The operating facilities acquired from McFarland Cascade Holdings, Inc. on November 30, 2012 contributed sales of $15.9 million over a one-month period, while the Russellville, Arkansas operating facility acquired from Thompson Industries in December 2011 contributed additional sales of $43.9 million in 2012. The conversion effect from fluctuations in the value of the Canadian dollar, Stella-Jones' reporting currency, versus the U.S. dollar, increased the value of U.S. dollar denominated sales by about $8.6 million when compared with the previous year. Excluding these factors, 2012 sales increased approximately $9 million.
Operating income in 2012 amounted to $109.6 million, or 15.3% of sales, versus $88 million, or 13.7% of sales a year earlier. The increase in absolute dollars reflects higher business activity and acquisitions, while the increase as a percentage of sales is due to a better absorption of fixed costs from increased volume and greater efficiencies throughout Stella-Jones' network.
Net income for 2012 totalled $73.1 million, or $4.53 per share, fully diluted, versus $55.7 million, or $3.48 per share, fully diluted, in 2011, representing a year-over-year increase of 31.2%. Cash flow from operating activities before changes in non-cash working capital components and interest and income tax paid rose 21.2% to $120.8 million.
"2012 represented another record year for Stella-Jones in terms of sales and net income. It also marked our twelfth consecutive year of growth in net income, driven by constant efforts to further enhance operating efficiency and a methodical execution of our continental expansion strategy. These achievements reflect solid demand for our products, the strength of our business model, rigorous adherence to our core competencies and the dedication of the Stella-Jones team," said Brian McManus, President and CEO.
4Q sales totalled $159.3 million, up 8% from last year's 4Q sales of $147.5 million. 4Q operating income was $21.1 million, or 13.3% of sales, compared with $20.4 million, or 13.8% of sales, last year.
Net income for the period reached $16.5 million, or $1.00 per share, fully diluted, up from $13.4 million, or $0.83 per share, fully diluted, last year. The Company's effective tax rate for the 4Q 2012 was reduced by tax benefits resulting from the donation to local economic development authorities of land located in Stanton, Kentucky and by the deductibility of acquisition costs related to the McFarland transaction. Cash flow from operating activities before changes in non-cash working capital components and interest and income tax paid was $22.4 million, compared with $24.8 million a year ago.
Stella-Jones Inc. is a leading producer and marketer of pressure treated wood products. The Company supplies North America's railroad operators with railway ties, timbers and recycling services; and the continent's electrical utilities and telecommunications companies with utility poles.