United States
 Securities and Exchange Commission
   FORM 10-K
  (Mark One)x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934For the Fiscal Year Ended
    September 30, 2010oro

TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from
    to   Commission file number
    001-08137
  AMERICAN PACIFIC
    CORPORATION
 (Exact name of registrant as
    specified in its charter)
  
  Delaware

59-6490478(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)   3883 Howard Hughes Parkway,
    Suite 700
 Las Vegas, Nevada
    89169
 (Address of principal executive
    offices) (Zip Code)
  (702) 735-2200
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to
    Section 12(b) of the Act:
  Title of each class

Name of each exchange on which
    registeredCommon Stock, Par Value $0.10 Per Share

The NASDAQ Stock Market LLC   Securities registered pursuant to
    section 12(g) of the Act:
  None
 (Title of class)
  Indicate by check
    mark if the registrant is a well-known seasoned issuer, as
    defined in Rule 405 of the Securities Act.
    o Yes  x No  Indicate by check
    mark if the registrant is not required to file reports pursuant
    to Section 13 or Section 15(d) of the Act.
    o Yes  x No




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x o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. x
  Rule 12b-2
  Large accelerated
    filer o





Accelerated
    filer oNon-accelerated
    filer   o
    (Do not check if a smaller reporting company)





Smaller reporting company x   Indicate by check
    mark whether the registrant is a shell company (as defined in
    Rule 12b-2
    of the Act).
    o Yes  x No      DOCUMENTS
    INCORPORATED BY REFERENCE




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PART I
  FORWARD LOOKING
    STATEMENTS
  Form 10-K and/or
    Item 1.
    Business
    (Dollars in Thousands)  OUR
    COMPANY
   1




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U.S.-based
    Size (as a %of Fiscal 2010Industry / Market

Products

Business Segments

Revenues)Pharmaceuticals

   Active
    Pharmaceutical Ingredients   Registered
    Intermediates   Sodium
    Azide

   Fine
    Chemicals   Specialty
    Chemicals (Sodium
    Azide)


41
%Aerospace & Defense

   Perchlorates   Satellite
    Thrusters   Propulsion
    Systems   Aerospace
    Valves   Launch
    Vehicle
    Structures

   Specialty
    Chemicals
    (Perchlorates)   Aerospace
    Equipment


53
%Fire Suppression

   Halotron
    I   Halotron
    II

   Specialty
    Chemicals (Halotron)


2
%Water Treatment

   On-site
    Hypochlorite Generation Systems

   Other
    Businesses (PEPCON Systems)


4
%   (702) 735-2200 www.apfc.com
 2




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OUR BUSINESS
    SEGMENTS
    2010

2009

2008Fine Chemicals

40%

48%


61%Specialty Chemicals:Perchlorates

32%

28%


26%Sodium azide

1%

2%


0%*Halotron

2%

2%


2%Total specialty chemicals

35%

32%


28%Aerospace Equipment

21%

17%


8%Other Businesses:Real estate

0%*

0%*


1%Water treatment equipment

4%

3%


2%Total other businesses

4%

3%


3%Total revenues

100%

100%


100%    *
    
    less than 1%    FINE CHEMICALS.
   3




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
    Alternative Supply May Not Be Readily Available. We
    are currently the sole-source supplier on several of our fine
    chemicals products.
    Regulatory Approval. Applications to and approvals
    from the FDA and other regulatory authorities generally require
    the chemical contractor to be named. Switching contractors may
    require additional regulatory approvals and could take as long
    as two years to complete.
    Significant Financial Costs. Switching contractors
    and amending various filings can result in significant costs
    associated with technology transfer, process validation and
    re-filing with the FDA and other regulatory authorities around
    the world.    SPECIALTY CHEMICALS. ®
     4




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AEROSPACE EQUIPMENT.
        OTHER BUSINESSES.
  OUR
    STRENGTHS
  LEADING MARKET POSITIONS WITH SIGNIFICANT BARRIERS TO
    ENTRY.
  Fine Chemicals.
   5




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Specialty Chemicals.
  Aerospace Equipment.
  STRATEGIC CUSTOMER RELATIONSHIPS. and/or and/or
  MANUFACTURING EXCELLENCE.
  Fine Chemicals.
  Specialty Chemicals.
 6




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Aerospace Equipment.
  LONG-TERM CONTRACTS. take-or-pay
  ATTRACTIVE PORTFOLIO OF PRODUCTS.
  OUR
    STRATEGY
  LEVERAGE OUR EXISTING EXPERTISE TO MAINTAIN OUR LEADERSHIP
    POSITIONS.
  Fine Chemicals.
  Specialty Chemicals.
 7




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Aerospace Equipment.
  PRESERVE AND BUILD STRONG CUSTOMER RELATIONSHIPS.
  PURSUE ORGANIC GROWTH OPPORTUNITIES AND SELECTIVE
    ACQUISITIONS.
    OUR FINE
    CHEMICALS SEGMENT
     8




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Energetic and Specialty Processes.
  High Containment.
  22
  Simulated Moving Bed.
      Customers and Markets.
 9




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® ® tm
  Competition.
        Energetic and SpecialtyHigh Containment

Processes

Simulated Moving BedSAFC (1)

Group Novasep SAS

Group Novasep SASHelsinn (2)

OmniChem (3)

SAFC (1)Cambrex Corp.

Orgomol (4)

Diacel Chemical Industries, Ltd.OmniChem (3)    (1)
    
    the fine chemicals division of Sigma-Aldrich Corporation(2)
    
    the chemicals operations division of Helsinn Group(3)
    
    a component of the pharmaceuticals division of Ajinomoto Company(4)
    
    a subsidiary of BASF 10




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OUR SPECIALTY
    CHEMICALS SEGMENT
  PERCHLORATE CHEMICALS.
  Market.
            Customers and Markets.
 11




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Manufacturing Capacity and
    Process.
      Competition.
  SODIUM AZIDE.
  Market. non-U.S. markets.
    Customers.
 12




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Competition.
  HALOTRON. mono-ammonium
    hand-held
    Customers and Market.
      Competition. tm
 13




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tm tm
    OUR AEROSPACE
    EQUIPMENT SEGMENT
  Customers and Market.
  Competition.
  Recent Acquisition.
      OUR OTHER
    BUSINESSES SEGMENT
  WATER TREATMENT EQUIPMENT. on-site tm tm
 14




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REAL ESTATE.
  REGULATORY
    COMPLIANCE
  FEDERAL ACQUISITION REGULATIONS. and/or
  FDA AND SIMILAR REGULATORY AGENCIES.
  ENVIRONMENTAL MATTERS.
 15




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Regulatory Review of Perchlorates.
  Perchlorate Remediation Project in Henderson,
    Nevada.
           16




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Henderson Site Environmental Remediation
    Reserve.
         17




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AFC Environmental Matters.
      OTHER
    MATTERS
  BACKLOG. take-or-pay
  percentage-of-completion
 18




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INTELLECTUAL PROPERTY. ® ® ® ® ® ® ® ®
  RAW MATERIALS AND MANUFACTURING COSTS.
      GOVERNMENT CONTRACTS SUBJECT TO
    TERMINATION.
 19




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INSURANCE.
  EMPLOYEES.
    AVAILABLE INFORMATION. Form 10-K, Form 10-Q, Form 8-K http://www.apfc.com
  Item 1A.
    Risk Factors
    (Dollars in Thousands)    We depend on a limited number of customers for most of our
    sales in our Specialty Chemicals, Aerospace Equipment and Fine
    Chemicals segments and the loss of one or more of these
    customers could have a material adverse effect on our financial
    position, results of operations and cash flows.
     20




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The inherent limitations of our fixed-price or similar
    contracts may impact our profitability.
    The numerous and often complex laws and regulations and
    regulatory oversight to which our operations and properties are
    subject, the cost of compliance, and the effect of any failure
    to comply could reduce our profitability and liquidity.
  and/or
 21




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and/or
     22




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A significant portion of our business depends on contracts
    with the government or its prime contractors or subcontractors
    and these contracts are impacted by governmental priorities and
    are subject to potential fluctuations in funding or early
    termination, including for convenience, any of which could have
    a material adverse effect on our operating results, financial
    condition or cash flows.
  next-generation
  and/or
  We may be subject to potentially material costs and
    liabilities in connection with environmental or health
    matters.
   23




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Review of Perchlorate Toxicity by the
    EPA. and/or
  Perchlorate Remediation Project in Henderson,
    Nevada.
  Henderson Site Environmental Remediation
    Reserve.
 24




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Other Environmental Matters.
  Although we have established an environmental reserve for
    remediation activities in Henderson, Nevada, given the many
    uncertainties involved in assessing environmental liabilities,
    our environmental-related risks may from time to time exceed any
    related reserves.
   25




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For each of our Specialty Chemicals, Fine Chemicals and
    Aerospace Equipment segments, most production is conducted in a
    single facility and any significant disruption or delay at a
    particular facility could have a material adverse effect on our
    business, financial position and results of operations.
  short-term
  The release or explosion of dangerous materials used in
    our business could disrupt our operations and cause us to incur
    additional costs and liabilities.
  three-mile 15-month
  Disruptions in the supply of key raw materials and
    difficulties in the supplier qualification process, as well as
    increases in prices of raw materials, could adversely impact our
    operations.
  and/or
 26




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and/or
      Each of our Specialty Chemicals, Fine Chemicals and
    Aerospace Equipment segments may be unable to comply with
    customer specifications and manufacturing instructions or may
    experience delays or other problems with existing or new
    products, which could result in increased costs, losses of sales
    and potential breach of customer contracts.
     27




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Successful commercialization of pharmaceutical products
    and product line extensions is very difficult and subject to
    many uncertainties. If a customer is not able to successfully
    commercialize its products for which AFC produces compounds or
    if a product is subsequently recalled, then the operating
    results of AFC may be negatively impacted.
  scale-up.
  A strike or other work stoppage, or the inability to renew
    collective bargaining agreements on favorable terms, could have
    a material adverse effect on the cost structure and operational
    capabilities of AFC.
    The pharmaceutical fine chemicals industry is a
    capital-intensive industry and if AFC does not have sufficient
    financial resources to finance the necessary capital
    expenditures, its business and results of operations may be
    harmed.
    We may be subject to potential liability claims for our
    products or services that could affect our earnings and
    financial condition and harm our reputation.
   28




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Technology innovations in the markets that we serve may
    create alternatives to our products and result in reduced
    sales.
  and/or
  We are subject to strong competition in certain industries
    in which we participate and therefore may not be able to compete
    successfully.
   29




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Due to the nature of our business, our sales levels may
    fluctuate causing our quarterly operating results to
    fluctuate.
    The inherent volatility of the chemical industry affects
    our capacity utilization and causes fluctuations in our results
    of operations.
  period-to-period
  A loss of key personnel or highly skilled employees, or
    the inability to attract and retain such personnel, could
    disrupt our operations or impede our growth.
   30




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We may continue to expand our operations through
    acquisitions, but the acquisitions could divert
    managements attention and expose us to unanticipated
    liabilities and costs. We may experience difficulties
    integrating the acquired operations, and we may incur costs
    relating to acquisitions that are never consummated.
      We have a substantial amount of debt, and the cost of
    servicing that debt could adversely affect our ability to take
    actions, our liquidity or our financial condition.
    
    make it more difficult for us to satisfy any other outstanding
    debt obligations;
    require us to dedicate a substantial portion of our cash flow
    from operations to payments on our debt, reducing the amount of
    our cash flow available for working capital, capital
    expenditures, acquisitions, developing our real estate assets
    and other general corporate purposes; 31




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
    limit our flexibility in planning for, or reacting to, changes
    in the industries in which we compete;
    place us at a competitive disadvantage compared to our
    competitors, some of which have lower debt service obligations
    and greater financial resources than we do;
    limit our ability to borrow additional funds; or
    increase our vulnerability to general adverse economic and
    industry conditions.  We are obligated to comply with various ongoing covenants
    in our debt, which could restrict our operations, and if we
    should fail to satisfy any of these covenants, the payment under
    our debt could be accelerated, which would negatively impact our
    liquidity.
    
