Total selling, general and administrative expenses increased year over year by $5.2 million to $56.5 million and increased as a percentage of net sales to 11.3% for the first quarter of 2012, from 11.1% for the first quarter of 2011. The dollar and percentage increases were attributable to the acquisition of ValCom Technology and investments in significant internal systems projects targeted to improve operational efficiencies. In addition, variable compensation increased due to the improvement in gross profits. We expect that total SG&A will be at least $57.0 million for each of the next three quarters.
The Company generated significant positive cash flow in the quarter ended March 31, 2012. Total cash was $49.8 million compared to $4.6 million at December 31, 2011. In addition, there were no amounts outstanding on the Company’s line of credit at March 31, 2012, compared to $5.3 million outstanding at December 31, 2011. Days sales outstanding were 43 days at March 31, 2012, and inventory was reduced to $62.5 million from $77.4 million at December 31, 2011.
“I am pleased with our results this quarter. Our team continues to execute well. We generated solid sales growth and increased our pro forma earnings per share by 35%. In addition, we strengthened our balance sheet and generated significant positive cash flow,” said Timothy McGrath, President and Chief Executive Officer. “We believe the strategies we have put in place will position us well to gain market share and enhance long-term shareholder value.”
Non-GAAP Financial InformationAdjusted EBITDA, pro forma net income, and pro forma earnings per share are non-GAAP financial measures. This information is included to provide information with respect to the Company’s operating performance and earnings. Reconciliations of Adjusted EBITDA, pro forma net income, and pro forma earnings per share to GAAP net income are provided in tables immediately following the Condensed Consolidated Statements of Income.