SecProbe.io

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Mail Stop 6010

      July 5, 2005

Via U.S. Mail and Facsimile to (303) 678-9275

Lawrence D. Firestone
Chief Financial Officer
Applied Films Corporation
9586 I-25 Frontage Roads, Suite 200
Longmont, CO 80504

	Re:	Applied Films Corporation
		Form 10-K for the Fiscal Year Ended June 26, 2004
		Filed September 9, 2004
	Form 10-Q for the Fiscal Quarters Ended September 25, 2004,
December 25, 2004 and March 26, 2005
      File No. 000-23103

Dear Mr. Firestone:

      We have reviewed your filing and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your documents.  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 for the Fiscal Year Ended June 26, 2004

Item 7: MD&A of Financial Condition and Results of Operations,
page
24

Overview, page 24

1. We noted your discussion relating to the acquisition of Helix
Technology. Please tell us and revise future filings to include
additional discussion of the following:
* Analysis of the significant assumptions utilized by management
in
the valuation.
* Discussion of expected impact of the acquisition on your
revenues
and expenses.

Year Ended June 28, 2003 Compared to Year Ended June 26, 2004,
page
25

2. We note that your discussion of the significant changes in net
revenues and gross profit is limited and does not quantify the
specific reasons for material changes in line items in the
financial
statements. In future filings, each significant factor that
contributed to the changes, including offsetting factors, should
be
separately quantified. Trends and uncertainties that may have a
material impact upon revenues or operating results should also be
discussed. In addition, separately describe and quantify the
effects
of changes in prices and volume of your product offerings on your
operating results.

Item 8: Financial Statements and Supplementary Data, page 36

Note 2: Significant Accounting Policies, page 42

Marketable Securities, page 43

3. We see that the company elected to reclassify all of its
investments from trading to available-for-sale securities. We
noted
that paragraph 15 of SFAS 115 states, "given the nature of a
trading
security, transfers into or from the trading category should be
rare." Please tell us what changes in facts and circumstances led
to
this reclassification and its business purpose. Demonstrate to us
that this is a rare occurrence. We may have additional comments
based
on your response. In addition, MD&A in future filings should
disclose
more details of your business strategy for holding significant
amounts of marketable securities.

Goodwill and Other Intangible Assets, page 44

4. Describe to us the nature of the $1 million intangible asset
you
recorded for customer lists as part of the acquisition of Helix
Technology. Tell us how this was valued and why it meets the
criteria
under SFAS 141 as a separately identifiable intangible asset.
Refer
to EITF 02-17.

Note 5: Investment in Joint Venture, page 52

5. Please tell us how you considered FIN 46 in regards to your
investment in the China Joint Venture.

Note 7: Income Taxes, page 56

6. We note your statement that "provision has not been made for
additional foreign taxes on undistributed earnings of our foreign
subsidiaries and the China JV where such earnings will continue to
be
reinvested." However, upon review of your Form 10-K/A filed May
24,
2005, it appears based on Note 9 of the China JV, that in each of
the
past two years they have declared dividends of their undistributed
earnings. Please tell us how you have considered paragraphs 7 to
14
of APB 23 where you have concluded that  undistributed earnings
will
continue to be reinvested and have not recognized the deferred tax
impact and how the recent dividends of the China JV has impacted
that
accounting.

Note 12: Helix Acquisition, page 60

7. In future filings, please provide supplemental pro forma
information for the acquisition of Helix as required by paragraphs
54
and 55 of SFAS 141, or tell us why you are not required to provide
these disclosures.

8. We see the reference to the independent third party valuation
on
page 60. Please note the reference to third party experts is not
required but if this is included the third party expert should be
named and their consent included in any registration statements
filed. Alternatively, this reference could be removed and
disclosures
provided of the assumptions and methodology used by management in
the
valuations.

Item 9A: Controls and Procedures, page 61

9. We note your statement that the chief executive officer and
chief
financial officer have concluded that the company`s disclosure
controls and procedures are effective "except as discussed below."
Given the exceptions noted, it remains unclear whether your chief
executive officer and chief financial officer have concluded that
your disclosure controls and procedures are effective.  Please
revise
your disclosure in future filings to state, in clear and
unqualified
language, the conclusions reached by your chief executive officer
and
your chief financial officer on the effectiveness of your
disclosure
controls and procedures.  For example, if true, you can state that
your disclosure controls and procedures are effective including
consideration of the identified matters, so long as you provide
appropriate disclosure explaining how the disclosure controls and
procedures were determined to be effective in light of the
identified
matters.  Or, if true, you can state that given the identified
matters, your disclosure controls and procedures are not
effective.
You should not, however, state the conclusion in your current
disclosure, which appears to state that your disclosure controls
and
procedures are effective except to the extent they are not
effective.

10. Please tell us and updated future filings to provide more
details
of the "significant deficiency" discussed on page 61 and how this
impacted your internal controls and financial statements. In
addition, provide details of your efforts to correct this
deficiency.