    incur additional debt;
    pay dividends or make other restricted payments;
    create liens on assets to secure debt;
    incur dividend or other payment restrictions with regard to
    restricted subsidiaries;
    transfer or sell assets;
    enter into transactions with affiliates;
    enter into sale and leaseback transactions;
    create an unrestricted subsidiary;
    enter into certain business activities; or
    effect a consolidation, merger or sale of all or substantially
    all of our assets.    Significant changes in discount rates, rates of return on
    pension assets, mortality tables and other factors could affect
    our estimates of pension obligations, which in turn could affect
    future funding requirements and related costs and impact our
    future earnings.
   32




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Our suspended shareholder rights plan, Restated
    Certificate of Incorporation, as amended, and Amended and
    Restated By-laws discourage unsolicited takeover proposals and
    could prevent stockholders from realizing a premium on their
    common stock.
    
    a classified board of directors;
    the ability of our board of directors to designate the terms of
    and issue new series of preferred stock;
    advance notice requirements for nominations for election to our
    board of directors; and
    special voting requirements for the amendment, in certain cases,
    of our Restated Certificate of Incorporation, as amended, and
    our Amended and Restated By-laws.    Our proprietary and intellectual property rights may be
    violated, compromised, circumvented or invalidated, which could
    damage our operations.
    Our common stock price may fluctuate substantially, and a
    stockholders investment could decline in value.
    
    actual or anticipated fluctuations in our results of operations;
    events or concerns related to our products or operations or
    those of our competitors, including public health, environmental
    and safety concerns related to products and operations;
    material public announcements by us or our competitors;
    changes in government regulations or policies, such as new
    legislation, laws or regulatory decisions that are adverse to us
    and/or our
    products;
    changes in key members of management;
    developments in our industries;
    changes in investors acceptable levels of risk;
    trading volume of our common stock; and
    general economic conditions. 33




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and/or
  Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Approximate Area



ApproximateLocation

Principal Use

or Floor Space

Status

Annual Rent(a)

Iron County, UT

Specialty Chemicals and Water Treatment Equipment Manufacturing
    Facilities

258 Acres

Owned

N/A(b)

Rancho Cordova, CA

Fine Chemicals Manufacturing Facility

241 Acres

Owned/Leased

$1(c)

Niagara Falls, NY

Aerospace Equipment Manufacturing

81,425 sq. ft.

Leased

$147(d)

Chatsworth, CA

Aerospace Equipment Offices

3,495 sq. ft.

Leased

$107(e)

Dublin, Ireland

Aerospace Equipment Manufacturing

13,600 sq. ft.

Leased

$163(e)

Westcott, Buckinghamshire, UK

Aerospace Equipment Manufacturing

40 Acres

Leased

$218(e)

Cheltenham, Gloucestershire, UK

Aerospace Equipment Manufacturing

4,112 sq. ft.

Leased

$52(f)

Las Vegas, NV

Executive Offices

22,531 sq.ft.

Leased

$972(g)

Henderson, NV

Groundwater Remediation Site

1.75 Acres

Owned

N/A   (a)
    
    This facility is shared by the Specialty Chemicals segment and
    our Other Businesses segment for the production of perchlorate,
    sodium azide and Halotron products and water treatment
    equipment. Presently, this facility has significant remaining
    capacity. We own approximately 5000 acres of land that is
    utilized and adjacent to our Utah facilities. The acreage
    indicated in the chart represents land currently utilized by our
    manufacturing facilities.(b)
    
    This facility is used by the Fine Chemicals segment for the
    production of active pharmaceutical ingredients and registered
    intermediates. All buildings and improvements are owned. The
    land is leased under a capital lease arrangement with a bargain
    purchase option. Presently, this facility has adequate remaining
    capacity.(c)
    
    This facility is used for the design, manufacture and test of
    our Aerospace Equipment segment products. Presently, this
    facility has adequate capacity available to support its
    operations and expand, as may be required, through the addition
    of multiple labor shifts. 34




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(d)
    
    These offices are used for certain Aerospace Equipment segment
    business development and engineering personnel.(e)
    
    These facilities are used for the design, manufacture and test
    of our Aerospace Equipment segment products. Presently, these
    facilities have adequate remaining capacity.(f)
    
    These offices are used for our corporate office functions.(g)
    
    This facility is used for the groundwater remediation activities
    of the Company.    Item 3.
    Legal
    Proceedings    Item 4.
    (Removed and
    Reserved)    PART II
  Item 5.  Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities
  STOCK LISTING.
  2010


2009High


Low


High


LowFirst Quarter

$
9.15


$
6.32


$
13.58


$
7.58Second Quarter


8.17



5.70



8.64



3.90Third Quarter


7.38



5.02



7.44



4.55Fourth Quarter


5.66



3.84



8.81



6.44     DIVIDENDS, UNREGISTERED SALES OF STOCK AND STOCK
    REPURCHASES.
  TRANSFER AGENT. (800) 937-5449.
  SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
    PLANS. Form 10-K
 35




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Item 6.
    Selected
    Financial Data    Item 7. Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations (Dollars in Thousands)
  Form 10-K. and/or Form 10-K Form 10-K.
    OUR
    COMPANY
   36




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long-term
  U.S.-based
  OUR BUSINESS
    SEGMENTS
    2010


2009


2008Fine Chemicals


40%



48%



61%Specialty Chemicals:Perchlorates


32%



28%



26%Sodium azide


1%



2%



0%*Halotron


2%



2%



2%Total specialty chemicals


35%



32%



28%Aerospace Equipment


21%



17%



8%Other Businesses:Real estate


0%*



0%*



1%Water treatment equipment


4%



3%



2%Total other businesses


4%



3%



3%Total revenues


100%



100%



100%   *
    
    less than 1%  FINE CHEMICALS.
 37




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
    Alternative Supply May Not Be Readily
    Available. We are currently the sole-source
    supplier on several of our fine chemicals products.
    Regulatory Approval. Applications to and
    approvals from the FDA and other regulatory authorities
    generally require the chemical contractor to be named. Switching
    contractors may require additional regulatory approvals and
    could take as long as two years to complete.
    Significant Financial Costs. Switching
    contractors and amending various filings can result in
    significant costs associated with technology transfer, process
    validation and re-filing with the FDA and other regulatory
    authorities.  SPECIALTY CHEMICALS. ®
     38




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AEROSPACE EQUIPMENT.
  U.S.-based
    OTHER BUSINESSES.
  RESULTS OF
    OPERATIONS
  REVENUES
  Year Ended September 30,


Percentage Change2010


2009


2008


10 vs. 09

09 vs. 08Fine Chemicals

$
69,632


$
95,484


$
124,187



(27%)


(23%)Specialty Chemicals


62,611



62,210



57,097



1%


9%Aerospace Equipment


37,608



33,488



16,435



12%


104%Other Businesses


6,341



5,966



5,410



6%


10%Total Revenues

$
176,192


$
197,148


$
203,129



(11%)


(3%)   Fine Chemicals.
 39




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Specialty Chemicals.
  
    A 17% decrease in perchlorate volume offset by a 24% increase in
    the related average price per pound for Fiscal 2010.
    A 17% decrease in perchlorate volume and a 27% increase in the
    related average price per pound for Fiscal 2009.
    Sodium azide revenues decreased 24% in Fiscal 2010 and increased
    398% in Fiscal 2009, each compared to the prior fiscal year.
    Halotron revenues decreased 1% in Fiscal 2010 and decreased 14%
    in Fiscal 2009, each compared to the prior fiscal year. 40




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
    The average price per pound of Grade I AP increased
    approximately proportionate and inverse to the decrease in Grade
    I AP volume consistent with the contractual Grade I AP
    price-volume matrix and comparable catalog pricing.
    This was offset, in part, by our other lower-priced perchlorate
    products, such as sodium perchlorate and potassium perchlorate,
    which accounted for a greater percentage of all perchlorate
    product volume in the Fiscal 2010 periods. This change in the
    mix of perchlorate product sales had a reducing effect on the
    overall average price per pound of all perchlorate products.              Aerospace Equipment.
 41




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Other Businesses.
  COST OF REVENUES
    AND GROSS MARGIN
  Year Ended September 30,


Percentage Change2010


2009


2008


10 vs. 09

09 vs. 08Revenues

$
176,192


$
197,148


$
203,129



(11%)


(3%)Cost of Revenues


121,477



136,295



135,388



(11%)


1%Gross Margin

$
54,715


$
60,853


$
67,741



(10%)


(10%)Gross Margin Percentage


31%



31%



33%       
    The Fine Chemicals segment gross margin percentage declined six
    points compared to the prior fiscal year. Reduced volume was the
    primary contributor to the reduction. In addition, the segment
    experienced several manufacturing inefficiencies including
    increases in cycle times for certain core products, higher than
    anticipated costs associated with validating a process change
    for a core product, and higher than anticipated efforts
    associated with certain development products. 42




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
    The Specialty Chemicals segment gross margin percentage improved
    six points because Fiscal 2010 included a greater percentage of
    non-Grade I AP volume and Fiscal 2010 benefited from unique cost
    items such as lower utilities and production variances which are
    not expected to recur.
    The Aerospace Equipment segment gross margin percentage declined
    seven points primarily due to increases in estimated costs to
    complete certain systems contracts. These cost increases
    occurred primarily because engineering and design work required
    more efforts than anticipated, as well as because there were
    certain quality issues with supplier product.      
    Fine Chemicals segment gross margin percentage for Fiscal 2009
    declined by approximately eight points, reflecting the following: ¡
    A decrease in the gross margin percentage due to lower
    production volume and the related impact on gross margin due to
    less absorption of fixed manufacturing costs.¡
    During the fourth quarter of Fiscal 2008, the implementation of
    a new process for a large-volume core anti-viral product which
    experienced
    start-up
    difficulties that negatively impacted margins for this product
    for the first half of Fiscal 2009.¡
    A decrease in revenues for central nervous system products,
    including a price reduction for a large-volume core product. 
    Specialty Chemicals segment gross margin percentage improved two
    points for Fiscal 2009 compared to the prior fiscal year
    primarily due to a reduction in amortization expense from $1,517
    for Fiscal 2008 to zero for Fiscal 2009. In mid-Fiscal 2008
    second quarter, the Specialty Chemicals segment completed the
    amortization of the value assigned to the perchlorate customer
    list acquired in the fiscal year ended September 30, 1998.
    Aerospace Equipment segment gross margin percentage improved two
    points for Fiscal 2009 compared to the prior fiscal year. The
    improvement was primarily driven by the AMPAC ISP Europe
    operations which experienced gross margin increases due to
    greater volumes. This improvement was offset somewhat by lower
    aggregate margins due to a change in product mix to a greater
    portion of propulsion systems in Fiscal 2009 as compared to
    engines in Fiscal 2008.  OPERATING
    EXPENSES
  Year Ended September 30,

Percentage Change2010

2009

2008

10 vs. 09

09 vs. 08Operating Expenses

$
48,045


$
45,325


$
42,865



6%


6%Percentage of Revenues


27%



23%



21%  43




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
    A $1,299 increase in Fine Chemicals segment operating expenses
    that is largely attributed to enhanced business development
    activities, as well as $425 in additional costs associated with
    our recently acquired facility in Texas.
    An increase in Aerospace Equipment segment operating expenses of
    $1,708 that includes additional research and development
    expenses and additional management and organizational structure
    required to support the business growth. Research and
    development activities, which amounted to approximately $1,000,
    are focused in the area of product development, including
    aerospace valves and enhancements to our thruster engines.
    A decrease in corporate operating expenses of $320. The most
    significant components of this decrease include a reduction in
    corporate development expenses of $542, an increase in costs
    associated with our board of directors of $406, and other
    individually insignificant increases and decreases which
    aggregate to a decrease of $184.    
    A $914 decrease in Fine Chemicals segment incentive
    compensation, as a result of recording no incentive compensation
    in Fiscal 2009.
    An increase in Specialty Chemicals segment operating expenses
    primarily due to an increase of $329 in employee benefit costs
    and an increase of $305 in lab and research and development
    costs.
    An increase in Aerospace Equipment segment operating expenses
    primarily due to additional operating expenses in the amount of
    $2,496 resulting from the acquisition of AMPAC ISP Holdings.
    A decrease in corporate expenses, primarily including a decrease
    in incentive compensation of $1,382 as a result of recording no
    incentive compensation in Fiscal 2009, offset partially by
    increases in payroll and related costs of $718, rent of $593 and
    stock-based compensation of $639.
    Other decreases of $324.  ENVIRONMENTAL REMEDIATION CHARGES.
  SEGMENT OPERATING
    PROFIT (LOSS) AND OPERATING INCOME
  Year Ended September 30,


