We furloughed 11,000 of our 15,000 employees globally.
In April, our weekly revenue had fallen to as low as 10% of the prior year revenue, the low point for KAR Global performance.
Changes in the business operations and especially, all of our support functions led us to permanently eliminate 5,000 positions, reducing our annual payroll costs by over $150 million.
Our SG&A was down year-over-year in Q4 by $25 million.
This decrease was achieved despite adding $5 million of SG&A in the fourth quarter related to BacklotCars.
By moving our U.S. customers from the TradeRev application to the BacklotCars, we will be moving from a timed auction format to a 24/7 bid-ask marketplace.
To sum it all up, after 90 days of owning BacklotCars, we are pleased with the performance and the fit with KAR.
We lost approximately $35 million in those two weeks as revenue was minimal and all employees were paid for two weeks despite all locations being closed.
We had negative adjusted EBITDA of approximately $25 million for the month.
We then saw a relatively fast rebound during May as weekly volumes rebounded to over 90% of the prior year, followed by June, where volumes and our financial performance exceeded the prior year.
While volume started to decline in August, we finished the third quarter with volumes over 90% of 2019 levels for the quarter and adjusted EBITDA that was 8% above 2019 levels.
We had gross profit of over 50% of net revenue and adjusted EBITDA margin that was 23.5% of total revenue.
Unfortunately, the fourth quarter saw volumes dropped to 75% of the prior year, excluding acquisitions.
Gross profit declined to 40% -- 46% of net revenue.
In terms of SG&A, we're able to control cost and hold the SG&A below the prior year by $25 million.
This was accomplished despite recording approximately $16 million in incentive pay in the fourth quarter compared to $7 million in the prior year.
This increase in incentive pay reflects the proposal by management to adjust the threshold for payment to 50% from approximately 95% of target for 2020.
The total payout for employees with annual incentive programs was approximately 70% of target for the year.
We also recorded an adjustment to contingent purchase price related to the acquisitions of CarsOnTheWeb and Dent-ology, that was a net increase in expense of $4.7 million.
The contingent purchase consideration and the write-off of goodwill totaling $25.5 million for our U.K. operations that we recorded earlier in the year are not tax deductible and increased our effective tax rate.
As we look forward, we expect our effective tax rate to be approximately 30%, unless, the U.S. federal income tax rate is increased from current levels.
We believe when volumes get back to 90% or more of 2019 levels, our business can generate gross profit of approximately 50% of net revenue with adjusted EBITDA margins in the mid 20% range.
In summary, the only difference between the two weighted average diluted shares numbers is the conversion of the convertible preferred stock to common shares using the conversion price of $17.75 per share.
We did buy back $10.2 million of common stock in the fourth quarter at an average price of $17.50 per share.
We expect capital expenditures to be approximately $125 million, an increase from actual capital expenditures of $101 million in 2020.

Summary:
We believe when volumes get back to 90% or more of 2019 levels, our business can generate gross profit of approximately 50% of net revenue with adjusted EBITDA margins in the mid 20% range.