Mail Stop 0308
June 22, 2005
David G. Fiore
President and Chief Executive Officer
AAC Group Holding Corp.
7211 Circle S Road
Austin, Texas 78745
Re: AAC Group Holding Corp.
Amendment No. 3 to Registration Statement on Form S-4
Filed June 7, 2005
File No. 333-121479
Dear Mr. Fiore:
We have reviewed your filing and have the following
comments.
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
information so we may better understand your disclosure. After
reviewing this information, we may 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.
Consolidated Financial Statements and Notes to Consolidated
Financial
Statements
Note 17: Business Segments, page F-35
1. We have read the response to comment 4 of our letter dated May
11,
2005. Additionally:
We note your assertion that some of the detailed information
included
in the reports provided to us are not used to manage your business
and are the result of legacy systems and are also supportive in
the
preparation of tax information for separate legal entities. It
appears that the reports you provided to us were prepared with the
help of a spreadsheet and were not generated directly by the
legacy
systems. Given your assertion that it is not necessary for your
chief operating decision maker to have this information, please
explain to us why you have not prepared a report that is more
condensed. Further, many of the reports that you have provided to
us
compare current actual results with budgeted and prior year
results.
Please explain to us how this type of comparison would be
necessary
for the sole purpose of preparing tax returns. We also note that
in
exhibit 21.1 that you filed on December 21, 2004, you list nine
subsidiaries that do not correspond exactly with the line items
that
you have included in your internal reports. Please explain to us
the
purpose of the classifications that you have presented in your
reports and how this facilitates the preparation of your tax
returns.
We note your assertion that the nature of the production process
of
yearbooks, graduation products and jewelry are the same since they
are all made to order. Please explain to us why it is necessary
to
produce these products in separate facilities. Please tell us why
you cannot print yearbooks on the same production line that
produces
rings. Please explain to us in more detail the similarities that
exist in the production of books as compared to jewelry. We note
that your response fails to discuss these similarities beyond the
first two sentences of the paragraph addressing this point. For
example, you fail to discuss how raw materials, such as paper and
ink, are applicable to the ring production process.
We note your attempt to integrate the sales force of the acquired
business. However, it appears that this effort is still ongoing.
Given the above, we continue to believe that you have more than
two
operating and reportable segments. Please explain to us in more
detail why you would not have separate reportable segments for (1)
Taylor yearbooks, (2) high school and college rings sold on
campus,
(3) class rings sold through retail channels, (4) other jewelry,
and
(5) other publications.
*****
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 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 filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment 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 staff comments and the declaration of
effectiveness 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 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 Dave Irving at (202) 942-1920 or Mike Moran,
Accounting Branch Chief, at (202) 942-2823 if you have questions
regarding comments on the financial statements and related
matters.
Please direct any other questions to Howard M. Baik at (202) 942-
1963
or to Ellie Quarles, Special Counsel, at (202) 942-1859.
Sincerely,
H. Christopher Owings
Assistant Director
cc (via fax): Joel F. Freedman, Esq.
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David G. Fiore
AAC Group Holding Corp.
June 22, 2005
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