In 2011, the company had an income tax benefit of $25.2 million, compared with $3.0 million of expense in 2010. The effective tax rate on the 2011 pretax income was a benefit of 60.2 percent, compared with expense of 5.2 percent in 2010. The 2011 income tax provision included a $42.3 million benefit from released valuation allowances for U.S. and Mexico deferred tax assets. This benefit was offset partially by the net expense for income taxes on U.S. and foreign income and other current period tax adjustments.
Fourth Quarter Results
Net sales for the 2011 fourth quarter advanced 14 percent to $216.8 million from $191.0 million for the previous year, principally reflecting an 11 percent increase in units shipped and higher pass-through pricing of aluminum. Unit shipments of 3.2 million in the 2011 fourth quarter exceeded those in the comparable quarter last year by 305,000.
Gross profit for the 2011 fourth quarter declined to $18.1 million, or 8 percent of sales, from $29.0 million, or 15 percent of sales, for the fourth quarter of 2010. The decline in gross profit and margin percentage reflected, in part, the impact of a weaker product mix. Higher factory costs included direct labor, repairs and maintenance and operating supplies. Costs for wheel development activities also increased in 2011 when compared to the prior year. Manufacturing operations continued to operate at full capacity utilization.Selling, general and administrative expenses for the fourth quarter of 2011 decreased $300,000 to $6.2 million, or 3 percent of net sales, from $6.5 million, or 4 percent of net sales, for the comparable period in 2010. Income before income taxes and equity earnings was $12.0 million in the 2011 fourth quarter, compared with $22.5 million for the fourth quarter of 2010, with the change affected by the same items that impacted gross profit comparisons above.