Navigation Links
American Pacific Reports Fiscal 2008 Results; Net Income Increases 80%
Date:12/11/2008

LAS VEGAS, Dec. 11 /PRNewswire-FirstCall/ -- American Pacific Corporation (Nasdaq: APFC) today reported financial results for its fiscal 2008 fourth quarter and year ended September 30, 2008.

We provide non-GAAP measures as a supplement to financial results based on GAAP. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is included in the accompanying supplemental data.

FINANCIAL HIGHLIGHTS

Quarter Ended September 30, 2008 Compared to Quarter Ended September 30, 2007

    -- Revenues increased 15% to $71.2 million from $61.7 million.
    -- Operating income increased 3% to $9.9 million compared to $9.6 million.
    -- Adjusted EBITDA decreased to $14.1 million compared to $14.9 million.
    -- Net income increased 19% to $4.3 million from $3.6 million.
    -- Diluted earnings per share was $0.57 compared to $0.48.


    Year Ended September 30, 2008 Compared to Year Ended September 30, 2007

    -- Revenues increased 10% to $203.1 million from $183.9 million.
    -- Operating income increased 4% to $24.9 million compared to
       $23.9 million.
    -- Adjusted EBITDA decreased to $42.8 million compared to $44.0 million.
    -- Net income increased 80% to $9.0 million from $5.0 million.
    -- Diluted earnings per share was $1.18 compared to $0.67.

The prior year includes a charge of $0.24 per diluted share related to our refinancing activities in February 2007.

CONSOLIDATED RESULTS OF OPERATIONS

Revenues -- For our fiscal 2008 fourth quarter, revenues increased 15%, reflecting a 40% increase in Fine Chemicals segment revenues offset by a 17% decrease in Specialty Chemicals segment revenues. Our revenues increased 10% in fiscal 2008 primarily due to a 19% increase in revenues for our Fine Chemicals segment.

See further discussion under our Segment Highlights.

Cost of Revenues and Gross Margins -- For our fiscal 2008 fourth quarter, cost of revenues was $50.2 million compared to $40.5 million for the prior fiscal year fourth quarter. The consolidated gross margin percentage was 29% and 34% for our fiscal 2008 and 2007 fourth quarters, respectively. For fiscal 2008, cost of revenues was $135.4 million compared to $120.2 million for the prior fiscal year. The consolidated gross margin percentage was 33% and 35% for fiscal 2008 and fiscal 2007, respectively.

One of the most significant factors that affects, and should continue to affect, the comparison of our consolidated gross margins from period to period is the change in revenue mix between our two largest segments because our Specialty Chemicals segment typically has higher gross margins than our Fine Chemicals segment. The revenue contribution by each of our segments is indicated in the following table.



                                        Three Months Ended    Year Ended
                                           September 30,     September 30,
                                           2008     2007     2008     2007

    Fine Chemicals                          66%      55%      61%      57%
    Specialty Chemicals                     24%      33%      28%      31%
    Aerospace Equipment                      7%       8%       8%       9%
    Other Businesses                         3%       4%       3%       3%
      Total Revenues                       100%     100%     100%     100%


In addition, consolidated gross margins for our fiscal 2008 fourth quarter and fiscal 2008 reflect:

    -- A decrease in Fine Chemicals segment gross margin percentage relating
       primarily to changes in product mix and a reduction in gross margin for
       an anti-viral product.
    -- Improvements in Specialty Chemicals segment gross margin percentage
       primarily due to a reduction in amortization expense.


    See further discussion under our Segment Highlights.

Operating Expenses -- For our fiscal 2008 fourth quarter, operating expenses decreased $0.6 million to $11.0 million from $11.6 million in the fourth quarter of the prior fiscal year primarily due to a reduction in incentive compensation expenses for our Fine Chemicals segment.

For fiscal 2008, operating expenses increased $3.1 million to $42.9 million from $39.8 million for the prior fiscal year. The variances are primarily due to:

    -- A decrease in Fine Chemicals segment operating expenses including a
       decrease in incentive compensation of $0.7 million offset partially by
       an increase in recruiting and personnel relocation expenses of
       $0.5 million.
    -- A $0.1 million decrease in Specialty Chemicals segment operating
       expenses due to various individually insignificant changes in general
       and administrative expenses.
    -- A $0.5 million increase in Aerospace Equipment segment operating
       expenses due to various individually insignificant changes in staffing
       and marketing expenses.
    -- An increase in corporate operating expenses including increases in
       supplemental executive retirement expenses of $0.9 million, rent of
       $0.4 million, and legal and professional services of $0.4 million.


