Trends were strongest in March and have sustained positive momentum into the early part of our fiscal fourth quarter with organic sales through the first 19 days of April up approximately 10% over the prior year.
Consolidated sales increased 1.2% over the prior year quarter.
Acquisitions contributed 1.8 points of growth, and foreign currencies increased quarter sales by 0.6%.
This was partially offset by one less selling day over the prior year period, typically impacted sales by 1.6%.
Net these factors, sales increased 0.4% on an organic daily basis.
Average daily sales rates increased over 8% sequentially on an organic basis versus the prior quarter, which was higher than our normal seasonal trends.
Sales in our Service Center segment increased 0.4% year-over-year on an organic daily basis when excluding the impact from foreign currency and one less selling day in the quarter.
The segment's average daily sales rate has now improved over 18% from the fiscal '20 June quarter.
Within our Fluid Power & Flow Control segment, sales increased 4.5% over the prior year quarter with our recent acquisitions of ACS and Gibson Engineering contributing 5.9 points of growth.
On an organic daily basis, segment sales increased 0.2%.
As highlighted on Page eight of the deck, gross margin of 29.4%, improved 43 basis points year-over-year or 29 basis points when excluding noncash LIFO expense of $0.8 million in the quarter and $2 million in the prior year quarter.
On a sequential basis, gross margins improved over 50 basis points.
On an adjusted basis, distribution and administrative expenses declined 3.4% year-over-year or approximately 6% when excluding incremental operating costs associated with our ACS and Gibson Engineering acquisitions.
Adjusted SG&A excludes $2.6 million of nonroutine income recorded in the third quarter of fiscal 2021 and $3.9 million of nonroutine expense in the prior year quarter.
As a result, adjusted EBITDA grew over 14% year-over-year and 27% sequentially, while adjusted EBITDA margin was 10.3%, up 119 basis points over the prior year.
On a GAAP basis, we reported earnings per share of $1.42, which includes the previously referenced nonroutine income.
On a non-GAAP adjusted basis, excluding this item, we reported earnings per share of $1.37, which compared to $1.02 in the prior year quarter.
Our adjusted tax rate during the quarter of 18%, was below prior year levels of 23.3% and our guidance of 23% to 25%.
Excluding this benefit, as we move into our fourth quarter, we believe a tax rate of 23% is an appropriate assumption near term.
Cash generated from operating activities during the third quarter was $44.1 million, while free cash flow totaled $40.3 million.
Year-to-date, we have generated record free cash of $191 million, which is up 25% from prior year levels and represents 150% of adjusted net income.
Given the strong cash flow performance of the quarter, we ended March with approximately $304 million of cash on hand.
Net leverage stood at 1.9 times adjusted EBITDA at quarter end below the prior year level of 2.5 times in fiscal '21 second quarter level of 2.1 times.
In addition, our revolver remains undrawn with approximately $250 million of capacity and additional $250 million accordion auction.
Based on month-to-date trends in April and assuming normal sequential patterns, we would expect our fiscal fourth quarter 2021 organic sales to increase by 12% to 13% on a year-over-year basis.
As a reminder, we will be fully lapping prior year weakness from the pandemic, which resulted in an 18.4% organic sales decline in last year's fiscal fourth quarter.
Based on the 12% to 13% organic sales growth assumption, we believe a low double-digit to mid-teen incremental margin is an appropriate benchmark to use for our fourth quarter.
We remain confident in our cash generation potential and reiterate our normalized annual free cash target reach to 100% of net income over a cycle.
Considering our embedded customer base, and addressable market exceeding $70 billion and growing, we believe this initiative represents a significant opportunity that should expand our share across both legacy and emerging market verticals in coming years.

Summary:
Consolidated sales increased 1.2% over the prior year quarter.
On a GAAP basis, we reported earnings per share of $1.42, which includes the previously referenced nonroutine income.
On a non-GAAP adjusted basis, excluding this item, we reported earnings per share of $1.37, which compared to $1.02 in the prior year quarter.
Based on month-to-date trends in April and assuming normal sequential patterns, we would expect our fiscal fourth quarter 2021 organic sales to increase by 12% to 13% on a year-over-year basis.
Based on the 12% to 13% organic sales growth assumption, we believe a low double-digit to mid-teen incremental margin is an appropriate benchmark to use for our fourth quarter.