Gross margin for the nine months ended September 30, 2013 was 31%, compared to 61% for the same period last year. Gross margin at the East Dubuque Facility was 55% for the current period, compared to 61% for the prior-year period, primarily due to lower ammonia sales volume and prices, and higher natural gas costs, partially offset by lower depreciation expense. Gross loss margin at the Pasadena Facility was 2% for the current period, which reflected inventory write-downs and sales of products that were produced from higher-cost raw materials. During the nine months ended September 30, 2013, the Partnership incurred write-downs of sulfur and sulfuric acid inventories of approximately $0.5 million, and of ammonium sulfate inventories of approximately $6.8 million due to lower market prices. Gross margin excluding the inventory write-down at the Pasadena Facility was 5%, while gross margin at Rentech Nitrogen excluding the inventory write-down was 34%.
SG&A expenses were $13.7 million for the nine months ended September 30, 2013, compared to $12.0 million for the prior-year period. The increase was primarily due to the addition of $3.8 million of SG&A expenses from the Pasadena Facility, partially offset by a $1.0 million decrease in Partnership level expenses and a $1.1 million decline in expenses at the East Dubuque Facility primarily due to lower unused credit facility fees and legal expenses.
Due to a reduced outlook for profitability at the Pasadena Facility compared to projections made when the Partnership acquired Agrifos, Rentech Nitrogen performed an impairment test for goodwill and determined that the carrying amount of the reporting unit exceeded its fair value. As a result, the Partnership recorded a loss due to goodwill impairment of $30.0 million at its Pasadena Facility during the period. The $30.0 million charge is the Partnership’s best estimate of the probable loss and is subject to further adjustments as the goodwill impairment analysis is finalized at fiscal year-end.
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