    SEGMENT HIGHLIGHTS

Fine Chemicals Segment

Our Fine Chemicals segment reflects the operating results of our wholly-owned subsidiary Ampac Fine Chemicals LLC ("AFC").

Quarter Ended September 30, 2008 Compared to Quarter Ended September 30, 2007

    -- Revenues were $47.3 million compared to revenues of $33.7 million.
    -- Operating income was $6.8 million, or 14% of revenue, compared to
       $6.0 million, or 18% of revenue.
    -- Segment EBITDA was $10.2 million, or 22% of revenue, compared to
       Segment EBITDA of $9.5 million, or 28% of revenue.


    Year Ended September 30, 2008 Compared to Year Ended September 30, 2007

    -- Revenues were $124.2 million compared to revenues of $104.4 million.
    -- Operating income was $16.2 million, or 13% of revenue, compared to
       $16.8 million, or 16% of revenue.
    -- Segment EBITDA was $29.1 million, or 23% of revenue, compared to
       Segment EBITDA of $30.4 million, or 29% of revenue.

The increase in Fine Chemicals revenues for the fourth quarter of fiscal 2008 compared to the prior fiscal year fourth quarter is primarily due to the timing of the completion of customer orders and satisfaction of the related revenue recognition criteria, as well as the factors affecting the fiscal 2008 revenue increases discussed below.

Fine Chemicals segment revenues increased $19.7 million, or 19%, in fiscal 2008 compared to the prior fiscal year primarily driven by increased volume for anti-viral products. Specifically,

    -- The volume for our largest (measured in terms of revenues) anti-viral
       product increased by 45% to support our customer's increase in safety
       stock inventory of the final drug.
    -- Volume for our second largest anti-viral product increased by 21% in
       support of increases in demand for our customer's end product.
    -- Volume for our largest oncology product declined in fiscal 2008 because
       fiscal 2007 included additional quantities purchased by our customer to
       build on-hand safety stock quantities.

Operating income was 14% of revenue for the fiscal 2008 fourth quarter compared to 18% for the prior fiscal year quarter and 13% of revenue for fiscal 2008 compared to 16% for the prior fiscal year period. Segment operating income for fiscal 2008 periods reflects:

    -- A decrease in the gross margin percentage of approximately eight points
       for the fiscal 2008 fourth quarter and approximately five points for
       fiscal 2008, each compared to the comparable prior fiscal year periods.
       There are several factors affecting Fine Chemicals gross margin
       percentages.  In particular,
       -- Our product mix changed such that fiscal 2008 periods contained a
          greater percentage of lower-margin products than fiscal 2007
          periods.
       -- During the fourth quarter of fiscal 2008, we implemented a new
          process for a large-volume anti-viral product and experienced
          start-up difficulties.  This negatively impacted margins.  While we
          have made progress toward our expectations for the new process, the
          effects are expected to continue into the early part of fiscal 2009.
       -- To a lesser extent, gross margin percentages were also reduced by
          product scheduling and maintenance issues which affected
          manufacturing efficiency.
    -- A decrease in depreciation and amortization expense of $0.8 million for
       fiscal year 2008.
    -- A decrease in operating expenses of $0.8 million for the fiscal 2008
       fourth quarter primarily due to a decrease in incentive compensation.
    -- A consistent level of operating expenses in fiscal 2008 compared to
       fiscal 2007 including a decrease in incentive compensation of
       $0.7 million, offset partially by an increase in recruiting and
       personnel relocation expenses of $0.5 million.

Specialty Chemicals Segment

Our Specialty Chemicals segment revenues include the operating results from our perchlorate, sodium azide and Halotron product lines, with perchlorates comprising 91% and 89% of Specialty Chemicals revenues in fiscal 2008 and fiscal 2007, respectively.

Quarter Ended September 30, 2008 Compared to Quarter Ended September 30, 2007

    -- Revenues declined 17% to $16.8 million from $20.4 million.
    -- Operating income was $6.4 million, or 38% of revenues, compared to
       $6.4 million, or 31% of revenues.
    -- Segment EBITDA was $6.8 million, or 40% of revenues, compared to
       $7.7 million, or 38% of revenues.


    Year Ended September 30, 2008 Compared to Year Ended September 30, 2007

    -- Revenues were $57.1 million for each year.
    -- Operating income was $23.1 million, or 41% of revenues, compared to
       $18.2 million, or 32% of revenues.
    -- Segment EBITDA was $26.0 million, or 45% of revenues, compared to
       $23.4 million, or 41% of revenues.

