Las Vegas firm’s stock slumps on decline in order

Thursday, March 23, 2000 | 11:26 a.m.

Las Vegas-based American Pacific Corp. stock fell 12 percent this morning after it announced Wednesday that a major customer will buy less of AP's rocket fuel chemical ammonium perchlorate.

AP stock was down $1.03 to $7.13 on the news.

American Pacific said Thiokol Propulsion, a division of Cordant Technologies Inc. of Salt Lake City, cut its current purchase order for ammonium perchlorate of 10.48 million pounds by about 3.23 million pounds.

This could reduce American Pacific revenue by about $4 million in the current fiscal year ending Sept. 30.

American Pacific said that under the change order, it will be required to make a claim for price adjustment within 30 days.

"Subject to the outcome of the price adjustment claim process, the purchase order modification may have a material adverse effect on the company's fiscal year 2000 operating results," American Pacific said.

American Pacific makes the chemical in Utah. Thiokol uses ammonium perchlorate as an ingredient in the fuel for solid-rocket motors, including the space shuttle booster motors, which it builds at plants in Utah.

American Pacific is the sole producer in North America of ammonium perchlorate, the principal chemical component of solid propellants used in NASA rockets and booster motors as well as in military rockets and a growing number of commercial launch vehicles.

American Pacific also manufactures the fire extinguisher ingredient Halotron as well as sodium azide, a primary chemical component of some automotive airbag systems.

For the year ended Sept. 30, American Pacific earned $11.6 million or $1.41 per share, including an extraordinary loss on debt extinguishment, on sales of $72.8 million.

For its first quarter ended Dec. 31, American Pacific reported a profit of $5 million or 64 cents per share, up from $3.3 million or 40 cents per share in the year-earlier quarter. Sales increased $2.1 million to $21 million.