Net sales for the fourth quarter were $643.7 million, up 33 percent from the prior year. Excluding surcharge revenue, net sales were $506.7 million, up 44 percent from a year ago on 31 percent higher volume. Excluding the Latrobe impact, fourth quarter revenue excluding surcharge was up 15 percent on 3 percent higher volume. Specialty Alloy Operations (SAO) segment sales without surcharge increased 18 percent on 10 percent higher volume, while Performance Engineered Products (PEP) segment sales without surcharge increased 15 percent on 5 percent lower volume compared with the fiscal year 2011 fourth quarter.
Gross profit was $120.6 million compared with $77.0 million in the fiscal year 2011 fourth quarter. The higher gross profit was driven by improvement in SAO due to increased volume and a higher profit per pound from an improved product mix and higher prices, and the inclusion of Latrobe.
SG&A expense as a percentage of revenue excluding surcharge was 0.5 percent lower than the prior year fourth quarter. SG&A expense in the current quarter was $54.1 million or 10.7 percent of revenue excluding surcharge, compared with $39.6 million or 11.2 percent of revenue excluding surcharge for the fourth quarter of fiscal year 2011. The increase in spending mostly reflects the addition of Latrobe-related overhead costs.
Operating income for the fourth quarter was $66.5 million compared with $35.0 million a year earlier. Latrobe accounted for $17.0 million of operating income, before being reduced by inventory fair value cost adjustments of $8.7 million. Excluding surcharge revenue and pension earnings, interest and deferrals (EID), operating margin was 14.0 percent compared to 12.4 percent in the fiscal year 2011 fourth quarter.Interest expense in the quarter was $5.4 million compared to $4.2 million in the year-ago period due to the impact of financing actions taken during last year’s fourth quarter. Other income was $0.9 million compared to $2.8 million in the fiscal year 2011 fourth quarter.