SecProbe.io

Supplements to SEC Response Letter

SUPPLEMENT 1

Item 6. Selected Financial Data

FIVE-YEAR SUMMARY OF SELECTED CONSOLIDATED FINANCIAL DATA FOR THE YEARS ENDED SEPTEMBER 30,

2004 (1)

(in thousands except per share amounts)

STATEMENT OF OPERATIONS DATA:

Sales and operating revenues

$ 59,489

$ 68,866

$ 73,588

$ 63,089

$ 67,369

Cost of sales

40,246

37,349

43,529

38,186

44,279

Gross profit

19,243

31,517

30,059

24,903

23,090

Operating expenses

21,493

14,480

13,776

10,050

10,236

Impairment charge

9,084

Operating (loss) income

(2,250 )

17,037

16,283

14,853

3,770

Interest income

1,102

1,877

1,987

Interest expense

1,696

4,180

4,467

5,568

Other expense (income)

Loss on Debt Extinguishments

1,522

1,594

Income (loss) before cumulative effect

(2,130 )

13,971

12,899

12,263

(1,405 )

Income taxes

(2,502 )

4,611

4,257

4,537

(15,136 )

Cumulative effect

Net (loss) income

(397 )

9,360

8,642

7,726

13,731

Basic net income per share

(0.05 )

1.29

1.21

1.10

1.88

Diluted net income per share

$ (0.05 )

$ 1.27

$ 1.18

$ 1.10

$ 1.86

BALANCE SHEET DATA:

Cash and cash equivalents

$ 23,777

$ 27,140

$ 65,826

$ 51,471

$ 30,128

Inventories and receivables

30,058

22,885

21,156

19,736

20,813

Property, plant and equipment – net

16,573

9,223

7,918

7,503

7,460

Intangible assets – net

13,679

17,579

21,297

25,411

29,805

Deferred income taxes

11,905

10,307

10,128

11,103

15,406

Total assets

100,628

101,685

131,971

123,042

117,590

Working capital

44,691

42,599

81,783

67,426

43,362

Long-term debt

40,600

44,175

44,175

Shareholders’ equity

$ 84,800

$ 84,834

$ 76,241

$ 66,955

$ 59,609

OTHER DATA:

Capital expenditures

$ 1,093

$ 3,119

$ 2,080

$ 1,624

$ 2,458

Depreciation and amortization

$ 5,737

$ 5,794

$ 6,384

$ 6,303

$ 8,931

Dividends per common share

$ 0.42

$ 0.00

$ 0.00

$ 0.00

$ 0.00

Closing stock price

$ 7.47

$ 8.48

$ 8.49

$ 7.10

$ 6.19

(1)

As discussed in Note 1 to our Consolidated Financial Statements, the consolidation of the ES joint venture as of March 31, 2004 significantly changes various line items of our balance sheet, statement of operations and cash flow presentations as compared to financial presentations in earlier reports.

SUPPLEMENT 2

AMERICAN PACIFIC CORPORATION

Condensed Consolidated Statements of Operations

(unaudited)

For the three months ended

For the nine months ended

June 30,

June 30,

Sales and Operating Revenues

$

$ 15,829,000

$

$ 39,410,000

Cost of Sales

10,994,000

26,717,000

Gross Profit

4,835,000

12,693,000

Operating Expenses

5,638,000

15,505,000

Operating Income (Loss)

(803,000 )

(2,812,000 )

Interest Income

262,000

815,000

Interest Expense

265,000

265,000

Other Income (Expense)

—

450,000

Income (Loss) Before Income Taxes and Cumulative Effect

(806,000 )

(2,712,000 )

Income Taxes (Benefit)

(282,000 )

(949,000 )

Cumulative Effect of Accounting Adjustment

—

769,000

Net Income (Loss)

$

$ (524,000 )

$

$ (2,532,000 )

Basic Net Income (Loss) Per Share

$

$ (0.07 )

$

$ (0.35 )

Basic Net Income (Loss) Before Cumulative Effect Per Share

$

$ (0.11 )

$

$ (0.37 )

Average Shares Outstanding

7,292,000

7,278,000

Diluted Net Income (Loss) Per Share

$

$ (0.07 )

$

$ (0.35 )

Diluted Net Income (Loss) Before Cumulative Effect Per Share

$

$ (0.11 )

$

$ (0.37 )

Diluted Shares

7,292,000

7,278,000

See the accompanying Notes to Condensed Consolidated Financial Statements.

