Adjusted operating income of $39.0 million was down $4.4 million compared to the year ago quarter on lower sales volumes, although gross margin was very strong at 25.4% for the quarter compared to 24.3% in the year ago quarter, driven by margin improvements at our cotton cellulose and nonwovens plants.
The June outage at our Foley mill had a negative impact of $2.2 million on first quarter operating income and $0.04 on EPS. Selling, general and administrative (SRA) expenses of $13.2 million were up $0.8 million year over year due to growth initiative consulting and legal fees incurred during the quarter.
Adjusted net income of $24.6 million, or $0.62 per share, excludes net income of $5.5 million or $0.14 per share relating to the cellulosic biofuel credit and after-tax restructuring charges of $0.6 million or $0.02 per share. Adjusted net income was down $5.3 million or $0.12 per share compared to the prior year period’s $29.9 million or $0.74 per share, which excluded net income of $11.2 million or $0.28 per share relating to the cellulosic biofuel credit. The year over year reduction in adjusted net income was driven by the drop in adjusted operating income mentioned above as well as by a higher effective tax rate.
Comparing the first quarter of fiscal year 2013 to the fourth quarter of fiscal 2012, sales were down $28 million or 12%. This was mainly due to a $27 million reduction in sales from the Foley specialty wood fibers facility, as shipments were impacted by the June outage and demand softness in some markets. Adjusted operating income was down $1.3 million due to lower shipment volume and unfavorable mix at Foley, and higher SRA expenses.
These were partly offset by higher operating income from our Memphis specialty cotton fibers plant and our Nonwovens segment. The net impact of the June outage was $1.9 million less in Q1 than in Q4. Adjusted EPS of $0.62 was down $0.04 versus the fourth quarter due to lower adjusted operating income and a higher effective tax rate.
Free cash flow was negative $21 million for the quarter and long-term debt increased by $23 million to $82 million, as the Company repaid $28 million of alternative fuel mixture credits which will be traded for higher value cellulosic biofuel credits. We currently expect to realize about $40 to $45 million in positive cash flow over the next three quarters relating to the cellulosic biofuel credit.
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