The variances in Specialty Chemicals revenues reflect the following factors:

    -- A 13% increase in perchlorate volume in fiscal 2008 and a 10% decline
       in the related average price per pound.
    -- A 13% decrease in perchlorate volume and a 5% decrease in the related
       average price per pound in the fiscal 2008 fourth quarter.
    -- Sodium azide revenues decreased 63% in fiscal 2008 compared to the
       prior fiscal year.
    -- Halotron revenues increased 4% in fiscal 2008 compared to the prior
       fiscal year.

For fiscal 2008, our largest programs were the Minuteman III propulsion replacement program, the Space Shuttle Reusable Solid Rocket Motor (RSRM), the Guided Multiple Launch Rocket System (GMLRS) missile and the ARES next-generation space exploration vehicles. The average price per pound of perchlorate sold in fiscal 2008 decreased compared to fiscal 2007 due to higher total sales volume of Grade I AP in fiscal 2008 compared to fiscal 2007.

We expect Grade I AP demand in fiscal 2009 to be less than fiscal 2008, primarily due to the completion of the three year Minuteman III propulsion replacement program. The expected decline in volume is not expected to have a corresponding effect on revenues due to the pricing under our contractual price-volume matrix. Over the longer term, we expect annual demand for Grade I AP to be within the range of 6 million to 9 million pounds based on current NASA and U.S. Department of Defense production programs. However, AP demand could increase if there is an extension of the Space Shuttle program and/or an acceleration of the Ares program,

The decrease in sodium azide revenues in fiscal 2008 reflects a continued reduction in demand for sodium azide used in pharmaceutical applications. We do not anticipate a significant increase in demand for sodium azide.

Increases in Halotron revenues are driven by volume changes which have been and are expected to be consistent year over year.

Specialty Chemicals operating income for fiscal 2008 was 41% of Specialty Chemicals revenue compared to 32% for the prior fiscal year, and for the fiscal 2008 fourth quarter was 38% compared to 31% for the fiscal 2007 fourth quarter, reflecting the following:

    -- Specialty Chemicals segment gross margin percentage improved eight
       points for both the fiscal 2008 fourth quarter and fiscal 2008,
       compared to the respective prior year periods, reflecting the
       following:
       -- Mid fiscal 2008 second quarter, the Specialty Chemicals segment
          completed the amortization of the value assigned to the perchlorate
          customer list acquired in fiscal 1998.  This reduction in
          amortization expense improved the Specialty Chemicals segment gross
          margin percentage by four points for fiscal 2008.
       -- The remaining improvement in the Specialty Chemicals segment gross
          margin percentage reflects better absorption of fixed manufacturing
          costs due to the higher production volume in fiscal 2008.
    -- Specialty Chemicals segment operating expenses for both the fiscal 2008
       fourth quarter and fiscal 2008 were consistent with the prior year
       periods.

Aerospace Equipment Segment

Our Aerospace Equipment segment reflects the operating results of our wholly-owned subsidiary Ampac-ISP Corp. ("ISP").

    Year Ended September 30, 2008 Compared to Year Ended September 30, 2007

    -- Revenues decreased 5% to $16.4 million from $17.3 million.
    -- Operating income was $0.7 compared to $1.5 million.

Quarter Ended September 30, 2008 Compared to Quarter Ended September 30, 2007

    -- Revenues increased 6% to $5.1 million from $4.8 million.
    -- Operating income was $0.5 million compared to $0.9 million.

The decreases in Aerospace Equipment revenues during fiscal 2008 is primarily due to the awards of new contracts occurring in the later part of fiscal 2008, and accordingly did not produce as much revenue within fiscal 2008. The increase in revenues for the fiscal 2008 fourth quarter reflects the inception of revenue generated from these new contract awards. Aerospace Equipment segment gross margin percentage was the same in fiscal 2008 and fiscal 2007. Aerospace Equipment segment operating expenses increased $0.5 million due to various individually insignificant increases in staffing and marketing expenses.

CAPITAL AND LIQUIDITY HIGHLIGHTS

Liquidity -- As of September 30, 2008, we had cash balances of $26.9 million and no cash borrowings against our $20.0 million revolving credit line. In addition, we were in compliance with the various covenants contained in our credit agreements.

Operating Cash Flows -- Cash flows from operating activities during fiscal 2008 decreased by $3.8 million compared to the prior fiscal year. Operating activities provided cash of $20.3 million for fiscal 2008 compared to providing cash of $24.1 million for the prior fiscal year.

Significant components of the change in cash flow from operating activities include:

    -- A decrease in cash provided by Adjusted EBITDA of $1.2 million.
    -- An improvement in cash used to fund working capital accounts of
       $1.7 million, excluding the effects of interest and income taxes.
    -- An increase in cash taxes paid of $4.1 million.
    -- An increase in cash used for interest payments of $1.4 million.
    -- A reduction in cash used for environmental remediation of $0.9 million.
    -- Other decreases in cash used for operating activities of $0.3 million.

