Mail Stop 6010
December 23, 2005
Via U.S. Mail and Facsimile
Timothy M. Adams
Vice President, Chief Financial Officer and Treasurer
Cytyc Corporation
250 Campus Drive
Marlborough, MA 01752
Re: Cytyc Corporation
Form 10-K for Fiscal Year Ended December 31, 2004
Filed February 26, 2005
File No. 000-27558
Dear Mr. Adams:
We have limited our review of your filing to those issues we
have addressed in our comments. Where indicated, we think you
should
revise your document in future filings 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 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 as of December 31, 2004
Financial Statements, page F-1
Note 4. Acquisition Activity, page F-19
In-Process Research and Development and Developed Technology, page
F-
19
1. In view of the significant value allocated to in-process
research
and development, your accompanying footnote disclosures should be
enhanced in future filings. Please disclose the method used to
value
the projects and state the significant assumptions, such as the
period in which material net cash inflows from significant
projects
are expected to commence, anticipated material changes from
historical pricing, margins and expense levels and the risk
adjusted
discount rate applied to the projects` cash flows. Describe each
individually significant project acquired, indicate the degrees of
completion at the acquisition date and disclose the anticipated
cost
and time of completion.
2. Also, until all acquired projects have been completed or
discontinued, a discussion of each significant project should be
presented in MD&A. Please discuss the status of each project that
you acquired, including how actual results have compared to the
assumptions underlying your valuation. Material variations from
your
underlying projections and assumptions should be disclosed and
their
reasons and potential impact explained in future filings. These
disclosures should be provided until the projects are complete or
abandoned.
Form 8-K dated October 26, 2005
3. We note that you present your non-GAAP measures in the form of
statements of income. That format may be confusing to investors as
it
also reflects several non-GAAP measures, including non-GAAP
operating
expenses, non-GAAP income from operations, non-GAAP income before
provision for income taxes, and non-GAAP net income and income per
share amounts, which have not been identified or described to
investors. In fact, it appears that management does not use all of
these non-GAAP measures but they are shown here as a result of the
presentation format. Please note that Instruction 2 to Item 2.02
of
Form 8-K requires that when furnishing information under this item
you must provide all the disclosures required by paragraph
(e)(1)(i)
of Item 10 of Regulation S-K and FAQ 8 Regarding the Use of Non-
GAAP
Financial Measures dated June 13, 2003 for each non-GAAP measure
presented. In addition, you should explain why you believe each
measure provides useful information to investors.
* To eliminate investor confusion, please remove the non-GAAP
statements of income format from future filings and only disclose
those non-GAAP measures used by management with the appropriate
reconciliations.
* Otherwise, confirm that you will revise your Forms 8-K in future
periods to provide all the disclosures required by Item
10(e)(1)(i)
of Regulation S-K and FAQ 8 for each non-GAAP measure presented in
the statement, and provide us with a sample of your proposed
disclosure. We may have further comment.
4. In addition, we note that you refer to your non-GAAP
information
as "pro forma" results. The pro forma terminology has very
specific
meaning in accounting literature, as indicated by Article 11 of
Regulation S-X. In future filings, please revise your
presentation
to omit the pro forma terminology when referring to your non-GAAP
information.
Form 10-Q for the quarterly period ended September 30, 2005
Item 1. Condensed Consolidated Financial Statements, page 4
Note 2(a) Acquisition of Proxima, page 7
5. Please tell us and revise future filings to disclose more
details
of how you valued the assets and liabilities of Proxima and how
you
determined the values of the intangible assets acquired.
Significant
assumptions and methodologies should be clearly disclosed.
Item 2. Management`s Discussion and Analysis of Financial
Condition
and Results of Operations, page 16
6. We see on page 24 that you are considering divesting the
GliaSite
System, but do not see a discussion of this in your MD&A. Tell us
and clarify your MD&A in future filings to discuss the status of
your
decision to keep or divest the GliaSite System and the impact that
this could have on your operations. Refer to SEC Release Nos. 33-
8350, 34-48960, and FR-72.
7. As a related matter, we see that you may incur a loss if you
divest the GliaSite System for an amount less than what you paid
for
it. Please clarify whether any of the GliaSite System assets are
impaired.
As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. When sending supplemental
information regarding this filing, please include the following
ZIP+4
code in our address: 20549-6010. 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
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 Lynn Dicker at (202) 551-3616 or me at (202)
551-3676 if you have questions regarding comments on the financial
statements and related matters. In this regard, do not hesitate
to
contact Martin James, Senior Assistant Chief Accountant, at (202)
551-3671.
Sincerely,
Brian Cascio
Accounting Branch Chief
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Mr. Timothy M. Adams
Cytyc Corporation
December 23, 2005
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