Backlog at March 31, 2013 was $586.6 million, down 5% from the December 31, 2012 level of $617.4 million. Orders for the first quarter of 2013 were $243.6 million and do not include the recent PetroChina award, which will be reflected in second quarter 2013 orders and backlog. First quarter 2012 had record orders of $385.1 million including major LNG project awards in excess of $150 million for several baseload LNG projects in Australia.
Selling, general and administrative ("SG&A") expenses for the first quarter of 2013 increased $6.6 million compared with the same period in 2012 to $47.2 million, or 17.2% of sales, which was down as a percentage of sales from 18.8% in the prior year's quarter. The additional costs are primarily due to the AirSep acquisition and employee-related costs as we pursue LNG-related growth opportunities.
Interest expense was $4.0 million for the first quarter of 2013, which included $2.4 million of non-cash accretion expense associated with the Company's Convertible Notes. Therefore, cash interest was $1.6 million.
Income tax expense was $6.6 million for the first quarter of 2013 and represented an effective tax rate of 29%, the same as the prior year quarter.Cash and short-term investments were $126.3 million at March 31, 2013, compared to $141.5 million at December 31, 2012. SEGMENT HIGHLIGHTS Energy & Chemical ("E&C") segment sales increased 17.5% to $80.9 million for the first quarter of 2013 compared with $68.8 million for the same quarter in the prior year. Gross margins were lower due to project mix and some higher costs as we execute on multiple projects, including a record number of large baseload projects, and concentrate on maximizing throughput. Higher costs due to some labor inefficiencies and project scope changes negatively impacted margins about 4% in the quarter. This project was shipped during the second quarter and certain costs associated with the project scope changes may possibly be recovered. In addition, the prior year quarter margin improved about 3.5% due to completion of projects including income recognition of project reserves.