<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K\A
(AMENDMENT NO. 1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
COMMISSION FILE NUMBER 1-8137
AMERICAN PACIFIC CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 59-6490478
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
3770 HOWARD HUGHES PARKWAY, SUITE 300,
LAS VEGAS, NEVADA 89109
(Address of principal executive office) (Zip Code)
(702) 735-2200
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock ($.10
par value)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 1, 1997, was approximately $57,600,000. Solely for
the purposes of this calculation, shares held by directors and officers of the
Registrant have been excluded. Such exclusion should not be deemed a
determination by the Registrant that such individuals are, in fact, affiliates
of the Registrant.
The number of shares of Common Stock, $.10 par value, outstanding as of December
1, 1997 was 8,137,537.
1
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Definitive Proxy Statement for 1998 Annual Meeting of Stockholders to
be filed not later than January 28, 1998 (Part III hereof).
S-14 Registration Statement (2-70830); Annual Reports on Forms 10-K
for the years ended September 30, 1995 and 1993; S-2 Registration Statement (33-
36664); Quarterly Report on Form 10-Q for the fiscal quarter ended December 31,
1990; S-8 Registration Statement (33-52898); S-3 Registration Statement (33-
52196) and Current Report on Form 8-K dated February 28, 1992; (all incorporated
by reference in Part IV hereof).
2
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- --------------------------------------------------------------------------
(a) (1) Financial Statements
--------------------
(a) See Part II, Item 8 for index to the Registrant's financial
statements and supplementary data.
(b) Separate audited financial statements of Gibson Ranch Limited
Liability Company as required under Regulation S-X 210. 3-09.
See pages 61-69 herein.
(2) Financial Statement Schedules
-----------------------------
None applicable.
(3) Exhibits
--------
(a) The following Exhibits are filed as part of this Report
(references are to Regulation S-K Exhibit Numbers):
3.1 Registrant's Restated Certificate of Incorporation, incorporated
by reference to Exhibit 3A to Registrant's Registration Statement
on Form S-14 (File No. 2-70830), (the "Form S-14").
3.2 Registrant's By-Laws, incorporated by reference to Exhibit 3B to
the Form S-14.
3.3 Articles of Amendment to the Restated Certificate of
Incorporation, as filed with the Secretary of State, State of
Delaware, on October 7, 1991, incorporated by reference to
Exhibit 4.3 to Registrant's Registration Statement on Form S-3
(File No. 33-52196) (the "Form S-3").
3.4 Articles of Amendment to the Restated Certificate of
Incorporation as filed with the Secretary of State, State of
Delaware, on April 21, 1992, incorporated by reference to Exhibit
4.4 to the Form S-3.
10.1 Employment agreement dated November 7, 1994 between the
Registrant and David N. Keys, incorporated by reference to
Exhibit 10.22 of the 1994 10-K.
10.2 Form of American Pacific Corporation Defined Benefit Pension
Plan, incorporated by reference to Exhibit 10.21 to the
Registrant's Registration Statement on Form S-2 (File No. 33-
36664) (the "1990 S-2").
10.3 Lease Agreement between 3770 Hughes Parkway Associates Limited
Partnership and the Registrant, dated July 31, 1990, incorporated
by reference to Exhibit 10.22 to the 1990 S-2.
31
<PAGE>
10.4 Limited Partnership Agreement of 3770 Hughes Parkway Associates,
Limited Partnership, incorporated by reference to Exhibit 10.23
to the 1990 S-2.
10.5 Cooperation and Stock Option Agreement dated as of July 4, 1990
by and between Dynamit Nobel AG and the Registrant, including
exhibits thereto, incorporated by reference to Exhibit 10.24 to
the 1990 S-2.
10.6 Stock Option Agreement between the Registrant and David N. Keys
dated November 12, 1990 incorporated by reference to Exhibit 19
to the Registrant's quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1990.
10.7 American Pacific Corporation 1991 Nonqualified Stock Option Plan,
incorporated by reference to Exhibit 10.26 to the 1990 S-2.
10.8 Indenture dated February 21, 1992, between the Registrant and
American Azide Corporation, a Nevada corporation, and Security
Pacific National Bank, Trustee, relating to the Registrant's
outstanding 11% Subordinated Secured Term Notes, incorporated by
reference to Exhibit 10.1 to the Registrant's Current Report on
Form 8-K dated February 28, 1992 (the "Form 8-K").
10.9 Form of Subordinated Secured Term Note dated February 21, 1992,
made by Registrant Incorporated by reference to Exhibit 10.2 to
the Form 8-K.
