THERMADYNE HOLDINGS CORPORATION NEW (THMD, Financial) filed Quarterly Report for the period ended 2012-03-31.
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Net sales for the three months ended March 31, 2012 increased $10.4 million as compared to the same period in 2011, with approximately $4.7 million related to increased volumes, $4.3 million associated with price increases and $1.4 million attributable to foreign currency translation.
For the three months ended March 31, 2012, gross margin as a percent of net sales increased as compared to the same period in 2011. Under its use of the last-in first-out (“LIFO”) inventory method, the Company recorded a $0.3 million credit to costs of sales resulting from expected deflation of manufacturing costs in 2012 resulting from our continued productivity enhancements. In the first quarter of 2011, a $1.0 million charge to cost of sales was recorded for LIFO. Also in the first quarter of 2011, the Company expensed $3.3 million to cost of sales related to fair value purchase accounting adjustments for inventory. The remaining increase is due to the beneficial impact of manufacturing efficiencies arising from our total cost productivity (“TCP”) program to lower costs and improve efficiency, increased volumes of activity in 2012 and price increases enacted in the second quarter of 2011.
For the three months ended March 31, 2012, selling, general, and administrative (“SG&A”) costs increased $1.6 million over the comparable period of 2011. This increased dollar spend is primarily a result of increased headcount and headcount-related expenses primarily in the sales and marketing disciplines and additional promotional expenses. Despite the additional investment in SG&A cost, SG&A as a percentage of net sales declined to 20.8% for the three months ended March 31, 2012. The 50 basis point improvement during the first quarter of 2012 as compared to the first quarter of 2011 is a result of higher sales volumes.
For the first quarter of 2012, net income was $5.2 million compared to $0.1 million in the first quarter of 2011. The higher net income amount for the first quarter of 2012 reflects a higher net sales base over the first quarter of 2011 combined with the impact of the prior year $3.3 million pre-tax purchase accounting inventory charge, partially offset by restructuring charges of $0.8 million in the first quarter of 2012.
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Highlight of Business Operations:
Our operating profit is also affected by the mix of the products we sell, as margins are generally higher on torches and their replacement parts, as compared to power supplies and filler metals.Net sales for the three months ended March 31, 2012 increased $10.4 million as compared to the same period in 2011, with approximately $4.7 million related to increased volumes, $4.3 million associated with price increases and $1.4 million attributable to foreign currency translation.
For the three months ended March 31, 2012, gross margin as a percent of net sales increased as compared to the same period in 2011. Under its use of the last-in first-out (“LIFO”) inventory method, the Company recorded a $0.3 million credit to costs of sales resulting from expected deflation of manufacturing costs in 2012 resulting from our continued productivity enhancements. In the first quarter of 2011, a $1.0 million charge to cost of sales was recorded for LIFO. Also in the first quarter of 2011, the Company expensed $3.3 million to cost of sales related to fair value purchase accounting adjustments for inventory. The remaining increase is due to the beneficial impact of manufacturing efficiencies arising from our total cost productivity (“TCP”) program to lower costs and improve efficiency, increased volumes of activity in 2012 and price increases enacted in the second quarter of 2011.
For the three months ended March 31, 2012, selling, general, and administrative (“SG&A”) costs increased $1.6 million over the comparable period of 2011. This increased dollar spend is primarily a result of increased headcount and headcount-related expenses primarily in the sales and marketing disciplines and additional promotional expenses. Despite the additional investment in SG&A cost, SG&A as a percentage of net sales declined to 20.8% for the three months ended March 31, 2012. The 50 basis point improvement during the first quarter of 2012 as compared to the first quarter of 2011 is a result of higher sales volumes.
For the first quarter of 2012, net income was $5.2 million compared to $0.1 million in the first quarter of 2011. The higher net income amount for the first quarter of 2012 reflects a higher net sales base over the first quarter of 2011 combined with the impact of the prior year $3.3 million pre-tax purchase accounting inventory charge, partially offset by restructuring charges of $0.8 million in the first quarter of 2012.
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