SUPPLEMENT 3

AMERICAN PACIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED SEPTEMBER 30, 2004, 2003 AND 2002

SALES AND OPERATING REVENUES

$ 59,489,000

$ 68,866,000

$ 73,588,000

COST OF SALES

40,246,000

37,349,000

43,529,000

GROSS PROFIT

19,243,000

31,517,000

30,059,000

OPERATING EXPENSES

21,493,000

14,480,000

13,776,000

OPERATING (LOSS) INCOME

(2,250,000 )

17,037,000

16,283,000

INTEREST INCOME

1,102,000

912,000

945,000

INTEREST EXPENSE

532,000

1,696,000

4,180,000

OTHER EXPENSE (INCOME)

450,000

760,000

LOSS ON DEBT EXTINGUISHMENTS

1,522,000

149,000

(LOSS) INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT

(2,130,000 )

13,971,000

12,899,000

PROVISION (BENEFIT) FOR INCOME TAXES

(2,502,000 )

4,611,000

4,257,000

INCOME BEFORE CUMULATIVE EFFECT

372,000

9,360,000

8,642,000

CUMULATIVE EFFECT ACCOUNTING ADJUSTMENT

769,000

NET (LOSS) INCOME

$ (397,000 )

$ 9,360,000

$ 8,642,000

BASIC NET (LOSS) INCOME PER SHARE

$ (0.05 )

$ 1.29

$ 1.21

BASIC LOSS (INCOME) BEFORE CUMULATIVE EFFECT

$ 0.05

$ 1.29

$ 1.21

AVERAGE SHARES OUTSTANDING

7,281,000

7,253,000

7,145,000

DILUTED NET (LOSS) INCOME PER SHARE

$ (0.05 )

$ 1.27

$ 1.18

DILUTED (LOSS) INCOME BEFORE CUMULATIVE EFFECT PER SHARE

$ 0.05

$ 1.27

$ 1.18

DILUTED SHARES

7,328,000

7,353,000

7,335,000

See Notes to Consolidated Financial Statements.

SUPPLEMENT 4

AMERICAN PACIFIC CORPORATION AND SUBSIDIARIES

STATEMENTS OF OPERATIONS

For the Quarter ended

For the twelve months ended

December 31, 2003

March 31, 2004

June 30, 2004

September 30, 2004

September 30, 2004

SALES AND OPERATING REVENUES

$ 4,794,000

$ 18,787,000

$ 15,829,000

$ 20,079,000

$ 59,489,000

COST OF SALES

4,324,000

11,398,000

10,994,000

13,530,000

40,246,000

GROSS PROFIT

470,000

7,389,000

4,835,000

6,549,000

19,243,000

OPERATING EXPENSES

3,764,000

6,102,000

5,638,000

5,989,000

21,493,000

OPERATING (LOSS) INCOME

(3,294,000 )

1,287,000

(803,000 )

560,000

(2,250,000 )

INTEREST INCOME

131,000

309,000

262,000

287,000

1,102,000

INTEREST EXPENSE

265,000

267,000

532,000

OTHER EXPENSE (INCOME)

340,000

110,000

450,000

(LOSS) INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT

(3,390,000 )

1,486,000

(806,000 )

580,000

(2,130,000 )

PROVISION (BENEFIT) FOR INCOME TAXES

(1,186,000 )

520,000

(282,000 )

(1,554,000 )

(2,502,000 )

(LOSS) INCOME BEFORE CUMULATIVE EFFECT

(2,204,000 )

966,000

(524,000 )

2,134,000

372,000

CUMULATIVE EFFECT ACCOUNTING ADJUSTMENT

769,000

769,000

NET (LOSS) INCOME

$ (2,204,000 )

$ 197,000

$ (524,000 )

$ 2,134,000

( $397,000 )

BASIC NET (LOSS) INCOME PER SHARE

$ (0.30 )

$ 0.13

$ (0.07 )

$ 0.30

$ 0.05

BASIC LOSS (INCOME) BEFORE CUMULATIVE EFFECT

$ (0.30 )

$ 0.03

$ (0.07 )

$ 0.30

$ (0.05 )

AVERAGE SHARES OUTSTANDING

7,256,000

7,285,000

7,292,000

7,145,000

7,145,000

DILUTED NET (LOSS) INCOME PER SHARE

$ (0.30 )

$ 0.13

$ (0.07 )

$ 0.30

$ 0.05

DILUTED (LOSS) INCOME BEFORE CUMULATIVE EFFECT PER SHARE

$ (0.30 )

$ 0.03

$ (0.07 )

$ 0.30

$ (0.05 )

DILUTED SHARES

7,256,000

7,363,000

7,292,000

7,335,000

7,335,000

SUPPLEMENT 5

ENERGETIC SYSTEMS

For the Six Months

For the Fiscal Year

For the Fiscal Year

Ended March 30,

Ended September 30,

Ended September 30,

Interest Income

$ 402,000

$ 620,000

$ —

Preferred Stock Dividend Received by the Company

$ —

$ —

$ —

SUPPLEMENT 6

TEST IS

MET

50%-or-Less-Owned Persons:

YES

NO

On an individual basis, if (C-1) is greater than (E-1) or (H-1) is greater than (E-1), the test is met, the potentially significant subsidiary is significant, and summarized financial information must be furnished in the footnotes to the consolidated financial statements.

X

On a group basis, if (C-2) is greater than (E-1) or (H-2) is greater than (E-1), the test is met, the group is significant, and summarized financial information must be furnished in the footnotes to the consolidated financial statements.