10.10 Form of Note and Warrants Purchase Agreement dated February 21,
1992, relating to the Registrant's Subordinated Secured Term
Notes, incorporated by reference to Exhibit 10.3 to the Form 8-K.
10.11 Form of Warrant to purchase Common Stock of the Registrant dated
February 21, 1992, incorporated by reference to Exhibit 10.4 to
the Form 8-K.
10.12 Form of Warrant to purchase Common Stock of American Azide
Corporation dated February 21, 1992, incorporated by reference to
Exhibit 10.5 to the Form 8-K.
10.13 Stock Option Agreement between Registrant and Joseph W. Cuzzupoli
dated January 30, 1992, incorporated by reference to Exhibit 4.6
of Registrant's Registration Statement on Form S-8 (File No. 33-
52898).
10.14 Articles of organization of Gibson Ranch Limited - Liability
Company dated August 25, 1993, incorporated by reference to
Exhibit 10.33 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended September 30, 1993 (the "1993 10-K").
10.15 Operating agreement of Gibson Ranch Limited - Liability
Company, a Nevada Limited - Liability Company, incorporated by
reference to Exhibit 10.34 to the 1993 10-K.
10.16 American Pacific Corporation 1994 Directors' Stock Option Plan
incorporated by reference to Exhibit 10.34 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended September
30, 1995 (the "1995 10-K").
32
<PAGE>
10.17 Stock Option Agreement between Registrant and General Technical
Services, Inc. dated July 11, 1995 incorporated by reference to
Exhibit 10.35 to the 1995 10-K.
10.18 Stock Option Agreement between Registrant and John R. Gibson
dated July 8, 1997 incorporated by reference to Exhibit 10.18 to
the Registrant's Annual Report on Form 10-K for the fiscal year
ended September 30, 1997 (the "1997 10-K").
10.19 Stock Option Agreement between Registrant and David N. Keys
dated July 8, 1997 incorporated by reference to Exhibit 10.19 to
the 1997 10-K.
10.20 Settlement Agreement between Registrant and C. Keith Rooker
dated July 17, 1997 incorporated by reference to Exhibit 10.20 to
the 1997 10-K.
10.21 Form of Stock Option Agreement between Registrant and certain
Directors dated May 21, 1997 incorporated by reference to Exhibit
10.21 to the 1997 10-K.
22 Subsidiaries of the Registrant incorporated by reference to
Exhibit 22 to the 1997 10-K.
*23 Consent of Deloitte & Touche LLP.
*24 Power of Attorney, included on Page 34.
*27 Financial Data Schedule (previously filed electronically with the
1997 10-K)
* FILED HEREWITH.
(b) Reports on Form 8-K.
--------------------
None.
33
<PAGE>
SIGNATURES
-----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: March 19, 1998 AMERICAN PACIFIC CORPORATION
(Registrant)
By: /s/ John R. Gibson
--------------------------------------------
John R. Gibson
President & Chief Executive Officer
By: /s/ David N. Keys
--------------------------------------------
David N. Keys
Senior Vice President, Chief Financial
Officer, Secretary and Treasurer,
Principal Financial and Accounting Officer
POWER OF ATTORNEY
-----------------
American Pacific Corporation and each of the undersigned do hereby
appoint John R. Gibson and David N. Keys and each of them severally, its or his
true and lawful attorneys, with full power of substitution and resubstitution,
to execute on behalf of American Pacific Corporation and the undersigned any and
all amendments to this Report and to file the same with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission. Each of such attorneys shall have the power to act hereunder with
or without the others.
34
<PAGE>
GIBSON RANCH
LIMITED LIABILITY COMPANY
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1997, AND
INDEPENDENT AUDITORS' REPORT
61
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Members
Gibson Ranch Limited Liability Company
Las Vegas, Nevada
We have audited the accompanying balance sheet of Gibson Ranch Limited Liability
Company (the "Company"), and the related statements of operations and members'
equity and of cash flows for the year ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Gibson Ranch Limited Liability
Company as of December 31, 1997, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Las Vegas, Nevada
March 6, 1998
62
<PAGE>
GIBSON RANCH LIMITED LIABILITY COMPANY
BALANCE SHEET
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Cash and cash equivalents $ 498,465
Receivables, net 377,597
Inventories 25,751,033
Deposits and other assets 1,032,269
-----------
TOTAL $27,659,364
===========
LIABILITIES AND MEMBERS' EQUITY
LIABILITIES:
Notes payable $ 5,852,947
Accounts payable and accrued liabilities 4,978,642
Due to members 2,379,393
Customer deposits 123,075
-----------
Total liabilities 13,334,057
MEMBERS' EQUITY 14,325,307
-----------
TOTAL $27,659,364
===========
</TABLE>
See notes to financial statements.
