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Mail Stop 0306
April 1, 2005
Via Facsimile and U.S. Mail
Mr. Anthony C. Allen
Acting Chief Financial Officer
Sypris Solutions, Inc.
101 Bullitt Lane, Suite 450
Louisville, Kentucky 40222
Re: Sypris Solutions, Inc.
Form 10-K for the year ended December 31, 2004
File No. 000-24020
Dear Mr. Allen:
We have reviewed your filings and have the following
comments.
We have limited our review to matters related to the issues raised
in
our comments. Where indicated, we think you should revise your
documents 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 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
filings.
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 fiscal year ended December 31, 2004
Consolidated Financial Statements
Note 1. Organization and Significant Accounting Policies
Revenue Recognition - Page 38
1. We note many instances where you use the word "generally" when
describing your accounting policies in this note and in the
critical
accounting estimates discussion on page 16. In future filing
please
disclose your policies for recognizing revenues for outsourced
services and the percentage of completion method as well as your
policies for applying the percentage of completion under all known
circumstances. For example, you could describe the various
arrangements or circumstances and explain how differences in the
arrangements impact the timing of revenue recognition.
Inventory - Page 37
2. Tell us and revise the note in future filings to identify the
"certain other inventory" the cost of which is determined using
the
LIFO method. In addition, revise the last sentence of Note 4 to
identify the captions of the preceding table which include
inventory
valued using LIFO.
3. In future filings revise the note to comply fully with Item 5-
02.6(d) of Regulation S-X.
Note 2. Acquisitions - Page 41
4. Revise the note in future filings to include the pro-forma
financial information required by paragraph 54 of SFAS 141 for
your
acquisitions consummated during 2003 and 2004, or disclose why the
information was not provided.
Item 9A. Controls and Procedures - Page 57
5. We note the statement that your chief executive officer and
chief
financial officer have concluded that the company`s disclosure
controls and procedures are effective with the exception of the
operations acquired during 2004 in Kenton, Ohio and Toluca,
Mexico.
Please note that an assessment of the effectiveness of disclosure
and
controls and procedures under Item 307 of Regulation S-K does not
permit the exclusion of acquisitions that were made during the
fiscal
year. Given the exceptions noted, it therefore remains unclear
whether your chief executive officer and chief financial officer
have
concluded that your disclosure controls and procedures are
effective.
* Please amend you filing 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
the
operations acquired during 2004 in Kenton, Ohio and Toluca,
Mexico.
Otherwise, you can state that your disclosure controls and
procedures
are not effective and explain why.
We note that you have also excluded these acquisitions from
management`s assessment of the effectiveness of internal control
over
financial reporting, as permitted by Question 3 of the Frequently
Asked Questions: Management`s Report on Internal Control over
Financial Reporting and Certification of Disclosure in Exchange
Act
Periodic Reports dated October 6, 2004.
* * * *
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested supplemental information. Detailed cover
letters greatly facilitate our review. 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 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.
You may contact Tara Harkins, Staff Accountant, at (202)
824-
5496 or me at (202) 942-1984 if you have questions regarding our
comments.
Sincerely,
Martin F. James
Senior Assistant Chief
Accountant
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Mr. Anthony C. Allen
Sypris Solutions, Inc.
April 1, 2005
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