Manufacturing costs were higher by $2.2 million in the first quarter of 2012 compared to the first quarter of 2011, primarily due to the impact of the additional llease expense for the new line in the U.S. region.
Operating income for the first quarter of 2012 was $17.0 million compared with an operating loss of $42.7 million in the first quarter of 2011 and an operating income of $0.3 million in the fourth quarter of 2011. Of the $59.7 million improvement in the year-over-year operating income, $53.9 million was due to lower special charges of $43.4 million, primarily associated with costs resulting from the Merger, and $10.5 million of purchase accounting adjustments primarily associated with stepped-up inventory values. Manufacturing costs were higher by $2.2 million in the first quarter of 2012 compared to the first quarter of 2011, primarily due to the impact of the additional llease expense for the new line in #
The remaining $5.8 million year-over-year improvement in operating income was due to favorable volumes of $5.6 million, principally associated with increases in volumes due to the disruption in operations in 2011 at our Cali, Colombia facility. Selling, general and administrative (SG&A) expenses for the first quarter of 2012 were lower than the prior-year period by $3.9 million and lower than the fourth quarter of 2011 by $2.0 million. The $3.9 million year-over-year decrease in SG&A was due primarily to $2.1 million of lower volume-related expenses; $1.1 million of lower stock compensation expense; $1.0 million of lower incentive compensation expenses; $0.4 million higher amortization expense; and $0.1 million of lower spending in other categories.
Special charges for the first quarter of 2012 consisted primarily of $0.7 million of professional fees associated with our recently announced internal redesign and restructuring of global operations; $1.0 of employee termination and severance expenses; $0.4 million of professional fees associated with the Blackstone Acquisition; and $0.3 million of restructuring and other restructuring costs.
After recognizing $4.5 million of income tax expense, the company reported a net loss attributable to PGI for the first quarter of 2012 of $0.3 million, compared with a net loss attributable to PGI of $54.4 million in the first quarter of 2011 and a net loss attributable to PGI of $21.4 million in the fourth quarter of 2011.
Net debt (defined as total debt less cash balances) as of March 31, 2012 was $519.3 million compared with $527.7 million as of December 31, 2011. Capital expenditures for the first quarter were $13.3 million. Operating working capital, defined as accounts receivable plus inventories less trade accounts payable and accrued liabilities, was $56.9 million and represented 4.8% of annual sales compared with $59.9 million and 5.3% of annual sales for the first quarter of 2011.
Adjusted EBITDA for the first quarter of 2012 was $36.8 million compared with $37.3 million in the first quarter of 2011 and $33.7 million in the fourth quarter of 2011 due primarily to higher volumes in the U.S. and Latin America, offset by lower volumes in Europe; and offset by the absence of a proforma addback in the prior year period reflecting the annualized incremental contribution from the company's Colombia operations prior to the flood, and the impact from the higher lease expense associated with the company's new line in Waynesboro, Virginia.
Polymer Group Inc (PGI)
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