The decrease in Brazil's revenues was due to the negative impact of Brazil's recent tight monetary policy on general commercial activity and specifically the agricultural sector into which many of our products are sold and capacity additions by our competitors, partially offset by higher unit selling prices in dollar terms due to the foreign exchange effects of Brazil's tight monetary policy.
Cost of sales increased 19.1% to $162.8 million in the quarter ended March 31, 2006 from $136.7 million in the quarter ended March 31, 2005. The increase in cost of sales primarily reflects higher raw material costs, the inclusion of SI results for February and March 2006 and the amortization of the $7.7 million inventory fair value adjustment related to the SI acquisition, partially offset by the absence of the $3.4 million amortization of inventory fair value adjustment, recorded in the quarter ended March 31, 2005, related to the December 2004 acquisition of the Propex business from BP p.l.c. As a percentage of net revenue, cost of sales increased slightly to 85.1% in the quarter ended March 31, 2006 from 84.6% in the quarter ended March 31, 2005, primarily due to the inventory fair value adjustment amortization and raw material cost increases.
Selling, general and administrative expenses increased to $26.0 million in the quarter ended March 31, 2006 from $14.2 million in the quarter ended March 31, 2005. As a percentage of net revenue, selling, general and administrative expenses increased to 13.6% in the quarter ended March 31, 2006 from 8.8% in the quarter ended March 31, 2005. The increase in selling, general and administrative expenses primarily reflects the inclusion of SI's overhead costs in February and March 2006.
As part of the SI acquisition, in-process research and development charges of $3.7 million were expensed in the quarter ended March 31, 2006. There was no comparable amount for the quarter ended March 31, 2005.
The Company recognized a $3.0 million restructuring charge in the quarter ended March 31, 2006 related to SI acquisition-related severance costs. As part of integrating the newly-acquired SI with the Company and as part of relocating the Company's headquarters to Chattanooga, Tennessee, most of the Austell, Georgia employees were made redundant. There was no comparable amount for the quarter ended March 31, 2005.
Income before interest and taxes decreased to a loss of $9.5 million in the quarter ended March 31, 2006 from income of $10.5 million in the quarter ended March 31, 2005. This decrease is primarily due to several non-recurring acquisition and restructuring related charges, including the $7.7 million amortization of the inventory fair value adjustment related to acquisition purchase accounting, the $3.7 million of in-process research and development charges, the Seneca, South Carolina facility restructuring's $5.5 million non-cash impairment related to equipment which will not be relocated to another plant, and the $3.0 million acquisition integration-related severance costs.
The decrease in the North America furnishings segment income was due primarily to a $7.5 million allocation of the above-mentioned non-recurring acquisition integration and restructuring charges and lower volumes resulting from the two largest carpet manufacturers backward integrating into carpet backing manufacturing, partially offset by increasing margins and the inclusion of SI activity in 2006.
The decrease in the North America geosynthetics segment income was due primarily to a $5.7 million allocation of the above-mentioned non-recurring acquisition integration and restructuring charges. The decrease in the North America industrial products segment income was due primarily to a $2.0 million allocation of the above-mentioned non- recurring acquisition integration and restructuring charges, partially offset by the inclusion of SI activity in 2006.