Percentage Change2010


2009


2008


10 vs. 09

09 vs. 08Fine Chemicals

$
(7,583)


$
2,299


$
16,246



(430%)


(86%)Specialty Chemicals


30,571



26,189



23,128



17%


13%Aerospace Equipment


(265)



3,012



736



(109%)


309%Other Businesses


(206)



195



1,022



(206%)


(81%)Total Segment Operating Profit


22,517



31,695



41,132



(29%)


(23%)Corporate Expenses


(15,847)



(16,167)



(16,256)



(2%)


(1%)Environmental Remediation Charges


-



(13,700)



-



(100%)


-Operating Income

$
6,670


$
1,828


$
24,876



265%


(93%)    44




---



##### 



BACKLOG
  take-or-pay
  percentage-of-completion
    INTEREST AND
    OTHER INCOME (EXPENSE)
  Year Ended September 30,


Percentage Change2010


2009


2008


10 vs. 09


09 vs. 08Interest and Other Income (Expense), Net:Interest Income

$
58


$
150


$
937



(61%)



(84%)Gain on Sale of Assets


-



-



429



-



(100%)Other


(13)



(4)



-



225%



-Total

$
45


$
146


$
1,366



(69%)



(89%)Interest Expense

$
10,656


$
10,735


$
10,803



(1%)



(1%)         INCOME TAXES.
 45




---



##### 



2010


2009


2008Federal income tax at the statutory rate


(35.0%)



(35.0%)



35.0%State income tax, net of federal benefit


(5.4%)



(5.0%)



5.2%Nondeductible expenses


8.5%



3.9%



1.5%Valuation allowance


1.4%



0.0%



1.0%Change in effective state income tax rate


0.0%



0.0%



(2.3%)Interest and penalties


9.4%



0.6%



1.4%Foreign tax rate differential


5.5%



2.4%



0.0%Other


(1.2%)



1.1%



0.2%Effective tax rate


(16.8%)



(32.0%)



42.0%     2010


2009Deferred tax assets:Environmental remediation reserves

$
11,058


$
11,955Pension obligations


15,005



10,400Tax credits and carryforwards


3,137



3,589Intangible assets


2,349



2,899Inventory


8,678



4,660Accrued expenses


2,214



1,997Other


917



590Subtotal


43,358



36,090Valuation allowance


(1,186)



(1,157)Deferred tax assets


42,172



34,933Deferred tax liabilities:Property, plant and equipment


(10,671)



(6,698)Prepaid expenses


(461)



(623)Other


(114)



(302)Deferred tax liabilities


(11,246)



(7,623)Net deferred tax assets

$
30,926


$
27,310     2010


2009Federal operating losses

$
1,251


$
1,382Federal R&D credits


160



160Federal AMT credits


1,412



1,684State operating losses


1,205



1,205U.K. operating losses


2,753



2,514Ireland operating losses


3,989



3,548    46




---



##### 



LIQUIDITY AND
    CAPITAL RESOURCES
  CASH
    FLOWS
  Year Ended September 30,


Percentage Change2010


2009


2008


10 vs. 09


09 vs. 08Cash Provided (Used) By:Operating activities

$
20,775


$
11,142


$
20,333



86%



(45%)Investing activities


(13,352)



(16,183)



(15,284)



(17%)



6%Financing activities


(5,053)



(316)



418



1,499%



(176%)Effect of changes in exchange rates on cash


(66)



145



-



(146%)



-Net change in cash for period

$
2,304


$
(5,212)


$
5,467



(144%)



(195%)   Operating
    Activities
  Fiscal 2010
    compared to Fiscal 2009
      
    A decrease in cash due to a decline in cash profits generated by
    our operations.
    An increase in cash provided by working capital accounts of
    $20,310, excluding the effects of interest and income taxes.
    An increase in cash taxes refunded of $98.
    An increase in cash paid for interest of $70.
    An increase in cash used for environmental remediation of $1,532.
    Other decreases in cash provided by operating activities of $506.    percentage-of-completion work-in-progress
   47




---



##### 



Fiscal 2009
    compared to Fiscal 2008
      
    A decrease in cash due to a decline in cash profits generated by
    our operations.
    An increase in cash used for working capital accounts of $7,572,
    excluding the effects of interest and income taxes.
    A decrease in cash taxes paid of $5,743.
    A decrease in cash interest of $113.
    An increase in cash used for environmental remediation of $143.
    Other increases in cash provided by operating activities of
    $2,884.        Investing Activities
  Fiscal 2010
    compared to Fiscal 2009
      Fiscal 2009
    compared to Fiscal 2008
    o
  Financing Activities
   48




---



##### 



LIQUIDITY AND CAPITAL RESOURCES.
        
    current results of operations, cash flows and backlog;
    anticipated changes in operating trends, including anticipated
    changes in revenues and margins;
    cash requirements related to our debt agreements and pension
    plans; and
    cash requirements related to our remediation activities,
    including amounts that we expect to spend through fall 2011 for
    the engineering, design, installation and cost of additional
    remediation equipment (Remediation Capital). See
    further discussion under the heading Environmental
    Remediation  AMPAC Henderson Site below.    LONG TERM DEBT
    AND REVOLVING CREDIT FACILITIES
  Senior Notes.
  
    ranked equally in right of payment with all of our existing and
    future senior indebtedness;
    ranked senior in right of payment to all of our existing and
    future senior subordinated and subordinated indebtedness; 49




---



##### 




    effectively junior to our existing and future secured debt to
    the extent of the value of the assets securing such
    debt; and
    structurally subordinated to all of the existing and future
    liabilities (including trade payables) of each of our
    subsidiaries that do not guarantee the Senior Notes.    
    at any time prior to February 1, 2011 at a price equal to
    100% of the purchase amount of the Senior Notes plus an
    applicable premium as defined in the related indenture;
    at any time on or after February 1, 2011 at redemption
    prices beginning at 104.5% of the principal amount to be
    redeemed and reducing to 100% by February 1, 2013; and
    under certain changes of control, we must offer to purchase the
    Senior Notes at 101% of their aggregate principal amount, plus
    accrued interest.    
    incur additional debt;
    pay dividends or make other restricted payments;
    create liens on assets to secure debt;
    incur dividend or other payment restrictions with regard to
    restricted subsidiaries;
    transfer or sell assets;
    enter into transactions with affiliates;
    enter into sale and leaseback transactions;
    create an unrestricted subsidiary;
    enter into certain business activities; or
    effect a consolidation, merger or sale of all or substantially
    all of our assets.    Revolving Credit Facility.
    
    incur debt, incur contingent obligations and issue certain types
    of preferred stock;
    create liens; 50




---



##### 




    pay dividends, distributions or make other specified restricted
    payments;
    make certain investments and acquisitions;
    enter into certain transactions with affiliates;
    enter into sale and leaseback transactions; and
    merge or consolidate with any other entity or sell, assign,
    transfer, lease, convey or otherwise dispose of assets.        PENSION BENEFITS.
   51




---



##### 



ENVIRONMENTAL REMEDIATION  AMPAC HENDERSON
    SITE.
     52




---



##### 



OTHER
    ARRANGEMENTS
  Operating Leases.
    Years ending September 30:2011

$
1,8142012


1,7222013


1,5772014


1,5662015


1,466Thereafter


4,933Total

$
13,078   Letters of Credit.
  Employee Agreements.
 53




---



##### 



INFLATION.
  CRITICAL
    ACCOUNTING POLICIES
      SALES AND REVENUE RECOGNITION.
    percentage-of-completion cost-to-cost percentage-of-completion
 54




---



##### 



DEPRECIABLE OR AMORTIZABLE LIVES OF LONG-LIVED
    ASSETS.
    IMPAIRMENT OF LONG-LIVED ASSETS.
      GOODWILL.
 55




---



##### 



ENVIRONMENTAL COSTS.
    INCOME TAXES.
         56




---



##### 



PENSION BENEFITS.
      RECENTLY ISSUED OR ADOPTED ACCOUNTING
    STANDARDS.
   57




---



##### 



No. 2010-17,
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk   58




---



##### 



Item 8. Financial
    Statements and Supplementary Data
    PageReports of Independent Registered Public
    Accounting Firms

F-1Consolidated Balance Sheets

F-3Consolidated Statements of Operations

F-4Consolidated Statements of Changes in
    Stockholders Equity

F-5Consolidated Statements of Cash Flows

F-6Notes to Consolidated Financial Statements

F-8   Item 9. Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure
    Item 9A. Controls
    and Procedures
  DISCLOSURE CONTROLS AND PROCEDURES. Rules 13a-15(e) 15d-15(e)
  CHANGES IN OUR INTERNAL CONTROL OVER FINANCIAL
    REPORTING.
  MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL
    REPORTING.
 59




---



##### 



Internal ControlIntegrated
    Framework
  Item 9B. Other
    Information
    PART III
  Item 10. Directors,
    Executive Officers and Corporate Governance
    Code of Ethics. and/or and/or
  Item 11. Executive
    Compensation
  Change-of-Control
  Item 12. Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters
   60




---



##### 



Item 13. Certain
    Relationships and Related Transactions, and Director
    Independence
    Item 14. Principal
    Accounting Fees and Services
    PART IV
  Item 15. Exhibits
    and Financial Statement Schedules
  Financial Statements
      Financial Statement Schedules
      Exhibits
  Regulation S-K):
  ExhibitNumber

Description3.1

Restated Certificate of Incorporation, as amended, of American
    Pacific Corporation (incorporated by reference to
    Exhibit 4.(a) to the registrants Registration
    Statement on
    Form S-3
    (File
    No. 33-15674)).3.2

Articles of Amendment to the Restated Certificate of
    Incorporation of American Pacific Corporation, as filed with the
    Secretary of State, State of Delaware, on October 7, 1991
    (incorporated by reference to Exhibit 4.3 to the
    registrants Registration Statement on
    Form S-3
    (File
    No. 33-52196)).3.3

Articles of Amendment to the Restated Certificate of
    Incorporation of American Pacific Corporation, as filed with the
    Secretary of State, State of Delaware, on April 21, 1992
    (incorporated by reference to Exhibit 4.4 to the
    registrants Registration Statement on
    Form S-3
    (File
    No. 33-52196)).3.4

American Pacific Corporation Amended and Restated By-laws
    (incorporated by reference to Exhibit 3.1 to the
    registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on September 20, 2010). 61




---



##### 



3.5

Rights Agreement, dated as of August 3, 1999, between
    American Pacific Corporation and American Stock
    Transfer & Trust Company (incorporated by
    reference to Exhibit 1 to the registrants
    Registration Statement on
    Form 8-A
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on August 6, 1999).3.6

Form of Letter to Stockholders that accompanied copies of the
    Summary of Rights to Purchase Preferred Shares (incorporated by
    reference to Exhibit 2 to the registrants
    Registration Statement on
    Form 8-A
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on August 6, 1999).3.7

Amendment, dated as of July 11, 2008, between American
    Pacific Corporation and American Stock Transfer &
    Trust Company (incorporated by reference to
    Exhibit 4.1 to the registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on July 11, 2008).3.8

Amendment No. 2 to Rights Agreement, dated as of
    September 14, 2010, between American Pacific Corporation
    and American Stock Transfer & Trust Company
    (incorporated by reference to Exhibit 4.1 to the
    registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on September 20, 2010).4.1

Form of 9% Senior Note due 2015 (incorporated by reference
    to Exhibit A of Exhibit 4.2 to the registrants
    Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on February 6, 2007).4.2

Indenture, dated as of February 6, 2007, by and among
    American Pacific Corporation, certain subsidiaries thereof and
    Wells Fargo Bank, National Association (incorporated by
    reference to Exhibit 4.2 to the registrants Current
    Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on February 6, 2007).10.1+

Employment Agreement, effective October 15, 2006, between
    American Pacific Corporation and Joseph Carleone, as amended and
    restated on November 14, 2008 (incorporated by reference to
    Exhibit 10.1 to the registrants Annual Report on
    Form 10-K
    (File
    No. 001-08137)
    for the fiscal year ended September 30, 2008).10.2+

Notice of Eligibility for Dr. Aslam Malik under Ampac Fine
    Chemicals LLC Severance Pay Plan, dated January 24, 2007
    (incorporated by reference to Exhibit 10.2 to the
    registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended March 31, 2007).10.3+

Ampac Fine Chemicals LLC Severance Pay Plan (incorporated by
    reference to Exhibit 10.1 to the registrants
    Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended March 31, 2007).10.4+

