Mail Stop 0407
June 14, 2005
Via U.S. Mail and Fax (480) 966-3983
Mr. Richard G. Vasek, Chief Financial Officer
Rockford Corporation
600 South Rockford Drive
Tempe, Arizona 85281
RE: Rockford Corporation
Form 10-K for the fiscal year ended December 31, 2004
Filed April 15, 2005
File No. 0-30138
Dear Mr. Vasek:
We have reviewed the above referenced filing and have the
following comments. We have limited our review to only your
financial statements and related disclosures and will make no
further
review of your documents. As such, all persons who are
responsible
for the adequacy and accuracy of the disclosure are urged to be
certain that they have included all information required pursuant
to
the Securities Exchange Act of 1934. Please address the following
comments in the amended filing. If you disagree, we will consider
your explanation as to why our comment is inapplicable or a future
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 that 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.
Mr. Richard G. Vasek
Rockford Corporation
June 14, 2005
Page 2
Form 10-K for the year ended December 31, 2004
Notes to Consolidated Financial Statements
Note 5. Notes Payable and Long-Term Debt, page 41
1. We note that you classified the 4.5% convertible senior
subordinated secured notes as the long-term debt in the
consolidated
financial statements as of December 31, 2004. We further note on
page 42 that as of September 30, 2004, you were in default under
the
indenture under which the convertible notes were issued and the
holders of the convertible notes waived the default on November
12,
2004. Please confirm to us whether you were in compliance with
all
applicable covenants as of December 31, 2004 and whether it is
probable that you will not fail to meet the same covenant
requirements within next 12 months subsequent to the balance sheet
date. Also, your response should address how you met the
requirements of EITF Issue No. 86-30, which relates to the
"Classification of obligations when a violation is waived by the
creditor". We may have further comments after review of your
response.
Item 9A. Control and Procedures, page 50
2. We note your statement that you identified certain deficiencies
with your internal controls related to the preparation of the
financial statements. Also, we note that the material weakness
resulted from control deficiencies that included inadequate
staffing
and supervision, leading to the untimely identification and
resolution of certain accounting matters; failure to perform
timely
reviews, substantiation and evaluation of certain general ledger
account balances; and lack of procedures or expertise needed to
prepare all required disclosures. Please clarify to us whether
you
considered them significant deficiencies in your internal control
over financial reporting. Tell us why you believe that your Form
10-
K fully comply the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 as indicated in the Exhibit 32.
We
may have further comments after review of your response.
Mr. Richard G. Vasek
Rockford Corporation
June 14, 2005
Page 3
3. You indicate on page 51 that "Except for the corrective actions
relating to the identified material weaknesses that are currently
in
process, and are described above, Rockford has not made
significant
changes to Rockford`s internal controls, and is not aware of
changes
in other factors that could significantly affect these controls,
since the review of those controls as at December 31, 2004". Your
disclosure about changes in internal controls should state whether
or
not there were any changes (not just significant) changes in
internal
controls that materially affected, or were reasonably likely to
materially affect, your internal controls. Please revise the
present
disclosure.
Form 10-Q for the period ended March 31, 2005
Item 4. Control and Procedures
4. We note your statement that "During the first quarter of 2005,
and
after the first quarter through the date of filing this report,
Rockford did not make any substantial changes in its internal
review
of Rockford`s financial reporting other than the correction of the
matters discussed below". Your disclosure about changes in
internal
controls should state whether or not there were any changes (not
just
significant) changes in internal controls that materially
affected,
or were reasonably likely to materially affect, your internal
controls. Please revise the present disclosure.
In connection with responding to our comment, 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.
Mr. Richard G. Vasek
Rockford Corporation
June 14, 2005
Page 4
Please respond to these comments within 10 business days or
tell us when you will provide us with a response. Please furnish
a
letter that keys your responses to our comments and provides any
requested supplemental information. Please file your response
letter
on EDGAR. You may contact Gopal Dharia, Staff Accountant, at
(202)
551-3353 or Ivette Leon, Assistant Chief Accountant, at (202) 551-
3351 if you have questions regarding comments on the financial
statements and related matters. Please contact me at (202) 551-
3810
with any other questions.
Sincerely,
Larry Spirgel
Assistant Director