“We invested heavily in our core strategies during the first quarter. Product development has been expanded through additional engineering teams in our Industrial segment, focused on growing our end markets served worldwide, and increased project spending in all segments. In addition, we invested $8 million in capital expenditures during the quarter to drive plant-level and administrative efficiencies. Headcount also continues to expand worldwide, as we add resources to drive growth in the emerging markets of Asia, Europe, the Middle East and Latin America. These investments are expected to yield strong returns in the future.”
First quarter sales increased 8 percent, including increases of 9 percent in the Americas, 3 percent in Europe (6 percent at consistent translation rates) and 10 percent in Asia Pacific (8 percent at consistent translation rates).
Gross profit margin, expressed as a percentage of sales, was 56 percent, slightly lower than the first quarter last year. The unfavorable effect of higher material costs was partially offset by realized price increases and improved efficiencies.Total operating expenses increased $7 million for the quarter, including $4 million related to the acquisition of ITW’s finishing businesses and a $2 million increase in product development expense. The effective income tax rate of 34½ percent for the quarter is higher than the rate for the first quarter last year due to the expiration of the federal R&D credit. Segment Results Certain measurements of segment operations are summarized below:
|Net sales (in millions)||$||134.1||$||72.0||$||28.0|
|Percentage change from last year|
|Operating earnings as a percentage of sales|