AMERICAN PACIFIC CORPORATION 
By LAS VEGAS, Aug. 7, 2013/PRNewswire/ -- American Pacific Corporation (NASDAQ: APFC) today reported financial results for its third quarter ended June 30, 2013.
FINANCIAL SUMMARY
Quarter Ended June 30, 2013Compared to Quarter Ended June 30, 2012
- Revenues increased 21% to $69.5 millioncompared to $57.6 million.
- Operating income increased to $13.8 millioncompared to $11.0 million.
- Adjusted EBITDA was $17.4 millioncompared to $14.6 million.
- Income from continuing operations improved to $8.4 millioncompared to $4.9 million.
- Diluted earnings per share from continuing operations increased to $1.03compared to $0.64.
Nine Months Ended June 30, 2013Compared to Nine Months Ended June 30, 2012
- Revenues increased 15% to $155.9 millioncompared to $136.0 million.
- Operating income increased 27% to $23.6 millioncompared to $18.5 million.
- Adjusted EBITDA was $34.0 millioncompared to $29.3 million.
- Income from continuing operations improved to $12.3 millioncompared to $6.2 million.
- Diluted earnings per share from continuing operations increased to $1.53compared to $0.81.
CONSOLIDATED RESULTS OF OPERATIONS
Revenues - For our Fiscal 2013 third quarter, revenues increased 21% to $69.5 millioncompared to $57.6 millionfor the Fiscal 2012 third quarter. For the nine months ended June 30, 2013, revenues increased 15% to $155.9 millioncompared to $136.0 millionfor the prior year nine-month period. The increases are supported by growth from our Fine Chemicals segment, offset partially by the inter-quarter timing of Specialty Chemicals segment and Other Businesses segment revenues. See further discussion below under Segment Highlights.
Cost of Revenues and Gross Profit - Fiscal 2013 third quarter cost of revenues was $44.3 millioncompared to $36.7 millionfor the Fiscal 2012 third quarter. The consolidated gross margin was 36% in each of the Fiscal 2013 and 2012 third quarters. The Fiscal 2013 nine-month period cost of revenues was $99.4 millioncompared to $89.3 millionfor the Fiscal 2012 nine-month period. The Fiscal 2013 nine-month period consolidated gross margin was 36% compared to 34% for the Fiscal 2012 nine-month period. On a consolidated level, one of the most significant factors that affects, and should continue to affect, the comparison of our consolidated gross profit and gross margin from period to period is the change in revenue mix among our segments. The revenue contribution by each of our segments is indicated in the following table.
Quarter Ended June 30, | Nine Months Ended June 30, | |||
2013 | 2012 | 2013 | 2012 | |
Fine Chemicals | 64% | 63% | 66% | 58% |
Specialty Chemicals | 30% | 37% | 30% | 40% |
Other Businesses | 6% | 0% | 4% | 2% |
Total Revenues | 100% | 100% | 100% | 100% |
See further discussion of gross profit and gross margin at the segment levels under the heading Segment Highlights.
Operating Expenses - For our Fiscal 2013 third quarter, operating expenses were $11.4 millioncompared to $9.9 millionfor the Fiscal 2012 third quarter. For our Fiscal 2013 nine-month period, operating expenses were $32.9 millioncompared to $28.2 millionfor the Fiscal 2012 nine-month period. The most significant components of the increase in operating expenses for the nine-month period were approximately $1.9 millionfor accrued incentive compensation, approximately $1.2 millionfor increased costs from our defined benefit retirement plans, approximately $0.6 millionfor Fine Chemicals segment research and development, and approximately $0.3 millionfor corporate shareholder matters. The increase in incentive compensation occurred primarily due to the timing of incentive compensation accruals. Strong operating performance year-to-date in Fiscal 2013 has resulted in incentive-based compensation costs of approximately $0.8 millionbeing recorded earlier in Fiscal 2013 than in Fiscal 2012. The third quarter operating expense variances reflect similar conditions.
SEGMENT HIGHLIGHTS
Fine Chemicals Segment
Our Fine Chemicals segment reflects the operating results of our wholly-owned subsidiaries Ampac Fine Chemicals LLC and AMPAC Fine Chemicals Texas, LLC (collectively, "AFC").
Quarter Ended June 30, 2013Compared to Quarter Ended June 30, 2012
- Revenues increased to $44.2 millioncompared to $36.4 million.
- Operating income was $5.8 millioncompared to $5.2 million.
- Segment EBITDA was $8.8 millioncompared to $8.1 million.
Nine Months Ended June 30, 2013Compared to Nine Months Ended June 30, 2012
- Revenues increased to $102.8 millioncompared to $78.4 million.
- Operating income was $10.8 millioncompared to $3.0 million.
- Segment EBITDA was $19.7 millioncompared to $11.9 million.
Fine Chemicals segment revenues increased 22% and 31% for the Fiscal 2013 third quarter and nine-month period, respectively, each compared to the corresponding Fiscal 2012 periods. The increase in revenues for the Fiscal 2013 third quarter is primarily associated with an increase in development product revenues which included the completion of a validation campaign for an anti-viral product that is in the late stages of its clinical trials. Additionally, oncology product revenues increased, for the Fiscal 2013 nine-month period, supported by revenues from new oncology products for drugs that were commercialized in the later part of Fiscal 2012. The magnitudes of the increases are also partially attributed to inter-quarter timing. We anticipate that a greater percentage of Fiscal 2013 annual revenues occurred during the first nine months of the year than the percentage of annual revenues that occurred during the first nine months of the prior fiscal year. Accordingly, some of the revenue variance is expected to reverse in our Fiscal 2013 fourth quarter.
The Fine Chemicals segment operating income of $5.8 millionfor the Fiscal 2013 third quarter reflects an increase compared to the Fiscal 2012 third quarter and is proportionate to the corresponding increase in revenues. The Fiscal 2013 third quarter operating margin declined slightly compared to the prior year third quarter including a one point decline in gross margin as a result of a change in product mix and higher operating expenses. Fine Chemicals segment operating income for the Fiscal 2013 nine-month period was $10.8 millioncompared to $3.0 millionfor the nine-month period in Fiscal 2012. For the Fiscal 2013 nine-month period, the gross margin percentage increased six percentage points. Gross margin improvements reflect significant improvements in manufacturing operations, as well as better pricing on certain core products. Our Fine Chemicals segment has dedicated significant efforts over the last two fiscal years to improving the efficiency of its manufacturing activities. Redesigned key processes continued to yield targeted throughput ranges during the Fiscal 2013 periods. In contrast, during the first half of Fiscal 2012, the Fine Chemicals segment had not yet achieved the benefits of these improvements. The gross margin improvement was offset partially by increased operating expenses. Fine Chemicals operating expenses increased in the Fiscal 2013 third quarter primarily due to the timing of incentive compensation accruals. Strong operating performance in the first half of Fiscal 2013 has resulted in accrued incentive-based compensation costs being recorded earlier in Fiscal 2013 than in Fiscal 2012. In addition, the Fine Chemicals segment has increased its investments in business development and research activities.
Specialty Chemicals Segment
Our Specialty Chemicals segment revenues include the operating results from our perchlorate, sodium azide and Halotron product lines, with our perchlorate product lines comprising 86% and 88% of Specialty Chemicals segment revenues in the Fiscal 2013 and 2012 nine-month periods, respectively.
Quarter Ended June 30, 2013Compared to Quarter Ended June 30, 2012
- Revenues were $20.9 millioncompared to $21.0 million.
- Operating income was $12.4 millioncompared to $9.7 million.
- Segment EBITDA was $12.7 millioncompared to $10.2 million.
Nine Months Ended June 30, 2013Compared to Nine Months Ended June 30, 2012
- Revenues were $47.2 millioncompared to $54.2 million.
- Operating income was $25.6 millioncompared to $26.6 million.
- Segment EBITDA was $26.2 millioncompared to $27.8 million.
Specialty Chemicals segment revenues of $20.9 millionfor the Fiscal 2013 third quarter was consistent with the Fiscal 2012 third quarter. Specialty Chemicals segment revenues of $47.2 millionfor the Fiscal 2013 nine-month period reflects a decrease of 13% as compared to the Fiscal 2012 period. The nine-month period revenue variance includes a 24% decrease in perchlorate volume due to changes in inter-quarter timing of perchlorate volume. We anticipate that Specialty Chemicals segment volume and revenues variances will reverse in the Fiscal 2013 fourth quarter.
Specialty Chemicals segment operating margin increased in the Fiscal 2013 periods each as compared to the corresponding prior year periods. The Fiscal 2013 periods experienced higher than expected perchlorate production volume which provided better coverage of fixed costs and accordingly resulted in an increase in operating margins.
CAPITAL AND LIQUIDITY HIGHLIGHTS
Liquidity - As of June 30, 2013, we had cash balances of $60.9 millionand no borrowings against our revolving credit facility. Cash flow for our Fiscal 2013 third quarter was particularly strong due to a customer deposit received in June 2013. This deposit will be used to purchase raw materials for the related customer contract and as a result we expect operating activities to use cash during our Fiscal 2013 fourth quarter.
Operating Cash Flows - Operating activities provided cash of $47.7 millionfor the Fiscal 2013 nine-month period compared to $13.3 millionfor the Fiscal 2012 nine-month period, an increase of $34.4 million.
Significant components of the change in cash flow from operating activities include:
- An increase in cash due to the improvement in cash profits provided by our operations of approximately $4.7 million.
- An improvement in cash provided by working capital accounts of approximately $30.4 millionexcluding the effects of interest and income taxes.
- An increase in cash paid for income taxes of approximately $7.0 million.
- A decrease in cash paid for interest expense of approximately $1.7 million.
- An increase in cash paid for costs associated with the retirement of long-term debt of approximately $1.6 million.
- A decrease in cash used for environmental remediation activities of approximately $1.8 million.
- A decrease in cash used to fund pension obligations of approximately $3.9 million.
- An increase in cash provided by other operating activities of approximately $0.5 million.
The improvement in working capital cash flow reflects additional customer deposits received by our Fine Chemicals segment in the Fiscal 2013 third quarter.
Cash paid for income taxes increased because our federal operating loss carryforwards were fully utilized in Fiscal 2012. Accordingly, we expect to pay cash taxes in Fiscal 2013.
Cash paid for interest in the Fiscal 2013 nine-month period decreased as compared to the Fiscal 2012 nine-month period reflecting both lower outstanding debt balances and lower interest rates that resulted from our refinancing in October 2012. Also in connection with the October 2012refinancing, we incurred cash redemption costs of approximately $1.6 millioncomprised primarily of the call premium to redeem the senior notes.
Environmental remediation spending decreased because the Fiscal 2012 nine-month period included higher spending associated with the capital expansion of our remediation facilities than the Fiscal 2013 nine-month period.
We make payments to fund defined benefit pension obligations at a level of at least 80% of the obligation. Our contributions were reduced in the Fiscal 2013 nine-month period, as compared to the Fiscal 2012 nine-month period, primarily due to improved plan asset returns in Fiscal 2012. In Fiscal 2012, we made additional contributions to our pension plans because the return on pension plan assets in the preceding year was not sufficient to maintain our target funding requirements.
Investing Cash Flows - Capital expenditures in the Fiscal 2013 nine-month period were $10.8 millioncompared to $4.2 millionfor the Fiscal 2012 nine-month period. The increase primarily relates to Fiscal 2013 projects that will provide additional medium scale capacity for our Fine Chemicals segment
Financing Cash Flows - For our Fiscal 2013 nine-month period financing activities used cash of $7.2 million. The Fiscal 2013 nine-month period amount includes a reduction in our long-term debt of $5.0 millionand debt issuance costs of $1.4 million, each incurred in connection with our October 2012refinancing activities. Subsequent to our October 2012refinancing, we also made scheduled principal payments for our new term loan in the amount of $3.4 million. In addition, stock option exercises during the Fiscal 2013 nine-month period generated $1.7 millionin net cash proceeds.
OUTLOOK
We are reaffirming our guidance for Fiscal 2013. We expect consolidated revenues of at least $205.0 millionand Adjusted EBITDA of at least $47.0 million. We are anticipating our capital expenditures, which do not include environmental remediation spending, for Fiscal 2013 to be $14.0 million.
Our Fiscal 2013 guidance for Adjusted EBITDA is computed by adding estimated amounts for depreciation and amortization of $13.5 million, interest expense and refinancing costs of $5.8 million, share-based compensation expense and other items of $1.0 millionand income taxes of $9.5 millionto estimated net income of $17.2 million.
NON-GAAP FINANCIAL INFORMATION AND BASIS OF PRESENTATION
We have provided 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. Segment EBITDA is defined as segment operating income (loss) plus depreciation and amortization. Adjusted EBITDA is defined as income (loss) from continuing operations before income tax expense (benefit), interest expense, loss on debt extinguishment, depreciation and amortization, share-based compensation and environmental remediation charges (if any).
Segment EBITDA and Adjusted EBITDA are not financial measures calculated in accordance with GAAP and should not be considered as an alternative to income (loss) from continuing 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 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.
Revenues and expenses associated with our former Aerospace Equipment segment operations, which were divested effective August 1, 2012, are presented as discontinued operations for all periods presented.
We report our results based on a fiscal year which ends on September 30. References to Fiscal years refer to the twelve months ended or ending September 30of the Fiscal year referenced.
INVESTOR TELECONFERENCE
We invite you to participate in a teleconference with our executive management covering our Fiscal 2013 third quarter financial results. The investor teleconference will be held Wednesday, August 7, 2013, at 1:30 p.m., Pacific Daylight Time. The teleconference will include a presentation by management followed by a question and answer session. The teleconference can be accessed by dialing 866-813-5647 between 1:15 and 1:30 p.m., Pacific Daylight Time. Please reference passcode #35393803. As is our customary practice, a live webcast of the teleconference is being provided by Thomson Reuters. Links to the webcast and the earnings release are available in the Investors section of our website at www.apfc.com, and will be available for replay until a few days before our next quarterly investor teleconference.
RISK FACTORS/FORWARD-LOOKING STATEMENTS
The unaudited financial results included in this release are preliminary. 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 the statement regarding the impact that change in revenue mix among our segments will have on comparisons of our consolidated gross profit and gross margin in the future, statements regarding our expectations for product revenues, sales volumes, working capital, interest expense, tax obligations, and capital expenditures, statements regarding the impact of process improvements and other efficiency and cost savings initiatives, statements regarding the expected impact of the timing of orders, sales and production activities on quarterly revenues, statements regarding the expected benefit of our credit swap agreement, statements regarding the impact that principal payments under our credit facility will have on our liquidity, statements regarding our ability to focus on the growth and performance of our pharmaceutical-related product lines following the sale of our Aerospace Equipment segment and the statements in the "Outlook" section of this earnings release. Words such as "expect", "anticipate", "should", "future" and similar expressions are intended to identify forward-looking statements. The inclusion of forward-looking statements should not be regarded as a representation by us that any of our expectations will be achieved. Actual results may differ materially from future results or outcomes expressed or implied by forward-looking statements set forth in the release due to risks, uncertainties and other important factors inherent in our business. Factors that might cause actual results to differ include, but are not limited to, the actual placement, timing and delivery of orders for new and/or existing products as well as the following:
- We depend on a limited number of customers and products for most of our sales and the loss of one or more of these customers or products could have a material adverse effect on our financial position, results of operations and cash flows.
- The inherent limitations of our fixed-price or similar contracts on 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 on our profitability and liquidity.
- A significant portion of our business is based on contracts with contractors or subcontractors to the U.S. government 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 or health matters.
- Although we have established an environmental reserve for remediation activities in Henderson, Nevada, given the many uncertainties involved in assessing environmental liabilities, our environmental-related risks may from time to time exceed any related reserves.
- For each of our Specialty Chemicals and Fine Chemicals segments, 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 liabilities.
- 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 and Fine Chemicals 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 liability claims for our products or services 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 strong competition in certain industries in which 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 inherent 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, or the inability to attract and retain such personnel, could disrupt our operations or impede our growth.
- We may continue to expand our operations through acquisitions, but the acquisitions 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.
- We are obligated to comply with various ongoing covenants in our debt, which could restrict our operations, and if we should fail to satisfy any of these covenants, the payment under our debt could be accelerated, which would negatively impact our liquidity.
- Significantchanges in discount rates, rates of return on pension assets and other factors could affect our estimates of pension obligations, which in turn could affect future funding requirements, related costs and our future financial condition, results of operations and cash flows.
- Our suspended stockholder 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 and intellectual property rights may be violated, compromised, circumvented or invalidated, which could damage our operations.
- Our business and operations would be adversely impacted in the event of a failure of our information technology infrastructure.
- We are exposed to counterparty risk through our interest rate swap and a counterparty default could adversely affect our financial condition.
- Our common stock price may fluctuate substantially, and a stockholder's investment could decline in value.
Readers of this earnings release are referred to our Annual Report on Form 10-K for Fiscal 2012 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 quarter and nine months ended June 30, 2013and cash flows for the nine months ended June 30, 2013are not necessarily indicative of the results that will be achieved for future periods.
ABOUT AMERICAN PACIFIC CORPORATION
American Pacific Corporation (AMPAC) is a leading custom manufacturer of fine chemicals and specialty chemicals within its focused markets. We supply active pharmaceutical ingredients and advanced intermediates to the pharmaceutical industry. For the aerospace and defense industry we provide specialty chemicals used in solid rocket motors for space launch and military missiles. We produce clean agent chemicals for the fire protection industry, as well as electro-chemical equipment for the water treatment industry. 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 www.apfc.com.
Contact: Dana M. Kelley- (702) 735-2200
E-mail: InvestorRelations@apfc.com
Website: www.apfc.com
AMERICAN PACIFIC CORPORATION | ||||||
Condensed Consolidated Statements of Operations | ||||||
(Unaudited, Dollars in Thousands, Except per Share Amounts) | ||||||
Three Months Ended | Nine Months Ended | |||||
June 30, | June 30, | |||||
2013 | 2012 | 2013 | 2012 | |||
Revenues | $ 69,519 | $ 57,623 | $ 155,881 | $ 136,026 | ||
Cost of Revenues | 44,313 | 36,736 | 99,369 | 89,291 | ||
Gross Profit | 25,206 | 20,887 | 56,512 | 46,735 | ||
Operating Expenses | 11,395 | 9,904 | 32,908 | 28,212 | ||
Other Operating Gains | - | - | - | 14 | ||
Operating Income | 13,811 | 10,983 | 23,604 | 18,537 | ||
Interest and Other Income (Expense), Net | 93 | 10 | 105 | 24 | ||
Interest Expense | 587 | 2,594 | 2,423 | 7,824 | ||
Loss on Debt Extinguishment | - | - | 2,835 | - | ||
Income from Continuing | ||||||
Operations before Income Tax | 13,317 | 8,399 | 18,451 | 10,737 | ||
Income Tax Expense | 4,945 | 3,517 | 6,167 | 4,583 | ||
Income from Continuing Operations | 8,372 | 4,882 | 12,284 | 6,154 | ||
Income (Loss) from Discontinued | ||||||
Operations, Net of Tax | 16 | (177) | (9) | (243) | ||
Net Income | $ 8,388 | $ 4,705 | $ 12,275 | $ 5,911 | ||
Basic Earnings Per Share: | ||||||
Income from Continuing Operations | $ 1.07 | $ 0.65 | $ 1.59 | $ 0.82 | ||
Income (Loss) from Discontinued | ||||||
Operations, Net of Tax | $ 0.00 | $ (0.02) | $ (0.00) | $ (0.03) | ||
Net Income | $ 1.07 | $ 0.62 | $ 1.59 | $ 0.78 | ||
Diluted Earnings Per Share: | ||||||
Income from Continuing Operations | $ 1.03 | $ 0.64 | $ 1.53 | $ 0.81 | ||
Income (Loss) from Discontinued | ||||||
Operations, Net of Tax | $ 0.00 | $ (0.02) | $ (0.00) | $ (0.03) | ||
Net Income | $ 1.03 | $ 0.61 | $ 1.53 | $ 0.77 | ||
Weighted Average Shares Outstanding: | ||||||
Basic | 7,816,000 | 7,556,000 | 7,739,000 | 7,548,000 | ||
Diluted | 8,132,000 | 7,661,000 | 8,031,000 | 7,635,000 | ||
AMERICAN PACIFIC CORPORATION | ||||
Condensed Consolidated Balance Sheets | ||||
(Unaudited, Dollars in Thousands, Except per Share Amounts) | ||||
June 30, | September 30, | |||
2013 | 2012 | |||
ASSETS | ||||
Current Assets: | ||||
Cash and Cash Equivalents | $ 60,885 | $ 31,182 | ||
Accounts Receivable, Net | 23,331 | 24,211 | ||
Inventories | 48,941 | 44,157 | ||
Prepaid Expenses and Other Assets | 890 | 1,477 | ||
Income Taxes Receivable | 755 | 2 | ||
Deferred Income Taxes | 13,143 | 13,028 | ||
Total Current Assets | 147,945 | 114,057 | ||
Property, Plant and Equipment, Net | 104,236 | 103,316 | ||
Deferred Income Taxes | 18,527 | 20,796 | ||
Other Assets | 6,279 | 8,295 | ||
TOTAL ASSETS | $ 276,987 | $ 246,464 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current Liabilities: | ||||
Accounts Payable | $ 6,748 | $ 12,006 | ||
Accrued Liabilities | 3,444 | 6,359 | ||
Accrued Interest | 16 | 988 | ||
Employee Related Liabilities | 9,692 | 10,568 | ||
Income Taxes Payable | 1,768 | 2,098 | ||
Deferred Revenues and Customer Deposits | 46,765 | 7,293 | ||
Current Portion of Environmental Remediation Reserves | 2,365 | 5,114 | ||
Current Portion of Long-Term Debt | 5,632 | 16 | ||
Total Current Liabilities | 76,430 | 44,442 | ||
Long-Term Debt | 51,000 | 65,004 | ||
Environmental Remediation Reserves | 10,283 | 11,640 | ||
Pension Obligations | 52,445 | 55,300 | ||
Other Long-Term Liabilities | 876 | 1,745 | ||
Total Liabilities | 191,034 | 178,131 | ||
Commitments and Contingencies | ||||
Stockholders' Equity | ||||
Preferred Stock - $1.00 par value; 3,000,000 authorized; none outstanding | - | - | ||
Common Stock - $0.10 par value; 20,000,000 shares authorized, | ||||
7,937,333 and 7,710,783 issued and outstanding | 794 | 771 | ||
Capital in Excess of Par Value | 77,818 | 74,796 | ||
Retained Earnings | 37,078 | 24,803 | ||
Accumulated Other Comprehensive Loss | (29,737) | (32,037) | ||
Total Stockholders' Equity | 85,953 | 68,333 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 276,987 | $ 246,464 | ||
AMERICAN PACIFIC CORPORATION | ||||||
Condensed Consolidated Statements of Cash Flows | ||||||
(Unaudited, Dollars in Thousands) | ||||||
Nine Months Ended | ||||||
June 30, | ||||||
2013 | 2012 | |||||
Cash Flows from Operating Activities: | ||||||
Net Income | $ 12,275 | $ 5,911 | ||||
Adjustments to Reconcile Net Income | ||||||
to Net Cash Provided by Operating Activities: | ||||||
Depreciation and amortization | 9,755 | 11,114 | ||||
Non-cash interest expense | 235 | 569 | ||||
Non-cash component of loss on debt extinguishment | 1,252 | - | ||||
Share-based compensation | 487 | 421 | ||||
Excess tax benefit from stock-based compensation | (898) | - | ||||
Deferred income taxes | 1,519 | 4,333 | ||||
Loss on sale of assets | 1 | 64 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable, net | 748 | 3,074 | ||||
Inventories | (4,373) | (5,559) | ||||
Prepaid expenses and other current assets | 587 | (393) | ||||
Accounts payable | (5,521) | (2,205) | ||||
Income taxes | (1,083) | 110 | ||||
Accrued liabilities | (3,203) | 295 | ||||
Accrued interest | (972) | 2,362 | ||||
Employee related liabilities | (106) | 266 | ||||
Deferred revenues and customer deposits | 39,472 | 1,742 | ||||
Environmental remediation reserves | (4,106) | (5,920) | ||||
Pension obligations, net | 487 | (3,445) | ||||
Other | 1,157 | (151) | ||||
Discontinued operations, net | (34) | 670 | ||||
