Our Q4 bookings were a record $197 million, up 23% compared to the prior year, with our Industrial Processing segment driving this growth.
Strong demand led to a 9% sequential increase in Parts & Consumables revenue, which made up 67% of total Q4 revenue.
Total revenue was down 8% compared to the fourth quarter of 2019.
We were particularly pleased that our adjusted EBITDA margin increased to 19.1%, and our free cash flow was up 7% to a record $38 million in the fourth quarter.
Full year revenue declined 10% to $635 million, while our bottom line performance benefited from a favorable product mix along with cost containment measures and government systems programs.
Cash flow from operations strengthened throughout the year, and free cash flow was near a record $85 million for the full year 2020.
Our diluted earnings per share was $4.77 and on an adjusted basis, declined 7% to $5 compared to our record of $5.36 per share in 2019.
Our Flow Control segment benefited from a rebound in capital project activity in the fourth quarter, which led to bookings increasing nearly 9% compared to the prior year period.
Our Parts & Consumables revenue was up 5% sequentially and made up 68% of total Q4 revenue.
As many of you know, our aftermarket parts business has a more favorable margin profile compared to capital business, and the product mix combined with improved operating leverage led to a 13% increase in adjusted EBITDA compared to Q4 of 2019 and represented 26% of revenue.
One was a robust U.S. housing market, which saw single-family homebuilding, the largest share of the housing market, increased 12% in December.
Revenue in this segment declined 13% to $69 million year-over-year, but increased 11% sequentially.
Parts & Consumables revenue was up 12% compared to the same period last year, and made up 70% of total revenue in the fourth quarter.
Revenue was down 7% to $39 million, and Parts & Consumables revenue in the fourth quarter made up 58% of total revenue.
Capital bookings in our Material Handling segment increased 23% compared to the same period last year and were up 18% sequentially.
This uncertainty limits our ability to forecast the timing of orders and as a result, we will not be providing guidance at this time.
Consolidated gross margins were 44.1% in the fourth quarter of 2020 compared to 40.9% in the fourth quarter of 2019, up 320 basis points.
Our overall percentage of Parts & Consumables revenue increased to 67% of total revenue in the fourth quarter of 2020 compared to 60% in the fourth quarter of 2019.
Also contributing to the increase in gross margins was approximately 50 basis points due to the receipt of government assistance benefits related to the pandemic.
SG&A expenses were $47.4 million in the fourth quarter of 2020, down $0.2 million from the fourth quarter of 2019.
SG&A expense as a percentage of revenue was 28.1% in the fourth quarter of 2020 compared to 26.1% in the fourth quarter of 2019.
There was an unfavorable foreign currency translation effect, which increased SG&A expenses by $1.1 million, and we received government assistance benefits of $0.4 million in the fourth quarter of 2020.
Excluding these items, along with backlog amortization and the SG&A from our acquisition, SG&A expenses for the fourth quarter of 2020 were down $1.3 million or 3% compared to the fourth quarter of 2019, primarily due to reduced travel-related expenses.
Our GAAP diluted earnings per share was $1.40 in the fourth quarter compared to $0.76 in the fourth quarter of 2019.
Our GAAP diluted earnings per share in the fourth quarter includes $0.12 from an intangible asset impairment charge, $0.01 of restructuring costs and $0.01 of acquired backlog amortization.
In addition, our fourth quarter results included pre-tax income of $1.2 million or $0.07 net of tax attributable to government employee retention assistance programs.
Our tax rate in the fourth quarter was 20.4% and included approximately $0.12 of tax benefits related to the following items.
Excluding these items, our tax rate would have been 27%.
For the full year 2020, gross margins increased 200 basis points to 43.7% compared to 41.7% in 2019.
Excluding the government assistance benefits, which contributed approximately 60 basis points to the 2020 gross margins and the amortization of profit and inventory in 2019, gross margins were up 90 basis points, primarily due to higher gross profit margins on Parts & Consumables and a higher overall percentage of Parts & Consumables.