Form of Indemnification Agreement between American Pacific
    Corporation and each Director of American Pacific Corporation
    (incorporated by reference to Exhibit 3.6 to the
    registrants Annual Report on
    Form 10-K
    (File
    No. 001-08137)
    for the fiscal year ended September 30, 2000).10.5+

Amended and Restated American Pacific Corporation Defined
    Benefit Pension Plan, as Amended and Restated Effective
    October 1, 2008, executed by American Pacific Corporation
    on June 12, 2009 (incorporated by reference to
    Exhibit 10.1 to the registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2009). 62




---



##### 



10.6+

American Pacific Corporation Supplemental Executive Retirement
    Plan, amended and restated and effective on and after
    October 1, 2007 (incorporated by reference to
    Exhibit 10.1 to the registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on November 15, 2007).10.7+

Trust Agreement for American Pacific Corporation
    Supplemental Executive Retirement Plan (incorporated by
    reference to Exhibit 10.6 to the registrants Annual
    Report on
    Form 10-K
    (File No. 001-08137)
    for the fiscal year ended September 30, 1999).10.8++

Long-Term Pricing Agreement, dated as of December 12, 1997,
    between Thiokol Corporation-Propulsion Group and American
    Pacific Corporation (incorporated by reference to
    Exhibit 10.1 to the registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended March 31, 1998).10.9++

Modification No. 1 to Long Term Pricing Agreement, dated
    September 13, 2000, between Thiokol Propulsion and American
    Pacific Corporation (incorporated by reference to
    Exhibit 10.14 to the registrants Annual Report on
    Form 10-K
    (File
    No. 001-08137)
    for the fiscal year ended September 30, 2000).10.10

Ground Lease, dated as of November 30, 2005, by and between
    Aerojet-General Corporation and Ampac Fine Chemicals LLC
    (incorporated by reference to Exhibit 10.5 to the
    registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on December 1, 2005).10.11++

Modification #3 to the Thiokol Long Term Pricing Agreement,
    dated April 5, 2006 (incorporated by reference to
    Exhibit 10.1 to the registrants Quarterly Report on
    Form 10-Q
    (File No. 001-08137)
    for the fiscal quarter ended March 31, 2006).10.12+

Ampac Fine Chemicals LLC Pension Plan for Bargaining Unit
    Employees, as Amended and Restated Effective October 1,
    2007, executed by American Pacific Corporation on June 12,
    2009 (incorporated by reference to Exhibit 10.2 to the
    registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2009).10.13+

Ampac Fine Chemicals LLC Pension Plan for Salaried Employees, as
    Amended and Restated Effective October 1, 2007, executed by
    American Pacific Corporation on June 12, 2009 (incorporated
    by reference to Exhibit 10.3 to the registrants
    Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2009).10.14

Amended and Restated Credit Agreement, dated as of
    February 6, 2007, among American Pacific Corporation,
    certain subsidiaries thereof, the lenders party thereto,
    Wachovia Bank, National Association and Bank of America, N.A.
    (incorporated by reference to Exhibit 10.3 to the
    registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on February 6, 2007).10.15

First Amendment to Credit Agreement, dated as of July 7,
    2009, by and among American Pacific Corporation, certain
    subsidiaries thereof, the lenders party thereto, and Wachovia
    Bank, National Association and Bank of America, N.A.
    (incorporated by reference to Exhibit 10.4 to the
    registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2009).10.16

Second Amendment to Credit Agreement, dated as of
    September 17, 2010, by and among American Pacific
    Corporation, certain subsidiaries thereof, Wells Fargo Bank,
    National Association as Administrative Agent, and the lenders
    party thereto (incorporated by reference to Exhibit 10.1 to
    the registrants Current Report on
    Form 8-K
    (File No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on September 27, 2010). 63




---



##### 



10.17+

American Pacific Corporation Amended and Restated 2001 Stock
    Option Plan (incorporated by reference to Exhibit 4.1 to
    the registrants Registration Statement on
    Form S-8
    (File No. 333-104732)
    filed by the registrant with the Securities and Exchange
    Commission on April 24, 2003).10.18+

Form of Option Agreement under the American Pacific Corporation
    Amended and Restated 2001 Stock Option Plan (incorporated by
    reference to Exhibit 4.3 to the registrants
    Registration Statement on
    Form S-8
    (File
    No. 333-104732)
    filed by the registrant with the Securities and Exchange
    Commission on April 24, 2003).10.19+

American Pacific Corporation 2002 Directors Stock Option
    Plan, as amended and restated (incorporated by reference to
    Exhibit 99.1 to the registrants Current Report on
    Form 8-K
    (File No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on October 25, 2005).10.20+

Form of Option Agreement under the American Pacific Corporation
    2002 Directors Stock Option Plan (incorporated by reference
    to Exhibit 4.4 to the registrants Registration
    Statement on
    Form S-8
    (File
    No. 333-104732)
    filed by the registrant with the Securities and Exchange
    Commission on April 24, 2003).10.21+

American Pacific Corporation 2008 Stock Incentive Plan
    (incorporated by reference to Exhibit 10.1 to the
    registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on March 17, 2008).10.22+

Form of Notice of Stock Option Award and Stock Option Award
    Agreement under the American Pacific Corporation 2008 Stock
    Incentive Plan (incorporated by reference to Exhibit 10.2
    to the registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on March 17, 2008).10.23+

Form of Notice of Restricted Stock Bonus Award and Restricted
    Stock Bonus Award Agreement under the American Pacific
    Corporation 2008 Stock Incentive Plan (incorporated by reference
    to Exhibit 10.3 to the registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on March 17, 2008).10.24+

American Pacific Corporation Incentive Compensation Plan
    (incorporated by reference to Exhibit 10.4 to the
    registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on March 17, 2008).10.25+

Severance Agreement, dated as of July 8, 2008, between
    American Pacific Corporation and Linda G. Ferguson (incorporated
    by reference to Exhibit 10.1 to the registrants
    Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on July 11, 2008).10.26+

Severance Agreement, dated as of July 8, 2008, between
    American Pacific Corporation and Dana M. Kelley (incorporated by
    reference to Exhibit 10.2 to the registrants Current
    Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on July 11, 2008).10.27+

First Amendment to American Pacific Corporation Defined Benefit
    Pension Plan, executed by American Pacific Corporation on
    June 28, 2010 (incorporated by reference to
    Exhibit 10.1 to the registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2010). 64




---



##### 



10.28+

First Amendment to Ampac Fine Chemicals LLC Pension Plan for
    Salaried Employees, executed by American Pacific Corporation on
    June 28, 2010 (incorporated by reference to
    Exhibit 10.2 to the registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2010).10.29+

First Amendment to Ampac Fine Chemicals LLC Pension Plan for
    Bargaining Unit Employees, executed by American Pacific
    Corporation on June 28, 2010 (incorporated by reference to
    Exhibit 10.3 to the registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2010).10.30+

Second Amendment to Ampac Fine Chemicals LLC Pension Plan for
    Bargaining Unit Employees, executed by American Pacific
    Corporation on July 15, 2010 (incorporated by reference to
    Exhibit 10.4 to the registrants Quarterly Report on
    Form 10-Q
    (File No. 001-08137)
    for the fiscal quarter ended June 30, 2010).*10.31+

Consulting Agreement, dated November 14, 2009, by and
    between American Pacific Corporation and Discovery Partners
    International LLC.10.32

Settlement Agreement, dated as of December 14, 2010, by and
    among American Pacific Corporation, Golconda Capital Portfolio,
    L.P., Golconda Capital Management, LLC and William D.
    Summitt (incorporated by reference to Exhibit 10.1 to the
    registrants Current Report on Form 8-K (File No.
    001-08137) filed by the registrant with the Securities and
    Exchange Commission on December 15, 2010).*21

Subsidiaries of the registrant.*23.1

Consent of Independent Registered Public Accounting Firm (BDO
    USA, LLP).*23.2

Consent of Independent Registered Public Accounting Firm
    (Deloitte & Touche LLP).*31.1

Certification of Principal Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.*31.2

Certification of Principal Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.*32.1

Certification of Chief Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.*32.2

Certification of Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.   *
    
    Filed herewith.+
    
    Management contract or compensatory plan or arrangement.       65




---



##### 



SIGNATURES
    Dated: December 20, 2010AMERICAN PACIFIC CORPORATION(Registrant)By:


/s/  JOSEPH
    CARLEONEJoseph Carleone
    President and Chief Executive Officer
    (Principal Executive Officer)By:


/s/  DANA
    M. KELLEYDana M. Kelley
    Vice President, Chief Financial
    Officer, and Treasurer
    (Principal Financial and Accounting Officer)  66




---



##### 



/s/  JOSEPH
    CARLEONEJoseph
    Carleone, President and 
    Chief Executive Officer, and Director 
    (Principal Executive Officer)

Date:  December 20, 2010/s/  DANA
    M. KELLEYDana
    M. Kelley, Vice President, 
    Chief Financial Officer, and Treasurer 
    (Principal Financial and Accounting Officer)

Date:  December 20, 2010/s/  JOHN
    R. GIBSONJohn
    R. Gibson, Chairman of the Board

Date:  December 20, 2010/s/  BARBARA
    SMITH CAMPBELLBarbara
    Smith Campbell, Director

Date:  December 20, 2010/s/  FRED
    D. GIBSON, JR.Fred
    D. Gibson, Jr., Director

Date:  December 20, 2010/s/  JAN
    H. LOEBJan
    H. Loeb, Director

Date:  December 20, 2010/s/  BERLYN
    D. MILLERBerlyn
    D. Miller, Director

Date:  December 20, 2010/s/  WILLIAM
    F. READDYWilliam
    F. Readdy, Director

Date:  December 20, 2010/s/  C.
    KEITH ROOKERC.
    Keith Rooker, Director

Date:  December 20, 2010/s/  CHARLOTTE
    E. SIBLEYCharlotte
    E. Sibley, Director

Date:  December 20, 2010/s/  BART
    WEINERBart
    Weiner, Director

Date:  December 20, 2010/s/  DEAN
    M. WILLARDDean
    M. Willard, Director

Date:  December 20, 2010/s/  JANE
    L. WILLIAMSJane
    L. Williams, Director

Date:  December 20, 2010  67




---



##### 



EXHIBIT INDEX
  ExhibitNumber

Description3.1

Restated Certificate of Incorporation, as amended, of American
    Pacific Corporation (incorporated by reference to
    Exhibit 4.(a) to the registrants Registration
    Statement on
    Form S-3
    (File
    No. 33-15674)).3.2

Articles of Amendment to the Restated Certificate of
    Incorporation of American Pacific Corporation, as filed with the
    Secretary of State, State of Delaware, on October 7, 1991
    (incorporated by reference to Exhibit 4.3 to the
    registrants Registration Statement on
    Form S-3
    (File
    No. 33-52196)).3.3

Articles of Amendment to the Restated Certificate of
    Incorporation of American Pacific Corporation, as filed with the
    Secretary of State, State of Delaware, on April 21, 1992
    (incorporated by reference to Exhibit 4.4 to the
    registrants Registration Statement on
    Form S-3
    (File
    No. 33-52196)).3.4

American Pacific Corporation Amended and Restated By-laws
    (incorporated by reference to Exhibit 3.1 to the
    registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on September 20, 2010).3.5

Rights Agreement, dated as of August 3, 1999, between
    American Pacific Corporation and American Stock
    Transfer & Trust Company (incorporated by
    reference to Exhibit 1 to the registrants
    Registration Statement on
    Form 8-A
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on August 6, 1999).3.6

Form of Letter to Stockholders that accompanied copies of the
    Summary of Rights to Purchase Preferred Shares (incorporated by
    reference to Exhibit 2 to the registrants
    Registration Statement on
    Form 8-A
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on August 6, 1999).3.7

Amendment, dated as of July 11, 2008, between American
    Pacific Corporation and American Stock Transfer &
    Trust Company (incorporated by reference to
    Exhibit 4.1 to the registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on July 11, 2008).3.8

Amendment No. 2 to Rights Agreement, dated as of
    September 14, 2010, between American Pacific Corporation
    and American Stock Transfer & Trust Company
    (incorporated by reference to Exhibit 4.1 to the
    registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on September 20, 2010).4.1

Form of 9% Senior Note due 2015 (incorporated by reference
    to Exhibit A of Exhibit 4.2 to the registrants
    Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on February 6, 2007).4.2

