SEC Comment Letter for ENGLOBAL CORP (ENG) (CIK 0000933738) — Sep 21, 2005
ENGLOBAL CORP (ENG) (CIK 0000933738)
Date: Sept. 21, 2005 · CIK: 0000933738 · Accession: 0000000000-05-048679
AI Filing Summary & Sentiment
Referenced dates: July 14, 2005
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Mail Stop 7010
August 10, 2005
Mr. Robert W. Raiford
Chief Financial Officer
ENGlobal Corporation
600 Century Plaza Drive, Suite 140
Houston, Texas 77073-6033
RE: Form 10-K for the Fiscal Year ended December 31, 2004
Form 10-Q for the Quarter ended March 31, 2005
File No. 1-14217
Dear Mr. Raiford:
We have reviewed your response letter dated July 14,
2005
and have the following additional 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.
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 December 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 where applicable.
Note 2 - Summary of Significant Accounting Policies, page 43
2. We have reviewed your response to comment 7. Please clarify
whether all depreciation and amortization expense is included in
the
selling, general and administrative costs line item. If so,
please
tell us how you determined this treatment is appropriate given the
guidance of paragraph 72 of SOP 81-1. If amounts are allocated to
direct costs, please disclose your method for allocating these
amounts.
Note 8 - Operating Leases, page 51
3. We have reviewed your response to comment 11. Please tell us
more
about your lease containing step rent provisions and capital
improvement funding. Specifically address the following:
* Tell us when the lease was initiated and when the rent
concessions
were provided;
* Provide us with a summary of the lease terms including when the
lease terminates; and
* Tell us how you accounted for the rent concessions in the period
they were provided.
Note 11 - Related-Party Transactions, page 53
4. We have reviewed your response to comment 12. Please address
the
following related to your investment in PEI:
* Tell us the amount each partner initially invested in PEI as
well
as when PEI was created;
* Tell us the amount that was paid by PEI for the purchase of the
building;
* Tell us the amount of equity income (loss) you recorded for each
of
the three years ended December 31, 2004 related to this
investment.
Tell us why your one-third investment in PEI was valued at zero at
December 31, 2004;
* Tell us if you intend to renew the lease for office space with
PEI
that expires in 2005 and the terms of the new lease, if
applicable;
and
* Provide us with a comprehensive explanation of how you
determined
that the conditions provided in paragraph 5 of FIN 46(R) do not
exist. Your explanation should address each condition and the
specific facts and circumstances that led you to believe the
condition did not exist.
Form 10-Q for the period ended March 31, 2005
General
5. Please address the comments above in your interim filings as
well.
* * * *
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. Please file your response on EDGAR
as
a correspondence file. Please understand that we may have
additional
comments after reviewing your responses to our comments.
If you have any questions regarding these comments, please
direct them to Gus Rodriguez, Staff Accountant, at (202) 551-3752
or,
in his absence, Nudrat Salik, Staff Accountant, at (202) 551-3692.
Sincerely,
Rufus Decker
Branch Chief
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Robert W. Raiford
ENGlobal Corporation
August 10, 2005
Page 3 of 3
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE
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