Cash used by working capital accounts improved during fiscal 2008 primarily due to reductions in inventory levels, primarily at AFC. The benefit to cash from reductions in inventory levels was partially offset by reductions in accrued liabilities and deferred revenues.

We consider these working capital changes to be routine and within the normal production cycle of our products. The production of certain fine chemical products requires a length of time that exceeds one quarter. Therefore, in any given quarter, work-in-progress inventory or deferred revenues can increase or decrease significantly. We expect that our working capital may vary normally by as much as $10.0 million from quarter to quarter.

Cash tax payments have increased due to the improvement in our pre-tax income and the negative effects of tax-basis inventory adjustments.

Cash used for interest increased primarily due to the timing of our interest payments. Our current debt instruments require semi-annual interest payments in February and August compared to the debt instruments in place through February 2007 which required interest payments at the end of each quarter.

Cash used for environmental remediation decreased because during the fiscal 2007 first quarter we were in the construction phase of our Henderson, Nevada remediation project compared to the lower cash requirements of the operating and maintenance phase which began in the fiscal 2007 second quarter.

Capital Expenditures -- Capital expenditures increased by $6.9 million in fiscal 2008. This includes an increase in capital expenditures at our corporate offices of $2.2 million primarily due to the relocation of our headquarters and an increase in capital expenditures by our Fine Chemicals segment that included the upgrade of an existing production line to better handle new projects and the installation of equipment in support of a long-term project.

OUTLOOK

Looking to fiscal 2009 and beyond, we believe our long-term growth opportunities remain strong. We remain committed to our strategy to provide long-term value through the growth of our Fine Chemicals and Aerospace Equipment segments.

For fiscal 2009, we expect consolidated revenue of at least $195.0 million, reflecting the following:

    -- Fine Chemicals segment revenues are anticipated to decline by
       approximately 10% as compared to fiscal 2008.  The expected decline
       reflects an approximately 85% reduction in volume for the anti-viral
       product that was our largest product in fiscal 2008.  The fiscal 2009
       decline in volume for this product is due to our customer's supply
       chain strategy and their desire to reduce their current levels of
       inventory.  Over the longer term, we believe that the pharmaceutical
       fine chemicals market will continue to present growth opportunities.
       The trend toward more outsourcing by the pharmaceutical industry
       continues and AFC's pipeline of new products continues to grow.  We
       believe that the key to enabling our growth in this segment is
       investment through strategic acquisitions and to a lesser extent
       investment in our facilities.
    -- Stable revenues from our Specialty Chemicals segment.
    -- Substantial growth from our Aerospace Equipment segment reflecting both
       the benefits from this segment's success with contract awards in fiscal
       2008 and the addition of our recently acquired European operations by
       ISP.

Our guidance for fiscal 2009 Adjusted EBITDA is at least $37.0 million and net income of at least $6.0 million. Our fiscal 2009 guidance for Adjusted EBITDA is computed by adding estimated amounts for depreciation and amortization of $15.0 million, interest expense of $11.0 million, share-based compensation expense of $1.0 million and income taxes of $4.0 million to estimated net income of $6.0 million. We are anticipating our capital expenditures for fiscal 2009 to be approximately $14.0 million.

INVESTOR TELECONFERENCE

We invite you to participate in a teleconference with our executive management covering our fiscal 2008 financial results. The investor teleconference will be held Thursday, December 11, 2008 at 1:30 p.m., Pacific Standard Time. The teleconference will include a presentation by management followed by a question and answer session. The teleconference can be accessed by dialing (973) 582-2852 between 1:15 and 1:30 p.m., Pacific Standard Time. Please reference conference ID# 76570053. As is our customary practice, a live webcast of the teleconference is being provided by Thomson Financial's First Call Events. A link to the webcast and the earnings release is available at our website at http://www.apfc.com, and will be available for replay until a few days before our next quarterly investor teleconference.

