Mail Stop 7010
October 3, 2005
Mr. Mark G. Meikle
Vice President, Finance and Chief Financial Officer
Roanoke Electric Steel Corporation
P.O. Box 13948
Roanoke, Virginia 24038-3948
RE: Form 10-K for fiscal year ended October 31, 2004
Forms 10-Q for the periods ended January 31, April 30 and July 31,
2005
File No. 0-2389
Dear Mr. Meikle:
We have reviewed your filings and have the following
comments. If you disagree with a comment, 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.
Form 10-K for the Year Ended October 31, 2004
General
1. Where a comment below requests additional disclosures or other
revisions, please show us in your response what the revisions will
look like. These revisions should be included in your future
filings, including your interim filings as appropriate.
Exhibit 13 - 2004 Annual Report
Financial Statements, page 10
Note 3 - Properties and Depreciation, page 17
2. The ranges of useful lives for each category of your property,
plant and equipment are very broad. Please separately discuss and
disclose the types of assets that fall in each part of the range.
Note 11 - Health Benefits and Postretirement Costs, page 22
3. You state on page ten of your January 31, 2005 Form 10-Q that
you
adopted the disclosure requirements of SFAS 132R on October 31,
2004.
However, the additional disclosures required by SFAS 132R are not
included in this note. Please ensure your October 31, 2005 Form
10-K
includes each of the disclosures required by SFAS 132R.
Contractual Obligations, page 30
4. Please revise your table of contractual cash obligations to
include the following:
(a) Estimated interest payments on your debt; and
(b) Estimated payments under derivative commodity instruments.
Because the table is aimed at increasing transparency of cash
flow,
we believe these payments should be included in the table. Please
also disclose any assumptions you made to derive these amounts.
Please refer to note 46 of SEC Release 33-8350.
Critical Accounting Policies and Estimates, page 30
5. Please tell us what consideration you gave to including the
estimates involved in your application of the percentage of
completion revenue recognition method as a critical accounting
estimate.
Form 10-Q for the Quarter Ended July 31, 2005
Condensed Consolidated Statements of Earnings, page 2
6. In the second quarter of fiscal 2005 you began allocating a
portion of your profit sharing expense to cost of sales. Please
tell
us more about the reasons for this change in presentation and the
basis for including the expense in costs of sales.
Results of Operations, page 14
Cost of Sales and Gross Margins, page 14
7. In your Form 8-K filed September 8, 2005 you state that margin
compression in the third quarter is the result of lower production
levels for most of your facilities. Please provide more detailed
discussion in your MD&A of the factors contributing to the margin
compression. In addition, please discuss the anticipated effect
of
adopting SFAS 151 under the heading Recently Adopted and Recently
Issued Accounting Pronouncements on page 31.
Item 4. Controls and Procedures, page 19
8. You indicate that your chief executive officer and chief
financial
officer concluded that your disclosure controls and procedures
were
effective to ensure that information required to be disclosed by
you
in reports you file under the Exchange Act, is accumulated and
communicated to the Company`s management and is recorded,
processed,
summarized, and reported as specified in Securities and Exchange
Commission rules and forms. Please revise your disclosure to
state
your conclusion while providing the complete definition of
disclosure
controls and procedures, or alternatively, simply state that your
disclosure controls and procedures are effective, or not
effective,
without providing any part of the definition of disclosure
controls
and procedures that is included in Exchange Act Rules 13a-15(e)
and
15d-15(e).
* * * *
Please respond to these comments within 10 business days
or
tell us when you will provide us with a response. Please provide
us
with a response letter that keys your responses to our comments
and
provides any requested information. Detailed letters greatly
facilitate our review.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings 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 filings;
* 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.
If you have any questions regarding these comments, please
direct them to Scott Watkinson, Staff Accountant, at (202) 551-
3741
or, in his absence, me, at (202) 551-3769.
Sincerely,
Rufus Decker
Accounting Branch Chief
??
??
??
??
Mr. Mark G. Meikle
Roanoke Electric Steel Corporation
October 3, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE