American Pacific Reports Third Quarter Results
LAS VEGAS, Aug. 8 /PRNewswire/ -- American Pacific Corporation
(Nasdaq: APFC) today reported financial results for its fiscal 2000 third
quarter and the nine-month period ended June 30, 2000, and provided
information on the Company's operations.
Financial Results. The Company reported a decrease in sales of
$1.7 million, or 9%, in the third quarter compared to last year's third
quarter. Sales were $17.0 million in the third quarter compared to sales of
$18.7 million in the same quarter in fiscal 1999. Net income before
extraordinary losses was $2.8 million or $0.40 diluted per share, compared to
$2.4 million or $0.29 diluted per share during the third quarter of fiscal
1999. After extraordinary losses on debt extinguishment, net income during
the third quarter of fiscal 2000 was $1.8 million or $0.26 diluted per share,
compared to net income of $2.2 million or $0.26 diluted per share during the
third quarter of last year.
For the first nine months of this year, sales decreased $0.1 million, or
less than 1%, to $54.3 million from $54.4 million in the first nine months of
fiscal 1999. Net income before extraordinary losses was $9.1 million or
$1.22 diluted per share, compared to $7.7 million or $0.93 diluted per share
during the same period last year. After extraordinary losses, net income
during the nine-month period ended June 30, 2000 was $7.5 million or
$1.00 diluted per share, compared to $7.5 million or $0.91 diluted per share
during the same period last year.
Operating expenses were $2.6 million in the third quarter of this year
compared to $2.5 million in the third quarter of last year. For the first
nine months, operating expenses were $7.8 million compared to $7.5 million
last year. Operating expenses include $0.6 million and $0.7 million during
the nine-month periods ended June 30, 2000 and 1999, respectively, in costs
related to the investigation and evaluation of trace amounts of perchlorate
chemicals found in Lake Mead (see Contingencies below).
Net interest expense was $0.8 million during the three-month period ended
June 30, 2000, compared to $1.3 million during the same period last year. Net
interest expense was $2.9 million during the first nine months of this year
compared to $4.2 million during the same period last year. The decreases in
net interest expense were primarily attributable to lower average outstanding
balances of the Company's Senior Unsecured Notes (the "Notes").
Earnings before interest, taxes, depreciation, and amortization ("EBITDA")
was approximately $6.3 million during the third quarter of this year compared
to EBITDA of approximately $6.8 million during the third quarter of last year.
EBITDA was approximately $19.1 million in the first nine months of this year
compared to $19.0 during the same period last year.
Purchase Order Change. As previously announced, in March 2000, the
Company received notification from Thiokol Propulsion (a division of Cordant
Technologies, Inc.) ("Thiokol") of a change in the current purchase order for
ammonium perchlorate ("AP") which will result in an estimated reduction in
revenues of approximately $4.0 million in the fiscal year ending
September 30, 2000. In 1998, the Company entered into an agreement with
Thiokol with respect to the supply of AP through the year 2008. The agreement
establishes a pricing matrix under which AP unit prices to Thiokol vary
inversely with the quantity of AP sold by the Company to all of its customers.
The reduced AP delivery quantities in the Thiokol change order results in an
AP unit price increase for all AP sold to Thiokol in fiscal 2000 and the
Company has billed and recognized in revenues the effects of the higher AP
unit price for quantities sold to Thiokol prior to receipt of the change
order.
The financial effects of the change order will be concentrated mostly on
the Company's fourth quarter of fiscal 2000. The Company's AP revenues in the
fourth quarter are expected to amount to only 40% to 50% of AP revenues
recognized in the fourth quarter of fiscal 1999. Accordingly, the Company
expects that its operating results will be materially adversely affected in
the fourth quarter of fiscal 2000. However, the change order also allows for
a price adjustment claim which the Company submitted in June 2000. The
resolution of this claim may take several months.
Debt Repurchase. In April and May 2000, the Company repurchased and
retired $14.0 million in principal amount of Notes. The Company incurred an
extraordinary loss of $1.0 million on these repurchases in the third quarter
of fiscal 2000. Since the original issuance of the Notes, the Company has
repurchased and retired approximately $30.8 million in principal amount at a
weighted average cost of approximately 102.7% of par.
Stock Repurchase. In the first nine months of fiscal 2000, the Company
spent approximately $6.7 million on the repurchase of its Common Stock. The
Company may (but is not obligated to) continue to repurchase its Common Stock
but is limited in its ability to use cash to repurchase stock by certain
covenants contained in the Indenture associated with the Notes.
Contingencies. Trace amounts of perchlorate chemicals have been found in
Lake Mead. Clark County, Nevada, where Lake Mead is situated, is the former
location of Kerr-McGee's AP operations, and was the location of the Company's
AP operations until May 1988. The Company is cooperating with State and local
agencies, and with Kerr-McGee and other interested firms, in the investigation
and evaluation of the source or sources of these trace amounts, possible
environmental impacts, and potential remediation methods. Until these
investigations and evaluations have reached definitive conclusions, it will
not be possible for the Company to determine the extent to which, if at all,
the Company may be called upon to contribute to or assist with future
remediation efforts, or the financial impacts, if any, of such cooperation,
contributions or assistance.
Forward Looking Statements
Except for the historical information contained herein, this News Release
may contain Forward Looking Statements that are subject to risks and
uncertainties, including potential declining demand and/or downward pricing
pressures for the Company's products, governmental budget constraints and/or
decreases affecting the U.S. Department of Defense or NASA which would cause a
decrease in demand for AP, technological advances or new competitive products
causing a reduction or elimination of demand for the Company's products,
success or failure of government programs or governmental customers, as well
as other risks detailed from time to time in the Company's SEC reports,
including the most recent Form 10-K and 10-Q Reports. In addition, the
operating results and cash flows for the three-month and nine-month periods
ended June 30, 2000 are not necessarily indicative of the results that will be
achieved in future periods.