X

On an individual basis, if C-1 is greater than E-2, the test is met, the potentially significant subsidiary is significant, and separate statements must be filed.

X

Subsidiaries Not Consolidated:

Rule 4.08(g)—Summarized financial information must be furnished in the footnotes to the consolidated financial statements.

X

Rule 3.09(a)—On an individual basis, if C-1 is greater than E-2 or H-1 is greater than E-2, the test is met, the potentially significant subsidiary is significant, and separate statements must be filed.

X

Notes to Test:

1.

After normal intercompany eliminations, but without elimination of investments in and advances to unconsolidated subsidiaries or 50%-or-less persons.

2.

a.

If tested subsidiary (or group) has an equity interest in other unconsolidated subsidiaries (or an equity interest in 50%-or-less-owned persons), do not substitute its proportional share of their assets for investments in and advances to those companies.

b.

Reduce the tested subsidiary’s total assets for any receivables from companies included in the consolidated statements.

c.

Do not eliminate receivables from other unconsolidated and 50%-or-less-owned persons.

Income Test

(1 )

Consolidated income (loss)

From continuing operations (before income taxes,

13,971,000

extraordinary items, and the cumulative effect of an accounting change). This amount includes pretax equity income of unconsolidated subsidiaries and 50%-or-less-owned companies whose operations are continuing.

(I-1)

Enter amount from (T) here

(I-2)

10,114,400

Using the greater of the (I-1) or (I-2), calculate:

2,794,200

1,397,100

20% of (I)-10% (I)

(J-1)

(J-2)

(2 )

Income (loss) of tested subsidiary

NA

Continuing operations of tested subsidiary (before income taxes, extraordinary items, and the cumulative effect of an accounting change).

(K)

Intercompany profits of tested subsidiary, before

NA

income taxes.

(L)

Total, (K) less (L)

(M)

(1,515,000 )

Proportionate share of income, (M) times (D)

(N-1)

(760,000 )

Proportionate share of income for a group of

(760,000 )

unconsolidated subsidiaries calculated based on the parent’s combined ownership of each unconsolidated subsidiary times their respective

income

(N-2)

TEST IS

MET

YES

NO

On an individual basis, if both (N-1) and (J-1) are positive figures and (N-1) is greater than (J-1), the test is met—the subsidiary is significant and separate financial statements are filed.

X

For the group of unconsolidated subsidiaries, if (N-2) and (J-2) are positive figures and (N-2) is greater than (J-2), the group is significant and summarized financial information must be furnished in the footnotes to the consolidated financial statements.

X

(3 )

If either (N) or (J), but not both, are loss figures, the test is made by comparing the potentially significant subsidiary (N-1) with the consolidated figures excluding the income or loss of the potentially significant subsidiary—as follows:

Consolidated income (loss) using the greater of (I-1) or (I-2)

(O)

13,971,000

Add back potentially significant subsidiary’s (or group’s) income (loss) if included in consolidation

(P)

(760,000 )

Consolidated income (loss) exclusive of tested subsidiary (or group) (O) less (P)

(Q)

14,731,000

20% of (Q)

(R)

2,946,200

TEST IS

MET

YES

NO

If (P) is greater than (R) disregard positive or negative—the test is met and the subsidiary (or group) is a significant subsidiary and separate information is required.

X

(4 )

Average Consolidated Income Rule.

Note:

The following rule is not applicable to registrants with a loss for the most current year. It is also not applicable, in any circumstances, to the tested subsidiary.

If income of the registrant and its subsidiaries consolidated for the most recent fiscal year is at least 10 percent lower than average of the income for the last five fiscal years, such average income should be used for computational purposes.

Average consolidated income—from continuing operations (before income taxes, extraordinary items, and the cumulative effect of an accounting change). Loss years should be omitted.

This year

13,971,000

1st preceding year

12,899,000

2nd preceding year

12,263,000

3rd preceding year

Loss

4th preceding year

11,439,000

Total

(S)

50,572,000

Average—(S) divided by 5, even if loss years are excluded from numerator

(T)

10,114,400

SUPPLEMENT 7

ENERGETIC SYSTEMS

For the Six

For the Fiscal Year

For the Fiscal Year

Months Ended March

Ended September 30,

Ended September 30,

31, 2004

Pre-Tax Income

$ (1,345,105 )

$ (1,578,259 )

$ —

Total Preferred Stock Dividend

$ —

$ —

$ —

Portion of Total Preferred Stock Dividend Paid to the Company

$ —

$ —

$ —

SUPPLEMENT 8

Bill and Hold Invoicing ($)

1Q

2Q

3Q

4Q

Full Year

FY 2004

—

13,331,758

5,513,567

12,358,501

31,203,826

FY 2003

10,026,458

15,917,582

10,571,933

11,328,183

47,844,156

SUPPLEMENT 9

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at September 30, 2004 and 2003 are summarized as follows:

Land

$ 310,000

$ 117,000

Buildings,