New and used equipment sales decreased as significant deliveries to mining customers in the fourth quarter of 2011 were not matched in the current year. This accounted for approximately 75% of the decline, with no one market being a significant component of the balance.
Rental revenues increased sizeably on a larger rental fleet and higher fleet utilization. All categories of rentals were higher including light equipment, heavy equipment, equipment on rent with purchase options and power. Rental rates have been largely consistent with the prior year, with continuing competitive market conditions.
Product support revenues achieved record levels due to double-digit growth in both parts and service. Improved market conditions and a larger installed base of equipment in territory combined with marketing initiatives have driven higher activity levels.
Operating income increased on improved gross margins. Gross margins were up 340 basis points in the quarter on sales mix, with a higher proportion of product support and rentals to total. Rental margins improved on higher utilization. Selling and administrative expenses were 2% higher than the comparable quarter last year, on higher compensation and bad debt expense offset by lower marketing expenses. Operating income as a percentage of revenues was 15.6% compared to 12.6% in the fourth quarter of 2011.
Bookings in the fourth quarter of 2012 were $156 million, down 1% from the similar period last year.
Fourth Quarter Results of Operations in CIMCO
Three months ended December 31($ thousands) 2012 2011 $ change % change----------------------------------------------------------------------------Package sales $41,786 $18,261 $ 23,525 129%Product support 21,880 19,125 2,755 14%----------------------------------------------------------------------------Total revenues $63,666 $37,386 $ 26,280 70%--------------------------------------------------------------------------------------------------------------------------------------------------------Operating income $ 4,361 $ 1,528 $ 2,833 185%--------------------------------------------------------------------------------------------------------------------------------------------------------Bookings ($ millions) $ 23 $ 27 $ (4) (15%)--------------------------------------------------------------------------------------------------------------------------------------------------------Key ratios:Product support revenues as a % of total revenues 34.4% 51.2%Group total revenues as a % of consolidated revenues 14.8% 9.2%Operating income as a % of revenues 6.8% 4.1%
Package revenues in the quarter were more than double those seen in 2011.
Industrial revenues in Canada were a substantial contributor, with a number of projects progressing including those previously announced for Maple Leaf Foods. Recreational revenues in Canada were down 14% from last year, as anticipated, as a federal stimulus program ended in 2011. US package activity in both recreational and industrial were lower year-over-year reflecting continued lower market activity on economic conditions.
Product support revenues rose on increased activity in both Canada and the US.