63
<PAGE>
GIBSON RANCH LIMITED LIABILITY COMPANY
STATEMENT OF OPERATIONS AND MEMBERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------
<TABLE>
<S> <C>
REVENUES:
Home sales $19,407,397
Land sale 2,240,000
-----------
Total revenues 21,647,397
-----------
COST OF SALES:
Home sales 17,291,000
Land sale 934,078
-----------
Total cost of sales 18,225,078
-----------
GROSS PROFIT 3,422,319
OPERATING EXPENSES 1,223,131
-----------
NET INCOME $ 2,199,188
===========
MEMBERS' EQUITY, JANUARY 1, 1997 (As previously stated) $13,678,922
ADJUSTMENT (See Note 1) 1,457,568
-----------
MEMBERS' EQUITY, JANUARY 1, 1997 (As adjusted) 15,136,490
NET INCOME 2,199,188
DISTRIBUTIONS PAID (3,010,371)
-----------
MEMBERS' EQUITY, DECEMBER 31, 1997 $14,325,307
===========
</TABLE>
See notes to financial statements.
64
<PAGE>
GIBSON RANCH LIMITED LIABILITY COMPANY
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1997
- -------------------------------------------------------------------------------------------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,199,188
Changes to reconcile net income to net cash provided by operating activities:
Increase in receivables (187,392)
Increase in deposits and other assets (39,382)
Increase in inventories (2,634,615)
Increase in accounts payable and accrued liabilities 2,103,551
Decrease in customer deposits (28,796)
------------
Net cash provided by operating activities 1,412,554
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of amounts due to members (407,228)
Distributions paid to members (3,010,371)
Proceeds from notes payable 18,466,503
Principal payments on notes payable (16,354,078)
------------
Net cash used in financing activities (1,305,174)
------------
NET INCREASE IN CASH 107,380
CASH, BEGINNING OF YEAR 391,085
------------
CASH, END OF YEAR $ 498,465
============
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Cash paid for interest $ 856,757
============
</TABLE>
See notes to financial statements.
65
<PAGE>
GIBSON RANCH LIMITED LIABILITY COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS--Gibson Ranch Limited Liability Company (the "Company")
was formed August 27, 1993, under the Nevada Limited Liability Company Act.
The members are The Developers of Nevada ("Developers"), its managing
member, and AmPac Development Company ("AmPac"). Limited liability
companies ("LLC") are statutorily established legal entities containing
features of corporations and partnerships. Except as provided by law, the
members are not personally liable for any debts of the Company or any
losses in excess of the amount of their capital contribution. The Company
has acquired real property in Henderson, Nevada, for the purpose of
developing lots, selling undeveloped commercial land, and constructing
single-family homes and four-plex townhomes. The Company will continue
until August 2023 unless dissolved prior to that time.
Prior to January 1, 1997, the Company had recorded the initial contribution
of land by Developers and AmPac at its agreed upon value in accordance with
the Company's operating agreement. Generally accepted accounting
principles require that the land should be recorded at the lower of the
members' cost basis or market value. Therefore, an adjustment of
$1,457,568 has been made to member's equity and land at January 1, 1997.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reported period. Significant estimates used include the
allocation of lot development costs. Actual results could differ from those
estimates.
2. SIGNIFICANT ACCOUNTING POLICIES
BALANCE SHEET PREPARATION--The operations of the Company involve a variety
of real estate transactions and it is not possible to precisely measure the
operating cycle of the Company. The balance sheet of the Company has been
prepared on an unclassified basis in accordance with real estate industry
practice.
REVENUE RECOGNITION--Profits on the sale of real estate are recognized upon
closing in accordance with Statement of Financial Accounting Standards
("SFAS") No. 66, Accounting for Sales of Real Estate, when title has
passed, the buyer has made a substantial commitment, the usual risks and
rewards of ownership have been transferred to the buyer and the
collectibilty of the sales price is reasonably assured. Construction costs
are generally allocated to lots using the specific identification method.
Payments received from buyers prior to closing are recorded as deposits.
MANAGEMENT FEES--Over the life of the Company, a management fee is paid to
the Company's managing member in the amount of $50,000 per month. This
management fee is charged to expense as incurred.
