Despite the increase in net sales, operating profit at our Industrial/Environmental Filtration segment declined 10%, or $1.0 million, primarily due to a 0.9 percentage point reduction in operating margin from the first quarter of 2012. Operating margin in this reporting segment was impacted by a higher mix of natural gas vessels as opposed to higher margin natural gas aftermarket elements and lower operational performance at TransWeb compared with last year’s first quarter.
Net sales at our Packaging segment increased less than 1% from the first quarter of 2012. This increase was due to an increase in spice packaging sales to both branded and private label customers partially offset by lower sales of decorated flat sheet metal products due to timing of certain promotional programs and lower film packaging sales attributed to lower general demand for film products and also influenced by the Kodak bankruptcy. Operating profit increased $0.4 million from the first quarter of 2012 primarily due to a 2.3 percentage point improvement in operating margin driven by a 2.7 percentage point decline in selling and administrative expenses as a percentage of net sales. Lower selling and administrative expenses were due in part to a $0.2 million bad debt expense recognized in the first quarter of 2012 related to the Kodak bankruptcy.
Income Taxes and Other IncomeThe 2.4 percentage point decrease in our effective tax rate to 30.4% in the first quarter of 2013 from 32.8% in last year’s first quarter was primarily due to the extension of the research and experimentation tax credit for 2012 in January 2013. Other income in the first quarter of 2013 declined approximately $0.7 million from last year’s first quarter, which included the receipt of a one-time $1.2 million dividend pursuant to our investment in BioProcess Algae LLC and a $0.5 million foreign currency loss which did not recur in the first quarter of 2013.