In Q3, we reported earnings of $1.27 per share versus $0.27 in the prior year quarter.
We incurred pre-tax restructuring and impairment charges of $28 million or $0.16 per share in Q3 primarily related to the exit of our unprofitable oil and gas business, which we divested at the end of January.
This compares to charges of $0.48 per share in the prior year quarter.
We recognized a net pre-tax benefit of $4 million or $0.07 per share on our investment in Nikola Corporation during the quarter.
This benefit was primarily due to a selling our remaining shares of Nikola for $147 million.
In total, we realized cumulative pre-tax cash proceeds of $634 million from our investment in Nikola and contributed $20 million in shares to the Worthington Industries Foundation establishing a charitable endowments supporting worthwhile community costs.
The prior year quarter included $0.11 per share benefit related to a gain on the consolidation of our Worthington Samuel Coil Processing JV combined with the lowering of the reserve associated with a tank replacement program within Pressure Cylinders.
Excluding these items, we generated a record $1.36 per share in earnings in Q3 compared to $0.64 in Q3 a year ago.
Consolidated net sales in the quarter of $759 million were relatively flat compared to $764 million in the prior year quarter.
Our reported gross profit for the quarter increased by $49 million from Q3 last year to $164 million and our gross margin increased to 21.6% from 15.1% as we had inventory holding gains this quarter and losses in the prior year quarter.
Adjusted EBITDA was $126 million up from $79 million in the prior year quarter and our trailing 12 month adjusted EBITDA is now $364 million.
Our adjusted EBITDA through the nine months ended February is $297 million.
In Steel Processing, net sales of $504 million were up 3% from Q3 of 2020 due to higher average selling prices, which were partially offset by lower total volumes.
Our total ship tons were down 11% from last year's third quarter driven by a decrease in total tons caused by furnace and mill outages.
Direct tons made up 48% mix compared to 44% in the prior year quarter.
Steel generated record operating income of $63 million in the quarter, which is up $44 million from $19 million in Q3 last year.
Operating margins increased significantly from 3.9% to 12.5%.
The large year-over-year increase was primarily driven by increased direct spreads, which benefited from inventory holding gains estimated at $31 million or $0.44 per share in the quarter compared to losses of $6 million or $0.08 per share in Q3 of last year.
In our Pressure Cylinders business, net sales were $255 million down 6% from the prior year quarter, primarily due to lower sales in our recently divested oil and gas business, where sales declined year-over-year by $24 million.
Cylinders operating income excluding impairment and restructuring charges and the benefit we had last year from the reserve adjustment I mentioned earlier was $13 million up $1million from the prior year quarter, while operating margins increased to 5% from 4.4%.
Collectively, these headwinds totaled roughly $4 million.
These investments include the expansion of our composite cylinder facility in Poland and the construction of a new Type 3 and Type 4 hydrogen cylinder production facility in Austria.
With respect to our JVs, equity income during the current quarter was $32 million compared to $25 million last year.
During the quarter, we received $18 million in dividends from our unconsolidated JVs.
Cash flow from operations was $9 million in the quarter and $234 million for the first nine months of our fiscal year with free cash flow totaling $169 million in the same period.
Free cash flow for the quarter was actually negative by $7 million due primarily to increase in steel prices that caused our working capital levels to increase by $71 million.
During the quarter, we generated $147 million in pre-tax proceeds from the sale of Nikola stock.
We completed two acquisitions totaling $130 million, invested $16 million on capital projects, paid $13 million in dividends and spent $52 million to repurchase $1 million of our common stock on the shares of our common stock at an average price of $52.37.
On the debt at quarter end of $709 million was relatively flat sequentially and interest expense of $8 million was in line with the prior year quarter.
And in Q3, with $650 million in cash and are well positioned to continue our balanced approach to capital allocation that focused on growth and rewarding shareholders.
Earlier today, the Board increased the authorization on our stock repurchase program to an aggregate of $10 million shares and declared a dividend of $0.28 per share for the quarter, a 12% increase over last quarter, which is payable in June of 2021.
That approach led us to raise our quarterly dividend by 12% today, a reflection of our strong financial position and performance, further rewarding our shareholders.

Summary:
In Q3, we reported earnings of $1.27 per share versus $0.27 in the prior year quarter.
We completed two acquisitions totaling $130 million, invested $16 million on capital projects, paid $13 million in dividends and spent $52 million to repurchase $1 million of our common stock on the shares of our common stock at an average price of $52.37.