Sales increased 12 percent, with increases of 15 percent in the Americas, 4 percent in EMEA (9 percent at consistent translation rates) and 10 percent in Asia Pacific (12 percent at consistent translation rates). Changes in currency translation rates decreased sales by approximately $4 million (1 percentage point). Incremental sales from operations acquired within the last 12 months were not significant.
Gross profit margin rate increased by more than 1 percentage point compared to the first quarter of last year. Favorable effects from realized pricing and higher production volume were partially offset by unfavorable impacts of product mix.
Total operating expenses were slightly lower than the first quarter last year. Reductions from the impact of currency translation, decreased amortization expense and lower unallocated corporate expenses (mostly stock compensation and central warehouse) more than offset volume and rate related increases.
The effective income tax rate for the quarter was 26 percent, down from 31 percent last year. Adoption of a new accounting standard, requiring excess tax benefits related to stock option exercises to be credited to the income tax provision (formerly credited to equity), reduced the effective tax rate by 4 percentage points. The tax rate benefit from foreign earnings taxed at lower rates than the U.S. rate was also higher compared to the first quarter last year.
Certain measurements of segment operations are summarized below:
Net sales (in millions)
Percentage change from last year
Operating earnings as a percentage of sales
Components of net sales change by geographic region for the Industrial segment were as follows:
Volume and Price
Improved conditions in Asia Pacific, strong project activity and timing of promotions in the Americas contributed to the increase in Industrial segment sales. Operating margin rates for the Industrial segment increased 3 percentage points compared to last year due to higher sales volume, improved gross margin rate and favorable expense leverage.