INVENTORIES--Inventories are stated at the lower of cost or net realizable
value. Inventory costs include preacquisition costs, property taxes,
interest, and insurance incurred during development and construction,
66
<PAGE>
and direct and certain indirect project costs. General and administrative
costs are charged to expense as incurred. Model construction, model
furnishing costs, and semi-permanent signs are capitalized. Costs of
amenities such as swimming pools, parks, and fitness centers are accounted
for as common costs and allocated to units to be sold.
The Company follows Financial Accounting Standards No. 121 - Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of. As of December 31, 1997, no adjustments to reduce cost to
fair value less estimated selling costs were required.
ALLOCATION OF PROCEEDS AND DISTRIBUTIONS OF PROFIT AND LOSSES--Under the
terms of the operating agreement, the capital contributions of all members
shall be returned on a pro rata basis as land in the project is developed
and sold. The profits and losses of the Company shall be split equally
between the members after the return of advances and agreed upon values for
initial contributions.
INCOME TAXES--As an LLC, the Company is taxed as a partnership. As a
result, the members separately account for their share of the Company's
income, deductions, losses, and credits. Accordingly, no provision for
income tax expense has been recognized in the accompanying financial
statements.
CASH AND CASH EQUIVALENTS--For purposes of reporting cash flows, cash and
cash equivalents includes cash on hand, cash in bank, and money market
accounts.
3. INVENTORIES
Inventories consist of the following as of December 31, 1997:
<TABLE>
<S> <C>
Land under development $10,869,926
Land held for investment 726,817
Development and construction costs 13,755,706
Model home furnishings and signs 398,584
-----------
Total $25,751,033
===========
</TABLE>
Interest and finance costs capitalized were $1,248,846, including $239,409
to AmPac, during the year ended December 31, 1997.
4. DEPOSITS AND OTHER ASSETS
Deposits and other assets consist of the following as of December 31, 1997:
<TABLE>
<S> <C>
Refundable deposits $ 759,985
Other assets 272,284
----------
Total $1,032,269
==========
</TABLE>
67
<PAGE>
5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities consist of the following as of
December 31, 1997:
<TABLE>
<S> <C>
Accounts payable - trade $4,121,209
Special improvement district assessment 684,705
Warranty reserve 114,756
Accrued interest 57,972
----------
Total $4,978,642
==========
</TABLE>
6. NOTES PAYABLE
Notes payable consist of the following as of December 31, 1997:
<TABLE>
<S> <C>
Note payable to a bank, monthly installments
of interest only based on the bank's prime
lending rate (8.50% at December 31, 1997), due
April 1999, secured by deed of trust and
guaranteed by the members of Developers. $ 461,448
Notes payable to a corporation, monthly
installments of interest only at 12.5%
through February 1998, due March 1998, secured
by deed of trust and guaranteed by the members
of Developers. 1,830,649
Revolving line of credit secured by deed of
trust and guaranteed by the members of
Developers. Bears interest at the prime rate
plus 1.25% and matures April 30, 1998. The
revolving line of credit is for $10,000,00 3,560,850
----------
Total $5,852,947
==========
</TABLE>
Scheduled maturities of notes payable for the years ending December 31 are
as follows:
<TABLE>
<S> <C>
1998 $5,391,499
1999 461,448
----------
Total $5,852,947
==========
</TABLE>
In accordance with the bank loan agreements, the Company is required to
maintain a minimum tangible net worth of no less than $5,000,000 at all
times. The Company is subject to certain other debt covenants which
includes providing reviewed or audited financial statements by a certain
date.
7. RELATED PARTY BALANCES AND TRANSACTIONS
Developers made advances to and received payments from the Company for
operating and development expenditures. Advances included in due to
members are $10,633 at December 31, 1997.
The Company also has a $2,400,000 revolving line of credit agreement with
AmPac and a $2,400,000 revolving line of credit agreement with Developers
that may be drawn only after the AmPac line has been exhausted. The
agreements have no stated repayment terms and accrue interest at 10
percent. The AmPac line is unsecured; the Developers line may be secured
by the land contributed by Developers. The balance outstanding at December
31, 1997, included in due to members is $2,368,761 due to AmPac.
68
<PAGE>
The Company incurred management fees to its managing member totaling
$600,000 for the year ended December 31, 1997.
AmPac's initial contribution of land was subject to its ability to obtain a
release of a mortgage lien in favor of AmPac's creditors. In December 1994
an agreement regarding release of liens was consummated. Under the terms
of this agreement, release amounts are distributed to a trustee upon sales
of the Company's property for future payment of AmPac's indebtedness. The
release amounts paid by the Company are recorded as distributions to the
members.
69
