May 5, 2005
VIA EDGAR
Larry Spirgel
Assistant Director
U.S. Securities and Exchange Commission
Mail Stop 4-7
Washington, D.C. 20549
Re: Radyne ComStream Inc.
Form 10-K for the fiscal year ended Dec. 31, 2004, filed March 16, 2005
File No. 000-11685
Dear Mr. Spirgel:
I write in response to your review of our referenced filing and the comments
contained in your letter of April 26th. We are submitting herewith our filed
Amendment No. 1 to our Annual Report on Form 10-K/A (File No. 000-11685). For
your reference in connection with our responses to the Staff's comments below.
Item 9A - Controls and Procedures, page 43 of the original filing, page 3 of our
amended filing
1. You noted that our draft revisions in response to prior comment 4. Your
draft revisions state that there were no changes in "other factors that
have materially affected, or are reasonably likely to materially affect
these controls subsequent to the date of their evaluation." You
requested that we revise this to comply with Item 308(c) of Regulation
S-K. Accordingly, we revised the language in our amended filing as
requested by the Staff. Further, in response to the Staff's comment, we
have eliminated the "other factors" language contained in the original
filing (see below).
ITEM 9A. CONTROLS AND PROCEDURES
Based on their evaluation as of December 31, 2004, our Chief Executive
Officer and Chief Financial Officer have concluded that our disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), were effective as of the end of the period covered by this report
to ensure that the information required to be disclosed by us in this
Annual Report on Form 10-K was recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and
instructions for Form 10-K. Our disclosure controls and procedures are
also designed to ensure that information required to be disclosed in the
reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, including our Principal Executive
Officer and our Principal Financial Officer, to allow timely decisions
regarding required disclosure. There were no changes in our internal
controls over financial reporting during the quarter ended December 31,
2004, that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
Please forward any further comments or questions to me.
Very truly yours,
Malcolm Persen
Chief Financial Officer
Radyne ComStream Inc.
Cc: Steven D. Pidgeon, Esq., Snell & Wilmer L.L.P.
================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K/A
(Amendment No. 1)
[X] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 2004
Or
[ ] Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
----------------
Commission File Number 0-11685
----------------
RADYNE COMSTREAM INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 11-2569467
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3138 East Elwood Street, Phoenix, Arizona 85034
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code: (602) 437-9620
Securities Registered Under Section 12(b) of the Exchange Act: None
Securities Registered Under Section 12(g) of the Exchange Act:
Common Stock, $.001 Par Value
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Securities Exchange Act of 1934).
Yes [X] No [ ]
The aggregate market value of the common stock held by non-affiliates of
the registrant was approximately $108 million computed by reference to the
closing price of the stock on the Nasdaq National Market on June 30, 2004, the
last trading day of the registrant's most recently completed second fiscal
quarter. For purposes of this determination, shares of common stock held by each
officer and director and by each person who owns 5% or more of the outstanding
common stock have been excluded in that such persons may be deemed to be
affiliates of the registrant. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.
The number of shares of the registrant's common stock, which were
outstanding as of the close of business on March 8, 2005 was 16,623,221.
DOCUMENTS INCORPORATED BY REFERENCE
Items 10, 11, 12, 13 and 14 of Part III incorporate information by
reference from the definitive proxy statement for the registrant's Annual
Meeting of Stockholders to be held on June 8, 2005.
================================================================================
EXPLANATORY NOTE
On March 16, 2005, Radyne ComStream Inc. (the "Company") filed its
Annual Report on Form 10-K for the fiscal year ended December 31, 2004,
with the Securities and Exchange Commission. This Amendment No. 1 on
Form 10-K/A is being filed to make clarifications to Part II, Item 9A
and to include a signature of the Company's Principal Accounting
Officer. This amendment includes new certifications of the Company's
Chief Executive Officer and Chief Financial Officer in accordance with
Rule 12b-15 under the Securities Exchange Act of 1934, as amended.
Accordingly, an amended Exhibit Index is included under Part IV, Item
15. Except as described above, no other information in the Form 10-K has
been amended. This Amendment No. 1 on Form 10-K/A continues to speak as
of the date of the original Form 10-K, and the Company has not updated
any disclosures to reflect events, if any, that occurred at a later
date.
