Our second quarter revenue grew 22.6% as we achieved double-digit growth across all of our business units.
And our e-commerce sales grew nearly 43%.
Second quarter adjusted EBITDA increased 28.8% driven by higher volumes and improved efficiencies from our Global Productivity Improvement Program.
But despite these headwinds, our stellar first half performance and our continued organic growth give us confidence in again raising our earnings framework to reflect mid-teens net sales and adjusted EBITDA growth, adjusted free cash flow of $260 million to $280 million.
Our balance sheet this quarter improved sequentially, ending the quarter with net leverage of 3.2 times and over -- and maintaining over $860 million in total liquidity.
Our actions earlier this quarter to refinance our debt are expected to reduce our annual interest expense by $18 million a year.
As a reminder, we issued $900 million of total debt with a mix of Term Loan B and a new 10-year three 7/8 senior notes, which will lower our cost of capital.
We will continue to target a net leverage ratio in the three to 4 times range.
Net sales increased 22.6%.
Excluding the impact of $18 million of favorable foreign exchange and acquisition sales of $26.8 million, organic net sales increased 18% with double-digit growth across all four business units.
Gross profit increased $75.1 million, and gross margin of 35.1% was in line with the year ago driven by higher volumes in all business units, improved efficiencies from our Global Productivity Improvement Program and favorable mix, offset by higher freight and input cost inflation and last year's retrospective tariff excluding benefits.
SG&A expense of $262.2 million increased 13.1% at 22.8% of net sales, with the dollar increase driven by improved volumes, higher advertising and marketing investments and incentive and distribution costs.
Operating income of $116.8 million was driven by improved volumes, improved productivity and lower restructuring costs partially offset by input cost inflation, marketing and advertising investments and incentive costs.
Adjusted diluted earnings per share improved to $1.76 driven by operating income growth along with lower shares outstanding.
Adjusted EBITDA increased 28.8% from the prior year primarily driven by growth across all business units.
Q2 interest expense from continuing operations of $65.5 million increased $30 million due to the debt refinancing costs.
Cash taxes during the quarter of $11.9 million were $4.4 million lower than last year.
Depreciation and amortization from continuing operations of $38.7 million was $2.3 million higher than the prior year.
Separately, share- and incentive-based compensation decreased from $14.6 million last year to $8.5 million this year driven by the change to incentive compensation payout methodology we talked about last year.
Cash payments for transactions were $3.1 million, down from $6 million last year.
And restructuring and related payments were $7.6 million versus $12.8 million last year.
The company had a cash balance of $290 million and approximately $577 million available on its $600 million cash flow revolver.
At the end of the quarter, total debt outstanding was approximately $2.6 billion, consisting of approximately $2.1 billion of senior unsecured notes, $400 million of term loans and approximately $159 million of finance leases and other obligations.
Additionally, net leverage improved sequentially and was approximately 3.2 times.
During the quarter, we sold off our remaining Energizer shares for proceeds of $12.6 million.
Capital expenditures were $16.2 million in Q2 versus $13 million last year.
We now expect mid-teens reported net sales growth in 2021, with foreign exchange expected to have a positive impact based on current rates.
This includes benefits from higher volumes; our GPIP program; approximately 11 months of results from the recent Armitage transaction in Global Pet Care, offset by net tariff headwind of about $30 million to $35 million driven by the expiration of previously disclosed retrospective tariff exclusions in 2020.
In addition, as David mentioned, we have also now factored in $120 million to $130 million of input cost inflation compared to a year ago.
Fiscal 2021 adjusted free cash flow for continuing operations is now expected to be between $260 million and $280 million, up from the previous range of $250 million to $270 million.
Depreciation and amortization is expected to be between $180 million and $190 million, including stock-based compensation of approximately $30 million to $35 million.
Full year interest expense is now expected to be between $130 million and $135 million.
This meaningful step-down compared to our prior range of last year is driven by our successful $900 million refinancing in February of our senior notes due 2024 and partial refinancing of our senior notes due 2025.
On a full run rate basis, as David mentioned, we expect annualized savings of approximately $18 million.
Restructuring and transaction-related cash spending is now expected to be between $70 million and $80 million.
Capital expenditures are expected to be between $85 million and $95 million.
And cash taxes are expected to be between $35 million and $40 million, and we do not anticipate being a significant U.S. federal cash taxpayer during fiscal 2021 as we continue to use net operating loss carryforwards.
We ended fiscal 2020 with approximately $800 million of usable federal NOLs.
For adjusted EPS, we use a tax rate of 25%, including state taxes.
Regarding our capital allocation strategy, we continue to target a net leverage range of 3 times to 4 times adjusted EBITDA.
First, we continue to plan for incremental advertising investments of over $20 million in fiscal 2021 as we continue to raise awareness, consideration and purchase intent with consumers.
Third, we continue to manage through inflationary pressures, which are currently expected to be $120 million to $130 million higher than the prior year.
Second quarter reported net sales increased 18.4%, and organic net sales increased 17.4%.
Adjusted EBITDA increased 5.6% primarily driven by positive volumes and productivity improvements that were materially offset by last year's significant benefit from retrospective tariff exclusions as well as higher freight and input cost inflation, distribution costs, COVID-19-related costs and higher marketing investments.
Excluding last year's tariff exclusions, adjusted EBITDA improved 20.1%.
In our Kwikset business, we are focused on driving demand for Microban, which incorporates antimicrobial technology on the surface of our hardware; also SmartKey technology, which allows users to rekey their own locks to any Kwikset key in about 15 seconds; and finally, our exciting Halo Touch Smart Lock product, which includes biometric- and WiFi-enabled technology along with voice-assist capability through Alexa and Google Assistant.
Reported and organic net sales increased 28% and 24.3%, respectively.
Adjusted EBITDA more than doubled to $25.4 million.
Q2 represented another strong quarter of financial performance with reported net and organic sales growth of 23.9% and 10%, respectively.
Adjusted EBITDA grew 39%.
Second quarter reported net sales increased 21.4%, and adjusted EBITDA increased 22.7%.
Last year's net sales were over $60 million with growing sales and margins over the past three years.
Our F '21 savings are running ahead of previous projections, and we are now raising our total gross savings target of $150 million to at least $200 million by the end of fiscal 2022.
During our call last quarter, we indicated these headwinds were $70 million to $80 million higher than we had originally planned for the year or in other words, $100 million to $110 million higher than fiscal 2020 levels.
Based on current rates as well as our improved expectations for top line growth for the year, these inflationary headwinds are now expected to be $120 million to $130 million higher in fiscal 2020 levels.
This quarter, e-commerce grew by nearly 43% and represented more than 16% of our total net sales.
Second, our second quarter financials reflect another quarter of operating leverage, with adjusted EBITDA increasing 28.8% from the prior year with growth across all businesses.
Thirdly, our balance sheet improved sequentially, ending the quarter with net leverage of 3.2 times with over $860 million in total liquidity.

Summary:
Our second quarter revenue grew 22.6% as we achieved double-digit growth across all of our business units.
But despite these headwinds, our stellar first half performance and our continued organic growth give us confidence in again raising our earnings framework to reflect mid-teens net sales and adjusted EBITDA growth, adjusted free cash flow of $260 million to $280 million.
Adjusted diluted earnings per share improved to $1.76 driven by operating income growth along with lower shares outstanding.
We now expect mid-teens reported net sales growth in 2021, with foreign exchange expected to have a positive impact based on current rates.
Fiscal 2021 adjusted free cash flow for continuing operations is now expected to be between $260 million and $280 million, up from the previous range of $250 million to $270 million.