Segment gross profit was $75.1 million compared with $78.6 million in the prior-year quarter, a 4.5 percent decrease primarily due to lower sales volumes. Segment gross margin was 33.5 percent compared with 33.6 percent in the prior-year quarter and 31.8 percent in the 2012 first quarter. The sequential increase of 170 basis points in gross margin reflected the impact of operational initiatives and cost reduction efforts launched in the 2012 first quarter.

Segment operating income was $46.4 million, an increase of 5.9 percent compared with the prior-year quarter. Segment operating margin was 20.7 percent compared with 18.7 percent in the prior-year quarter and 16.9 percent in the 2012 first quarter.

Construction Products

Sales up 6.2 percent; segment operating income up 19.9 percent

Second quarter sales for the Construction Products operating segment, which includes specialty construction chemicals products and specialty building materials products used in commercial, infrastructure and residential construction, were $273.8 million, an increase of 6.2 percent compared with the prior-year quarter. The increase was due to higher sales volumes (+7.5 percent) and improved pricing (+2.7 percent), partially offset by unfavorable currency translation (-4.0 percent). Last year’s third quarter acquisition of De Neef Conchem Group contributed $8.8 million to sales, which more than offset a $5.3 million decrease in sales due to the 2011 divesture of the vermiculite business.

Sales of Construction Products in emerging regions, which represented 33.3 percent of sales, increased 12.2 percent compared with the prior-year quarter due to strong sales in emerging Asia, Latin America and the Middle East. Sales in North America, which represented 41.5 percent of sales, increased 10.2 percent. Western Europe, which represented 15.4 percent of sales, declined 13.6 percent compared with the prior-year quarter.

Segment gross profit was $96.2 million, an increase of 9.4 percent compared with the prior-year quarter. Segment gross margin of 35.1 percent improved 100 basis points compared with the prior-year quarter and 90 basis points sequentially from the 2012 first quarter. The increase in gross margin compared with the prior-year quarter primarily was due to improved pricing, higher sales volumes and a favorable sales mix comparison between the acquired and divested businesses.

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