"Even though the first quarter is seasonally our slowest period, our Americas division jumped out to a strong start by posting a record number for first quarter sales," said Daniel T. Hendrix, Chairman and Chief Executive Officer of the Company.
"The revenue gains in the Americas and a double-digit percentage sales increase in Southeast Asia were offset by weak sales in Europe due to a combination of continued economic uncertainty and unusually bad weather in the U.K. at the end of the quarter, and by the impact of the fire at our Picton, Australia plant last summer.
Despite the general malaise in Western Europe, our European division maintained a healthy operating margin, and our supply chain and lead times for servicing Australia are stabilizing in advance of commissioning our rebuilt plant later this year."
First Quarter 2013 Financial Summary & Highlights
Sales: Sales for the first quarter of 2013 were $210.4 million, essentially even with sales of $210.0 million in the first quarter of 2012.
Our Americas business, up 9% year-over-year, led the sales increase, with strong growth coming in the corporate office segment (up 21%) as well as non-office segments such as hospitality (up 68%), government (up 4%) and healthcare (up 3%). Sales in our consumer business, FLOR, were up 24% year-over-year for the first quarter, mostly due to the expanded FLOR store channel.
Asia-Pacific sales were down 8% overall, with strong growth in Southeast Asia (up 11%) offset by the decline in Australia (down 13%).
The European region was down 10% in local currencies, or 9% as reported in U.S. dollars. Germany finished the quarter with a strong March to pull even with the prior year, and we saw nice activity in emerging markets such as Eastern Europe, the Middle East and India.
Operating Income: Operating income in the first quarter of 2013 was $14.0 million, or 6.7% of sales, down from the first quarter of 2012 when it was $16.6 million, or 7.9% of sales, excluding a restructuring and asset impairment charge of $16.3 million.
Including the charge, operating income in the first quarter last year was $0.3 million. SG&A expenses in the first quarter of 2013 were $57.3 million, or 27.2% of sales, versus $53.9 million, or 25.7% of sales, in the first quarter of 2012. The increase in SG&A expenses was mostly due to the continued development of our FLOR consumer business and the expansion of our sales force in the U.S.
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