As guided, in the fourth quarter, we achieved improvement in sequential consolidated net sales of 5.7%, in constant currency sequential net sales increased by 4.2%, driven by continued strength in respiratory products, increased sales of lifestyle products and growth in North America mobility and seating.
Compared to prior year, operating income increased by $5 million and free cash flow increased by nearly $12 million.
Turning to Slide 5, with fourth quarter, adding to the strong results from the three prior quarters, full-year operating income increased by $21.7 million and adjusted EBITDA grew by over 11% to nearly $32 million.
Importantly, after years of improvements, North America returned to profitability with more than $17 million increase in operating income and modest growth in constant currency net sales.
In 2020, we also introduced the Pico Green product line, the first shower chair made using renewable materials from sustainable products and which eliminates 99% of surface bacteria, particularly maintaining a safer patient environment.
These products come in many varieties and will help us engage with customers to provide better solutions for 24 hours of care.
Additionally, in December, we successfully completed the German plant consolidation, which is anticipated to generate approximately $5 million in annual cost savings, starting in 2021.
To offset lower sales, we took actions to reduce SG&A expense and improved operating income by $5 million.
Despite lower revenues, gross profit as a percentage of sales improved by 60 basis points, due to favorable sales mix and prior actions taken to expand margins.
In addition, adjusted EBITDA improved over 11% from 2019 and free cash flow exceeded our expectations.
North America's sequential sales growth of 3.3%, was more than offset by weakness in Europe as more stringent public health restrictions imposed during the fourth quarter continued to limit access to our customers and end users.
Respiratory, which continue to experience elevated demand globally, increased by over 75% compared to the prior year, and also grew sequentially, driven by sales of stationery oxygen concentrators used for the COVID-19 response.
Sequentially, reported net sales increased 10.8%, driven by increases in Lifestyle and Respiratory products.
With improved sales, we were able to expand gross profit, which improved 510 basis points for the quarter and 260 basis points for the full year.
Importantly, operating income improved by $4 million for the quarter and by $17 million for the year, as we realize the benefit of transformation initiatives, which return the segment to profitability.
In the fourth quarter, constant currency net sales increased 16.2%, driven by all product categories with a nearly 36% improvement in mobility and seating sales.
Sequentially, reported net sales increased 11.5%, driven by mobility and seating sales.
As of December 31, 2020, the company had approximately $273 million of total debt and approximately $105 million of cash on its balance sheet.
In 2020, we took proactive steps to improve our financial flexibility by retiring approximately $25 million of convertible notes in 2021.
As a result of these actions, the remaining balance of $1.3 million of the 2021 notes will be settled in cash this month.
Constant currency net sales growth in the range of 4% to 7%, we're giving a range of revenue, reflecting good growth over 2020 with the range providing for variations in sales by product line and in key markets depending on how the pandemic unfolds.
Given these assumptions, this is expected to result in a 41% improvement in adjusted EBITDA, taking us to $45 million, and free cash flow generation of $5 million.

Summary:
Constant currency net sales growth in the range of 4% to 7%, we're giving a range of revenue, reflecting good growth over 2020 with the range providing for variations in sales by product line and in key markets depending on how the pandemic unfolds.
Given these assumptions, this is expected to result in a 41% improvement in adjusted EBITDA, taking us to $45 million, and free cash flow generation of $5 million.