Frank H. BoykinI would like to remind everyone that our press release and statements we make on this call may include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risk and uncertainties, including, but not limited to, those set forth in our press release and our periodic filings with the Securities and Exchange Commission. This call may include discussion of non-GAAP numbers. You can refer to our Form 8-K and press release at the Investor Information section of our website for a reconciliation of any non-GAAP to GAAP amounts. Jeffrey S. Lorberbaum Thank you, Frank. Our first quarter earnings per share were $0.58 as reported, an increase of 38% over 2011 adjusted results due to volume increases, price increases, cost reductions and lower interest expense. Our sales grew by 5% as reported or 6% on a local basis, with year-over-year sales growth for the past 4 quarters. Price increases in the first quarter will offset the material inflation in our current costs in the second period. SG&A improved by 90 basis points as a percent of net sales. During the first quarter, we generated operating income of $72 million, an increase of 14% over 2011. We paid our 2012 bond obligations using our short-term facility at lower interest rates. Standard & Poor's upgraded our credit rating, and Moody's elevated our outlook to positive, reducing our interest rates on our bonds. Our balance sheet remains strong, with our net debt to adjusted EBITDA at historically low levels of 2.2x. We have almost $500 million available for strategic opportunities. In the U.S., our residential categories reflect the generally positive trends in the housing market. The National Association of Home Builders Index is at one of its highest levels since June 2007, with a positive outlook from record low interest rates and increased approvals. The mild winter weather contributed to the strongest existing home sales for the period in 5 years, which support greater remodeling and renovation in this year. Our commercial outlook is for moderate sales growth in line with the AIA Billing Index for commercial construction.
Frank, would you give our financial report, please?Frank H. Boykin Sure. I'd be glad to, Jeff. Good morning, everyone. Net sales for the quarter were $1,409,000,000, up 5% or a 6% increase on a constant exchange rate basis. Both higher volume and pricing benefited our results. Gross profit was $359 million, with a margin of 25.5% flat with last year. Price increases, volume and productivity improvements offset inflation. SG&A was $287 million or 20.4% of net sales. This was an improvement of 90 basis points over last year. We're continuing to control our cost, holding our dollars flat and leveraging on higher sales. We expect the SG&A dollars to be flat for the full year. Our operating income was $72 million, with a margin of 5.1%. Our margin grew 40 basis points over last year. We continue to drive profitability improvements throughout the business. Interest expense was $22 million. It was lower than last year, with lower rates from our new bank facility and a rating agency upgrade. We estimate our quarterly expense to be $20 million in future quarters. Our income tax rate was 20%, which compares to a 17% rate last year. We expect the rate to improve slightly over the rest of the year. Earnings per share were $0.58 per share or a 38% improvement over 2011. If we move to the segments. The Mohawk segment sales were $700 million or 1% better than last year as we implemented carpet price increases to offset inflation. Our carpet sales are up, in line with the carpet industry, which increased 3% year-over-year. This was offset by lower rug sales. In the rug business, deferred customer promotions, channel inventory declines and mix reduced our rug sales. Our operating income was $25 million, with a margin of 3.6%, which was flat with last year. Raw material inflation partially offset -- was partially offset by lagging price increases. Read the rest of this transcript for free on seekingalpha.com