Indenture, dated as of February 6, 2007, by and among
    American Pacific Corporation, certain subsidiaries thereof and
    Wells Fargo Bank, National Association (incorporated by
    reference to Exhibit 4.2 to the registrants Current
    Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on February 6, 2007).10.1+

Employment Agreement, effective October 15, 2006, between
    American Pacific Corporation and Joseph Carleone, as amended and
    restated on November 14, 2008 (incorporated by reference to
    Exhibit 10.1 to the registrants Annual Report on
    Form 10-K
    (File
    No. 001-08137)
    for the fiscal year ended September 30, 2008).10.2+

Notice of Eligibility for Dr. Aslam Malik under Ampac Fine
    Chemicals LLC Severance Pay Plan, dated January 24, 2007
    (incorporated by reference to Exhibit 10.2 to the
    registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended March 31, 2007). 68




---



##### 



10.3+

Ampac Fine Chemicals LLC Severance Pay Plan (incorporated by
    reference to Exhibit 10.1 to the registrants
    Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended March 31, 2007).10.4+

Form of Indemnification Agreement between American Pacific
    Corporation and each Director of American Pacific Corporation
    (incorporated by reference to Exhibit 3.6 to the
    registrants Annual Report on
    Form 10-K
    (File
    No. 001-08137)
    for the fiscal year ended September 30, 2000).10.5+

Amended and Restated American Pacific Corporation Defined
    Benefit Pension Plan, as Amended and Restated Effective
    October 1, 2008, executed by American Pacific Corporation
    on June 12, 2009 (incorporated by reference to
    Exhibit 10.1 to the registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2009).10.6+

American Pacific Corporation Supplemental Executive Retirement
    Plan, amended and restated and effective on and after
    October 1, 2007 (incorporated by reference to
    Exhibit 10.1 to the registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on November 15, 2007).10.7+

Trust Agreement for American Pacific Corporation
    Supplemental Executive Retirement Plan (incorporated by
    reference to Exhibit 10.6 to the registrants Annual
    Report on
    Form 10-K
    (File No. 001-08137)
    for the fiscal year ended September 30, 1999).10.8++

Long-Term Pricing Agreement, dated as of December 12, 1997,
    between Thiokol Corporation-Propulsion Group and American
    Pacific Corporation (incorporated by reference to
    Exhibit 10.1 to the registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended March 31, 1998).10.9++

Modification No. 1 to Long Term Pricing Agreement, dated
    September 13, 2000, between Thiokol Propulsion and American
    Pacific Corporation (incorporated by reference to
    Exhibit 10.14 to the registrants Annual Report on
    Form 10-K
    (File
    No. 001-08137)
    for the fiscal year ended September 30, 2000).10.10

Ground Lease, dated as of November 30, 2005, by and between
    Aerojet-General Corporation and Ampac Fine Chemicals LLC
    (incorporated by reference to Exhibit 10.5 to the
    registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on December 1, 2005).10.11++

Modification #3 to the Thiokol Long Term Pricing Agreement,
    dated April 5, 2006 (incorporated by reference to
    Exhibit 10.1 to the registrants Quarterly Report on
    Form 10-Q
    (File No. 001-08137)
    for the fiscal quarter ended March 31, 2006).10.12+

Ampac Fine Chemicals LLC Pension Plan for Bargaining Unit
    Employees, as Amended and Restated Effective October 1,
    2007, executed by American Pacific Corporation on June 12,
    2009 (incorporated by reference to Exhibit 10.2 to the
    registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2009).10.13+

Ampac Fine Chemicals LLC Pension Plan for Salaried Employees, as
    Amended and Restated Effective October 1, 2007, executed by
    American Pacific Corporation on June 12, 2009 (incorporated
    by reference to Exhibit 10.3 to the registrants
    Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2009).10.14

Amended and Restated Credit Agreement, dated as of
    February 6, 2007, among American Pacific Corporation,
    certain subsidiaries thereof, the lenders party thereto,
    Wachovia Bank, National Association and Bank of America, N.A.
    (incorporated by reference to Exhibit 10.3 to the
    registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on February 6, 2007). 69




---



##### 



10.15

First Amendment to Credit Agreement, dated as of July 7,
    2009, by and among American Pacific Corporation, certain
    subsidiaries thereof, the lenders party thereto, and Wachovia
    Bank, National Association and Bank of America, N.A.
    (incorporated by reference to Exhibit 10.4 to the
    registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2009).10.16

Second Amendment to Credit Agreement, dated as of
    September 17, 2010, by and among American Pacific
    Corporation, certain subsidiaries thereof, Wells Fargo Bank,
    National Association as Administrative Agent, and the lenders
    party thereto (incorporated by reference to Exhibit 10.1 to
    the registrants Current Report on
    Form 8-K
    (File No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on September 27, 2010).10.17+

American Pacific Corporation Amended and Restated 2001 Stock
    Option Plan (incorporated by reference to Exhibit 4.1 to
    the registrants Registration Statement on
    Form S-8
    (File No. 333-104732)
    filed by the registrant with the Securities and Exchange
    Commission on April 24, 2003).10.18+

Form of Option Agreement under the American Pacific Corporation
    Amended and Restated 2001 Stock Option Plan (incorporated by
    reference to Exhibit 4.3 to the registrants
    Registration Statement on
    Form S-8
    (File
    No. 333-104732)
    filed by the registrant with the Securities and Exchange
    Commission on April 24, 2003).10.19+

American Pacific Corporation 2002 Directors Stock Option
    Plan, as amended and restated (incorporated by reference to
    Exhibit 99.1 to the registrants Current Report on
    Form 8-K
    (File No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on October 25, 2005).10.20+

Form of Option Agreement under the American Pacific Corporation
    2002 Directors Stock Option Plan (incorporated by reference
    to Exhibit 4.4 to the registrants Registration
    Statement on
    Form S-8
    (File
    No. 333-104732)
    filed by the registrant with the Securities and Exchange
    Commission on April 24, 2003).10.21+

American Pacific Corporation 2008 Stock Incentive Plan
    (incorporated by reference to Exhibit 10.1 to the
    registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on March 17, 2008).10.22+

Form of Notice of Stock Option Award and Stock Option Award
    Agreement under the American Pacific Corporation 2008 Stock
    Incentive Plan (incorporated by reference to Exhibit 10.2
    to the registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on March 17, 2008).10.23+

Form of Notice of Restricted Stock Bonus Award and Restricted
    Stock Bonus Award Agreement under the American Pacific
    Corporation 2008 Stock Incentive Plan (incorporated by reference
    to Exhibit 10.3 to the registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on March 17, 2008).10.24+

American Pacific Corporation Incentive Compensation Plan
    (incorporated by reference to Exhibit 10.4 to the
    registrants Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on March 17, 2008).10.25+

Severance Agreement, dated as of July 8, 2008, between
    American Pacific Corporation and Linda G. Ferguson (incorporated
    by reference to Exhibit 10.1 to the registrants
    Current Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on July 11, 2008). 70




---



##### 



10.26+

Severance Agreement, dated as of July 8, 2008, between
    American Pacific Corporation and Dana M. Kelley (incorporated by
    reference to Exhibit 10.2 to the registrants Current
    Report on
    Form 8-K
    (File
    No. 001-08137)
    filed by the registrant with the Securities and Exchange
    Commission on July 11, 2008).10.27+

First Amendment to American Pacific Corporation Defined Benefit
    Pension Plan, executed by American Pacific Corporation on
    June 28, 2010 (incorporated by reference to
    Exhibit 10.1 to the registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2010).10.28+

First Amendment to Ampac Fine Chemicals LLC Pension Plan for
    Salaried Employees, executed by American Pacific Corporation on
    June 28, 2010 (incorporated by reference to
    Exhibit 10.2 to the registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2010).10.29+

First Amendment to Ampac Fine Chemicals LLC Pension Plan for
    Bargaining Unit Employees, executed by American Pacific
    Corporation on June 28, 2010 (incorporated by reference to
    Exhibit 10.3 to the registrants Quarterly Report on
    Form 10-Q
    (File
    No. 001-08137)
    for the fiscal quarter ended June 30, 2010).10.30+

Second Amendment to Ampac Fine Chemicals LLC Pension Plan for
    Bargaining Unit Employees, executed by American Pacific
    Corporation on July 15, 2010 (incorporated by reference to
    Exhibit 10.4 to the registrants Quarterly Report on
    Form 10-Q
    (File No. 001-08137)
    for the fiscal quarter ended June 30, 2010).*10.31+

Consulting Agreement, dated November 14, 2009, by and
    between American Pacific Corporation and Discovery Partners
    International LLC.10.32

Settlement Agreement, dated as of December 14, 2010, by and
    among American Pacific Corporation, Golconda Capital Portfolio,
    L.P., Golconda Capital Management, LLC and William D.
    Summitt (incorporated by reference to Exhibit 10.1 to the
    registrants Current Report on Form 8-K (File No.
    001-08137) filed by the registrant with the Securities and
    Exchange Commission on December 15, 2010).*21

Subsidiaries of the registrant.*23.1

Consent of Independent Registered Public Accounting Firm (BDO
    USA, LLP).*23.2

Consent of Independent Registered Public Accounting Firm
    (Deloitte & Touche LLP).*31.1

Certification of Principal Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.*31.2

Certification of Principal Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.*32.1

Certification of Chief Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of*32.2

Certification of Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.         (b)
    
    See (a)(3) above.(c)
    
    None applicable. 71




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM         ,
      F-1




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
              F-2




---



##### 



AMERICAN PACIFIC
    CORPORATION
 Consolidated Balance Sheets
 September 30, 2010 and 2009
 (Dollars in Thousands)
   2010


2009ASSETSCurrent Assets:Cash and Cash Equivalents

$
23,985


$
21,681Accounts Receivable, Net


51,900



44,028Inventories


36,126



36,356Prepaid Expenses and Other Assets


1,542



1,811Income Taxes Receivable


2,802



2,148Deferred Income Taxes


10,672



6,317Total Current Assets


127,027



112,341Property, Plant and Equipment, Net


113,873



114,645Intangible Assets, Net


1,420



3,553Goodwill


2,933



3,144Deferred Income Taxes


20,254



21,121Other Assets


10,236



10,037TOTAL ASSETS

$
275,743


$
264,841LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Accounts Payable

$
9,197


$
7,444Accrued Liabilities


8,062



5,295Accrued Interest


1,575



1,650Employee Related Liabilities


6,472



6,930Income Taxes Payable


193



189Deferred Revenues and Customer Deposits


18,769



6,911Current Portion of Environmental Remediation Reserves


8,694



2,522Current Portion of Long-Term Debt


70



151Total Current Liabilities


53,032



31,092Long-Term Debt


105,102



110,097Environmental Remediation Reserves


15,176



24,168Pension Obligations


37,161



27,720Other Long-Term Liabilities


1,615



667Total Liabilities


212,086



193,744Commitments and ContingenciesShareholders EquityPreferred Stock - $1.00 par value; 3,000,000 authorized;
    none outstanding


-



-Common Stock - $0.10 par value; 20,000,000 shares
    authorized, 7,543,091 and 7,504,591 issued and outstanding


754



750Capital in Excess of Par Value


73,091



72,322Retained Earnings


6,720



9,997Accumulated Other Comprehensive Loss


(16,908
)


(11,972
)Total Shareholders Equity


63,657



71,097TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

$
275,743


$
264,841    F-3




---



##### 



AMERICAN PACIFIC
    CORPORATION
 Consolidated Statements of
    Operations
 For the Years Ended September 30, 2010, 2009, and
    2008
 (Dollars in Thousands, Except per Share Amounts)
   2010


2009


2008Revenues

$
176,192


$
197,148


$
203,129Cost of Revenues


121,477



136,295



135,388Gross Profit


54,715



60,853



67,741Operating Expenses


48,045



45,325



42,865Environmental Remediation Charges


-



13,700



-Operating Income


6,670



1,828



24,876Interest and Other Income, Net


45



146



1,366Interest Expense


10,656



10,735



10,803Income (Loss) before Income Taxes


(3,941
)


(8,761
)


15,439Income Tax Expense (Benefit)


(664
)


(2,802
)


6,488Net Income (Loss)

$
(3,277
)

$
(5,959
)

$
8,951Earnings (Loss) per Share:Basic

$
(0.44
)

$
(0.80
)

