Engineered Solutions Segment
Net sales for the Engineered Solutions segment were $53 million in the second quarter of 2012 versus $50 million in the second quarter of 2011. The increase was largely driven by continued growth in our advanced consumer electronics products and the incremental revenue associated with acquisitions. This increase was partially offset by the decline in sales in the solar market of our advanced graphite materials products.
Operating income for the Engineered Solutions segment was $5 million in the second quarter of 2012, or nine percent of sales. This compares to operating income of $7 million, or 15 percent of sales in the same period in 2011. The decline reflects the significant slowdown in the solar market and the European economy.
Mr. Shular commented, “As expected, our Engineered Solutions segment has returned to profitability this quarter as we continue to see solid demand in our advanced consumer electronics product line. We expect this segment to continue to grow in the second half of the year and are targeting a double digit operating income margin percentage in the fourth quarter of 2012.”Corporate Total company overhead expenses were $38 million as compared to $36 million in the second quarter of 2011. This compares to overhead expense in the first quarter of 2012 of $43 million. The decline in overhead quarter-over-quarter is largely driven by lower administrative expense as a result of right sizing initiatives taken in the first quarter of 2012 and a reduction in variable incentive compensation expense. Other (income) expense on a net basis was negligible in the second quarter of 2012, or flat versus the same period of the prior year. Interest expense in the quarter was $5 million, or flat as compared to the second quarter of 2011. The effective income tax rate (excluding the previously mentioned tax benefit) in the second quarter was 24 percent.