Full year net sales and earnings per diluted share were $708.2 million and $3.63 per diluted share for 2012, respectively, compared to net sales and earnings per diluted share of $683.2 million and $3.66 per diluted share for 2011, respectively. Full year 2012 net income was $47.4 million compared to 2011 net income of $45.9 million. Changes in foreign exchange rates negatively impacted the full year 2012 net sales by $26.8 million, or 4%, and net income by $1.7 million or $0.13 per diluted share.
Fourth Quarter 2012 Summary
Net sales for the fourth quarter of 2012 were $172.9 million, a decrease of less than 1% from $173.3 million in the fourth quarter of 2011. Product volumes, including acquisitions, increased revenues by approximately 3%, which were offset by decreases due to foreign exchange rate translation of $3.7 million, or 2%, and a slight decrease due to selling and price mix of less than 1%.
Gross profit increased approximately $2.5 million, or 4%, from the fourth quarter of 2011. The increase in gross profit on consistent sales was due to an improvement in gross margin to 34.2% compared to 32.7% for the fourth quarter of 2011 and 32.7% for the third quarter of 2012. The increase in gross margin is primarily the result of some stabilization in raw material costs experienced in the fourth quarter of 2012, allowing margins to return to more acceptable levels.
Selling, general and administrative expenses ("SG&A") increased approximately $0.2 million compared to the fourth quarter of 2011, primarily related to acquisitions and higher selling, inflationary and other labor related costs which were partially offset by a decrease in foreign exchange rate translation and lower incentive compensation. SG&A for the fourth quarter of 2012 also includes certain uncommon expenses totaling $0.06 per diluted share largely consisting of severance and related items and costs associated with the launch of the Company's new revitalized Brand. SG&A, as a percentage of sales, was slightly up at 26.3% for the fourth quarter of 2012 compared to 26.1% for the fourth quarter of 2011.
The decrease in interest expense was primarily due to lower average borrowings and lower interest rates in the fourth quarter of 2012 as compared to the fourth quarter of 2011.
The increase in other income in the fourth quarter of 2012 was primarily due to higher other income related to the change in fair value of a contingent consideration liability of $1.7 million, or $0.09 per diluted share, compared to $0.6 million, or $0.03 per diluted share, in the fourth quarter of 2011 and, also, a separate increase to other income of approximately $1.0 million, or $0.08 per diluted share, related to the change in fair value of an acquisition-related liability, was recorded in the fourth quarter of 2012.
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