Consolidated gross margin for the quarter ended December 31, 2012 improved 7.5% to $22.4 million, as compared to $20.8 million for the prior year comparable period. Gross margin percentage did however decline to 28.0% of sales as compared to 29.9% in the prior year comparative period, principally due to the previously mentioned raw material cost increases, product mix and start-up costs relating to the new Virginia manufacturing facility. Operating (Selling, R&D, and General and Administrative) expenses at $7.4 million were up approximately 3.0% from the prior year comparable quarter, however, declined as a percentage of sales to 9.2% from 10.3%, as we continue to prudently exercise tight controls over these expenses. Our effective tax rate for the three months ended December 31, 2012 and 2011 was 34.5% and 31.0%, respectively. This increase in the effective tax rate is primarily attributable to a change in apportionment relating to state income taxes and the expiration/lack of renewal of the 2012 U.S. R&D tax credit.The Company continues to maintain and grow a solid financial structure. Diligent working capital controls, particularly effective inventory and accounts receivable management, contribute strongly to the business performance. The $181.7 million of net working capital on December 31, 2012 included a cash balance of $144.7 million, up from $114.8 million at December 31, 2011, and reflects the early pay-down of the Italian long-term debt, the early $6.5 million payment in December of our 2012 dividend to shareholders and $13.9 million of capital expense funding, predominantly for the new Virginia site.
Balchem Corporation Announces Fourth Quarter 2012 Results
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