Nine Month Results
Net sales for the nine months ended September 30, 2012 increased 0.3 percent to $4.38 billion, compared with $4.37 billion in the prior year. Core sales increased 2.2 percent for the nine months with foreign currency translation adversely impacting net sales by 1.9 percent.
Gross margin increased 50 basis points compared with prior year to 38.2 percent, as productivity gains and pricing more than offset the effect of input cost inflation.
Normalized operating margin increased 20 basis points versus prior year to 12.9 percent. Reported operating margin improved 840 basis points due to asset impairment charges in last year’s results.
Normalized earnings were $1.27 per diluted share compared with $1.19 per diluted share in the prior year. For the nine months ended September 30, 2012, normalized diluted earnings per share exclude $0.18 per diluted share for restructuring and restructuring-related costs associated with Project Renewal and the European Transformation Plan; income tax charges of $0.07 per diluted share attributable to certain tax contingencies, expiration of statutes of limitation and resolution of tax examinations; $0.01 per diluted share related to the extinguishment of debt; and a net gain of $0.01 per diluted share from discontinued operations primarily related to the receipt of the escrow from the disposal of the hand torch and solder business. For the nine months ended September 30, 2011, normalized earnings per diluted share exclude $1.03 per diluted share for impairment charges primarily related to goodwill write-downs; $0.12 per diluted share for restructuring and restructuring-related costs associated with the European Transformation Plan; $0.01 per diluted share related to the incremental costs associated with the company’s CEO transition; and benefits of $0.17 per diluted share resulting from the reversal of certain tax contingencies due to the expiration of various statutes of limitation. In addition, last year the company recorded a net loss from discontinued operations of $8.1 million, or $0.03 per share, reflecting the income from discontinued operations and loss on disposal of the hand torch and solder business, which was excluded from normalized earnings. (A reconciliation of the “as reported” results to “normalized” results is included below.)