$
1.20Diluted

$
(0.44
)

$
(0.80
)

$
1.18Weighted Average Shares Outstanding:Basic


7,490,000



7,482,000



7,451,000Diluted


7,490,000



7,482,000



7,599,000    F-4




---



##### 



AMERICAN PACIFIC
    CORPORATION
 Consolidated Statements of
    Changes in Stockholders Equity
 For the Years Ended September 30, 2010, 2009 and 2008
 (Dollars in Thousands)
   CommonShares














AccumulatedOutstanding,


Par











Other


TotalNet of


Value of


Capital in








Compre-


Stock-Treasury


Common


Excess of


Retained


Treasury


hensive


holdersShares


Stock


Par Value


Earnings


Stock


Loss


EquityBALANCES, October 1, 2007


7,428,671


$
946


$
87,513


$
7,296


$
(16,982
)

$
(3,084
)

$
75,689Comprehensive Income:Net Income














8,951











8,951Currency Translation






















(127
)


(127
)Change in Unamortized Benefit Plan Costs, Net of Tax






















296



296Retirement Plan Amendments,Net of Tax






















(2,352
)


(2,352
)Total Comprehensive Income


























6,768Cumulative effect of adoption of new accounting standard
    (Note 8)














(291
)










(291
)Purchase of Treasury Stock


(11,080
)














(193
)






(193
)Issuance of Common Stock


60,000



6



375















381Tax Benefit From Stock Options










481















481Share-based Compensation










127















127BALANCES, September 30, 2008


7,477,591



952



88,496



15,956



(17,175
)


(5,267
)


82,962Comprehensive Income:Net loss














(5,959
)










(5,959
)Currency Translation






















(83
)


(83
)Change in Unamortized BenefitPlan Costs, Net of Tax






















(6,622
)


(6,622
)Total Comprehensive Loss


























(12,664
)Retirement of Treasury Stock






(205
)


(16,970
)






17,175







-Issuance of Common Stock


5,000



1



31















32Share-based Compensation


22,000



2



765















767BALANCES, September 30, 2009


7,504,591



750



72,322



9,997



-



(11,972
)


71,097Comprehensive Income:Net loss














(3,277
)










(3,277
)Currency Translation






















(335
)


(335
)Change in Unamortized BenefitPlan Costs, Net of Tax






















(4,601
)


(4,601
)Total Comprehensive Loss


























(8,213
)Issuance of CommonStock, Net of Tax


2,500



-



(7
)














(7
)Share-based Compensation


36,000



4



776















780BALANCES, September 30, 2010


7,543,091


$
754


$
73,091


$
6,720


$
-


$
(16,908
)

$
63,657    F-5




---



##### 



AMERICAN PACIFIC
    CORPORATION
 Consolidated Statements of
    Cash Flows
 For the Years Ended September 30, 2010, 2009 and 2008
 (Dollars in Thousands)
   2010


2009


2008Cash Flows from Operating Activities:Net Income (Loss)

$
(3,277
)

$
(5,959
)

$
8,951Adjustments to Reconcile Net Income (Loss) to Net Cash Provided
    by Operating Activities:Depreciation and amortization


16,445



16,166



16,454Non-cash interest expense


572



632



637Share-based compensation


780



767



127Deferred income taxes


(565
)


(2,405
)


3,355Excess tax benefit from stock option exercises


-



-



(481
)Loss (Gain) on sale of assets


12



76



(416
)Changes in operating assets and liabilities:Accounts receivable, net


(7,834
)


(14,437
)


(2,317
)Inventories


270



2,974



6,666Prepaid expenses and other current assets


281



1,620



(1,510
)Accounts payable


1,434



(3,474
)


(349
)Income taxes


(635
)


(266
)


(919
)Accrued liabilities


2,775



(359
)


(1,765
)Accrued interest


(75
)


-



(36
)Employee related liabilities


(490
)


(461
)


(431
)Deferred revenues and customer deposits


11,932



2,195



(4,664
)Environmental remediation reserves


(2,820
)


12,412



(1,145
)Pension obligations, net


1,819



1,346



277Other


151



315



(2,101
)Net Cash Provided by Operating Activities


20,775



11,142



20,333Cash Flows from Investing Activities:Capital expenditures


(13,362
)


(9,458
)


(15,284
)Acquisition of businesses and earnout adjustment


-



(6,725
)


-Other investing activities


10



-



-Net Cash Used in Investing Activities


(13,352
)


(16,183
)


(15,284
)Cash Flows from Financing Activities:Payments of long-term debt


(5,064
)


(348
)


(251
)Issuance of common stock


11



32



381Excess tax benefit from stock option exercises


-



-



481Purchase of treasury stock


-



-



(193
)Net Cash Provided (Used) by Financing Activities


(5,053
)


(316
)


418Effect of Changes in Currency Exchange Rates on Cash


(66
)


145



-Net Change in Cash and Cash Equivalents


2,304



(5,212
)


5,467Cash and Cash Equivalents, Beginning of Year


21,681



26,893



21,426Cash and Cash Equivalents, End of Year

$
23,985


$
21,681


$
26,893  F-6




---



##### 



AMERICAN PACIFIC
    CORPORATION
 Consolidated Statements of Cash Flows
    (Continued)
 For the Years Ended September 30, 2010, 2009 and 2008
 (Dollars in Thousands)
   2010


2009


2008Cash Paid (Refunded) For:Interest

$
10,159


$
10,089


$
10,141Income taxes


(537
)


(439
)


5,304Non-Cash Investing and Financing Transactions:Capital leases originated


98



-



-Additions to Property, Plant and Equipment not yet paid


624



300



119    F-7




---



##### 



AMERICAN PACIFIC
    CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    FOR THE YEARS ENDED SEPTEMBER 30, 2010, 2009 AND 2008
    (Dollars in Thousands, Except Per Share Amounts) 1.
    SUMMARY OF
    SIGNIFICANT ACCOUNTING POLICIES  Principles of Consolidation.
    Use of Estimates.
  Revenue Recognition.
   F-8




---



##### 



1.
    SUMMARY OF
    SIGNIFICANT ACCOUNTING POLICIES (Continued)   percentage-of-completion cost-to-cost percentage-of-completion
  Deferred Revenues and Deferred Cost of
    Revenues.
  Environmental Remediation.
    Related Party Transactions.
  Cash and Cash Equivalents.
  Fair Value Disclosure.
     F-9




---



##### 



1.
    SUMMARY OF
    SIGNIFICANT ACCOUNTING POLICIES (Continued)         Concentration of Credit Risk.
  2010

2009

2008Fine chemicals customer






14%



13%Fine chemicals customer










19%Fine chemicals customer










10%Specialty chemicals customer


23%



11%Specialty chemicals customer


19%



10%Aerospace equipment customer






13%



12%
   Inventories.
  Property, Plant and Equipment.
  Intangible Assets.
   F-10




---



##### 



1.
    SUMMARY OF
    SIGNIFICANT ACCOUNTING POLICIES (Continued)   Depreciation and Amortization
    Expense.
  2010


2009


2008Classified as cost of revenuesDepreciation

$
13,625


$
13,566


$
13,168Amortization


-



-



1,517Classified as operating expensesDepreciation


744



532



532Amortization


2,076



2,068



1,237Total

$
16,445


$
16,166


$
16,454
   Goodwill.
  Income Taxes.
    Impairment of Long-Lived Assets.
   F-11




---



##### 



1.
    SUMMARY OF
    SIGNIFICANT ACCOUNTING POLICIES (Continued)    Earnings (Loss) Per Share.
  Foreign Currency.
  Recently Issued or Adopted Accounting
    Standards.
     F-12




---



##### 



1.
    SUMMARY OF
    SIGNIFICANT ACCOUNTING POLICIES (Continued)        No. 2010-17,
  2.
    SHARE-BASED
    COMPENSATION     F-13




---



##### 



2.
    SHARE-BASED
    COMPENSATION (Continued)          Stock Options


Restricted StockOutstanding andOutstanding


Non-Vested


Non-VestedWeighted





Weighted





WeightedAverage





Average





AverageExercise





Fair





FairPrice





Value





ValueShares


Per Share


Shares


Per Share


Shares


Per ShareBalance, September 30, 2009


540,997


$
8.64



161,710


$
5.57



22,000


$
11.25Granted


149,000



7.21



149,000



3.65



36,000



7.15Vested


-



-



(61,065
)


5.62



(7,336
)


11.25Exercised


(2,500
)


4.87



-



-



-



-Expired / Cancelled


(29,321
)


8.86



(750
)


3.74



-



-Balance, September 30, 2010


658,176



8.32



248,895



4.41



50,664



8.34
     Number of vested stock options


409,281Weighted average exercise price per share

$
8.07Aggregate intrinsic value

$
3Weighted average remaining contractual term in years


6.0
    F-14




---



##### 



2.
    SHARE-BASED
    COMPENSATION (Continued)      2010


2009


2008Weighted average grant date fair value per share of options
    granted Significant fair value assumptions:

$
3.65


$
5.41


$
7.86Expected term in years


6.00



6.00



5.75Expected volatility


51.3%



48.7%



44.5%Expected dividends


0.0%



0.0%



0.0%Risk-free interest rates


2.3%



2.7%



3.4%Total intrinsic value of options exercised

$
4


$
21


$
629Aggregate cash received for option exercises

$
11


$
32


$
406Compensation cost (included in operating expenses)Stock options

$
546


$
585


$
127Restricted stock


234



182



-Total


780



767



127Tax benefit recognized


170



135



50Net compensation cost

$
610


$
632


$
77As of period end date:Total compensation cost for non-vested awards not yet recognized:Stock options

$
297


$
303


$
70Restricted stock

$
88


$
65


$
-Weighted-average years to be recognizedStock options


1.4



1.5



0.6Restricted stock


1.4



1.5



-
       3.
    BALANCE SHEET
    DATA    2010


2009Accounts Receivable:Trade receivables

$
42,348


$
35,942Unbilled receivables


9,773



7,807Employee and other receivables


319



479Allowance for bad debt


(540)



(200)Total

$
51,900


$
44,028
  F-15




---



##### 



3.
    BALANCE SHEET
    DATA (Continued)  percentage-of-completion
  2010


2009Inventories:Finished goods

$
2,977


$
1,951Work-in-progress


18,318



22,080Raw materials and supplies


9,103



9,930Deferred cost of revenues


5,728



2,395Total

$
36,126


$
36,356
   2010


2009Property, Plant and Equipment:Land and improvements

$
3,683


$
3,455Buildings and improvements


48,875



47,548Machinery and equipment


133,198



127,116Construction in progress


8,012



2,325Total Cost


193,768



180,444Less: accumulated depreciation


(79,895
)


(65,799
)Total

$
113,873


$
114,645
   4.
    INTANGIBLE
    ASSETS    2010


2009Perchlorate customer list

$
38,697


$
38,697Less accumulated amortization


(38,697
)


(38,697
)-



-Customer relationships


8,976



9,018Less accumulated amortization


(7,556
)


(6,182
)1,420



2,836Backlog


1,559



1,579Less accumulated amortization


(1,559
)


(862
)-



717Total

$
1,420


$
3,553
     F-16




---



##### 



4.
    INTANGIBLE
    ASSETS (Continued)    Years ending September 30:2011

$
8322012


2942013


294Total

$
1,420
     5.
    DEBT    2010


2009Senior Notes, 9%, due 2015

$
105,000


$
110,000Capital Leases, due through 2014


172



248Total Debt


105,172



110,248Less Current Portion


(70
)


(151
)Total Long-term Debt

$
105,102


$
110,097
   Senior Notes.
  
    ranked equally in right of payment with all of our existing and
    future senior indebtedness;
    ranked senior in right of payment to all of our existing and
    future senior subordinated and subordinated indebtedness;
    effectively junior to our existing and future secured debt to
    the extent of the value of the assets securing such
    debt; and
    structurally subordinated to all of the existing and future
    liabilities (including trade payables) of each of our
    subsidiaries that do not guarantee the Senior Notes.    
    at any time prior to February 1, 2011 at a price equal to
    100% of the purchase amount of the Senior Notes plus an
    applicable premium as defined in the related indenture;
    at any time on or after February 1, 2011 at redemption
    prices beginning at 104.5% of the principal amount to be
    redeemed and reducing to 100% by February 1, 2013; and
    under certain changes of control, we must offer to purchase the
    Senior Notes at 101% of their aggregate principal amount, plus
    accrued interest.    
    incur additional debt;
    pay dividends or make other restricted payments; F-17




