-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UdMnv77A7ul+gD4TR+qaJ8vHU/3Ah1TflM6HJqs+0TxpdbASjOkLqgwvwZp8O14S RgShu262Boe5HLOMdKMtwQ== 0000950137-06-011868.txt : 20070201 0000950137-06-011868.hdr.sgml : 20070201 20061106154020 ACCESSION NUMBER: 0000950137-06-011868 CONFORMED SUBMISSION TYPE: CORRESP PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20061106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPARTECH CORP CENTRAL INDEX KEY: 0000077597 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS PLASTIC PRODUCTS [3080] IRS NUMBER: 430761773 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: CORRESP BUSINESS ADDRESS: STREET 1: 120 S CENTRAL AVE STREET 2: STE 1700 CITY: CLAYTON STATE: MO ZIP: 63105 BUSINESS PHONE: 3147214242 MAIL ADDRESS: STREET 1: 120 S CENTRAL AVE STREET 2: STE 1700 CITY: CLAYTON STATE: MO ZIP: 63105 FORMER COMPANY: FORMER CONFORMED NAME: SPARTAN MANUFACTURING CORP DATE OF NAME CHANGE: 19830621 FORMER COMPANY: FORMER CONFORMED NAME: PERMANEER CORP DATE OF NAME CHANGE: 19781019 CORRESP 1 filename1.htm corresp
 

CONFIDENTIAL TREATMENT FOR CERTAIN RESPONSES
REQUESTED BY SPARTECH CORPORATION
SPARTECH CORPORATION
120 S. Central, Suite 1700
Clayton, Missouri 63105-1705
(314) 721-4242
(314) 721-1543 FAX
November 6, 2006
BY EDGAR
Securities and Exchange Commission
Washington, D.C. 20549-7010
Attn: Mr. John Hartz
         
 
  Re:   Spartech Corporation
 
      Form 10-K for the fiscal year ended 10/29/05
 
      Form 10-Q for the quarter ended July 29, 2006
 
      File No. 1-5911
 
        
 
      Response to Comment Letter dated September 22, 2006
Ladies and Gentlemen:
          This letter is written in response to the letter dated September 22, 2006 from Mr. John Hartz, commenting on our responses dated August 2, 2006 and August 28, 2006. The Company’s responses follow, set forth under the corresponding comments from Mr. Hartz’s letter.
Form 10-K for the period ended October 29, 2005
Note 5 – Fixed Asset Charge, page 40
  1.   At this time we have no further comments regarding the fixed asset charge, pending the review of your Form 10-K/A.
          On October 30, 2006, we filed our Form 10-K/A addressing the restatement and comments including in your previous correspondence.
Note 17 – Segment Information, page 50
  2.   We note your response to prior comment two, and appreciate the additional information you have provided. It continues to appear to us that each “component” of your segments is an operating segment as defined in paragraph 10 of SFAS 131. We note that you believe that your components are not operating segments because “these reports help explain the results of our segments, not as a basis for assessing or analyzing the performance of each component itself”. It appears to us that this represents a semantic distinction that does not eliminate certain clear factors indicating that the components are operating segments. In particular:
  •   Each component engages in business activities from which it may earn revenues and incur expenses. We direct you to sections I, II, III, IV and V of the Spartech

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CONFIDENTIAL TREATMENT FOR CERTAIN RESPONSES
REQUESTED BY SPARTECH CORPORATION
      Corporation Monthly Reporting Package. Included therein are sales, material margins, gross margins and operating earnings. This information is provided in considerable detail, See section V.;
 
  •   Discrete financial information is available. See above;
 
  •   The CODM regularly reviews this information to make decisions about resources to be allocated to the components and assess their performance;
      We assume that you agree with the first two points, but may have a different opinion regarding the third. We note that the Spartech Corporation Monthly Reporting Package is regularly provided to the CODM. This fact leads to the conclusion that it is intended for him and as such it is intended for him to “review”. You indicated that each segment manager is responsible for presenting transactions, projects or initiatives that meet certain return expectations for his segment and that this may require an integration of several segment components to accomplish these objectives. It appears to us that there are distinct differences between each component even when reviewing these objectives. We also note that in order to discuss the performance of the segment which the managers are responsible they need to refer to events and fluctuations of the component parts, which leads us to believe that these components are effectively being evaluated separately.
 
      It is not essential that this information be the only method in which the components are assessed in how resources are allocated, but it seems clear that the performance of each component is an element of assessing performance and considering transactions, projects or initiatives that meet certain return expectations, and therefore are used in resource allocation.
 
      We also note that you intend to revise the reporting provided in your Board Package; however, revising this information does not change what has already been reported and how you have traditionally viewed your business and used the component level information to manage and allocate your resources. Not withstanding the above, we also believe that changing the information provided the Board does not clearly indicate that the component information will not be used to manage your business and allocate your resources. For example, considering the overall nature of your business and the method of managing it, we would assume that the definition of the CODM would have to be expanded in that event and the components would remain your operating segments as defined in SFAS 131. See paragraph 12
 
      We ask that you reconsider your current views as it appears that your components are operating segments.
 
      [Confidential Treatment requested for this response.]
Form 10-Q for the period ended July 29, 2006
Item 4. Controls and Procedures. page 25

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CONFIDENTIAL TREATMENT FOR CERTAIN RESPONSES
REQUESTED BY SPARTECH CORPORATION
  3.   We note that based upon your evaluation of disclosure controls and procedures, “the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in timely alerting them to material information relating to the Company required to be included in the Company’s periodic SEC filings.” Revise future filings to clarify, if true, that your certifying officers have also concluded that your disclosure controls and procedures were effective to ensure that information required to be disclosed by you in the reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within time periods specified under SEC’s rules and forms.
          In future filings, we will include our conclusions regarding the effectiveness of our disclosure controls and procedures to ensure that information required to be disclosed by us in the reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within time periods specified under SEC’s rules and forms.
* * * * * * * *
Please contact the undersigned at (314) 889-8329, or Jeff Fisher, Senior Vice President and General Counsel, (314) 889-8314, with any questions or additional comments.
         
  Very truly yours,

SPARTECH CORPORATION
 		  
  /s/ Randy C. Martin    
     
  Randy C. Martin
Executive Vice President and
Chief Financial Officer 		  
 

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