- For the third quarter of 2013, the Company reported improved income from continuing operations of $9.0 million, or $0.19 per diluted share, compared to $6.9 million, or $0.15 per diluted share for the third quarter of 2012.
- Gross profit margins increased to 20.9% in the third quarter of 2013 as compared to 20.1% a year ago, due to favorable product mix and cost reduction actions.
- Strong cash flow in the quarter resulted in a Net Debt reduction of $22.4 million.
- Full-year 2013 Adjusted Income from Continuing Operations is expected to approximate 2012 levels.
Consolidated Results for the Third quarter Ending August 31, 2013
Net sales decreased $27.0 million, or 9.4%, to $261.2 million for the third quarter of 2013, compared to $288.2 million for the third quarter of 2012. The sales decrease was driven by lower volume of $10.0 million, or 3.5%, and reduced pricing of $18.7 million, or 6.5%, partially offset by favorable currency translation effects of $1.7 million.
Gross profit in the third quarter of 2013 decreased to $54.7 million, compared to $57.8 million in the third quarter of 2012, due to the lower volumes and pricing. Raw material costs declined $15.8 million in the third quarter versus the same period last year. Gross profit margins in the third quarter of 2013 improved to 20.9%, compared to margins of 20.1% in the third quarter of 2012. The increase was due to better product mix and cost reduction actions.
Selling, general and administrative expense (SG&A) in the third quarter of 2013 was $28.5 million, or 10.9% of sales, compared to $30.4 million, or 10.5% of sales, in the third quarter of 2012. The $1.9 million improvement was due to lower employee expenses and a reduction in discretionary spending.
Interest expense in the third quarter of 2013 declined to $7.7 million, a decrease of $1.1 million from the third quarter of 2012, due to lower borrowing spreads as a result of a March 2013 term loan amendment and lower foreign borrowings.
Income tax expense was $3.4 million, representing a 27.4% effective income tax rate, for the third quarter of 2013, compared to income tax expense of $3.4 million, or a 33.0% effective tax rate, in the third quarter of 2012. The lower rate in 2013 is due primarily to higher income in foreign jurisdictions where the rate is lower than the U.S. statutory rate.
The Company estimates its full-year 2013 effective rate will be approximately 30%. Additionally, cash tax payments in the U.S. over the next few years are expected to be minimal as the Company has $114.0 million of U.S. federal net operating loss carryforwards and $90.0 million of state and local tax net operating loss carryforwards with expiration dates between 2022 and 2033.
Net income for the third quarter of 2013 was $9.0 million, or $0.19 per diluted share, compared to net income of $6.4 million, or $0.14 per diluted share, for the third quarter of 2012.
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