MRB’s adjusted operating income in the first quarter was $8 million or $8 per ton. These results represented an improvement on last year’s first quarter, mainly due to the continued implementation of MRB’s productivity improvements, which totaled $7 million in the quarter. The adjusted results excluded the adverse impact of $6 million arising from the resale or modification of certain previously contracted ferrous bulk shipments for delivery in the first quarter. The last time this happened was back in 2008 when the market collapsed. So the non-GAAP adjustment within our results is intended to provide comparability with other reporting periods and to give more insight to our overall performance in the quarter.
On a sequential basis, the substantial drop in ferrous markets also led to a significant impact from average inventory accounting. Even though we reduced our purchase prices for raw materials, both our reported and adjusted results include an estimated $7 million adverse impact of average inventory accounting, which was the main reason that our adjusted results were different from our fourth quarter.
It is important to note that because we have a high focus on managing our inventory turns and our buy program to quickly adjust to market changes, we did not incur a significant inventory valuation charge despite the large market drop. The productivity benefits in MRB’s results are arising from a combination of a 12 percent year-over-year reduction in the MRB’s headcount, the elimination of management layers, increased use of shared services, cutting transportation costs, and more efficient yard processes, which has reduced both overtime and use of outside contractors. The improvements are split between cost of goods sold and MRB’s SG&A, which in fiscal 2014 was down by 10 percent on the previous fiscal year. MRB’s productivity contribution was the majority of the $10 million consolidated total for the quarter, with the remaining $3 million of this total between our other two business segments and corporate.
Now moving to Slide 10, let’s turn to our steel manufacturing business. SMB continued to deliver higher performance year-over-year on improving demand in West Coast construction markets, which drove 4 percent higher average selling prices and continued contributions from productivity initiatives. Operating income of $6 million was $4 million higher year-over-year due to improved gross margins, driven by the strength in demand and a bad debt of $1 million in last year’s results.
Sales volumes of 127,000 based in tons were in line with the prior year first quarter but lower sequentially due to a planned maintenance outage. Rolling mill utilization in the quarter was 72 percent, up significantly from 65 percent in the prior year quarter.
Now let’s move to our auto parts business on Slide 11. Auto parts continued to generate strong car purchase volumes in Q1 of 97,000, up 7percent year-over-year on benefits from ramping up new stores and organic improvements. However, the sharply lower commodity prices had a significant impact on the first quarter results. Operating income was $2 million, compared to $6 million in the same quarter last year. Of the difference, $2 million was due to the estimated adverse impact of average inventory accounting, with the balance due to further margin compression arising from the lower price environment.
