IDEX committed $6 million to boost sponsored activities across the company.
Broad rebound in order rates we discussed in the third quarter continued as our fourth-quarter organic orders were up 7% compared to the prior year.
FMT organic orders for the fourth quarter were up 3%, driven by project orders in our water businesses, continued strength in agriculture, and recovery in industrial day rate businesses.
HST organic orders were up 6% in the fourth quarter, driven by new product initiatives in life sciences and the recovery in auto and semicon continuing to boost our Sealing Solutions businesses.
Finally, Fire & Safety/Diversified organic orders were up 15% in the quarter.
A year ago, as we entered 2020, we talked about the general industrial slowdown that we were seeing and what a flat to down 2% to 5% world looked like for IDEX.
We were able to drive approximately $30 million of revenue in 2020 and expect to generate about the same amount in 2021 related to these initiatives.
So relative to our $25 million to $100 million of opportunities we highlighted, we'll achieve about $60 million.
Q4 orders of $679 million were up 10% overall and up 7% organically.
For the year, orders were down 3% overall and down 4% organically, with strong organic order recovery in the fourth quarter partially offsetting the 18% organic order decline we saw in the second quarter at the height of the pandemic.
Fourth-quarter sales of $615 million were up 2% overall, but down 1% organically.
Our industrial and energy markets led the decline but did have positive organic growth of around 60% of our reporting units, led by strong performance in our ceilings, MPT, and dispensing businesses.
Full-year sales of $2.4 billion were down 6% overall and down 9% organically, driven by the impact of COVID, industrial market softness, and challenges in oil and gas.
Q4 gross margins contracted 20 basis points to 43.8%, driven by a decline in volume and unfavorable sales mix, partially offset by price capture.
For the full year, gross margins contracted 140 basis points.
Excluding the impact of the FMD inventory step-up, adjusted gross margins contracted 130 basis points to 43.9%, driven by volume declines in sales mix, offset by our continued ability to capture price and drive operational productivity.
Fourth-quarter operating margin was 22.6%, up 50 basis points compared to prior year.
Full-year operating margin was 22.1%, down 110 basis points compared to the prior year.
Adjusted operating margin was 23.4% for the fourth quarter, up 10 basis points compared to prior year and 22.8% for the year, down 140 basis points compared to 2019.
Our Q4 effective tax rate was 22.2%, which was higher than the prior-year ETR of 20.6% due to the revaluation of foreign deferred income tax balances driven by changes in foreign tax rates.
Fourth-quarter adjusted net income was $105 million, resulting in an earnings per share of $1.37, up $0.04 or 3% over prior-year adjusted EPS.
Full-year adjusted net income was $397 million, resulting in adjusted earnings per share of $5.19, down $0.61 or 11% compared to prior year.
Finally, free cash flow for the quarter was $149 million, up 9% compared to prior year and was 142% of adjusted net income.
For the year, free cash flow was $518 million, a record for IDEX, up 9% versus last year and 131% of adjusted net income, driven by strong working capital performance.
Adjusted operating income declined $66 million for the year.
With organic sales down around $247 million, we would have expected a negative impact in operating income of $148 million at roughly 60% contribution margin rate.
The $148 million was offset by $58 million of executed operational actions, $23 million from the impact of restructuring actions combined with $35 million of discretionary cost control items, and $10 million of price, net productivity, and negative business mix.
Finally, we had $7 million of reduced variable compensation for the year.
This yielded a better-than-expected flow-through of 34%.
Again, organic flow-through is based on taking reported sales and op income, less the impact of FX and acquisitions, which was roughly $77 million on the top line and $7 million of profit.
Based on current order rates and expected market recoveries, we see an accelerating 2021 and expect organic revenue for the year to be up 6% to 8%.
This translates to an earnings per share impact of roughly $0.75 to $0.95, depending on our top-line results.
We expect our productivity initiatives to more than offset inflation, providing $0.04 of benefits.
The structural cost actions we have taken are expected to provide $0.12 of earnings per share benefit in the year.
These discretionary add-backs and strategic investments will provide approximately $0.19 to $0.26 of pressure in our 2021 guidance.
Next, we anticipate $0.08 to $0.11 headwind from variable compensation as we reset our incentive comp for the year.
Finally, FMD has one-quarter of inorganic results, which we expect to provide $3 million of revenue but provide $0.03 of earnings per share pressure.
First, we expect an $0.18 headwind from tax, primarily related to discrete benefits we realized in 2020, associated with equity vesting and option exercising.
Second, we expect a 2% tailwind from FX, providing $0.13 of earnings per share benefit.
So in summary, we are projecting organic revenue growth of 6% to 8% for the year, and earnings per share expectations are in the range of $5.65 to $5.95, a 9% to 15% increase over 2020.
In Q1, we are projecting earnings per share to range from $1.38 to $1.42 with organic revenue growth of 2% to 4% and operating margins of approximately 23.5%.
The Q1 effective tax rate is expected to be approximately 23%.
We expect a 3% top-line benefit from the impact of FX, and corporate costs in the first quarter are expected to be around $18 million.
Again, we're projecting full-year earnings per share in the range of $5.65 to $5.95 with full-year organic revenue to be up 6% to 8%, with operating margins between 23.5% to 24.5%.
We expect FX to provide a 2% benefit to top-line results.
The full-year effective tax rate is expected to be around 23%.
Capital expenditures are anticipated to be around $55 million.
And free cash flow is expected to be between 115% to 120% of net income.
Corporate costs are expected to be approximately $70 million for the year.

Summary:
Q4 orders of $679 million were up 10% overall and up 7% organically.
Fourth-quarter sales of $615 million were up 2% overall, but down 1% organically.
Fourth-quarter adjusted net income was $105 million, resulting in an earnings per share of $1.37, up $0.04 or 3% over prior-year adjusted EPS.
Based on current order rates and expected market recoveries, we see an accelerating 2021 and expect organic revenue for the year to be up 6% to 8%.
So in summary, we are projecting organic revenue growth of 6% to 8% for the year, and earnings per share expectations are in the range of $5.65 to $5.95, a 9% to 15% increase over 2020.
In Q1, we are projecting earnings per share to range from $1.38 to $1.42 with organic revenue growth of 2% to 4% and operating margins of approximately 23.5%.
Again, we're projecting full-year earnings per share in the range of $5.65 to $5.95 with full-year organic revenue to be up 6% to 8%, with operating margins between 23.5% to 24.5%.