Form 10-Q for the Fiscal Quarter Ended March 26, 2005

Consolidated Balance Sheets, page 2

11. The Division of Investment Management ("Division") has asked
us
to advise you as follows.

On the basis of information in your Form 10-Q for the fiscal
quarter
ended March 26, 2005, it appears that you may be an investment
company as defined in Section 3(a)(1)(C) of the Investment Company
Act of 1940 ("Investment Company Act").  Section 3(a)(1)(C)
includes
within the definition of "investment company" any issuer which:

is engaged or proposes to engage in the business of investing,
reinvesting, owning, holding, or trading in securities, and owns
or
proposes to acquire investment securities having a value exceeding
40
percentum of the value of such issuer`s total assets (exclusive of
Government securities and cash items) on an unconsolidated
basis....1

Based on our review of your financial statements, it appears that
more than forty percent of your total assets (exclusive of
government
securities and cash items) may consist of "investment securities"
as
defined in Section 3(a)(2) of the Investment Company Act.2
Accordingly, please provide a written explanation as to your
status
under Section 3(a)(1)(C) of the Investment Company Act, together
with
such information as may be necessary to support your legal
conclusions.  Where appropriate, your response should present
financial information with enough detail and specificity to enable
the Division to make an informed evaluation of your legal
arguments.

Among other things, your response should include an analysis of
your
total assets, on an unconsolidated basis, as of the end of its
most
recent fiscal quarter.  Without intending to limit the scope of
your
analysis, we request that you specifically address the following
issues:

* Whether, or to what extent, the assets described as "government
bonds" are "government securities" within the meaning of Section
2(a)(16) of the Investment Company Act; and
* Whether your China joint venture is a "majority-owned
subsidiary"
within the meaning of Section 2(a)(24) of the Investment Company
Act.

In addition, you may also wish to consider and address whether you
fit within any of the exemptive rules adopted by the Commission
that
deal with the status of certain issuers under Investment Company
Act.3

Item 2: MD&A of Financial Condition and Results of Operations,
page
17

12. We note that you define backlog as "unrecognized revenue on
contracts in progress." Supplementally and in future filings
please
clarify this definition and indicate whether the amounts represent
deferred or unearned revenue. If services have been performed
related
to these amounts clarify when revenue will be recognized. If
services
have not been performed revise to clearly indicate the nature of
these amounts.

Item 4: Controls and Procedures, page 23

13. We note your disclosure that management has concluded that
your
disclosure controls and procedures are "reasonably effective". As
noted previously, you should state definitively whether your
controls
are "effective" or "not effective".  In this regard, please revise
your future filings to eliminate the term "reasonably" as it is
not
defined under Rule 13a-15(e).

Form 8-K Dated April 21, 2005

14. 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. In
addition, your discussion of non-GAAP results in the Form 8-K
should
provide more specific and detailed disclosures as required by
paragraph (e)(1)(i) of Item 10 of Regulation S-K and Question 8 of
the FAQ Regarding the Use of Non-GAAP Financial Measures dated
June
13, 2003, including:
* The substantive reasons why management believes each non-GAAP
measure provides useful information to investors;
* The specific manner in which management uses each non-GAAP
measure
to conduct or evaluate its business;
* The economic substance behind management`s decision to use each
measure; and
* The material limitations associated with the use of each non-
GAAP
measure as compared to the use of the most directly comparable
GAAP
measure and the manner in which management compensates for these
limitations when using the non-GAAP measure.

       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.  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 filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 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.

      You may contact Kevin Kuhar, Staff Accountant, at (202) 551-
3662 or me at (202) 551-3676 if you have questions regarding these
comments on the financial statements and related matters.
Regarding
Comment 11, you may contact Ian McGrath, Staff Attorney with the
Division of Investment Management, at (202) 551-6851.  In this
regard, do not hesitate to contact Martin James, Senior Assistant
Chief Accountant, at (202) 551-3671.

								Sincerely,

								Brian Cascio
								Branch Chief

1 Section 3(a)(2) of the Investment Company Act defines
"investment
securities" to include "all securities except (A) Government
securities, (B) securities issued by employees' securities
companies,
and (C) securities issued by majority-owned subsidiaries of the
owner
which (i) are not investment companies, and (ii) are not relying
on
the exception from the definition of investment company in
[Sections
3(c)(1) or 3(c)(7)]."
2 For the purposes of this analysis, we have treated as
"investment
securities" the following items from your March 26, 2005 balance
sheet:  1) "marketable securities," less the amount of marketable
securities classified as "government bonds" or "money market
funds"
in Note 2; and 2) "investment in joint venture."  Also for the
purposes of this analysis, we have excluded from your total assets
the following items:  1) "cash and cash equivalents;" 2)
"restricted
cash;" and 3) the amount of "marketable securities" classified as
"government bonds" or "money market funds" in Note 2.  Please note
that this analysis is based solely on the descriptions and values
of
these items provided in your balance sheet.  We do not express any
view as to whether these items are properly characterized as
"investment securities," "government securities" or "cash items"
for
the purposes of the Investment Company Act, nor do we express any
view as to whether the book values assigned to these items are the
values required to be used for the purposes of the Investment
Company
Act.
3 See, e.g., Rule 3a-1 under the Investment Company Act (certain
prima facie investment companies); Rule 3a-2 under the Investment
Company Act (certain transient investment companies).
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Lawrence D. Firestone
Applied Films Corporation
July 5, 2005
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