Mail Stop 3561
August 17, 2005
Eugene Wielepski
Chief Financial Officer and Vice President-Finance
I.C. Isaacs & Company, Inc.
3840 Bank Street
Baltimore, Maryland 21224-2522
Re: I.C. Isaacs & Company, Inc.
Amendment No. 1 to Registration Statement on Form
S-2
Filed on August 10, 2005
File No. 333-125396
Annual Report on Form 10-K for the Fiscal Year
Ended
December 31, 2004, as amended
File No. 0-23379
Dear Mr. Wielepski:
We have limited our review to only your financial statements
and related disclosures and do not intend to expand our review to
other portions of your documents. 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.
Form 10-K for Fiscal Year Ended December 31, 2004
General
1. We note your proposal to address all of the comments issued in
our
letter dated June 28, 2005 via future filings. However, we
believe
the revisions in the aggregate are substantive enough,
particularly
in light of your recent Form S-2 filing, to warrant an amendment
to
your Form 10-K for the fiscal year ended December 31, 2004.
Please
note that the revisions should be made for all of the prior
comments
and not just for the issues subject to further comment below.
Also,
please make conforming amendments to your subsequent filings on
Forms
10-Q, to the extent applicable.
Item 7. Management`s Discussion and Analysis of Financial
Condition
and..., page 14
Year Ended December 31, 2004 Compared to Year Ended December 31,
2003, page 15
2. We have reviewed your proposed disclosures in response to
comment
1 in our letter dated June 28, 2005 and find the proposed
disclosures
very difficult to understand. Also, we are unclear as to why the
systems limitations you discuss would impact your ability to
provide
the requested disclosures. In this regard, we believe you could
discuss the overall change in your net sales by discussing first
the
factors that contributed to the overall change in gross sales, and
then discussing separately the change in sales returns and
allowances
and how this impacted net sales for the year.
With respect to your discussion of the overall change in your
gross
sales, it appears, based on the information you have provided,
that
the change in overall sales volumes did not contribute
significantly
to the increase in gross revenues in fiscal 2004. Rather, the
increased selling prices of your products, coupled with an
increase
in the volume of products sold at regular prices, rather than at
promotional/discounted prices, caused the overall increase in
gross
revenues. If this is the case, please clarify your disclosure
accordingly and attempt to provide the information in a summarized
format, as appropriate. If our understanding is incorrect, please
revise your disclosure to further clarify. Also, please note that
the prior comment was issued with respect to the discussion of
your
results of operations in general, and not just with respect to the
discussion of the changes in your net sales. Please revise your
disclosures accordingly.
Item 15. Exhibits, Financial Statement Schedules, page 24
3. We reviewed your response to comment 3 in our letter dated June
28, 2005. Please address the part of the comment that relates to
your Form 10-K exhibit requirements, as it appears your response
addresses only your proposed revisions to the Form S-2. As
indicated
in the prior comment, it appears that you have omitted from your
Form
10-K a number of exhibits required by Item 601 of Regulation S-K,
including but not limited to your Articles of Incorporation, your
Bylaws, your code of ethics, the listing of your subsidiaries, and
copies of material contracts, such as the Framework Agreement.
Please revise to either include all required exhibits or to
incorporate them by reference to previously filed documents.
Consolidated Financial Statements, page F-2
Consolidated Statements of Operations, page F-3
4. We reviewed your response to comment 4 in our letter dated June
28, 2005 and continue to believe you should revise your financial
statements to present the loss on sale of property as an operating
item. Refer to paragraph 45 of SFAS 144. We note your arguments
that the land was never utilized in operations. However, we
understand that you purchased the land in order to build a more
modern distribution facility and believe your later decision to
continue using your current facility was an operating decision
that
had consequences that should be reflected in operating income.
Please revise your financial statements accordingly.
* * * * * *
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.
You may contact Adam Phippen, Staff Accountant, at (202)
551-
3336, or George Ohsiek, Accounting Branch Chief, at (202) 551-
3843,
if you have questions regarding comments on the financial
statements
and related matters. Please contact John Fieldsend, Staff
Attorney,
at (202) 551-3343, David Mittelman, Legal Branch Chief, at (202)
551-
3214, or me at (202) 551-3720 with any other questions.
Sincerely,
H. Christopher
Owings
Assistant Director
cc: Steven D. Dreyer, Esq.
Arent Fox PLLC
Via Fax: (212) 484-3990
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Eugene Wielepski
I.C. Isaacs & Company, Inc.
August 17, 2005
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