Our percentage of Parts & Consumables revenue increased to 66% in 2020 compared to 63% in 2019.
SG&A expenses decreased $10.6 million or 6% to $181.9 million in 2020 compared to $192.5 million in 2019.
As a percentage of revenue, SG&A expenses were 28.6% in 2020 compared to 27.3% in 2019.
We had $0.6 million of SG&A from our acquisitions in 2020 and incurred acquisition-related costs of $1 million and $2.2 million in 2020 and 2019, respectively.
In addition, there was a favorable foreign currency translation effect of $0.4 million and we received government assistance benefits of $2.2 million in 2020.
Excluding SG&A from our acquisition, acquisition-related costs, the impact of foreign currency translation and government assistance benefits, SG&A expenses were down $7.4 million or 4% compared to 2019, primarily due to a decrease in travel-related costs.
Our GAAP diluted earnings per share in 2020 was $4.77, up 5% compared to $4.54 in 2019.
Our GAAP diluted earnings per share in 2020 includes $0.12 from an intangible asset impairment charge, $0.07 of restructuring costs, $0.04 of acquired backlog amortization, $0.03 of acquisition costs and $0.03 from a discrete tax benefit.
In addition, our 2020 results included pre-tax income of $6.1 million or $0.39 net of tax attributable to government employee retention assistance programs.
In the fourth quarter of 2020, adjusted EBITDA was $32.1 million or 19.1% of revenue compared to $32.2 million or 17.6% of revenue in the fourth quarter of 2019.
On a sequential basis, adjusted EBITDA increased 7% due to increased profitability in our Material Handling segment.
For the full year, adjusted EBITDA was $115.9 million or 18.3% of revenue compared to the record set in 2019 of $127.1 million or 18% of revenue.
In the fourth quarter of 2020, operating cash flow was a record $40.3 million and included a positive impact of $12.8 million from working capital compared to operating cash flows of $39.2 million in the fourth quarter of 2019, which included a positive impact from working capital of $17.9 million.
For the full year, operating cash flow was $92.9 million, down 5% compared to the record of $97.4 million in 2019.
We repaid $30.1 million of debt, paid a $2.8 million dividend on our common stock and paid $2.2 million for capital expenditures.
For the full year, we repaid $72 million of our debt.
Free cash flow was a record $38.1 million in the fourth quarter of 2020, increasing 69% sequentially and 7% compared to the fourth quarter of 2019.
For the full year, free cash flow was $85.3 million, down $2.2 million or 2% compared to the record of $87.5 million in 2019.
In the fourth quarter of 2020, GAAP diluted earnings per share was $1.40 and adjusted diluted earnings per share was $1.54.
The $0.14 difference relates to an intangible asset impairment charge of $0.12, restructuring costs of $0.01 and amortization of acquired backlog of $0.01.
The $0.12 intangible asset impairment charge is associated with our timber harvesting product line, which is part of our Wood Processing Systems business.
This is an ancillary product line that was part of our acquisition of NII FPG's Forest Products business in 2017 and represents less than 1.5% of our consolidated revenues in 2020.
We evaluated the recoverability of the intangible asset related to this business, which resulted in a pre-tax impairment charge of $1.9 million in the fourth quarter of 2020 and $2.3 million in the fourth quarter of 2019.
After these impairment charges, the remaining intangible asset for this product line is $0.5 million.
In the fourth quarter of 2019, GAAP diluted earnings per share was $0.76 and adjusted diluted earnings per share was $1.32.
The $0.56 difference relates to a $0.55 charge for the settlement of a pension plan, an intangible asset impairment charge of $0.16, and restructuring costs of $0.01, which were partially offset by a $0.16 tax benefit associated with the exercise of previously awarded employee stock options.