RISK FACTORS/FORWARD-LOOKING STATEMENTS

Statements contained in this earnings release that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including without limitation statements regarding factors that will affect our consolidated gross margins, statements regarding the effects on margins resulting from our Fine Chemicals segment's implementation of a new process for a large-volume anti-viral product, statements regarding our beliefs about future demand, and related revenues for perchlorates, in particular Grade I AP, statements regarding our expectations for demand for sodium azide, statements regarding our expectations for Halotron volumes, statements regarding our working capital changes and future variations, and all statements in the "Outlook" section of this earnings release. Words such as "anticipate", "expect", "could", "should", "may", "can", "will" and similar expressions are intended to identify forward-looking statements. The inclusion of forward-looking statements should not be regarded as a representation by the Company that any of its expectations will be achieved. Actual results may differ materially from those set forth in the release due to risks and uncertainties inherent in the Company's business. Factors that might cause such differences include, but are not limited to, the following:

    -- We depend on a limited number of customers for most of our sales in our
       Specialty Chemicals, Aerospace Equipment and Fine Chemicals segments
       and the loss of one or more of these customers could have a material
       adverse affect on our revenues.
    -- The inherent limitations of our fixed-price or similar contracts may
       impact our profitability.
    -- The numerous and often complex laws and regulations and regulatory
       oversight to which our operations and properties are subject, the cost
       of compliance, and the effect of any failure to comply could reduce our
       profitability and liquidity.
    -- A significant portion of our business depends on contracts with the
       government or its prime contractors and these contracts are impacted by
       governmental priorities and are subject to potential fluctuations in
       funding or early termination, including for convenience, any of which
       could have a material adverse effect on our operating results,
       financial condition or cash flows.
    -- We may be subject to potentially material costs and liabilities in
       connection with environmental liabilities.
    -- Although we have established an environmental reserve for remediation
       at our Henderson, Nevada site, given the many uncertainties involved in
       assessing such liabilities, our environmental-related risks may from
       time to time exceed any related reserves.
    -- For each of our Specialty Chemicals, Fine Chemicals and Aerospace
       Equipment segments, most production is conducted in a single facility
       and any significant disruption or delay at a particular facility could
       have a material adverse effect on our business, financial position and
       results of operations.
    -- The release or explosion of dangerous materials used in our business
       could disrupt our operations and cause us to incur additional costs and
       liability.
    -- Disruptions in the supply of key raw materials and difficulties in the
       supplier qualification process, as well as increases in prices of raw
       materials, could adversely impact our operations.
    -- Each of our Specialty Chemicals, Fine Chemicals and Aerospace Equipment
       segments may be unable to comply with customer specifications and
       manufacturing instructions or may experience delays or other problems
       with existing or new products, which could result in increased costs,
       losses of sales and potential breach of customer contracts.
    -- Successful commercialization of pharmaceutical products and product
       line extensions is very difficult and subject to many uncertainties. If
       a customer is not able to successfully commercialize its products for
       which AFC produces compounds or if a product is subsequently recalled,
       then the operating results of AFC may be negatively impacted.
    -- A strike or other work stoppage, or the inability to renew collective
       bargaining agreements on favorable terms, could have a material adverse
       effect on the cost structure and operational capabilities of AFC.
    -- The pharmaceutical fine chemicals industry is a capital-intensive
       industry and if AFC does not have sufficient financial resources to
       finance the necessary capital expenditures, its business and results of
       operations may be harmed.
    -- We may be subject to potential product liability claims that could
       affect our earnings and financial condition and harm our reputation.
    -- Technology innovations in the markets that we serve may create
       alternatives to our products and result in reduced sales.
    -- We are subject to competition in certain industries where we
       participate and therefore may not be able to compete successfully.
    -- Due to the nature of our business, our sales levels may fluctuate
       causing our quarterly operating results to fluctuate.
    -- The volatility of the chemical industry affects our capacity
       utilization and causes fluctuations in our results of operations.
    -- A loss of key personnel or highly skilled employees could disrupt our
       operations.
    -- We may continue to expand our operations through acquisitions, which
       could divert management's attention and expose us to unanticipated
       liabilities and costs. We may experience difficulties integrating the
       acquired operations, and we may incur costs relating to acquisitions
       that are never consummated.
    -- We have a substantial amount of debt, and the cost of servicing that
       debt could adversely affect our ability to take actions, our liquidity
       or our financial condition.
    -- If we are unable to generate sufficient cash flow to service our debt
       and fund our operating costs, our liquidity may be adversely affected.
    -- Our shareholder rights plan, Restated Certificate of Incorporation, as
       amended, and Amended and Restated By-laws discourage unsolicited
       takeover proposals and could prevent stockholders from realizing a
       premium on their common stock.
    -- Our proprietary rights may be violated or compromised, which could
       damage our operations.

Readers of this earnings release are referred to our Annual Report on Form 10-K for the year ended September 30, 2007, our Form 10-Q for the quarter ended June 30, 2008 and our other filings with the Securities and Exchange Commission for further discussion of these and other factors that could affect our future results. The forward-looking statements contained in this earnings release are made as of the date hereof and we assume no obligation to update for actual results or to update the reasons why actual results could differ materially from those projected in the forward-looking statements, except as required by law. In addition, the operating results for the three-months and year ended September 30, 2008 and cash flows for the year ended September 30, 2008 are not necessarily indicative of the results that will be achieved for future periods.