American Pacific Corporation is a specialty chemical company that produces
products used primarily in space flight and defense systems, automotive airbag
safety systems and fire extinguishment systems. The Company also designs and
manufactures environmental protection products and is involved in real estate
development.
AMERICAN PACIFIC CORPORATION
Condensed Consolidated Income Statements
For the three months ended For the nine months ended
June 30, June 30,
2000 1999 2000 1999
Sales and Operating
Revenues $17,021,000 $18,659,000 $54,316,000 $54,404,000
Cost of Sales 10,866,000 12,429,000 34,563,000 34,987,000
Gross Profit 6,155,000 6,230,000 19,753,000 19,417,000
Operating Expenses 2,572,000 2,548,000 7,812,000 7,505,000
Operating Income 3,583,000 3,682,000 11,941,000 11,912,000
Net Interest and
Other Expense 756,000 1,326,000 2,864,000 4,191,000
Income Before
Provision for
Income Taxes and
Extraordinary
Loss 2,827,000 2,356,000 9,077,000 7,721,000
Provision for
Income Taxes -- -- -- --
Net Income Before
Extraordinary
Loss 2,827,000 2,356,000 9,077,000 7,721,000
Extraordinary
Loss-Debt
Extinguishments 980,000 174,000 1,594,000 174,000
Net Income $1,847,000 $2,182,000 $7,483,000 $7,547,000
Basic Net Income
(Loss) Per Share:
Income Before
Extraordinary
Loss $.40 $.29 $1.23 $.95
Extraordinary
Loss (.14) (.02) (.22) (.02)
Net Income $.26 $.27 $1.01 $.93
Average Shares
Outstanding 7,080,000 8,134,000 7,399,000 8,156,000
Diluted Net Income
(Loss) Per Share:
Income Before
Extraordinary
Loss $.40 $.28 $1.22 $.93
Extraordinary
Loss (.14) (.02) (.22) (.02)
Net Income $.26 $.26 $1.00 $.91
Diluted Shares 7,090,000 8,272,000 7,469,000 8,269,000
AMERICAN PACIFIC CORPORATION
Condensed Consolidated Balance Sheets
June 30, September 30,
2000 1999
ASSETS
Current Assets:
Cash and Cash Equivalents $21,961,000 $40,434,000
Accounts and Notes Receivable 15,557,000 8,859,000
Related Party Notes Receivable 412,000 447,000
Inventories 11,080,000 9,577,000
Prepaid Expenses and Other Assets 949,000 680,000
Restricted Cash -- 1,195,000
Total Current Assets 49,959,000 61,192,000
Property, Plant and Equipment, Net 16,585,000 17,254,000
Intangible Assets, Net 30,912,000 34,210,000
Real Estate Equity Investments 7,980,000 11,237,000
Development Property 5,456,000 6,440,000
Other Assets, Net 1,474,000 2,549,000
TOTAL ASSETS $112,366,000 $132,882,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued
Liabilities $9,776,000 $6,909,000
Current Portion of Long-Term Debt -- 1,195,000
Total Current Liabilities 9,776,000 8,104,000
Long-Term Debt 44,175,000 67,000,000
Long-Term Payables 1,485,000 2,005,000
TOTAL LIABILITIES 55,436,000 77,109,000
Commitments and Contingencies
Warrants to Purchase Common Stock 3,569,000 3,569,000
Shareholders' Equity:
Common Stock 852,000 847,000
Capital in Excess of Par Value 80,094,000 79,757,000
Accumulated Deficit (15,796,000) (23,279,000)
Treasury Stock (11,722,000) (5,034,000)
Receivable from the Sale of Stock (67,000) (87,000)
Total Shareholders' Equity 53,361,000 52,204,000
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $112,366,000 $132,882,000
AMERICAN PACIFIC CORPORATION
Condensed Consolidated Cash Flow Statements
For the three months ended For the nine months ended
June 30, June 30,
2000 1999 2000 1999
Cash Flows From
Operating
Activities $1,099,000 $6,507,000 $11,726,000 $17,177,000
Cash Flows From
Investing
Activities:
Capital
Expenditures (1,066,000) (413,000) (2,221,000) (2,505,000)
Real Estate
Equity Investment
Capital Activity 563,000 3,189,000 3,257,000 4,569,000
Net Cash Flows
From Investing
Activities (503,000) 2,776,000 1,036,000 2,064,000
Cash Flows From
Financing
Activities:
Debt Related
Payments (14,567,000) (3,053,000) (24,889,000) (3,053,000)
Issuance of
Common Stock -- 27,000 342,000 72,000
Treasury Stock
Acquired -- -- (6,688,000) (725,000)
Net Cash Flows
From Financing
Activities (14,567,000) (3,026,000) (31,235,000) (3,706,000)
Net Change in
Cash and Cash
Equivalents (13,971,000) 6,257,000 (18,473,000) 15,535,000
Cash and Cash
Equivalents,
Beginning of
Period 35,932,000 29,667,000 40,434,000 20,389,000
Cash and Cash
Equivalents,
End of Period $21,961,000 $35,924,000 $21,961,000 $35,924,000
Supplemental
Disclosure of
Cash Flow
Information:
Interest Paid -- -- $3,050,000 $3,238,000 |
