Segment Information

3 Months Ended

Dec. 31, 2012

Segment Information

7. 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 from continuing operations attributed to customers that exceed ten percent of the total in each of the given periods.

	Three Months Ended
	December 31,
	2012		2011
Fine chemicals cust omer		36%		32%
Specialty chemicals customer		30%		25%

The following provides financial information about our segment operations:

	Three Months Ended
	December 31,
	2012		2011
Revenues:
Fine Chemicals	$	21,347	$	21,475
Specialty Chemicals		14,350		14,220
Other Businesses		621		2,790
Total Revenues	$	36,318	$	38,485
Segment Operating Income (Loss):
Fine Chemicals	$	1,277	$	(1,187)
Specialty Chemicals		7,917		7,644
Other Businesses		(160)		(72)
Total Segment Operating Income (Loss)		9,034		6,385
Corporate Expenses		(4,086)		(3,626)
Operating Income	$	4,948	$	2,759
Depreciation and Amortization:
Fine Chemicals	$	3,015	$	3,040
Specialty Chemicals		207		235
Other Businesses		5		4
Corporate		83		94
Total Depreciation and Amortization	$	3,310	$	3,373