Mail Stop 6010
September 20, 2005
Via U.S. Mail and Facsimile to (603) 224-6673
Brian A. Byrne
Chief Financial Officer
AAVID Thermal Technologies, Inc.
One Eagle Square, Suite 509
Concord, New Hampshire 03301
Re: AAVID Thermal Technologies, Inc.
Form 10-K for the year ended December 31, 2004
Filed March 29, 2005
Forms 10-Q for the periods ended March 31, and June 30, 2005
File No. 033-99232
Dear Mr. Byrne:
We have reviewed your filings and have the following
comments.
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 documents 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
filings.
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 10-K for the year ended December 31, 2004
Item 7. Management Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations, page 26
1. We see on page 28 that you attribute foreign exchange gains to
the
impact of changes in exchange rates on certain long-term inter-
company notes. With respect to these notes, tell us how your
accounting considers the guidance from paragraph 20 to SFAS 52.
2. We refer to the disclosure of EBITDA as defined in your credit
agreement. Please revise future filings to more fully comply with
the disclosure guidance from Question 10 to the "Frequently Asked
Questions Regarding the Use of Non-GAAP Financial Measures." In
that
regard, you should expand to describe (1) the materiality of the
credit agreement and the covenant, (2) the amount or limit
required
for compliance with the covenant; and (3) the actual or reasonably
likely effects of compliance or non-compliance with the covenant
on
the company`s financial condition and liquidity. Show us how you
intend to apply this comment.
3. We refer to the disclosure of operating income excluding
intangible asset amortization and restructuring charges. Either
delete these measures from all future filings or expand to fully
comply with the requirements of Item 10(e) to Regulation S-K. If
you
choose to retain the disclosures of this non-GAAP measure, expand
future filings to provide the following:
* A quantitative reconciliation showing the differences between
the
non-GAAP measure and the most directly comparable financial
measure
presented in GAAP;
* The substantive reasons why management believes the non-GAAP
measure provides useful information to investors;
* The specific manner in which management uses the non-GAAP
measure
to conduct or evaluate its business;
* The economic substance behind management`s decision to use the
measure; and
* The material limitations associated with the use of the non-GAAP
measure as compared to the use of the most directly comparable
GAAP
measure and the manner in which management compensates for these
limitations when using the non-GAAP measure.
Refer also to Questions 8 and 33 to the "Frequently Asked
Questions
Regarding the Use of Non-GAAP Financial Measures." Show us how
you
intend to apply this comment.
Financial Statements
Report of Independent Registered Public Accounting Firm, page 48
4. We note that the audit report does not state that the audit was
performed in accordance with PCAOB standards. Please revise the
audit report to make appropriate reference to the auditing
standards
of the PCAOB. Refer to PCAOB Auditing Standard No 1.
Note B. Summary of Significant Accounting Policies
Revenue Recognition, page 58
5. Unless insignificant, please expand future filings to disclose
how
you account for product warranties and to provide the quantitative
disclosures called for by FIN 45.
6. Tell us about the significant terms and conditions of
transactions
with distributors, including more specific detail about rights of
return and stock rotation arrangements. In a written response,
show
us that it is appropriate to recognize revenue on transactions
with
distributors at shipment. Refer to SAB 104 and SFAS 48 for
guidance
in preparing your response.
Note N. Restructuring Charges and Reserves, page 70
7. In future filings please separately present cash payments from
non-cash adjustments to existing reserves.
8. As a related matter, in 2004 we see a $625,000 reduction in an
item labeled "fixed asset reserves." Future filings should
identify
and describe the underlying reasons for non-cash adjustments to
existing reserves.
Section 302 Certifications - Exhibits 31.1 and 31.2
9. We note that the certifications filed as Exhibits 31.1 and 31.2
are not in the form specified in Regulation S-K. The Section 302
certifications must be in the exact form prescribed; and, the
wording
of the certifications may not be changed in any respect, except
for
the modifications temporarily permitted to be made to the fourth
paragraph pursuant to Part III.E of Release No. 8238.
Accordingly,
please file an amendment to your Form10-K that includes the entire
filing together with the certifications of each of your current
CEO
and CFO in the form currently set forth in Item 601(b)(31) of
Regulation S-K. Please similarly amend the Forms 10-Q for the
periods ended March 31, 2005 and June 30, 2005.
`
* * * *
As appropriate, please amend your December 31, 2004 Form 10-
K
and March 31, and June 30, 2005 Forms 10-Q and respond to these
comments within 10 business days or tell us when you will provide
us
with a response. 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 amendments 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
Exchange Act of 1934 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.
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 the filing;
* 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.
You may contact Traci Hornfeck, Staff Accountant, at (202)
551-
3642 or me at (202) 551-3605 if you have questions regarding these
comments. In this regard, do not hesitate to contact Brian
Cascio,
Branch Chief, at (202) 551-3676.
Sincerely,
Gary Todd
Reviewing Accountant
??
??
??
??
Mr. Nicholas K. Fortson
University Bancorp, Inc.
September 20, 2005
Page 4
Brian A. Byrne
AAVID Thermal Technologies, Inc.
September 20, 2005
Page 5