SEGMENT INFORMATION

12 Months Ended

Sep. 30, 2012

SEGMENT INFORMATION

10. SEGMENT INFORMATION

We report our continuing operations in three operating segments: Fine Chemicals, Specialty Chemicals, and Other Businesses. These segments are based upon business units that offer distinct products and services, are operationally managed separately and produce products using different production methods. Segment operating income or loss includes all sales and expenses directly associated with each segment. Environmental remediation charges, corporate general and administrative costs, which consist primarily of executive, investor relations, accounting, human resources and information technology expenses, and interest are not allocated to segment operating results.

Fine Chemicals. Our Fine Chemicals segment includes the operating results of our wholly-owned subsidiaries Ampac Fine Chemicals LLC and AMPAC Fine Chemicals Texas, LLC (collectively, “AFC”). AFC is a custom manufacturer of active pharmaceutical ingredients and registered intermediates for commercial customers in the pharmaceutical industry. AFC operates in compliance with the U.S. Food and Drug Administration’s current Good Manufacturing Practices and the requirements of certain other regulatory agencies such as the European Union’s European Medicines Agency and Japan’s Pharmaceuticals and Medical Devices Agency. AFC also complies with Drug Enforcement Administration requirements related to the manufacture and sale of certain controlled substances. AFC has distinctive competencies and specialized engineering capabilities in performing chiral separations, manufacturing chemical compounds that require high containment, performing energetic chemistries at commercial scale, and manufacturing Schedule II controlled substances.

Specialty Chemicals. Our Specialty Chemicals segment manufactures and sells: (i) perchlorate chemicals, principally ammonium perchlorate, which is the predominant oxidizing agent for solid propellant rockets, booster motors and missiles used in space exploration, commercial satellite transportation and national defense programs, (ii) sodium azide, a chemical used in pharmaceutical manufacturing, and (iii) Halotron^®, a series of clean fire extinguishing agents used in fire extinguishing products ranging from portable fire extinguishers to total flooding systems.

Other Businesses. Our Other Businesses segment contains our water treatment equipment division and real estate activities. Our water treatment equipment business markets, designs, and manufactures electrochemical On Site Hypochlorite Generation, or OSHG, systems. These systems are used in the disinfection of drinking water, control of noxious odors, and the treatment of seawater to prevent the growth of marine organisms in cooling systems. We supply our equipment to municipal, industrial and offshore customers. Our real estate activities are not material.

Our revenues are characterized by individually significant orders and relatively few customers. As a result, in any given reporting period, certain customers may account for more than ten percent of our consolidated revenues. The following table provides disclosure of the percentage of our consolidated revenues attributed to customers that exceed ten percent of the total in each of the fiscal years ended September 30:

	2012			2011			2010
Fine chemicals customer		31	%		23	%		23	%
Fine chemicals customer		12	%
Specialty chemicals customer		17	%					17	%
Specialty chemicals customer		12	%		24	%		18	%

The following provides financial information about our segment operations for the fiscal years ended September 30:

	2012			2011			2010
Revenues:
Fine Chemicals	$	111,536		$	89,497		$	69,632
Specialty Chemicals		68,513			66,905			62,611
Other Businesses		5,578			4,312			6,341
Total Revenues	$	185,627		$	160,714		$	138,584
Segment Operating Income (Loss):
Fine Chemicals	$	8,678		$	(6,283	)	$	(7,583	)
Specialty Chemicals		34,919			35,600			30,571
Other Businesses		(473	)		(1,308	)		(206	)
Total Segment Operating Income		43,124			28,009			22,782
Corporate Expenses		(14,326	)		(14,124	)		(15,847	)
Environmental Remediation Charges		(700	)		(6,000	)		-
Operating Income	$	28,098		$	7,885		$	6,935

	2012		2011		2010
Depreciation and Amortization:
Fine Chemicals	$	11,914	$	12,473	$	12,997
Specialty Chemicals		1,401		1,136		1,148
Other Businesses		18		17		16
Corporate		367		432		635
Total	$	13,700	$	14,058	$	14,796
Capital Expenditures:
Fine Chemicals	$	7,383	$	11,153	$	10,614
Specialty Chemicals		1,353		756		1,047
Other Businesses		18		8		12
Corporate		34		14		71
Total	$	8,788	$	11,931	$	11,744
Assets, at year end:
Fine Chemicals	$	143,551	$	144,003	$	137,252
Specialty Chemicals		21,029		19,785		39,411
Other Businesses		7,302		5,064		4,395
Corporate		74,582		60,954		64,786
Total	$	246,464	$	229,806	$	245,844

All of our continuing operations are located in the United States. Export sales consist mostly of fine chemicals and water treatment equipment sales. For the year ended September 30, 2012, sales outside the U.S. represented 36% of consolidated revenues. Of this amount 17% was sold to customers in Ireland and 12% sold to customers in Belgium, with no other individual country representing more than 10%. For the year ended September 30, 2011, sales outside the U.S. represented 25% of consolidated revenues, with no individual country representing more than 10%. For the year ended September 30, 2010, sales outside the U.S. represented 15% of consolidated revenues, with no individual country representing more than 10%.