SEC Comment Letter for MORTON INDUSTRIAL GROUP INC (CIK 0000064247) — May 24, 2005
MORTON INDUSTRIAL GROUP INC (CIK 0000064247)
Date: May 24, 2005 · CIK: 0000064247 · Accession: 0000000000-05-025508
AI Filing Summary & Sentiment
File numbers found in text: 000-13198
Letter
May 23, 2005 via U.S. mail and facsimile to (309) 263-1866 Mr. Daryl R. Lindemann Chief Financial Officer and Secretary Morton Industrial Group, Inc. 1021 W. Birchwood Morton, IL 61550
RE: Form 10-K for the year ended December 31, 2004 Filed March 29, 2005 File No. 000-13198
Dear Mr. Lindemann:
We have reviewed your filing 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 supplemental information so we may better understand your disclosure. After reviewing this information, we may or may not 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.
March 26, 2004 Refinancing, p. 16
1. Please tell us how you accounted for the extinguishment of the revolving credit facility and term loan due to the former Harris syndicate, as well as the cancellation of the warrants held by them.
Significant Cash Commitments, p. 18
2. In future filings, include your interest commitments under your interest-bearing debt in this table, or provide textual discussion of this obligation below the table. If you provide a textual discussion, the discussion should quantify the interest payments using the same time frames stipulated in the table. Regardless of whether you decide to include interest payments in the table or in textual discussion below the table, you should provide appropriate disclosure with respect to your assumptions of your estimated variable rate interest payments.
Report of Independent Registered Public Accounting Firm, p. 24
3. Please amend your filing to include the signature of your independent registered public accounting firm. Refer to Article 2 of Regulation S-X.
(5) Intangible Assets, p. 34
4. Regarding your intangible assets: * In future filings, debt issuance costs should not be included as intangible assets as these costs do not meet the definition of an intangible asset. Please reclassify this amount on your balance sheets. * Please tell us the method you use to amortize your debt issuance costs and where you classify such amortization. * Please tell us why your accumulated amortization decreased by $1,569 from December 31, 2003 to December 31, 2004.
(9) Income Taxes, p. 40
5. We note that the decrease in your deferred tax valuation allowance of $7,441 increased your net earnings by 58% for the year ended December 31, 2004. Please explain in detail your consideration of paragraphs 20 - 25 of SFAS No. 109 in reducing your valuation allowance and determining that your net deferred tax asset of $8,100 is realizable, particularly in light of your pre-tax losses in 2000, 2001, and 2002. Please also identify for us the specific factors that resulted in this reduction in 2004, as opposed to other years.
6. In addition, in future filings in your management`s discussion and analysis section, please explain the reason for this decrease in your valuation allowance and its effect on your net income. In your response, please show us what these future revisions will look like.
(10) Redeemable Preferred Stock, p. 42
7. Citing relevant accounting literature, please explain why you recognize the gain on the 2003 modification of your mandatorily redeemable preferred stock over the term of the agreement, as opposed to recognizing the gain, in its entirety, in 2003.
(16) Segment Reporting, p. 45
8. You indicate that your only segment is your contract metal fabrication segment. However, we note, based on your discussion in Item 1 of your Form 10-K, that your products are used in the construction, industrial, and agricultural industries. Please clarify for us whether your business includes any components that meet the definition of an operating segment in paragraph 10 of SFAS No. 131. If so, please tell us how you meet the aggregation requirements in paragraph 17 if SFAS No. 131, given the variety of industries you serve, the variety of your products, and the tailored- nature of your production processes. In addition, in future filings, please disclose and supplementally provide to us the information required by paragraph 37 of SFAS No. 131.
* * * *
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 supplemental response letter that keys your responses to our comments and provides any requested supplemental information. Detailed letters greatly facilitate our review. Please file your supplemental response on EDGAR as a correspondence file. Please understand that we may have additional comments after reviewing your responses to our comments.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filings reviewed by the staff to be certain that they have provided all information investors require for an informed 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.
If you have any questions regarding these comments, please direct them to Ryan Rohn, Staff Accountant, at (202) 551-3739 or, in his absence, to the undersigned at (202) 551-3255.
