Cash flows from operations before changes in working capital items increased in 2012 by $24.5 million to $78.7 million from $54.2 million in 2011. The 2012 increase was primarily due to increased gross profit partially offset by an increase in SG&A.
Cash flows from operations before changes in working capital items increased in the fourth quarter of 2012 by $4.5 million to $19.4 million from $14.9 million in the fourth quarter of 2011. The increase in cash flows from operations before changes in working capital for the fourth quarter of 2012 compared to the fourth quarter of 2011 was primarily due to increased gross profit derived from higher revenue partially offset by an increase in cash costs associated with manufacturing facility closures, restructuring and other related charges.
The Company had total cash and loan availability under its Asset-Based Loan ("ABL") facility totalling $54.7 million as of December 31, 2012. Cash flows from operations combined with two new financing arrangements and the extension of the ABL facility allowed the Company to fund the redemptions of the Notes at par value in the aggregate amount of $80.0 million. The Company had cash and loan availability under its ABL facility exceeding $71 million as of March 6, 2013.
The Company will continue to focus on developing and selling higher margin products, reducing variable manufacturing costs, executing manufacturing plant rationalization initiatives and optimizing its debt structure. As a result, the Company anticipates the following:
-- Revenue for the first quarter of 2013 is expected to be greater than the fourth quarter of 2012, which is reflective of normal seasonality. Revenue is expected to be approximately the same or slightly lower than the first quarter of 2012 due to fewer shipping days;-- Gross margin for the first quarter of 2013 is expected to be similar to the fourth quarter of 2012;-- Adjusted EBITDA for the first quarter of 2013 is expected to be greater than both the fourth quarter of 2012 and the first quarter of 2012;-- Cash flows from operations in the first quarter of 2013 are expected to be lower than the fourth quarter of 2012 primarily due to changes in working capital requirements related to: -- Higher trade receivables resulting from the expected return to a more typical distribution of shipments within the quarter and higher revenue; and -- Payments of amounts expensed in 2012.-- Total debt at March 31, 2013 is expected to be greater than at December 31, 2012, which is consistent with typical seasonal working capital requirements;-- Cash income taxes paid in 2013 are expected to be less than $2 million. The effective income tax rate may vary significantly from historical rates due to the accounting for tax assets in conjunction with the impact of restructuring charges and other adjustments. Such potential variations in rate would, therefore, not necessarily be indicative of future income tax payments;-- Capital expenditures for 2013, excluding any real estate purchases, are expected to be $33 to $39 million, reflecting planned replacements of machinery and equipment to achieve improved manufacturing efficiencies. Capital expenditures are expected to return to a lower level of $17 to $21 million in 2014;-- The remaining $38.7 million Notes outstanding are expected to be redeemed in 2013. In order to retire the Notes and Finance capital expenditures, the Company expects to increase borrowings under both its ABL facility and secured debt equipment finance agreement. Furthermore, any real estate purchases are expected to be financed through mortgages;-- Manufacturing cost reductions are expected to total $16 to $20 million in 2013, which includes $5 million of expected savings related to: -- Closure of the Richmond, Kentucky manufacturing facility; and -- Consolidation of shrink film production from Truro, Nova Scotia to Tremonton, Utah. Consistent with prior years, the Company anticipates that some of these cost savings will be offset by other manufacturing costs that are expected to increase, such as labor and energy; and-- Over the next two years, the Company plans to relocate and modernize its Columbia, South Carolina manufacturing operations with state-of-the-art equipment in a new facility. A letter of intent has been entered into for the purchase of a manufacturing facility in Blythewood, South Carolina, which is in close proximity to Columbia. This plan, which reflects the Company's largest single facility improvement in many years, is expected to result in the following: -- Total annual cash savings in excess of $13 million starting in the first half of 2015 with the first full year effects in 2016; -- Total charge of $32 to $38 million between 2013 and 2015, with $28 to $32 million expected to be recorded in the first quarter of 2013; -- Of the total charge recorded in the first quarter of 2013, $25 to $27 million relates to non-cash impairment of property, plant and equipment with the remaining $3 to $5 million relating to cash items that will be disbursed over the next two years; -- Subsequent to the first quarter of 2013, $4 to $6 million of expenses are expected to be recorded and paid over the next two years; -- Total capital expenditures for equipment related to this project are expected to be $26 million, of which $2.7 million was paid for in the fourth quarter of 2012, $15 to $17 million expected to be paid in 2013 and the remainder to be incurred in periods subsequent to 2013. These capital expenditure amounts do not include any real estate investments. This capital expenditure of $15 to $17 million in 2013 is included in the $33 to $39 million total capital expenditures discussed above; and -- Total cost of the new building and facility improvements is expected to be approximately $13.5 million.