The actions which are ongoing include approximately a 35% reduction in global headcount; temporarily idling assets; cutting discretionary expenditures; prioritizing the most critical projects, including capital expenditures; and rightsizing working capital to generate strong cash flow.
Fourth quarter sales of almost $296 million were in line with our forecast.
Adjusted fourth quarter diluted earnings per share was a negative $0.18 compared to a positive $0.86 last year.
Our focus on cash management has been unwavering throughout this pandemic, and in the fourth quarter we generated another $104 million, resulting in $214 million of free cash flow for the year.
Fourth quarter aerospace sales were down 66% compared to Q4 2019.
Build rate reductions driven by the pandemic combined with the 737 MAX grounding and significant supply chain inventory destocking led to the reduced sales levels.
Sales to other commercial aerospace, which includes regional and business aircraft, fell almost 60% year over year.
On a positive note, space and defense sales increased almost 4% compared to Q4 2019.
Industrial sales declined approximately 29% when compared to Q4 2019.
As you know, wind energy sales are our largest industrial submarket, and those sales declined 42% in constant currency.
2020 sales were $1.5 billion, down 36% year over year.
Adjusted diluted earnings per share for the year was $0.25.
Free cash flow came in strong at $214 million compared to $287 million in 2019.
2020 commercial aerospace sales were about $822 million compared to $1.6 billion in 2019, a decline of almost 50% [Indecipherable] an unprecedented decline in demand driven by lower build rates across all programs, including the 737 MAX, was compounded by inventory destocking across the supply chain.
Space and defense sales for 2020 grew nominally to $448 million compared to $445 million in 2019.
Finally, turning to industrial, sales were $232 million in 2020, which was 26.5% lower year over year.
Our relationship with Safran spans more than 35 years, and we are proud to partner with this key customer providing our high-performance materials that support the strength, efficiency, and reliability in their products.
We have increased our liquidity by $239 million at December 31st, 2020, compared to the end of the first quarter of 2020.
Accordingly, a weak dollar, as we are currently facing, is a headwind to our financial results.
Quarterly sales totaled $295.8 million.
Turning to our three markets, commercial aerospace represented approximately 43% of total fourth quarter sales.
Commercial aerospace sales of $126.7 million decreased 67% compared to the fourth quarter of 2019 as destocking continued to impact our sales.
Space and defense represented 40% of the fourth quarter sales and totaled $119.7 million, an increase of 2.5%, compared to the same period in 2019.
Industrial comprised 17% of fourth quarter 2020 sales.
Industrial sales totaled $49.4 million, decreasing 31% compared to the fourth quarter of 2019 on weaker wind and recreation markets, partially offset by strengthening automotive.
On a consolidated basis, gross margin for the fourth quarter was 10.3% compared to 26% in the fourth quarter of 2019.
Fourth quarter selling, general, and administrative expenses decreased 29.2% in constant currency or $9.9 million year over year as a result of headcount reductions and continued tight controls on discretionary spending.
Research and technology expenses decreased 21.4% in constant currency.
We continue to target eliminating $150 million of annualized overhead costs, including indirect labor.
Adjusted operating loss in the fourth quarter totaled $6.1 million, reflecting the lower sales volume and overhead headwinds combined with the negative sales mix.
The year-over-year impact of exchange rates was negative by approximately 40 basis points.
The composite material segment represented 76% of total sales and generated a negative 6.2% operating margin compared to 18.8% margin in the prior year period.
The engineered products segment, which is comprised of all structures and engineered core businesses, represented 24% of total sales and generated an 8.6% operating margin, compared to 16.9% in the fourth quarter of 2019.
The tax benefit for the fourth quarter and year-to-date periods of 2020 was $12 million and $61 million, respectively.
The 2020 tax benefit was also impacted by discrete tax items of $55 million, primarily composed of a valuation allowance released in the third quarter of 2020.
Net cash provided by operating activities was $107.1 million for the fourth quarter and $264.3 million for 2020.
Working capital was a source of cash of $87.7 million in the last quarter of the year.
Capital expenditures on an accrual basis was $3.2 million in the fourth quarter of 2020, compared to $30 million for the prior year period in 2019.
Accrual basis capital expenditures were $42.5 million for the full 2020 year.
Free cash flow for the fourth quarter of 2020 was $104.3 million and $213.7 million for the year.
We increased our liquidity by $108 million as of 31st -- December 31st, 2020, compared to September 30th, 2020, further strengthening our balance sheet.
Our total liquidity at the end of the fourth quarter of 2020 was $875 million consisting of $103 million of cash and an undrawn revolver balance of $772 million.
Our leverage as of December 31st, 2020, is measured on a net debt basis and was 3.6 times compared to 3.25 times at September 30, 2020, which at that time was measured on a gross debt basis.
The increase in the leverage ratio was due to the lower 12-month trailing EBITDA as net debt actually decreased $108 million at December 31, 2020, compared to September 30, 2020.
Total sales decreased 36%, adjusted operating income was $72 million, and adjusted diluted earnings per share was $0.25.
We delivered $214 million of free cash flow during the year, which we used to deleverage.
The tax assumption is more complicated than normal, but we expect the rate to be approximately 24% to 25% in 2021.

Summary:
Adjusted fourth quarter diluted earnings per share was a negative $0.18 compared to a positive $0.86 last year.
Accordingly, a weak dollar, as we are currently facing, is a headwind to our financial results.
Quarterly sales totaled $295.8 million.