View:
February 14, 2006
Mail Stop 4561
T. Kendall Hunt
Chairman and Chief Executive Officer
VASCO Data Security International, Inc.
1901 South Meyers Road, Suite 210
Oakbrook. IL 60181
Re: VASCO Data Security International, Inc.
Amendment 1 to Form S-3 under cover of Form S-1
Filed January 24, 2006
Registration no. 333-124458
Form 8-K/A filed May 23, 2005
File no. 0-24389
Dear Mr. Hunt:
We have reviewed your amendment and have following comments.
Form 8-K/A Filed May 23, 2005
1. We note that your Form S-1/A filed on January 24, 2006 includes
financial statements for AOS-Hagenuk`s that were audited in
accordance with US generally accepted accounting standards. The
information in the Form S-1, however, does not satisfy the
Company`s
Form 8-K requirements. Accordingly, you are still required to
amend
your Form 8-K to include the financial statements for AOS-Hagenuk,
which were audited in accordance with US GAAS. Please revise
accordingly.
Form S-1/A Filed January 24, 2006
Management`s Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources, page 21
2. We note your use of the non-GAAP measures, EBIDTA, both in the
Company`s Form S-1 and in your Forms 10-Q. Tell us how you
considered Item 10(e)(1)(i) & (ii) and Question 8 of Frequently
Asked
Questions Regarding the Use of Non-GAAP Financial Measures to
include
the following disclosures:
* the manner in which management uses the non-GAAP measure to
conduct
or evaluate its business;
* the economic substance behind management`s decision to use such
a
measure;
* the material limitations associated with use of the non-GAAP
financial measure as compared to the use of the most directly
comparable GAAP financial measure;
* the manner in which management compensates for these limitations
when using the non-GAAP financial measure; and
* the substantive reasons why management believes the non-GAAP
financial measure provides useful information to investors (see
also
footnote 44 to Release No. 33-8176 Final Rule: Conditions for Use
of
Non-GAAP Financial Measures)
3. Also, based on your disclosures it appears you are presenting
EBITDA as a performance measure. Tell us why it is appropriate to
present EBITDA as a performance measure, considering it excludes
recurring charges (interest, taxes, depreciation and
amortization).
In your response, address why each of the charges excluded from
EBITDA are not considered necessary to assess your performance.
In
addition, provide us with your revised disclosure that clearly
addresses why each recurring item is excluded and how you
compensate
for the limitations of EBITDA as a performance measure. See also
Question 15 of Frequently Asked Questions Regarding the Use of
Non-
GAAP Financial Measures.
Management, page 43
Executive Compensation, page 47
4. The period ended December 31, 2005, is now Vasco`s "last fiscal
year" as that term is used in Item, 402 of Regulation S-K. Please
update the summary compensation table and other tables required by
Item 402 accordingly. Also, provide corresponding information
responsive to Item 404 of Regulation S-K for 2005 and the
subsequent
period, as applicable.
Part II
Item 16. Exhibits and Financial Statement Schedules, page II-2
5. Exhibit 6.1 states that the 10,217,776 shares of common stock
are
validly issued, fully paid, and non-assessable. This conclusion
appears to conflict with the disclosure at pages 53-54 of the
prospectus which indicates that some of the shares are not yet
issued. For example, it appears 65,660 shares offered by AOS are
not
outstanding and that 606,805 shares offered by the Hunt Trust are
not
outstanding. Please revise.
Other
6. In Exhibit 23.1, it appears that the Company`s independent
accounting firm is providing the consent. However, the name of
the
accounting firm is not identified. Please revise accordingly.
We have not yet received the written representation that we
requested in our prior comment letter. Please provide the
requested
response.
As appropriate, please amend your registration statement in
response to these comments. 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.
You may contact Kari Jin at (202) 551-3481, or Kathleen
Collins
at (202) 551-3499, if you have questions or comments on the
financial
statements and related matters. Please contact Hugh Fuller at
(202)
551-3853 or me at (202) 551-3730 with other questions.
Sincerely,
Mark P. Shuman
Branch Chief - Legal
cc: Robert B. Murphy
Pepper Hamilton LLP
600 14 Street, NW
Washington, DC 20005
Fax no. (202) 220-1665