Direct costs are comprised of field and shop expenses, and include depreciation and amortization on the Corporation's equipment. Excluding depreciation and amortization, gross profit as a percentage of revenue was 30 percent for the three-month period ended March 31, 2013 as compared to 29 percent in the comparable 2012-period.
Increased margins for the three-month period ended March 31, 2013 were partly the result of robust activity levels experienced across all regions. In addition, greater demand for the Corporation's resistivity while drilling ("RWD") and other premium directional drilling technologies and lower third party equipment rentals made a positive impact on the margins. For the three-month period ended March 31, 2013, third party equipment rentals decreased to 2 percent of consolidated revenue compared to 3 percent in the corresponding 2012-quarter. Adversely affecting margins were slower than expected levels of activity in Colombia.
Depreciation and amortization for the three-month period ended March 31, 2013 increased by 21 percent to $5.8 million as compared to $4.8 million in the 2012-quarter. The increase is the result of the Corporation's record level capital expenditure program in 2012.
(Stated in thousands of dollars except percentages) Three-month periods ended March 31, 2013 2012 % Change--------------------------------------------------------------------------------------------------------------------------------------------------------Selling, general & administrative ("SG&A") costs 10,485 8,504 23Share-based payments (included in SG&A costs) 327 797 (59)SG&A costs excluding share-based payments as a percentage of revenue 11% 10%--------------------------------------------------------------------------------------------------------------------------------------------------------SG&A costs for the three-month period ended March 31, 2013 increased by 23 percent to $10.5 million as compared to $8.5 million in 2012. Included in SG&A costs are share-based payments of $0.3 million for the 2013-quarter and $0.8 million for the 2012-quarter. Excluding these costs, SG&A costs as a percentage of consolidated revenue for the three-month period ended March 31, 2013 and 2012 were 11 and 10 percent, respectively.
During the first quarter of 2013, SG&A costs, excluding share-based payments, increased in dollar terms, due to higher payroll and marketing related costs incurred. These costs are primarily associated with the strong activity levels achieved in Canada and the US.
Share-based payments relate to the amortization of the fair values of issued options of the Corporation using the Black-Scholes model. Share-based payments decreased in the three-month period ending March 31, 2013, as the Corporation shifted to rewarding employees with retention awards rather than options. In the first quarter of 2013, the expense included in SG&A costs related to retention awards was $0.5 million (2012 - $0.1 million).
(Stated in thousands of dollars) Three-month periods ended March 31, 2013 2012 % Change--------------------------------------------------------------------------------------------------------------------------------------------------------Research & development expense 536 553 (3)--------------------------------------------------------------------------------------------------------------------------------------------------------