---



##### 



5.
    DEBT
    (Continued)  
    create liens on assets to secure debt;
    incur dividend or other payment restrictions with regard to
    restricted subsidiaries;
    transfer or sell assets;
    enter into transactions with affiliates;
    enter into sale and leaseback transactions;
    create an unrestricted subsidiary;
    enter into certain business activities; or
    effect a consolidation, merger or sale of all or substantially
    all of our assets.    Senior Note Repurchase.
  Revolving Credit Facility.
    
    incur debt, incur contingent obligations and issue certain types
    of preferred stock;
    create liens;
    pay dividends, distributions or make other specified restricted
    payments;
    make certain investments and acquisitions;
    enter into certain transactions with affiliates;
    enter into sale and leaseback transactions; and
    merge or consolidate with any other entity or sell, assign,
    transfer, lease, convey or otherwise dispose of assets.   F-18




---



##### 



5.
    DEBT
    (Continued)      Principal Maturities.
  Years ending September 30:2011

$
702012


692013


222014


112015


105,000Thereafter


-Total

$
105,172
   Debt Issue Costs.
  Letters of Credit.
  6.
    EARNINGS (LOSS)
    PER SHARE    2010


2009


2008Net Income (Loss)

$
(3,277
)

$
(5,959
)

$
8,951Basic Weighted Average Shares


7,490,000



7,482,000



7,451,000Diluted:Weighted Average Shares, Basic


7,490,000



7,482,000



7,451,000Dilutive Effect of Stock Options


-



-



148,000Weighted Average Shares, Diluted


7,490,000



7,482,000



7,599,000Basic Earnings (Loss) per Share

$
(0.44
)

$
(0.80
)

$
1.20Diluted Earnings (Loss) per Share

$
(0.44
)

$
(0.80
)

$
1.18
    F-19




---



##### 



7.
    STOCKHOLDERS
    EQUITY  Preferred Stock.
  Treasury Stock.
  8.
    INCOME
    TAXES    2010


2009


2008United States

$
(3,198
)

$
(8,456
)

$
15,934Foreign


(743
)


(305
)


(495
)Total

$
(3,941
)

$
(8,761
)

$
15,439
     2010


2009


2008Current

$
(172
)

$
429


$
1,580Deferred


(492
)


(3,231
)


4,908Income tax expense (benefit)

$
(664
)

$
(2,802
)

$
6,488
     2010


2009Deferred tax assets:Environmental remediation reserves

$
11,058


$
11,955Pension obligations


15,005



10,400Tax credits and carryforwards


3,137



3,589Intangible assets


2,349



2,899Inventory


8,678



4,660Accrued expenses


2,214



1,997Other


917



590Subtotal


43,358



36,090Valuation allowance


(1,186
)


(1,157
)Deferred tax assets


42,172



34,933Deferred tax liabilities:Property, plant and equipment


(10,671
)


(6,698
)Prepaid expenses


(461
)


(623
)Other


(114
)


(302
)Deferred tax liabilities


(11,246
)


(7,623
)Net deferred tax assets

$
30,926


$
27,310
     2010

2009Federal operating losses

$
1,251


$
1,382Federal R&D credits


160



160Federal AMT credits


1,412



1,684State operating losses


1,205



1,205U.K. operating losses


2,753



2,514Ireland operating losses


3,989



3,548
  F-20




---



##### 



8.
    INCOME TAXES
    (Continued)      2010


2009


2008Federal income tax at the statutory rate


(35.0%)



(35.0%)



35.0%State income tax, net of federal benefit


(5.4%)



(5.0%)



5.2%Nondeductible expenses


8.5%



3.9%



1.5%Valuation allowance


1.4%



0.0%



1.0%Change in effective state income tax rate


0.0%



0.0%



(2.3%)Interest and penalties


9.4%



0.6%



1.4%Foreign tax rate differential


5.5%



2.4%



0.0%Other


(1.2%)



1.1%



0.2%Effective tax rate


(16.8%)



(32.0%)



42.0%
           2010


2009Unrecognized Tax Benefits - Beginning of Year

$
652


$
313Additions for tax positions of prior years


855



392Reductions for tax positions of prior years


(261
)


-Lapse of statute of limitations


-



(53
)Unrecognized Tax Benefits - End of Year

$
1,246


$
652
    F-21




---



##### 



8.
    INCOME TAXES
    (Continued)      9.
    EMPLOYEE BENEFIT
    PLANS  Defined Benefit Plan Descriptions.
    Defined Contribution Plan Descriptions.
   F-22




---



##### 



9.
    EMPLOYEE BENEFIT
    PLANS (Continued)  Summary Defined Benefit Plan Results.
  Pension Plans


SERP2010


2009


2010


2009Change in Benefit Obligation:Benefit obligation, beginning of year

$
50,515


$
37,392


$
6,981


$
5,979Service cost


2,196



1,983



439



350Interest cost


3,281



2,892



374



370Amendments


285



-



-



-Actuarial losses


8,272



9,468



316



409Benefits paid


(1,397
)


(1,220
)


(427
)


(127
)Benefit obligation, end of year


63,152



50,515



7,683



6,981Change in Plan Assets:Fair value of plan assets, beginning of year


29,294



27,552



-



-Actual return on plan assets


1,950



21



-



-Employer contributions


3,300



2,941



427



127Benefits paid


(1,397
)


(1,220
)


(427
)


(127
)Fair value of plan assets, end of year


33,147



29,294



-



-Funded status

$
(30,005
)

$
(21,221
)

$
(7,683
)

$
(6,981
)
     Pension Plans


SERP2010


2009


2010


2009Employee related liabilities

$
-


$
-


$
(527
)

$
(482
)Pension obligations and other long-term liabilities


(30,005
)


(21,221
)


(7,156
)


(6,499
)Net amount recognized

$
(30,005
)

$
(21,221
)

$
(7,683
)

$
(6,981
)
     Pension Plans


SERP2010


2009


2010


2009Net actuarial loss (gain)

$
8,733


$
11,648


$
316


$
409Prior service costs


285



-



-



-Amortization of:Net actuarial loss from previous years


(1,178
)


(509
)


-



-Prior service costs


(69
)


(76
)


(420
)


(434
)Income tax benefits related to above items


(3,109
)


(4,426
)


42



10Changes in unrecognized benefit plan costs

$
4,662


$
6,637


$
(62
)

$
(15
)
  F-23




---



##### 



9.
    EMPLOYEE BENEFIT
    PLANS (Continued)    Pension Plans


SERP2010


2009


2010


2009Net actuarial loss (gain)

$
24,036


$
16,481


$
595


$
279Prior service costs


538



322



2,242



2,662Income tax benefits related to above items


(9,830
)


(6,721
)


(1,134
)


(1,176
)Unrecognized benefit plan costs, net of tax

$
14,744


$
10,082


$
1,703


$
1,765
     Pension Plans


SERPAmortization of net actuarial loss

$
1,749


$
-Amortization of prior service costs


62



420Total

$
1,811


$
420
     2010


2009Plan Assets:Ampac Plan

$
25,565


$
23,650AFC Salaried Plan


4,831



3,431AFC Bargaining Plan


2,751



2,213Accumulated Benefit Obligation:Ampac Plan


39,181



32,826AFC Salaried Plan


6,529



4,684AFC Bargaining Plan


3,402



2,896Projected Benefit Obligation:Ampac Plan


51,226



41,769AFC Salaried Plan


8,239



5,850AFC Bargaining Plan


3,687



2,896
     Pension Plans





SERP2010


2009


2008


2010


2009


2008Net Periodic Benefit Plan Cost:Service cost

$
2,196


$
1,983


$
2,078


$
439


$
350


$
351Interest cost


3,281



2,892



2,526



374



370



346Expected return on plan assets


(2,410
)


(2,201
)


(2,466
)


-



-



-Recognized actuarial losses


1,178



509



296



-



-



-Amortization of prior service costs


69



76



76



420



434



434Net periodic pension cost

$
4,314


$
3,259


$
2,510


$
1,233


$
1,154


$
1,131
  F-24




---



##### 



9.
    EMPLOYEE BENEFIT
    PLANS (Continued)  Assumptions.
  Pension Plans


SERP2010


2009


2008


2010


2009


2008Weighted-Average Actuarial AssumptionsUsed to Determine Benefit Obligation asof September 30:Discount rate


5.80%



6.40%



7.25%



4.80%



5.60%



7.25%Rate of compensation increase


4.00%



4.00%



4.00%



4.00%



4.00%



4.00%Weighted-Average Actuarial AssumptionsUsed to Determine Net Periodic BenefitPlan Cost for the Years EndedSeptember 30:Discount rate


6.40%



7.25%



6.25%



5.60%



7.25%



6.25%Rate of compensation increase


4.00%



4.00%



4.50%



4.00%



4.00%



4.50%Expected return on plan assets


8.00%



8.00%



8.00%



-



-



-
       Plan Assets and Investment Policy.
  Target


Actual2010


2010


2009Equity securities


70%



68%



65%Debt securities


27%



29%



25%Cash and marketable securities


3%



3%



10%Total


100%



100%



100%
  F-25




---



##### 



9.
    EMPLOYEE BENEFIT
    PLANS (Continued)    Quotes Prices


Significantin Active


Other


SignificantMarkets for


Observable


UnobservableIdentical Assets


Inputs


Inputs(Level 1)


(Level 2)


(Level 3)


TotalEquity SecuritiesDomestic large-cap

$
12,721










$
12,721Domestic mid-cap


2,514











2,514Domestic small-cap


1,353











1,353International


4,646











4,646Other


1,173











1,173Fixed Income Securities














-Mutual funds


3,332











3,332Corporate bonds





$
3,181







3,181Certificated of deposit






1,513







1,513U.S. Treasuries


1,167











1,167Mortgage-backed






517







517Cash and cash equivalents


976











976Other


5



49







54$
27,887


$
5,260


$
-


$
33,147
   Contributions and Benefit Payments.
    Years ending September 30:

Pension Plans


SERP2011

$
1,700


$
5242012


1,753



5152013


1,949



6042014


2,085



5902015


2,209



7892016-2020


14,507



3,618
   10.
    COMMITMENTS AND
    CONTINGENCIES  Operating Leases.
 F-26




---



##### 



10.
    COMMITMENTS AND
    CONTINGENCIES (Continued)    Years ending September 30:2011

$
1,8142012


1,7222013


1,5772014


1,5662015


1,466Thereafter


4,933Total

$
13,078
   Purchase Commitments.
  Employee Agreements.
    Environmental
    Matters.
  Regulatory Review of Perchlorates.
  Perchlorate Remediation Project in Henderson,
    Nevada.
 F-27




---



##### 



10.
    COMMITMENTS AND
    CONTINGENCIES (Continued)            Henderson Site Environmental Remediation Reserve.
   F-28




---



##### 



10.
    COMMITMENTS AND
    CONTINGENCIES (Continued)             F-29




---



##### 



10.
    COMMITMENTS AND
    CONTINGENCIES (Continued)    Balance, September 30, 2009

$
26,690Additions or adjustments


-Expenditures


(2,820)Balance, September 30, 2010

$
23,870
   AFC Environmental Matters.
      Other Matters.
  11.
    SEGMENT
    INFORMATION    Fine Chemicals.
 F-30




---



##### 



11.
    SEGMENT
    INFORMATION (Continued)    Specialty Chemicals. ®
  Aerospace Equipment.
  Other Businesses.
    2010


2009


2008Fine chemicals customer


18%



24%



13%Fine chemicals customer










31%Fine chemicals customer










10%Specialty chemicals customer


14%



15%



16%Specialty chemicals customer


15%



11%
  F-31




---



##### 



11.
    SEGMENT
    INFORMATION (Continued)    2010


2009


2008Revenues:Fine Chemicals

$
69,632


$
95,484


$
124,187Specialty Chemicals


62,611



62,210



57,097Aerospace Equipment


37,608



33,488



16,435Other Businesses


6,341



5,966



5,410Total Revenues

$
176,192


$
197,148


$
203,129Segment Operating Income (Loss):Fine Chemicals

$
(7,583)


$
2,299


$
16,246Specialty Chemicals


30,571



26,189



23,128Aerospace Equipment


(265)



3,012



736Other Businesses


(206)



195



1,022Total Segment Operating Income


22,517



31,695



41,132Corporate Expenses


(15,847)



