the closing of this
offering to your stockholders of record at the cash dividend
record
date. Please revise the filing to include the pro forma balance
sheet and pro forma per share amounts that reflect this dividend
as
required by SAB Topic 1(B)(3).
Note 10 - Commitments and Contingencies, page F-15
Legal Proceedings, page F-16
26. If significant, disclose the amount of any charges incurred
and
liabilities you recorded relating to the possible Export
Administration Regulation violations. Also, revise your
disclosures
to indicate your expectations as to the likelihood of the
referenced
contingency having a negative material impact on your income
statement. If it is at least reasonably possible that this or any
unaccrued contingency (if negatively resolved) could have a
material
negative impact on your financial statements, the notes to the
financial statements must either disclose the range of possible
loss
or indicate no such estimate can be made. Refer to paragraph 10
of
SFAS 5.
Note 17 - Segment, Major Customer and Geographic Information, page
F-
20
27. We note your discussion of various product lines on page 50
and
throughout your MD&A. Please revise to provide the disclosures
required by paragraph 37 of SFAS 131, or supplementally tell us
why
you do not believe this is required.
Exhibits
28. We note your intention to file a number of exhibits, including
your legal opinion, by amendment. Because we may have comments on
these exhibits, and on the related disclosure, please file the
exhibits allowing adequate time for their review. Also,
supplementally explain why you have not filed agreements with your
foundries.
Closing Comments
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 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 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 Eric Atallah at (202) 551-3663 or in his
absence, Jay Webb at (202) 551-3603 if you have questions
regarding
comments on the financial statements and related matters. Please
contact Jay Mumford at (202) 824-5348 or me at (202) 942-1880 with
any other questions.
Sincerely,
Peggy Fisher
Assistant Director
cc: Robert W. Sweet, Esq.
John D. Hancock, Esq.
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Stephen G. Daly
Hittite Microwave Corporation
June 2, 2005
Page 7