ABOUT AMERICAN PACIFIC CORPORATION

American Pacific Corporation is a leading manufacturer of specialty and fine chemicals within its focused markets, as well as propulsion products sold to defense, aerospace and pharmaceutical end markets. Our products provide access to, and movement in, space via solid fuel and propulsion thrusters and represent the registered or active pharmaceutical ingredient in drug applications such as HIV, epilepsy and cancer. We also produce specialty chemicals utilized in various applications such as fire extinguishing systems, as well as manufacture water treatment equipment. Our products are designed to meet customer specifications and often must meet certain governmental and regulatory approvals. Additional information about us can be obtained by visiting our web site at http://www.apfc.com.



    AMERICAN PACIFIC CORPORATION
    Consolidated Statements of Operations
    (Unaudited, Dollars in Thousands, Except per Share Amounts)

                                     Three Months Ended        Year Ended
                                        September 30,         September 30,
                                       2008       2007       2008       2007

    Revenues                         $71,152    $61,728   $203,129   $183,928
    Cost of Revenues                  50,200     40,514    135,388    120,230
      Gross Profit                    20,952     21,214     67,741     63,698
    Operating Expenses                11,041     11,577     42,865     39,841
      Operating Income                 9,911      9,637     24,876     23,857
    Interest and Other Income, Net       145        279      1,366        644
    Interest Expense                   2,730      2,827     10,803     11,996
    Debt Repayment Charges                 -        202          -      2,916
      Income before Income Tax         7,326      6,887     15,439      9,589
    Income Tax Expense                 2,999      3,266      6,488      4,605
      Net Income                      $4,327     $3,621     $8,951     $4,984


    Earnings per Share:
      Basic                            $0.58      $0.49      $1.20      $0.68
      Diluted                          $0.57      $0.48      $1.18      $0.67

    Weighted Average Shares
     Outstanding:
      Basic                        7,478,000  7,423,000  7,451,000  7,365,000
      Diluted                      7,612,000  7,565,000  7,599,000  7,471,000



    AMERICAN PACIFIC CORPORATION
    Consolidated Balance Sheets
    (Unaudited, Dollars in Thousands, Except per Share Amounts)

                                                          September 30,
                                                     2008               2007
    ASSETS
    Current Assets:
      Cash and Cash Equivalents                    $26,893            $21,426
      Accounts Receivable, Net                      27,445             25,236
      Inventories                                   40,357             47,023
      Prepaid Expenses and Other Assets              3,392              1,882
      Income Taxes Receivable                        1,804                376
      Deferred Income Taxes                          6,859              2,101
        Total Current Assets                       106,750             98,044
    Property, Plant and Equipment, Net             118,608            116,965
    Intangible Assets, Net                           3,013              5,767
    Deferred Income Taxes                           13,849             19,385
    Other Assets                                     9,193              9,246
        TOTAL ASSETS                              $251,413           $249,407

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities:
      Accounts Payable                             $10,554            $10,784
      Accrued Liabilities                            5,526              7,829
      Accrued Interest                               1,650              1,686
      Employee Related Liabilities                   6,917              7,222
      Income Taxes Payable                             111                 83
      Deferred Revenues and Customer
       Deposits                                      3,091              7,755
      Current Portion of Environmental
       Remediation Reserves                            996                726
      Current Portion of Long-Term Debt                254                252
        Total Current Liabilities                   29,099             36,337
    Long-Term Debt                                 110,120            110,373
    Environmental Remediation Reserves              13,282             14,697
    Pension Obligations and Other Long-
     Term Liabilities                               15,950             12,311
        Total Liabilities                          168,451            173,718
    Commitments and Contingencies
    Shareholders' Equity
      Preferred Stock - $1.00 par value;
       3,000,000 authorized; none
       outstanding                                       -                  -
      Common Stock - $0.10 par value;
       20,000,000 shares authorized,
        9,523,541 and 9,463,541 issued                 952                946
      Capital in Excess of Par Value                88,496             87,513
      Retained Earnings                             15,956              7,296
      Treasury Stock - 2,045,950 and
       2,034,870 shares                            (17,175)           (16,982)
      Accumulated Other Comprehensive
       Loss                                         (5,267)            (3,084)
        Total Shareholders' Equity                  82,962             75,689
        TOTAL LIABILITIES AND SHAREHOLDERS'
         EQUITY                                   $251,413           $249,407