Net Cash Provided by Operating Activities | 47,679 | 13,258 | ||||
Cash Flows from Investing Activities: | ||||||
Capital expenditures | (10,760) | (4,187) | ||||
Other investing activities | - | 120 | ||||
Discontinued operations, net | - | (689) | ||||
Net Cash Used by Investing Activities | (10,760) | (4,756) | ||||
Cash Flows from Financing Activities: | ||||||
Issuances of long-term debt | 60,000 | - | ||||
Payments of long-term debt | (68,388) | (13) | ||||
Debt issuance costs | (1,386) | - | ||||
Issuances of common stock | 1,660 | 53 | ||||
Excess tax benefit from stock-based compensation | 898 | - | ||||
Discontinued operations, net | - | (40) | ||||
Net Cash Used by Financing Activities | (7,216) | - | ||||
Effect of Changes in Currency Exchange Rates on Cash | - | (8) | ||||
Net Change in Cash and Cash Equivalents | 29,703 | 8,494 | ||||
Cash and Cash Equivalents, Beginning of Period | 31,182 | 30,703 | ||||
Cash and Cash Equivalents, End of Period | $ 60,885 | $ 39,197 | ||||
AMERICAN PACIFIC CORPORATION | ||||||
Supplemental Data | ||||||
(Unaudited, Dollars in Thousands) | ||||||
Three Months Ended | Nine Months Ended | |||||
June 30, | June 30, | |||||
2013 | 2012 | 2013 | 2012 | |||
Operating Segment Data: | ||||||
Revenues: | ||||||
Fine Chemicals | $ 44,223 | $ 36,359 | $ 102,837 | $ 78,428 | ||
Specialty Chemicals | 20,897 | 21,001 | 47,181 | 54,182 | ||
Other Businesses | 4,399 | 263 | 5,863 | 3,416 | ||
Total Revenues | $ 69,519 | $ 57,623 | $ 155,881 | $ 136,026 | ||
Segment Operating Income (Loss): | ||||||
Fine Chemicals | $ 5,805 | $ 5,204 | $ 10,832 | $ 3,039 | ||
Specialty Chemicals | 12,419 | 9,694 | 25,554 | 26,635 | ||
Other Businesses | (356) | (340) | (749) | (769) | ||
Total Segment Operating Income | 17,868 | 14,558 | 35,637 | 28,905 | ||
Corporate Expenses | (4,057) | (3,575) | (12,033) | (10,368) | ||
Operating Income | $ 13,811 | $ 10,983 | $ 23,604 | $ 18,537 | ||
Depreciation and Amortization: | ||||||
Fine Chemicals | $ 3,002 | $ 2,929 | $ 8,911 | $ 8,897 | ||
Specialty Chemicals | 267 | 520 | 597 | 1,132 | ||
Other Businesses | 6 | 4 | 16 | 13 | ||
Corporate | 66 | 93 | 231 | 281 | ||
Total Depreciation and Amortization | $ 3,341 | $ 3,546 | $ 9,755 | $ 10,323 | ||
Segment EBITDA: | ||||||
Fine Chemicals | $ 8,807 | $ 8,133 | $ 19,743 | $ 11,936 | ||
Specialty Chemicals | 12,686 | 10,214 | 26,151 | 27,767 | ||
Other Businesses | (350) | (336) | (733) | (756) | ||
Total Segment EBITDA | 21,143 | 18,011 | 45,161 | 38,947 | ||
Less: Corporate Expenses, Excluding Depreciation | (3,991) | (3,482) | (11,802) | (10,087) | ||
Plus: Share-based Compensation | 118 | 101 | 487 | 421 | ||
Plus: Interest and Other Income (Expense), Net | 93 | 10 | 105 | 24 | ||
Adjusted EBITDA | $ 17,363 | $ 14,640 | $ 33,951 | $ 29,305 | ||
Reconciliation of Income from Continuing Operations to Adjusted EBITDA: | ||||||
Income from Continuing Operations | $ 8,372 | $ 4,882 | $ 12,284 | $ 6,154 | ||
Add Back: | ||||||
Income Tax Expense | 4,945 | 3,517 | 6,167 | 4,583 | ||
Interest Expense and Loss on Debt Extinguishment | 587 | 2,594 | 5,258 | 7,824 | ||
Depreciation and Amortization | 3,341 | 3,546 | 9,755 | 10,323 | ||
Share-based Compensation | 118 | 101 | 487 | 421 | ||
Adjusted EBITDA | $ 17,363 | $ 14,640 | $ 33,951 | $ 29,305 | ||
SOURCE American Pacific Corporation
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