Thank you, Jim, and good morning, everyone. My comments today will start with some highlights related to our first quarter results, balance sheet, and cash flow. I will then share a few summary remarks about our outlook for the second quarter before finishing with an update regarding our targets for fiscal 2020.
As Jim just mentioned, first quarter results were a little lower than our expectations, largely due to timing of orders and shipment dates. But our outlook for the second quarter anticipates that we can make up the shortfall.
As a result, the revenue and earnings we expect to report for the first half of the year is largely consistent with what was assumed in the fiscal 2020 targets we shared in March.
For the first quarter, our revenue and earnings were impacted by customer requests for extended shipment dates in the Americas, which were much higher than normal.
In addition, our strong order growth in the Americas occurred later in the quarter than we anticipated.
As a result, our organic revenue growth of 6% was just below our estimated range of 7% to 10%, and our earnings in the quarter also fell short of our estimates.
However, customer order backlog in the Americas ended the quarter significantly higher than the prior year, which is contributing to our strong outlook for the second quarter.
Beyond the timing of orders and shipments in the Americas, a few other points are worth mentioning.
First, operating expenses were a few million dollars less than we anticipated, largely due to the timing of project spending, which shifted to the second quarter.
Second, gross margins were largely consistent with our expectations after adjusting for the impact of the lower-than-expected volume.
Our gross margin continues to reflect unfavorable shifts in our business mix, but the year-over-year comparisons of business mix are beginning to abate as the prior year includes some of these impacts. Plus, we are also beginning to benefit from pricing, net of inflation, after this being a headwind for much of last year.
As a result, our gross margin in the first quarter was within 30-basis points of the prior year after much of last year reflecting more than a 100-basis point year-over-year decline. A leveling off of the business mix impacts and continued benefits from pricing, net of inflation, along with continued improvement in our gross margin in EMEA are key assumptions behind our target to improve our overall gross margin in fiscal 2020. And that leads to another point, which is that EMEA posted a 60-basis point improvement in its gross margin and was profitable in the first quarter, a very nice start to the fiscal year.
Switching to year-over-year comparisons. We grew revenue by $70 million, or 9% in the quarter, with $47 million representing broad-based organic growth of 6%, with the Americas growing 5%, EMEA growing 9%, and the Other category growing 10% on an organic basis. I won't repeat everything Jim just summarized, but simply reiterate that our strategy is working and customers are responding, and it's showing up in our continued market share gains in the Americas and many other markets around the world.
For earnings, the $0.15 of earnings in the quarter compares to $0.14 in the prior year.
Our operating margin improved by 20 basis points, due to a 50-basis point improvement in our operating expense leverage, offset in part by 30-basis point decline in our gross margin. In the second half of fiscal 2017, we began ramping up our investments in product development and other growth strategies, including partnerships and acquisitions. And over the last four quarters, we have been realizing revenue growth from those investments, which has improved our leverage and operating expenses.
In addition, we continued to drive fitness across our business model, which is helping to reallocate existing resources to support growth initiatives, as well as drive process efficiencies and improve profitability.
For gross margin, we posted year-over-year improvement in EMEA and the Other category in the first quarter, but this was more than offset by a 40-basis point decline in the Americas.
The Americas continued to experience unfavorable business mix impacts, but these were partially offset by absorption benefits associated with the higher volume, plus the benefits of pricing actions taken over the last several quarters, net of higher commodity and freight cost.
Our overhead costs are also higher than a year ago in support of our growth and business continuity strategies, but this was largely offset by benefits from our continued cost reduction efforts.
As it relates to orders in the quarter, the 15% order growth was driven by 15% growth in the Americas and 21% growth in the Other category, while orders in EMEA grew 10%, compared to the prior year. These comparisons were favorably impacted by a list price adjustment in February 2018, which we estimate accelerated orders from the first quarter of fiscal 2019 into the fourth quarter of fiscal 2018, thereby favorably impacting our current quarter growth rate by a few hundred basis points. Consolidated backlog at the end of the first quarter was approximately 15% higher than the prior year.