2
PART II
ITEM 9A. CONTROLS AND PROCEDURES
Based on their evaluation as of December 31, 2004, our Chief Executive
Officer and Chief Financial Officer have concluded that our disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), were effective as of the end of the period covered by this report
to ensure that the information required to be disclosed by us in this
Annual Report on Form 10-K was recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and
instructions for Form 10-K. Our disclosure controls and procedures are
also designed to ensure that information required to be disclosed in the
reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, including our Principal Executive
Officer and our Principal Financial Officer, to allow timely decisions
regarding required disclosure. There were no changes in our internal
controls over financial reporting during the quarter ended December 31,
2004, that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management of the Company is responsible for establishing and
maintaining adequate internal control over financial reporting as
defined by Rules13a-15(f) and 15d-15(f) under the Exchange Act. Because
of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures may
deteriorate. Management assessed the effectiveness of the Company's
internal control over financial reporting as of December 31, 2004. In
making this assessment, our management used the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in Internal Control-Integrated Framework.
Based on our assessment of those criteria, management believes that the
Company maintained effective internal control over financial reporting
as of December 31, 2004.
KPMG LLP, the independent registered public accounting firm that audited
the consolidated financial statements of the Company included in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2004,
issued its report on management's assessment of the effectiveness of the
Company's internal control over financial reporting as of December 31,
2004. The report is included in our Annual Report on Form 10-K filed on
March 16, 2005.
3
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) (3) EXHIBITS:
See Exhibit Index
4
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 on
Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly
authorized.
RADYNE COMSTREAM INC.
By: /s/Robert C. Fitting
---------------------------------------------
Robert C. Fitting, Chief Executive Officer
(Principal Executive Officer)
By: /s/Malcolm C. Persen
---------------------------------------------
Malcolm C. Persen, Vice President,
Secretary and Chief Financial Officer
(Principal Financial Officer)
By: /s/Garry D. Kline
---------------------------------------------
Garry D. Kline, Vice President and Controller
(Principal Accounting Officer)
Dated: May 5, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
NAME TITLE DATE
- --------------------------- ------------------------------------------------------------ ------------------
* Chairman of the Board of Directors May 5, 2005
- ---------------------------
C.J. Waylan
* Chief Executive Officer and Director May 5, 2005
- ---------------------------
Robert C. Fitting
* Vice President, Secretary and Chief Financial Officer May 5, 2005
- --------------------------- (Principal Financial Officer)
Malcolm C. Persen
/s/ Garry D. Kline Vice President and Controller (Principal Accounting Officer) May 5, 2005
- ----------------------------
Garry D. Kline
* Director May 5, 2005
- ---------------------------
Lee Yip Loi
* Director May 5, 2005
- ---------------------------
Dennis Elliott
* Director May 5, 2005
- ---------------------------
Michael A. Smith
* By: /s/ Malcolm C. Persen
-----------------------------------
Malcolm C. Persen, Attorney-in-Fact
5
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
- ------------ --------------------------------------------------------------------------------------------
3.1 (1) Restated Certificate of Incorporation
3.2 (2) By-Laws, as amended and restated
10.1(a)(3) ***1996 Incentive Stock Option Plan
10.1(b)(4) ***Amendment to 1996 Incentive Stock Option Plan
10.2 (5) ***1999 Employee Stock Purchase Plan
10.3(a) (6) ***2000 Long-Term Incentive Plan
10.3(b) (7) ***Amendment to 2000 Long-Term Incentive Plan
10.4(a)(8) Lease between ADI Communication Partners, L.P. and ComStream dated April 23, 1997
10.4(b)(8) First Amendment to lease between ADI Communication Partners L.P. and ComStream
dated July 16, 1997
10.4(c)(8) Second Amendment to Lease between Kilroy Realty, L.P. and ComStream dated
November 18, 1998
10.5(9) Lease for facility in Phoenix, Arizona
10.6(10) Credit Agreement by and between the Registrant and Wells Fargo HSBC Trade Bank, N.A.
10.7(11) ***Change of Control Agreement, dated as of March 20, 2002, by and between Registrant and
Robert C. Fitting
10.8(12) ***Change of Control Agreement, dated as of March 20, 2002, by and between Registrant and
Steven Eymann
10.9(13) ***Change of Control Agreement, dated as of March 20, 2002, by and between Registrant and
Brian Duggan
10.10(14) ***Employment Agreement, dated as of November 1, 2003 by and between Registrant and
Robert C. Fitting
10.10(15) ***Change of Control Agreement, dated May 13, 2004, by and between Registrant and Malcolm
C. Persen
10.11(16) ***Employment Agreement by and between Registrant and Malcolm C. Persen dated as of March
9, 2005
10.12(17) Agreement and Plan of Merger, dated March 2, 2005, by and among Radyne ComStream Inc.,
Xicom Acquisition Inc., Xicom Technology., the Xicom Shareholders (as defined therein)
and Walt Wood, solely in his capacity as the Shareholders' Representative.