(16,167)



(16,256)Environmental Remediation Charges


-



(13,700)



-Operating Income

$
6,670


$
1,828


$
24,876Depreciation and Amortization:Fine Chemicals

$
12,997


$
12,943


$
12,876Specialty Chemicals


1,148



1,274



2,825Aerospace Equipment


1,649



1,461



222Other Businesses


16



12



12Corporate


635



476



519Total

$
16,445


$
16,166


$
16,454Capital Expenditures:Fine Chemicals

$
10,614


$
6,438


$
10,667Specialty Chemicals


1,047



1,503



1,687Aerospace Equipment


1,618



1,318



686Other Businesses


12



13



1Corporate


71



186



2,243Total

$
13,362


$
9,458


$
15,284Assets, at year end:Fine Chemicals

$
137,252


$
143,600


$
155,807Specialty Chemicals


39,411



25,237



18,282Aerospace Equipment


29,899



27,769



10,563Other Businesses


4,395



8,233



4,963Corporate


64,786



60,002



61,798Total

$
275,743


$
264,841


$
251,413
    F-32




---



##### 



12.
    INTEREST AND
    OTHER INCOME (EXPENSE), NET    2010


2009


2008Interest Income

$
58


$
150


$
937Gain on Sales of Assets


-



-



429Other


(13
)


(4
)$
45


$
146


$
1,366
   13.
    GUARANTOR
    SUBSIDIARIES    Condensed Consolidating Balance Sheet - September 30,
    2010Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedAssets:Cash and Cash Equivalents

$
-


$
22,991


$
994


$
-


$
23,985Accounts Receivable, Net


-



48,194



6,054



(2,348
)


51,900Inventories


-



34,968



1,158



-



36,126Prepaid Expenses and Other Assets


-



1,249



293



-



1,542Income Taxes Receivable and Deferred Income Taxes


-



13,474



-



-



13,474Total Current Assets


-



120,876



8,499



(2,348
)


127,027Property, Plant and Equipment, Net


-



111,946



1,927



-



113,873Intangible Assets, Net


-



537



883



-



1,420Goodwill


-



-



2,933



-



2,933Deferred Income Taxes


-



20,222



32



-



20,254Other Assets


-



9,945



291



-



10,236Intercompany Advances


91,545



4,896



-



(96,441
)


-Investment in Subsidiaries, Net


77,112



4,817



-



(81,929
)


-Total Assets

$
168,657


$
273,239


$
14,565


$
(180,718
)

$
275,743Liabilitites and Stockholders Equity:Accounts Payable and Other Current Liabilities

$
-


$
23,931


$
3,916


$
(2,348
)

$
25,499Environmental Remediation Reserves


-



8,694



-



-



8,694Deferred Revenues and Customer Deposits


-



17,927



842



-



18,769Current Portion of Long-Term Debt


-



21



49



-



70Intercompany Advances


-



91,545



4,896



(96,441
)


-Total Current Liabilities


-



142,118



9,703



(98,789
)


53,032Long-Term Debt


105,000



57



45



-



105,102Environmental Remediation Reserves


-



15,176



-



-



15,176Pension Obligations and Other Long-Term Liabilities


-



38,776



-



-



38,776Total Liabilities


105,000



196,127



9,748



(98,789
)


212,086Total Shareholders Equity


63,657



77,112



4,817



(81,929
)


63,657Total Liabilities and Shareholders Equity

$
168,657


$
273,239


$
14,565


$
(180,718
)

$
275,743
   F-33




---



##### 



13.
    GUARANTOR
    SUBSIDIARIES (Continued)  Condensed Consolidating Balance Sheet - September 30,
    2009Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedAssets:Cash and Cash Equivalents

$
-


$
20,046


$
1,635


$
-


$
21,681Accounts Receivable, Net


-



40,399



3,951



(322
)


44,028Inventories


-



35,223



1,133



-



36,356Prepaid Expenses and Other Assets


-



1,645



166



-



1,811Income Taxes Receivable and Deferred Income Taxes


-



8,465



-



-



8,465Total Current Assets


-



105,778



6,885



(322
)


112,341Property, Plant and Equipment, Net


-



113,143



1,502



-



114,645Intangible Assets, Net


-



1,775



1,778



-



3,553Goodwill


-



-



3,144



-



3,144Deferred Income Taxes


-



21,121



-



-



21,121Other Assets


-



10,037



-



-



10,037Intercompany Advances


79,918



2,535



-



(82,453
)


-Investment in Subsidiaries, Net


101,179



6,229



-



(107,408
)


-Total Assets

$
181,097


$
260,618


$
13,309


$
(190,183
)

$
264,841Liabilitites and Stockholders Equity:Accounts Payable and Other Current Liabilities

$
-


$
19,894


$
1,936


$
(322
)

$
21,508Environmental Remediation Reserves


-



2,522



-



-



2,522Deferred Revenues and Customer Deposits


-



4,579



2,332



-



6,911Current Portion of Long-Term Debt


-



99



52



-



151Intercompany Advances


-



79,918



2,535



(82,453
)


-Total Current Liabilities


-



107,012



6,855



(82,775
)


31,092Long-Term Debt


110,000



-



97



-



110,097Environmental Remediation Reserves


-



24,168



-



-



24,168Pension Obligations and Other Long-Term Liabilities


-



28,259



128



-



28,387Total Liabilities


110,000



159,439



7,080



(82,775
)


193,744Total Shareholders Equity


71,097



101,179



6,229



(107,408
)


71,097Total Liabilities and Shareholders Equity

$
181,097


$
260,618


$
13,309


$
(190,183
)

$
264,841
   Condensed Consolidating Statement of Operations - Year Ended
    September 30, 2010Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiary


Eliminations


ConsolidatedRevenues

$
-


$
165,489


$
10,842


$
(139
)

$
176,192Cost of Revenues


-



114,570



7,046



(139
)


121,477Gross Profit


-



50,919



3,796



-



54,715Operating Expenses


-



43,785



4,260



-



48,045Operating Income (Loss)


-



7,134



(464
)


-



6,670Interest and Other Income, Net


10,533



317



(272
)


(10,533
)


45Interest and Other Expense


10,533



10,650



6



(10,533
)


10,656Loss before Income Tax andEquity Account for Subsidiaries


-



(3,199
)


(742
)


-



(3,941
)Income Tax Expense (Benefit)


-



(624
)


(40
)


-



(664
)Net Loss beforeEquity Account for Subsidiaries


-



(2,575
)


(702
)


-



(3,277
)Equity Account for Subsidiaries


(3,277
)


(702
)


-



3,979



-Net Loss

$
(3,277
)

$
(3,277
)

$
(702
)

$
3,979


$
(3,277
)
   F-34




---



##### 



13.
    GUARANTOR
    SUBSIDIARIES (Continued)  Condensed Consolidating Statement of Operations - Year Ended
    September 30, 2009Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiary


Eliminations


ConsolidatedRevenues

$
-


$
187,854


$
9,492


$
(198
)

$
197,148Cost of Revenues


-



129,851



6,642



(198
)


136,295Gross Profit


-



58,003



2,850



-



60,853Operating Expenses


-



55,921



3,104



-



59,025Operating Income (Loss)


-



2,082



(254
)


-



1,828Interest and Other Income, Net


10,668



185



(2
)


(10,705
)


146Interest and Other Expense


10,668



10,723



49



(10,705
)


10,735Loss before Income Tax andEquity Account for Subsidiaries


-



(8,456
)


(305
)


-



(8,761
)Income Tax Expense (Benefit)


-



(2,906
)


104



-



(2,802
)Net Loss beforeEquity Account for Subsidiaries


-



(5,550
)


(409
)


-



(5,959
)Equity Account for Subsidiaries


(5,959
)


(409
)


-



6,368



-Net Loss

$
(5,959
)

$
(5,959
)

$
(409
)

$
6,368


$
(5,959
)
   Condensed Consolidating Statement of Operations - Year Ended
    September 30, 2008Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiary


Eliminations


ConsolidatedRevenues

$
-


$
200,611


$
2,742


$
(224
)

$
203,129Cost of Revenues


-



133,043



2,569



(224
)


135,388Gross Profit


-



67,568



173



-



67,741Operating Expenses


-



42,245



620



-



42,865Operating Income (Loss)


-



25,323



(447
)


-



24,876Interest and Other Income, Net


10,654



1,353



13



(10,654
)


1,366Interest and Other Expense


10,654



10,742



61



(10,654
)


10,803Income (Loss) before Income Tax andEquity Account for Subsidiaries


-



15,934



(495
)


-



15,439Income Tax Expense


-



6,488



-



-



6,488Income (Loss) beforeEquity Account for Subsidiaries


-



9,446



(495
)


-



8,951Equity Account for Subsidiaries


8,951



(495
)


-



(8,456
)


-Net Income (Loss)

$
8,951


$
8,951


$
(495
)

$
(8,456
)

$
8,951
   Condensed Consolidating Statement of Cash Flows - Year Ended
    September 30, 2010Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiary


Eliminations


ConsolidatedNet cash Provided (Used) by Operating Activities

$
-


$
22,396


$
(1,603
)

$
-


$
20,793Cash Flows from Investing Activities:Capital expenditures


-



(12,449
)


(913
)


-



(13,362
)Other


-



10



-



-



10Net Cash Used in Investing Activities


-



(12,439
)


(913
)


-



(13,352
)Cash Flows from Financing Activities:Payments of long-term debt


(4,900
)


(119
)


(45
)


-



(5,064
)Issuance of common stock, net of tax benefit


(7
)


-



-



-



(7
)Intercompany advances, net


4,907



(6,893
)


1,986



-



-Net Cash Provided (Used) by Financing Activities


-



(7,012
)


1,941



-



(5,071
)Effect of Changes in Currency Exchange Rates


-



-



(66
)


-



(66
)Net Change in Cash and Cash Equivalents


-



2,945



(641
)


-



2,304Cash and Cash Equivalents, Beginning of Period


-



20,046



1,635



-



21,681Cash and Cash Equivalents, End of Period

$
-


$
22,991


$
994


$
-


$
23,985
   F-35




---



##### 



13.
    GUARANTOR
    SUBSIDIARIES (Continued)  Condensed Consolidating Statement of Cash Flows - Year Ended
    September 30, 2009Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiary


Eliminations


ConsolidatedNet cash Provided by Operating Activities

$
-


$
10,101


$
1,041


$
-


$
11,142Cash Flows from Investing Activities:Acquisition of business


-



(7,196
)


471



-



(6,725
)Capital expenditures


-



(8,741
)


(717
)


-



(9,458
)Net Cash Used in Investing Activities


-



(15,937
)


(246
)


-



(16,183
)Cash Flows from Financing Activities:Payments of long-term debt


-



(275
)


(73
)


-



(348
)Issuance of common stock


32



-



-



-



32Intercompany advances, net


(32
)


(507
)


539



-



-Net Cash Provided (Used) by Financing Activities


-



(782
)


466



-



(316
)Effect of Changes in Currency Exchange Rates


-



-



145



-



145Net Change in Cash and Cash Equivalents


-



(6,618
)


1,406



-



(5,212
)Cash and Cash Equivalents, Beginning of Period


-



26,664



229



-



26,893Cash and Cash Equivalents, End of Period

$
-


$
20,046


$
1,635


$
-


$
21,681
   Condensed Consolidating Statement of Cash Flows - Year Ended
    September 30, 2008Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiary


Eliminations


ConsolidatedNet cash Provided (Used) by Operating Activities

$
-


$
20,960


$
(627
)

$
-


$
20,333Cash Flows from Investing Activities:Capital expenditures


-



(15,242
)


(42
)


-



(15,284
)Net Cash Used in Investing Activities


-



(15,242
)


(42
)


-



(15,284
)Cash Flows from Financing Activities:Payments of long-term debt


-



(251
)


-



-



(251
)Issuance of common stock


381



-



-



-



381Excess tax benefit from stock option exercises


481



-



-



-



481Purchases of treasury stock


(193
)


-



-



-



(193
)Intercompany advances, net


(669
)


(155
)


824



-



-Net Cash Provided (Used) by Financing Activities


-



(406
)


824



-



418Net Change in Cash and Cash Equivalents


-



5,312



155



-



5,467Cash and Cash Equivalents, Beginning of Period


-



21,352



74



-



21,426Cash and Cash Equivalents, End of Period

$
-


$
26,664


$
229


$
-


$
26,893
  F-36