Advertisement
Initiatives to improve results in the Construction Products Distribution business continued during the first quarter. Ongoing business improvement projects for 2013 include: a) assessment of overall logistics and existing branch network, b) review of supply chain management including procurement and transportation, c) review of product pricing, d) working capital management and e) sales growth in select focus products/markets.
In addition to the Construction Products Distribution segment's significant assumptions detailed above, refer to "Risk Factors to Superior" for a detailed review of the significant business risks affecting Superior's Construction Products Distribution segment.
Consolidated Capital Expenditure Summary---------------------------------------------------------------------------- Three months ended March 31,(millions of dollars) 2013 2012----------------------------------------------------------------------------Efficiency, process improvement and growth-related 8.5 3.5Other capital 3.2 2.5---------------------------------------------------------------------------- 11.7 6.0Proceeds on disposition of capital (0.5) (0.9)----------------------------------------------------------------------------Total net capital expenditures 11.2 5.1Investment in finance leases 1.0 3.3----------------------------------------------------------------------------Total expenditures 12.2 8.4--------------------------------------------------------------------------------------------------------------------------------------------------------
Efficiency, process improvement and growth related expenditures were $8.5 million in the first quarter compared to $3.5 million in the prior year quarter. These are primarily related to Energy Services' purchases of rental assets and truck related expenditures although additional expenditures were made during the quarter on the Canadian Propane distribution system conversion and the expansion projects at Specialty Chemicals. Other capital expenditures were $3.2 million in the first quarter compared to $2.5 million in the prior year quarter, consisting primarily of required maintenance and general capital across all of Superior's segments. Proceeds on the disposal of capital were $0.5 million in the first quarter and consisted of Superior's disposition of surplus tanks, cylinders and other assets. During the first quarter Superior entered into new leases with capital equivalent value of $1.0 million primarily related to delivery vehicles for the Energy Services and Construction Products Distribution segments.
Corporate and Interest Costs
Corporate costs for the first quarter were $6.1 million, compared to $4.0 million in the prior year quarter. The increase was primarily due to higher long term incentive costs as a result of an increase in Superior's share price and estimated payout amounts.
Interest expense on borrowing and finance lease obligations for the first quarter was $9.1 million compared to $10.5 million in the prior year quarter. The decrease was due to lower average debt as a result of Superior's $143.9 million equity offering ($137.8 million net of issuance costs) which closed on March 27, 2013, higher cash flows and the benefit of debt repayments efforts during the past 12 months. See "Liquidity and Capital Resources" discussion for further details on the change in average debt levels.