    AMERICAN PACIFIC CORPORATION
    Consolidated Statements of Cash Flow
    (Unaudited, Dollars in Thousands)

                                                          Year Ended
                                                         September 30,
                                                    2008               2007
    Cash Flows from Operating
     Activities:
      Net Income                                   $8,951             $4,984
      Adjustments to Reconcile Net
       Income to Net Cash Provided by
       Operating Activities:
          Depreciation and amortization            16,454             19,461
          Non-cash interest expense                   637              2,142
          Share-based compensation                    127                 75
          Non-cash component of debt
           repayment charges                            -              2,309
          Excess tax benefit from stock
           option exercises                          (481)               (32)
          Deferred income taxes                     3,355              2,102
          Gain on sale of assets                     (416)                22
          Changes in operating assets
           and liabilities:
            Accounts receivable, net               (2,317)            (5,712)
            Inventories                             6,666             (7,622)
            Prepaid expenses and other
             current assets                        (1,510)              (292)
            Accounts payable                         (349)               238
            Income taxes                             (919)               (63)
            Accrued liabilities                    (1,765)             2,621
            Accrued interest                          (36)             1,637
            Employee related liabilities             (431)             2,622
            Deferred revenues and customer
             deposits                              (4,664)             2,072
            Environmental remediation
             reserves                              (1,145)            (2,088)
            Pension obligations, net                  277              1,677
            Other                                  (2,101)            (2,015)
              Net Cash Provided by Operating
               Activities                          20,333             24,138

    Cash Flows from Investing Activities:
      Capital expenditures                        (15,284)            (8,421)
      Earnout payment for acquisition of
       AFC Business                                     -             (6,000)
      Discontinued operations - collection of
       note receivable                                  -              7,510
              Net Cash Used by Investing
               Activities                         (15,284)            (6,911)

    Cash Flows from Financing Activities:
      Proceeds from the issuance of
       long-term debt                                   -            110,000
      Payments of long-term debt                     (251)          (108,586)
      Debt issuance costs                               -             (4,814)
      Issuances of common stock, net                  381                695
      Excess tax benefit from stock
       option exercises                               481                 32
      Purchases of treasury stock                    (193)                 -
              Net Cash Provided (Used) by
               Financing Activities                   418             (2,673)

    Net Change in Cash and Cash
     Equivalents                                    5,467             14,554
    Cash and Cash Equivalents, Beginning
     of Period                                     21,426              6,872
    Cash and Cash Equivalents, End of
     Period                                       $26,893            $21,426



    AMERICAN PACIFIC CORPORATION
    Supplemental Data
    (Unaudited, Dollars in Thousands)

                                        Three Months Ended     Year Ended
                                           September 30,      September 30,
                                           2008     2007      2008      2007

    Operating Segment Data:

    Revenues:
       Fine Chemicals                    $47,267  $33,748  $124,187  $104,441
       Specialty Chemicals                16,819   20,386    57,097    57,088
       Aerospace Equipment                 5,085    4,788    16,435    17,348
       Other Businesses                    1,981    2,806     5,410     5,051
          Total Revenues                 $71,152  $61,728  $203,129  $183,928

    Segment Operating Income:
       Fine Chemicals                     $6,820   $5,995   $16,246   $16,790
       Specialty Chemicals                 6,360    6,377    23,128    18,223
       Aerospace Equipment                   488      851       736     1,458
       Other Businesses                      682      646     1,022     1,210
          Total Segment Operating Income  14,350   13,869    41,132    37,681
    Corporate Expenses                    (4,439)  (4,232)  (16,256)  (13,824)
    Operating Income                      $9,911   $9,637   $24,876   $23,857

    Depreciation and Amortization:
       Fine Chemicals                     $3,371    3,491   $12,876    13,637
       Specialty Chemicals                   433    1,301     2,825     5,159
       Aerospace Equipment                    66       38       222       142
       Other Businesses                        3        3        12        12
       Corporate                             109      126       519       511
          Total Depreciation and
           Amortization                   $3,982   $4,959   $16,454   $19,461

    Segment EBITDA (a):
       Fine Chemicals                    $10,191   $9,486   $29,122   $30,427
       Specialty Chemicals                 6,793    7,678    25,953    23,382
       Aerospace Equipment                   554      889       958     1,600
       Other Businesses                      685      649     1,034     1,222
          Total Segment EBITDA            18,223   18,702    57,067    56,631
    Less: Corporate Expenses, Excluding
     Depreciation                         (4,330)  (4,106)  (15,737)  (13,313)
    Plus: Share-based Compensation            37        8       127        75
    Plus: Interest Income                    145      279     1,366       644
    Adjusted EBITDA (b)                  $14,075  $14,883   $42,823   $44,037