Moving to cash flow and the balance sheet. We used $71 million of cash to support the seasonality of our operations in the first quarter, including the payment of accrued variable compensation and retirement plan contributions. Increased working capital reflected normal seasonality plus increased inventory to support Smith System's summer seasonality, as well as some impact from the extended shipment dates mentioned earlier.
Capital expenditures were $15 million in the quarter, and we continue to expect the full-year to total approximately $85 million to $95 million. We returned approximately $17 million to shareholders in the first quarter through the payment of a cash dividend of $0.145 per share. And yesterday, the Board of Directors approved the same level of dividend to be paid in July. The share repurchases during the quarter were associated with the vesting [ph] of equity awards and satisfaction of participant tax obligations.
Related to the balance sheet, we adopted the new lease accounting standard this quarter and recorded an operating lease obligation totaling $219 million. This obligation represents the present value of lease payments for our offices and showrooms, manufacturing and distribution facilities, and vehicles and equipment.
Our adoption of the standard did not impact retained earnings nor did it impact our statements of income or cash flow.
You can read more about our adoption of this standard in our Form 10-Q, which we plan to file tomorrow.
For the second quarter, we project double-digit revenue growth, which translates to expected organic revenue growth of 6% to 9% after adjusting for currency translation effects, acquisitions and a small divestiture. From an earnings perspective, we expect to report $0.41 to $0.45 per share, which compares to $0.41 in the prior year. Recall the prior year included a $7.5 million gain on the sale of property in the Americas segment, which had the effect of increasing earnings by approximately $0.03 after consideration of related variable compensation expense.
The prior year also included favorable warranty, product liability, and workers' compensation cost and the initial effects of purchase accounting related to Smith System. These last two items will also impact the year-over-year comparisons of gross margin and operating expenses in the Americas segment. But in total, they largely offset.
For the full year, recall we are targeting revenue growth between 5.5% to 9.5%, which includes an organic component, as well as net benefits from some inorganic items.
Our pipelines of potential project activity for the balance of fiscal 2020 reflects strong growth in most markets, and we are pleased with our win rates, which we believe have been supported by our expanded product offering, sales deployment strategies, and ability to help customers navigate changes in the workplace.
We have also seen improvement in demand for day-to-day business in several markets. Thus, we continue to target organic revenue growth between 2% and 6% for fiscal 2020. This target assumes that average industry growth percentages across our markets will approximate low single digits, and we are targeting to grow faster than the industry again in fiscal 2020 by continuing to implement our growth strategies.
Based on how our organic revenue growth accelerated during fiscal 2019, the organic revenue target for fiscal 2020 anticipates higher growth rates in the first half of the year compared to the second half.
In addition, our revenue will benefit from the inorganic impact of consolidating Smith System and Orangebox for a full-year, which will mostly benefit the first half of the year. Plus, we will report an extra week of revenue in the fourth quarter of fiscal 2020 due to the timing of our year-end. Together, these impacts are expected to contribute approximately 4% growth in our reported revenue this year.
Regarding currency translation effects, several foreign currency exchange rates in countries where we report revenue have continued to devalue relative to the U.S. dollar. Accordingly, the translation of our revenue could be negatively impacted, and the impact on our growth rate could exceed the approximate 0.5% we estimated in March, which was based on exchange rates at the start of our fiscal year.
For earnings, we are targeting fully diluted earnings for fiscal 2020 between $1.20 and $1.35 per share. This target is consistent with our mid-term objective to grow earnings at 2x the rate of organic revenue growth by continuing to leverage our scale, improve our profitability in EMEA, and drive fitness across our business model.
In addition, we expect a few pennies of earnings associated with each of the inorganic growth drivers I just mentioned.
Our targets for fiscal 2020 assume a relatively stable geopolitical environment and continued growth in the major economies around the world. The recent reductions in CEO sentiment and various projections for slowing economic growth are notable, and could continue to temper capital spending growth.
However, we believe our industry share of capital spending could be more resilient than it has been in the past when global economies faced similar headwinds.
We believe C-suites are increasingly viewing their workplaces as strategic assets, which need to be modernized if they are going to help drive growth and productivity, compete for talent, and strengthen their cultures. And we believe our innovation and knowledge uniquely position us to work with these organizations during their transformation.
From there, we will turn it over for questions.