Sincerely,
Nili Shah
Accounting Branch Chief
Show Raw Text
<DOCUMENT>
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<FILENAME>filename1.txt
<TEXT>
May 23, 2005
via U.S. mail and facsimile to (309) 263-1866
Mr. Daryl R. Lindemann
Chief Financial Officer and Secretary
Morton Industrial Group, Inc.
1021 W. Birchwood
Morton, IL 61550
RE: Form 10-K for the year ended December 31, 2004
Filed March 29, 2005
File No. 000-13198
Dear Mr. Lindemann:
We have reviewed your filing 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
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not 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.
March 26, 2004 Refinancing, p. 16
1. Please tell us how you accounted for the extinguishment of the
revolving credit facility and term loan due to the former Harris
syndicate, as well as the cancellation of the warrants held by
them.
Significant Cash Commitments, p. 18
2. In future filings, include your interest commitments under your
interest-bearing debt in this table, or provide textual discussion
of
this obligation below the table. If you provide a textual
discussion, the discussion should quantify the interest payments
using the same time frames stipulated in the table. Regardless of
whether you decide to include interest payments in the table or in
textual discussion below the table, you should provide appropriate
disclosure with respect to your assumptions of your estimated
variable rate interest payments.
Report of Independent Registered Public Accounting Firm, p. 24
3. Please amend your filing to include the signature of your
independent registered public accounting firm. Refer to Article 2
of
Regulation S-X.
(5) Intangible Assets, p. 34
4. Regarding your intangible assets:
* In future filings, debt issuance costs should not be included as
intangible assets as these costs do not meet the definition of an
intangible asset. Please reclassify this amount on your balance
sheets.
* Please tell us the method you use to amortize your debt issuance
costs and where you classify such amortization.
* Please tell us why your accumulated amortization decreased by
$1,569 from December 31, 2003 to December 31, 2004.
(9) Income Taxes, p. 40
5. We note that the decrease in your deferred tax valuation
allowance
of $7,441 increased your net earnings by 58% for the year ended
December 31, 2004. Please explain in detail your consideration of
paragraphs 20 - 25 of SFAS No. 109 in reducing your valuation
allowance and determining that your net deferred tax asset of
$8,100
is realizable, particularly in light of your pre-tax losses in
2000,
2001, and 2002. Please also identify for us the specific factors
that resulted in this reduction in 2004, as opposed to other
years.
6. In addition, in future filings in your management`s discussion
and
analysis section, please explain the reason for this decrease in
your
valuation allowance and its effect on your net income. In your
response, please show us what these future revisions will look
like.
(10) Redeemable Preferred Stock, p. 42
7. Citing relevant accounting literature, please explain why you
recognize the gain on the 2003 modification of your mandatorily
redeemable preferred stock over the term of the agreement, as
opposed
to recognizing the gain, in its entirety, in 2003.
(16) Segment Reporting, p. 45
8. You indicate that your only segment is your contract metal
fabrication segment. However, we note, based on your discussion
in
Item 1 of your Form 10-K, that your products are used in the
construction, industrial, and agricultural industries. Please
clarify for us whether your business includes any components that
meet the definition of an operating segment in paragraph 10 of
SFAS
No. 131. If so, please tell us how you meet the aggregation
requirements in paragraph 17 if SFAS No. 131, given the variety of
industries you serve, the variety of your products, and the
tailored-
nature of your production processes. In addition, in future
filings,
please disclose and supplementally provide to us the information
required by paragraph 37 of SFAS No. 131.
* * * *
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 supplemental response letter that keys your responses to
our comments and provides any requested supplemental information.
Detailed letters greatly facilitate our review. Please file your
supplemental response on EDGAR as a correspondence file. Please
understand that we may have additional comments after reviewing
your
responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed 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.
If you have any questions regarding these comments, please
direct them to Ryan Rohn, Staff Accountant, at (202) 551-3739 or,
in
his absence, to the undersigned at (202) 551-3255.
Sincerely,
Nili Shah
Accounting Branch Chief
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Mr. Daryl R. Lindemann
Morton Industrial Group, Inc.
May 23, 2005
Page 4 of 4
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0510
DIVISION OF
CORPORATION FINANCE
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