Fourth Quarter and Full-Year Results
Fourth quarter 2012 sales increased 12% over the prior year period to $159.2 million. This increase was driven by our recent acquisitions, which added $20.3 million to sales, as well as 14% growth in vascular revenue. Fourth quarter results included the impact of foreign currency exchange rate fluctuations, which lowered orthopaedic sales by approximately $0.6 million in comparison to the prior year. On an organic constant currency basis, sales for the fourth quarter decreased 2% versus the prior year as the benefits described above were partially offset by lower cardiac and neuromodulation revenue, due to the timing of customer inventory builds. For the year, sales increased 14% to $646.2 million and included $84.8 million of revenue from our acquisitions partially offset by $6.3 million of negative foreign currency exchange rate fluctuations. On an organic constant currency basis, revenue for 2012 was consistent with the prior year as above market growth from our cardiac and vascular product lines was offset by operational issues experienced within our orthopaedics product line.
Gross profit increased $7.2 million to $51.9 million for the fourth quarter of 2012, compared to $44.7 million for the comparable 2011 period. This increase resulted from the higher sales volumes discussed above, as well as a shift in mix to higher margin products. As a result, gross margin for the fourth quarter of 2012 increased 110 basis points to 32.6%. For the year, gross profit increased $21.3 million to $201.6 million, which was primarily due to higher sales volumes. Gross margin for the year of 31.2% was 50 basis points below the prior year, as the benefit of higher production volumes and mix was offset by production inefficiencies at our Swiss Orthopaedic facilities.
Selling, general and administrative (“SG&A”) expenses increased $2.4 million to $20.9 million, or 13.2% of sales, for the fourth quarter of 2012 compared to $18.6 million, or 13.1% of sales, for the same period of 2011. For the year, SG&A costs increased $8.4 million to $81.0 million, or 12.5% of sales, versus $72.5 million, or 12.8% of sales for 2011. The increase in SG&A expenses for the quarter and full-year were directly attributable to our acquisitions which added $1.7 million and $9.6 million, respectively, of incremental SG&A costs.