Corporate – Corporate operating expenses increased $15.6 million to $42.7 million for the first quarter of fiscal 2013 compared to the prior year quarter. Results for the first quarter of fiscal 2013 included pre-tax costs of $16.3 million incurred in connection with a tender offer for the Company’s common stock and threatened proxy contest. Results for the first quarter of fiscal 2012 included pre-tax costs of $2.8 million incurred in connection with a proxy contest. Excluding tender offer and proxy contest costs, adjusted corporate operating expenses increased $2.1 million to $26.4 million for the first quarter of fiscal 2013 compared to the prior year quarter. The increase in adjusted corporate expenses in the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012 was related to higher share-based compensation costs.
Interest Expense Net of Interest Income – Interest expense net of interest income decreased $5.8 million to $14.2 million in the first quarter of fiscal 2013 compared to the prior year quarter. The decrease was largely due to the expiration of the Company’s interest rate swap in the first quarter of fiscal 2012. First quarter fiscal 2012 interest expense included $2.2 million of expense related to the Company’s interest rate swap. In addition, in the first quarter of fiscal 2013, the Company recognized $2.3 million of interest income upon receipt of payment on a note receivable.
Provision for Income Taxes – The Company recorded income tax expense of $21.0 million in the first quarter of fiscal 2013, or 31.5 percent of pre-tax income, compared to 22.3 percent of pre-tax income in the prior year quarter. Excluding discrete items, the Company’s effective tax rate was 34.3 percent in the first quarter of fiscal 2013 compared to 35.7 percent in the prior year quarter.
Share Repurchases – During the first quarter of fiscal 2013, the Company repurchased 4,250,072 shares of its common stock at an aggregate cost of $125.1 million. The Company is targeting to spend an additional $175 million to repurchase shares over the next 9 to 15 months.Fiscal 2013 Expectations As a result of its strong first fiscal quarter results, its outlook for the remainder of the year, the impact of share repurchases to date and benefits associated with the reinstatement of the U.S. research and development tax credit, the Company is increasing its outlook range for full-year fiscal 2013 adjusted earnings from continuing operations to $2.80 - $3.05 per share. This estimate excludes $0.09 per share incurred in the first quarter of fiscal 2013 as well as any future potential costs related to the tender offer for the Company’s common stock and threatened proxy contest, restructuring costs and discrete tax items.
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