The company said the decline in net sales was due to the expiration of a contract with Bayer AG late in the 2011 fiscal year, which accounted for a $45.7 million reduction in net sales. Excluding sales to Bayer AG, the company's current third quarter net sales increased 5% compared to the prior year.
Gross profit as a percent of net sales in the EMS segment for the third quarter of fiscal year 2012 improved 1.9 percentage points when compared to the third quarter of the prior year. The company partially credited the improvement to restructuring activities in which two facilities were closed during the second quarter of fiscal year 2012.
James C. Thyen, Chief Executive Officer and President, stated, "We saw solid earnings performance from our EMS segment during the third quarter, despite the 19% reduction in sales. Excluding non-operating items, this is the best quarterly net income performance from the EMS segment since the second quarter of fiscal year 2005. We are seeing the benefits from our focused margin-improvement initiatives and from our past restructuring activities favorably impacting the bottom line."