Hi Shear Technology Corp – ‘CORRESP’ from 12/1/06

On:  Friday, 12/1/06, at 3:37pm ET   ·   Private-to-Public:  Filing ¶  –  Release Delayed to:  1/29/07   ·   Accession #:  1019687-6-2941

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Delayed-Release Comment-Response or Other Letter to the SEC
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: CORRESP     Comment-Response or Other Letter to the SEC            2     11K 

CORRESP
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 [Hi-Shear Letterhead]

November 28, 2006                                                               

Ms. Linda Cvrkel, Mail Stop 3561                                                
Branch Chief                                                                    
Securities and Exchange Commission                                              
Division of Corporation Finance                                                 
Washington, D.C. 20549                                                          

Re:     Hi-Shear Technology Corporation                                         
Form 10-K for the fiscal year ended May 31, 2006                
Filed July 31, 2006                                             
File No. 001-12810                                              

Dear Ms. Linda Cvrkel,                                                          

Thank you for forwarding your comments regarding Hi-Shear's Form 10-KSB for the 
fiscal year ended May 31, 2006. We do not believe that any revision to the      
company's filing is necessary. The following is our response to each comment.   

Reference:                                                                      
Management's Discussion and Analysis of Financial Condition and Results of      
Operations, page 7 Fiscal year ended May 31, 2006 compared with fiscal year     
ended May 31, 2005, page 8                                                      

Comment:                                                                        
We note that during your fiscal year 2005, you wrote down $1,645,000 of amounts 
receivable after the unfavorable conclusion of the related court case. The      
amount charged to expense in 2005 was the difference between the company's      
accounts receivable balance due from the customer and the total amount of       
damages awarded to you by the jury. Given that $1,645,000 has been written off, 
please tell us what amount of receivables related to this customer remained at  
your 2005 and 2006 fiscal year ends and why you still believe you will collect  
these amounts.                                                                  

Response:                                                                       
The only remaining receivable balance on this customer's account at fiscal year 
end 2005 and 2006 is the $58,000 that was awarded to Hi-Shear by the court for  
them to pay. The customer is financially capable of paying this amount and has  
offered to do so. Payment is not being accepted from the customer at this time  
by Hi-Shear, pending appeals of the case. A note will be added in future filing 
under the referred heading.                                                     

CORRESP
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November 28, 2006                                                               
Ms. Linda Cvrkel, Mail Stop 3561                                                
Securities and Exchange Commission                                              
Page 2                                                                          

Reference:                                                                      
Notes to Consolidated Financial Statements, page F-6                            
Note 2. Fourth Quarter Adjustments, page F-12                                   

Comment:                                                                        
Please provide us with further details concerning the $70,000 gain recorded in  
fiscal 2006. Include in your response if and when the $96,000 expense for the   
fine was originally recorded and indicate where any expense recorded was        
classified in your financial statements. Also, please explain why the           
adjustments discussed in note 2 were not recognized until the fourth quarter of 
2006.                                                                           

Response:                                                                       
The $96,000 fine amount was recorded as a general and administrative expense    
when the fine was levied in the fourth quarter of Fiscal 2005. An appeal of the 
amount of the fine resulted in the fine subsequently being reduced to the amount
of $26,000 by the California Department of Occupational Safety and Health in the
fourth quarter of Fiscal 2006. This $70,000 reduction to general and            
administrative expense was reported as a gain in the fourth quarter of Fiscal   
2006.                                                                           

Adjustments to the company inventory balances are determined and recorded       
each quarter. The adjustments discussed in Note 2 were the fourth quarter       
inventory balance adjustments, made to the fourth quarter balance sheet, in the 
fourth quarter. These were not first quarter, second quarter or third quarter   
inventory balance adjustments made in the fourth quarter.                       

We acknowledge 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.                               

Sincerely,                                                                      

/s/ George W. Trahan                                                            
--------------------                                                            
George W. Trahan                                                                
CEO                                                                             

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘CORRESP’ Filing		Date		First		Last			Other Filings
Release Delayed to:		1/29/07							UPLOAD
Filed on:		12/1/06
		11/28/06		1		2
		7/31/06		1					10KSB
		5/31/06		1					10KSB
		5/31/05		1					10KSB,  ARS,  NT 10-K
									List all Filings