SEGMENT INFORMATION

6 Months Ended

Mar. 31, 2013

SEGMENT INFORMATION

8. 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 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				Six Months Ended
	March 31,				March 31,
	2013		2012		2013		2012
Fine chemicals customer		32%		33%		34%		32%
Fine chemicals customer		15%				11%
Specialty chemicals customer				27%				16%
Specialty chemicals customer				11%		16%		18%

The following provides financial information about our segment operations:

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2013		2012		2013		2012
Revenues:
Fine Chemicals	$	37,267	$	20,594	$	58,614	$	42,069
Specialty Chemicals		11,934		18,961		26,284		33,181
Other Businesses		843		363		1,464		3,153
Total Revenues	$	50,044	$	39,918	$	86,362	$	78,403
Segment Operating Income (Loss):
Fine Chemicals	$	3,750	$	(978)	$	5,027	$	(2,165)
Specialty Chemicals		5,218		9,297		13,135		16,941
Other Businesses		(233)		(357)		(393)		(429)
Total Segment Operating Income (Loss)		8,735		7,962		17,769		14,347
Corporate Expenses		(3,890)		(3,167)		(7,976)		(6,793)
Operating Income	$	4,845	$	4,795	$	9,793	$	7,554
Depreciation and Amortization:
Fine Chemicals	$	2,894	$	2,928	$	5,909	$	5,968
Specialty Chemicals		123		377		330		612
Other Businesses		5		5		10		9
Corporate		82		94		165		188
Total Depreciation and Amortization	$	3,104	$	3,404	$	6,414	$	6,777