RESULTS OF OPERATIONS
Three Months Ended August 31, 2017
Net Sales Consolidated net sales of $1,345.4 million for the first quarter of fiscal 2018 grew by approximately 7.5% from net sales of $1,252.1 million for last year’s first quarter. Acquisitions added 5.4%, while organic sales, which include the impact of price and volume, improved by 1.8%. Consolidated net sales for the quarter also reflect a slightly favorable foreign exchange impact of 0.3%.
Industrial segment net sales for the current quarter grew by 8.0% to $729.8 million, from net sales of $675.8 million during the same period a year ago. The improvement was primarily due to recent acquisitions, which contributed 4.3% to net sales during the current quarter. Organic growth of 3.2% during the quarter resulted from improved performance by several of our European businesses; especially certain U.K. based operations, but was slightly offset by a lagging performance by our businesses which continue to be impacted by recession and political unrest in Brazil, as well as our companies serving oil and gas markets. Slightly favorable foreign exchange impacted net sales by 0.5% during the current quarter.
Consumer segment net sales for the quarter grew by 6.8% to $427.1 million, from $400.0 million during last year’s first quarter, due to growth in net sales from recent acquisitions of 8.1%. This segment had a decline in organic sales of 1.2% during the quarter versus the same period last year, driven primarily by the timing of shipments and softer consumer takeaway at our larger retail customers. Slightly unfavorable foreign currency impacted net sales in the consumer segment by 0.1% during the current quarter versus the same period a year ago.
Specialty segment net sales for the quarter grew by 6.9% to $188.5 million, primarily due to growth in net sales from recent acquisitions, which provided 4.1%. Organic sales improved by 3.0% during the current quarter, more than overcoming the loss of sales associated with the fiscal 2017 closure of an unprofitable European manufacturing facility. Organic growth in net sales was driven by recent hurricane activity that impacted our businesses serving the water damage restoration and equipment markets, as well as increases in specialty OEM industrial coatings. Foreign currency had a slightly negative impact on specialty segment net sales for the quarter by 0.2%.
Gross Profit Margin Our consolidated gross profit margin of 42.5% of net sales for the first quarter of fiscal 2018 compares to a consolidated gross profit margin of 44.1% for the comparable period a year ago. This gross profit decline of approximately 1.6% of net sales primarily reflects current year margins that were burdened by the impact of overall higher raw material and other manufacturing costs, along with the impact from an unfavorable mix of product sold versus last year. We anticipate that rising raw material prices will continue to trend upward, in part due to the impact of recent hurricane activity.
Selling, General and Administrative Expenses (“SG&A”) Our consolidated SG&A expense increased by approximately $10.3 million during the current period versus the same period last year, but improved to 29.3% of net sales from 30.7% of net sales for the prior year quarter, resulting primarily from the 7.5% increase in net sales during the current quarter, combined with tighter cost controls during the current quarter and the benefit from severance actions taken during fiscal 2017 across each of our segments. Partially offsetting those expense reductions was the impact from the number of recently acquired companies during the last 12 months, which added approximately $13.1 million in SG&A expense, along with higher healthcare costs and higher distribution expense, partially offset by lower bad debt expense. Lastly, warranty expense for the quarter ended August 31, 2017 increased slightly by approximately $0.9 million from the amount recorded during the comparable prior year period, and it is typical that warranty expense will fluctuate from period to period.
Our industrial segment SG&A was approximately $13.3 million higher for the first quarter of fiscal 2018 versus the comparable prior year period, but decreased slightly as a percentage of net sales, which reflects the industrial segment’s solid 8.0% growth in net sales combined with overall tighter cost controls during the current quarter and the benefit from severance actions taken during fiscal 2017. We will continue to focus on improving operating leverage throughout the industrial segment. In addition to higher healthcare costs and higher distribution expense, recent acquisitions increased SG&A expense in this segment by approximately $6.7 million.
Our consumer segment SG&A increased by approximately $2.2 million during the first quarter of fiscal 2018 versus the same period last year, but decreased as a percentage of net sales, reflecting overall tighter cost controls during the current quarter and the benefit from severance actions taken during fiscal 2017. Additionally, the consumer segment recorded lower employee compensation expense as well as slightly lower distribution expense during the current quarter, and benefited from favorable transactional foreign exchange. Recent acquisitions increased SG&A expense in this segment by approximately $5.7 million.
Our specialty segment SG&A was approximately $0.6 million lower during the first quarter of fiscal 2018 versus the comparable prior year period, and decreased as a percentage of net sales, which reflects this segment’s 6.9% growth in net sales combined with overall tighter cost controls during the current quarter and the benefit from severance actions taken during fiscal 2017. This segment also
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