    Reconciliation of Net Income to
     Adjusted EBITDA (b):

    Net Income                            $4,327   $3,621    $8,951    $4,984
    Add Back:
       Income Tax Expense                  2,999    3,266     6,488     4,605
       Interest Expense                    2,730    2,827    10,803    11,996
       Debt repayment charges                  -      202         -     2,916
       Depreciation and Amortization       3,982    4,959    16,454    19,461
       Share-based Compensation               37        8       127        75
    Adjusted EBITDA                      $14,075  $14,883   $42,823   $44,037



    (a) Segment EBITDA is defined as segment operating income plus
        depreciation and amortization.
    (b) Adjusted EBITDA is defined as net income before income tax expense,
        interest expense, debt repayment charges, depreciation and
        amortization, and share-based compensation.

Segment EBITDA and Adjusted EBITDA are not financial measures calculated in accordance with GAAP and should not be considered as an alternative to income from operations as performance measures. Each EBITDA measure is presented solely as a supplemental disclosure because management believes that each is a useful performance measure that is widely used within the industries in which we operate. In addition, EBITDA measures are significant measurements for covenant compliance under our revolving credit facility. Each EBITDA measure is not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure for comparison.


'/>"/>
SOURCE American Pacific Corporation
Copyright©2008 PR Newswire.
All rights reserved


Related medicine news :

1. The American Federation for Medical Research Says Daschle Must Cure Clinical Research Crisis if Change Is To Take Hold in U.S. Health Care System
2. Sanofi-aventis Partners with the African American Community in Baltimore to Increase Health Awareness, Access to Resources and Help Improve Patient Care
3. Americans United for Life Releases Eight New Model Legislation & Policy Guides: Twenty-Three Model Legislation & Policy Guides Now Available
4. Tea Dragon Films is First Adopter in the American Botanical Councils New Adopt-An-Herb Program
5. Spa Savings Benefit Stressed Americans
6. Americans Want Schools to Take Recess Seriously
7. Blitzkrieg Declared On American Medicine
8. Melanoma Foundation of New England Wins Gold Triangle Award From the American Academy of Dermatology
9. American Lung Association Announces Support of Pickens Plan
10. Fewer HIV-Infected Americans Passing the Virus On
11. Eisai Inc. and the North American Thrombosis Forum (NATF)* Introduce the DVTeamCare(TM) Hospital Award and Call for Nominations
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:2/12/2016)... Pa. (PRWEB) , ... February 12, 2016 , ... Every ... heaters. , This winter the West Penn Burn Center, part of the ... Company #1, to bring you the “Space Heaters Need Space” campaign. ...
(Date:2/12/2016)... ... February 12, 2016 , ... The Jones Agency, a ... across eastern Texas, is launching a cooperative charity drive with the Tarrant Area Food ... more than 50,000 individuals and families in need, the Tarrant County Food Bank offers ...
(Date:2/12/2016)... , ... February 12, 2016 , ... ... the Pittsburgh metro area, celebrates the beginning of the latest charity campaign in ... social skills through art. Donations to this worthy cause are currently being accepted ...
(Date:2/12/2016)... , ... February 12, 2016 , ... For Coast Dental ... Suzan Sweeney, RDH, and dental assistant Terrell Moore shortly before 7 a.m. to volunteer ... of dental professionals, donating their time and skills to help hundreds of uninsured and ...
(Date:2/12/2016)... ... February 12, 2016 , ... Nearly every health website and ... These articles generally list between five and 15 foods that should be consumed ... one of these lists and believes that nutritious eye healthy foods are extremely ...
Breaking Medicine News(10 mins):
(Date:2/12/2016)... , Maharashtra, February 12, 2016 ... research report titled Chronic Inflammation Global Clinical Trials ... snapshot of the global clinical trials landscape along ... trials by Region, Country (G7 & E7), Trial ... status and reviews top companies involved and enlists ...
(Date:2/11/2016)... Feb. 11, 2016 Stem cells are primitive ... by self-renewal and the capacity to differentiate into mature ... discovery, as the first mouse embryonic stem cells were ... until 1995 that the first culturing of embryonic stem ... were not produced until 2006 As a result of ...
(Date:2/11/2016)... 11, 2016  Kindred Biosciences, Inc. (NASDAQ: KIN ... the lives of pets, today announced the submission to ... Animal Drug Application (NADA) for Zimeta™ (dipyrone injection, KIND-012).  ... of Zimeta for the control of pyrexia (fever) in ... --> --> The Chemistry, Manufacturing, ...
Breaking Medicine Technology: