Gross margins for the E&I segment were 13.7% and 13.6% for the second quarter 2012 and first six months of 2012, respectively, compared to 13.5% in the first quarter 2012. Gross margins also improved for the OCTG segment at 9.8% and 9.5% for the second quarter 2012 and first six months of 2012, respectively, compared to 9.2% in the first quarter 2012.
Selling, general and administrative (“SG&A”) expenses were 5.7% and 5.1% of total sales for the second quarter 2012 and for the first six months of 2012, respectively, compared to 5.3% and 5.6% of total sales for the same periods in 2011, respectively. SG&A expense for the second quarter 2012 was increased by a non-cash charge of $3.0 million related to equity-based compensation expense associated with the acceleration of certain equity-based awards. Exclusive of the $3.0 million charge, SG&A expenses were 5.1% and 4.8% of total sales for the second quarter 2012 and first six months of 2012, respectively, and reflect improved operating leverage on higher sales.
Net loss for the second quarter 2012 was $(13.8 million) compared to net income of $1.0 million in the second quarter 2011. Excluding the $15.1 million (net of tax of $1.9 million) loss on prepayment of debt related to the Company’s initial public offering and the $3.0 million (net of tax of $0 million) non-cash equity based compensation charge discussed above, net income for the second quarter of 2012 would have been $4.3 million. Loss per diluted share was $(0.35) in the second quarter 2012 and reflects Edgen Group’s allocable net loss which includes the impact of the charges discussed above, and the weighted average number of outstanding dilutive shares since the initial public offering on May 2, 2012.
Net loss for the first six months of 2012 was $(9.7 million) compared to a net loss of $(6.4 million) for the first six months of 2011. Excluding the impact of the debt prepayment and equity-based compensation charges previously discussed, net income for the six months ended June 30, 2012 would have been $8.4 million
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