In the U.S. markets, masonry product shipments increased due to an improving residential housing market, enhanced product acceptance and an expanded product offering profile. Overall, growth in clay brick shipments in our markets improved moderately over 2011.
For the year ended December 31, 2012, this business segment reported operating earnings of $7,246, a significant improvement from $1,362 in 2011. This increase reflected strong revenue growth combined with lower average manufacturing costs as a result of higher production volumes.
For the fourth quarter of 2012, revenues increased by 21% to $18,097, from $14,991 in 2011 due to the same reasons as discussed above for fiscal 2012.
Operating income for the fourth quarter was negatively impacted by $1,566 due to the write-off of certain obsolete and discontinued merchandise inventory totaling $586 and specific plant repair and maintenance expenses, including roof repair costs at the Brampton clay brick facility totaling $980. As a consequence, operating income decreased to $146 for the fourth quarter of 2012 from $634 for the same period in 2011.
Revenues of the Landscape Products business segment increased to $24,955, for the year ended December 31, 2012, from $22,008 in 2011, an increase of $2,947, or 13.4%.
The increase in revenues was due to favourable weather conditions experienced during the first half of the year which led to an early start to the selling season. This is due in part to the introduction of an expanded product portfolio.
For the year ended December 31, 2012, the Landscape Products business segment recorded operating income of $757 compared to an operating loss of $264 in 2011.
The Landscape Products business segment reported an operating loss of $568 on revenues of $4,645 for the fourth quarter ended December 31, 2012 compared to an operating loss of $427 on revenues of $4,604 in 2011. The decline in operating results were due primarily to an adjustment to inventory of $433.
UNIVERSAL RESOURCE RECOVERY INC.
For the year ended December 31, 2012, the Company advanced $2,670 in short-term loans to Universal. These advances are classified as short-term as management believes the Company will be repaid from the sale proceeds of Universal's assets following the settlement of Universal's senior ranking claims. In relation to this loan receivable, the Company has registered, as security, a mortgage on Universal's property located in Welland, Ontario.
At the same time, Universal's continuing financial difficulties indicated a potential impairment of the Company's loan receivable. Due to increasing liquidity requirements in Universal as at December 31, 2012, an impairment analysis was performed to ascertain the fair value of this loan. Accordingly, a fair value of this non-interest bearing loan advanced to Universal was determined based on the fair value of Universal's assets, net of senior ranking claims. This fair value assessment was based on several independent property and equipment appraisals and management's estimates of the fair values of other assets and other liabilities. This assessment led to the conclusion that the carrying value of the loan was impaired. Consequently, the carrying value of this loan receivable was written-down by $1,278, including $656 in the fourth quarter, to its fair value of $1,392 as at December 31, 2012.
The Company's share of Universal's losses, recognized in accordance with the equity method of accounting for interests in joint ventures, is limited to the value of its investment in Universal. The investment was reduced to zero as at December 31, 2011 as the Company recognized losses incurred by Universal totaling $8,857. Losses of $1,791 were unrecognized as at December 31, 2011.
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