PCB news from PCB007.
Arlon Electronic Materials sales were $18.6 million for the fourth quarter of 2011, which was $2.2 million lower compared to $20.8 million for the same period of 2010. Segment operating income decreased by $0.5 million to $2.0 million for the fourth quarter of 2011, as compared to $2.5 million for the same period of 2010.
For the twelve months ended December 31, 2011, Arlon segment sales increased by $5.9 million, or 7.8%, to $81.3 million, as compared to $75.4 million for the same period of 2010. Segment operating income was $8.3 million for the twelve months ended December 31, 2011 compared to $8.8 million in the prior year.
The sales increase was primarily due to increased sales of PCB materials related to the telecommunications infrastructure in China, as well as increased sales of flex heater and coil insulation products for the general industrial market.
Slightly lower operating income in 2011 compared to the same period of 2010 was primarily driven by lower gross profit margin. Arlon's gross profit margin was 1.5% lower for the twelve months ended December 31, 2011 as compared to 2010 primarily due to capacity constraints at its China manufacturing facility. To satisfy customer demand while increasing its manufacturing capacity in China, Arlon increased production in the U.S. at lower margins. In addition, the Arlon segment recorded a non-cash asset impairment charge of $0.7 million during the first quarter of 2011 related to certain vacant land it owns in Rancho Cucamonga, California.