The increase of $0.22 in adjusted diluted earnings per share in the fourth quarter of 2020 compared to the fourth quarter of 2019 consists of the following: $0.21 due to higher gross margins, $0.15 from a lower recurring tax rate, $0.07 due to government assistance programs, $0.06 due to lower interest expense, $0.02 due to lower operating expenses and $0.01 from the operating results of our acquisition.
These increases were partially offset by $0.29 due to lower revenue and $0.01 due to higher weighted average shares outstanding.
Collectively, included in all the categories I just mentioned was a favorable foreign currency translation effect of $0.03 in the fourth quarter of 2020, compared to last year's fourth quarter due to the weakening of the U.S. dollar.
We reported GAAP diluted earnings per share of $4.77 in 2020, and our adjusted diluted earnings per share was $5.
The $0.23 difference relates to an intangible asset impairment charge of $0.12, restructuring costs of $0.07, amortization of acquired backlog of $0.04, acquisition costs of $0.03 and a discrete tax benefit of $0.03.
We reported GAAP diluted earnings per share of $4.54 in 2019 and our adjusted diluted earnings per share was $5.36.
The adjusted diluted earnings per share excludes $0.55 from a pension settlement charge, $0.32 for the amortization of acquired profit and inventory and backlog, an intangible asset impairment charge of $0.16, acquisition costs of $0.06, $0.01 of restructuring costs and $0.29 of tax benefits from the exercise of previously awarded employee stock options.
Decrease of $0.36 in adjusted diluted earnings per share from 2019 to 2020 consists of the following: $1.87 from lower revenue and $0.05 from higher weighted average shares outstanding.
These decreases were partially offset by $0.45 from lower operating expenses, $0.39 from government assistance programs, $0.35 due to lower interest expense, $0.33 from higher gross margins, $0.03 from the operating results of our acquisition and $0.01 from a lower recurring tax rate.
Collectively, included in all the categories I just mentioned, was an unfavorable foreign currency translation effect of $0.04 in 2020 compared to 2019.
Cash conversion days measure, calculated by taking days in receivables plus days in inventory and subtracting days in accounts payable, was 125 at the end of the fourth quarter of 2020, down from 140 at the end of the third quarter of 2020, but up from 104 days in the fourth quarter of 2019.
Working capital as a percentage of revenue was 14.2% in the fourth quarter of 2020 compared to 15.6% in the third quarter of 2020 and 12.2% in the fourth quarter of 2019.
Net debt, that is debt less cash, at the end of 2020 was $166.8 million compared to $232.8 million at the end of 2019.
We were able to lower our net debt by $66 million due to the excellent free cash flow generated in 2020.
Our interest expense decreased 42% or $5.4 million to $7.4 million in 2020 compared to $12.8 million in 2019 due to our ability to successfully leverage cash generated around the world to pay down debt and lower interest rates.
Our leverage ratio calculated defined in our credit agreement was 1.61 at the end of the fourth quarter of 2020, down from 2.03 in the fourth quarter of 2019, as we continue to make excellent progress in paying down debt.
We currently anticipate an overall increase in revenue of 9% to 12%, with stronger performance in the second half of the year.
Excluding the government assistance programs, our gross margins came in at 43.1% in 2020.
As a percentage of revenue, we anticipate SG&A will be approximately 27% to 28%, while the percentage of R&D expense will be the same as 2020.
Overall, we expect minimal benefit from government assistance programs in 2021 compared to the $0.39 we received in 2020.
We expect our recurring tax rate will be approximately 27% to 28% in 2021.
We anticipate capex spending in 2021 will be approximately 2% of revenue.
In addition, we expect depreciation and amortization will be approximately $30 million to $31 million in 2021.

Summary:
Total revenue was down 8% compared to the fourth quarter of 2019.
This uncertainty limits our ability to forecast the timing of orders and as a result, we will not be providing guidance at this time.
Our GAAP diluted earnings per share was $1.40 in the fourth quarter compared to $0.76 in the fourth quarter of 2019.
In the fourth quarter of 2020, GAAP diluted earnings per share was $1.40 and adjusted diluted earnings per share was $1.54.