Date:12/11/2008

-- 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 En
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SOURCE American Pacific Corporation Copyright©2008 PR Newswire. All rights reserved

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