21.1(18) Subsidiaries of the Registrant
23.1(19) Consent of KPMG LLP
24.1(20) Power of Attorney (see signature page)
31.1* Certification of the Principal Executive Officer Pursuant to Rule 13-14(a) Under the
Securities Exchange Act of 1934
31.2* Certification of the Principal Financial Officer pursuant to Rule 13-14(a) Under the
Securities Exchange Act of 1934
32.1(21) Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1(22) Cautionary Statement Regarding Forward-Looking Statements and Risk Factors
- ------------
* Filed herewith
*** Indicates management compensatory contract, plan or arrangement
(1) Incorporated by reference from exhibit 3.1 to Registrant's description
of capital stock on Form 8-A12G, filed on July 13, 2000.
(2) Incorporated by reference from exhibit 3.2 to Registrant's description
of capital stock on Form 8-A12G, filed on July 13, 2000.
(3) Incorporated by reference to Exhibit 4.1 to Registrant's Registration
Statement on Form S-8, dated and declared effective on March 12, 1997
(File No. 333-23159).
(4) Incorporated by reference to Exhibit 4.1 to Registrant's Registration
Statement on Form S-8, dated and declared effective on November 18,
1998 (File No. 333-67469).
6
(5) Incorporated by reference to Exhibit 4.1 to Registrant's Registration
Statement on Form S-8, dated and declared effective on November 5,
1999 (File No. 333-90383).
(6) Incorporated by reference to Exhibit 4.1 to Registrant's Registration
Statement on Form S-8, dated and declared effective on July 19, 2000
(File No. 333-41704)
(7) Incorporated by reference to Exhibit 4.1 to Registrant's Registration
Statement on Form S-8, dated and declared effective on May 29, 2002
(File No. 333-89316).
(8) Incorporated by reference from Registrant's Registration Statement on
Form S-2, filed January 11, 1999 (File No. 333-70403).
(9) Incorporated by reference to Exhibit 10.3 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1997, as filed
with the SEC on March 27, 1998 (File No. 000-11685).
(10) Incorporated by reference to Exhibit 10.6 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 2001, as filed
with the SEC on April 1, 2002 (File No. 000-11685).
(11) Incorporated by reference to Exhibit 10.1 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2002, as filed
with the SEC on May 15, 2002 (File No. 000-11685).
(12) Incorporated by reference to Exhibit 10.2 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2002, as filed
with the SEC on May 15, 2002 (File No. 000-11685).
(13) Incorporated by reference to Exhibit 10.3 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2002, as filed
with the SEC on May 15, 2002 (File No. 000-11685).
(14) Incorporated by reference to Exhibit 10.1 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 2003, as filed
with the SEC on November 14, 2003 (File No. 000-11685).
(15) Incorporated by reference to Exhibit 10.1 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2004 as filed with
the SEC on August 11, 2004 (File No. 000-11685).
(16) Incorporated by reference to Exhibit 10.11 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 2004, as filed
with the SEC on March 16, 2005 (File No. 000-11685).
(17) Incorporated by reference to Exhibit 10.12 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 2004, as filed
with the SEC on March 16, 2005 (File No. 000-11685).
(18) Incorporated by reference to Exhibit 21.1 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 2004, as filed
with the SEC on March 16, 2005 (File No. 000-11685).
(19) Incorporated by reference to Exhibit 23.1 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 2004, as filed
with the SEC on March 16, 2005 (File No. 000-11685).
(20) Incorporated by reference to Exhibit 24.1 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 2004, as filed
with the SEC on March 16, 2005 (File No. 000-11685).
(21) Incorporated by reference to Exhibit 32.1 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 2004, as filed
with the SEC on March 16, 2005 (File No. 000-11685).
(22) Incorporated by reference to Exhibit 99.1 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 2004, as filed
with the SEC on March 16, 2005 (File No. 000-11685).
7
EXHIBIT 31.1
CERTIFICATION
I, Robert C. Fitting, certify that:
1. I have reviewed this annual report on Form 10-K/A of Radyne ComStream Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operation and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: May 5, 2005
/s/ Robert C. Fitting
- -------------------------------------------
Robert C. Fitting, Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 31.2
CERTIFICATION
I, Malcolm C. Persen, certify that:
1. I have reviewed this annual report on Form 10-K/A of Radyne ComStream Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operation and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: May 5, 2005
/s/ Malcolm C. Persen
- -------------------------------------------
Malcolm C. Persen, Chief Financial Officer
(Principal Financial Officer)