With respect to market share capture, we're sustaining growth rates that are at or above our long range target of growth, at least 400 basis points above the industrial production index.
Our fiscal second quarter average daily sales growth rate of 7.9%, does not do justice to the momentum that we see developing.
Therefore, the absolute sales growth rate of 11.4% is more indicative of underlying performance.
February was particularly strong at nearly 18%, with a catch up from the soft January.
Implant continues its strong momentum and now represents approximately 9% of company sales.
We're tracking ahead of plan, which targeted 10% of total company sales by the end of fiscal '23.
E-commerce reached 60.7% of total company sales, up 150 basis points from prior year and 30 basis points from the prior quarter.
We were able to save the customer over $1.2 million on an annualized basis, by recommending alternate tooling that yielded faster metal removal rates, shorter lead times, and increased productivity with a more cost effective tool.
You may have seen that we were recently awarded a five year contract to service 10 U.S. Marine Corps bases across the continental United States, Hawaii, and Japan.
And we said we would achieve this by leveraging growth, by executing on gross margin initiatives, and by delivering structural cost takeout of at least $100 million, helping to reduce opex as a percentage of sales by at least 200 basis points from our fiscal 2019 baseline.
Price realization thus far has been strong, and as a result, Q2 gross margins came in at 42.5%.
We also generated strong operating expense leverage and reduced adjusted opex as a percentage of sales by 80 basis points versus prior year.
We delivered $6 million of savings in the second quarter and remain on track for $25 million in expected cost savings for the fiscal year.
And we remain on pace to achieve our goal of at least $100 million in total cost savings by the end of fiscal '23.
While these conditions create some challenges for us here at MSC, they also provide opportunities to take additional market share from the 70% of the distribution market that's made up of local and regional distributors.
Our second quarter sales came in at $863 million.
As Erik mentioned, given the extra two days this year coming with minimal sales, the total sales growth of 11.4% over the prior year period is more reflective of our real growth.
On an average daily sales basis, Q2 growth was 7.9%.
Our non-safety and non-janitorial product lines grew just over 10% on an ADS basis, and sales of safety and janitorial products declined roughly 3%.
Government sales declined roughly 11%, due to the difficult janitorial and safety comps.
This is a large improvement from Q1's decline of nearly 30%, and we expect the comps to ease further in the back half of fiscal 2022.
We're continuing to see strong execution and growth initiatives with vending and plant and mscdirect.com, each growing roughly 100 basis points or more, as a percent of total company sales versus the prior year.
As Erik mentioned, our fiscal Q2 gross margin was 42.5%, up 90 basis points sequentially from our first quarter, and up 440 basis points from last year's fiscal Q2.
As you may recall included in last year's Q2 gross margin was a $30 million PPE related write down.
Excluding this write down, our prior year Q2 adjusted gross margin was 42%, 50 basis points below the current year quarter.
Reported and adjusted operating expenses in the second quarter were $266 million, or 30.8% of sales.
Last year reported operating expenses were $245.1 million, and adjusted operating expenses were $244.4, or 31.6% of sales.
This represents an 80 basis point reduction in adjusted opex to sales.
We incurred approximately $3.1 million of restructuring and other costs in the quarter, as compared to $21.6 million in the prior year quarter.
Our operating margin was 11.3%, compared to 3.6% in the same period last year.
Excluding the restructuring and other costs and the PPE related inventory write down in the prior year, our adjusted operating margin was 11.6% versus an adjusted 10.4% in the prior year period, a 120 basis point improvement.
On the adjusted incremental margin front for second quarter came in at just over 22% ahead of our initial fiscal 2022 goal.
Earnings per share were $1.25 as compared to $0.32 in the same period prior year.
Adjusted earnings per share were $1.29 as compared to adjusted earnings per share of a $1.03 in the prior year period, an increase of 25%.
Turning to the balance sheet, you can see that as of the end of our fiscal second quarter, we were carrying $658 million of inventory, up $35 million from Q1 balance of $623 million.
Our capital expenditures were $16 million in the second quarter.
Moving ahead to Slide 7, you can see the uses of working capital also impacts our free cash flow, which came in slightly negative for the second quarter as compared to $4 million in the prior year quarter.
We do expect cash conversion to improve in the second half of fiscal 2022, and for the fiscal 2022 full year to come in at approximately 70% to 80%, roughly comparable with historical periods of Southwest.
Our total debt at the end of the fiscal second quarter was $835 million, which reflects a $72 million increase from our first quarter.
As for the composition of our debt, $285 million was on our revolving credit facility, about $200 million was under our uncommitted facilities, approximately $300 million with long-term fixed rate borrowings, and $50 million were short-term fixed rate borrowings.
Our cash and cash equivalents were $42 million, resulting in net debt of $794 million at the end of the quarter, up from $700 million at the end of the first quarter.
You may recall that our updated cost savings goal for fiscal 2023 is a minimum of $100 million versus our fiscal 2019 cost base.
As you can see on Slide 8, our cumulative savings for fiscal 2021 were $60 million, and we also invested roughly $22 million over that same period.
For the full year fiscal 2022, we expect additional gross savings of $25 million, and additional investments of $15 million.
We've made excellent progress toward this goal in the first half, as we've achieved $16 million of gross savings and invested $11 million.
We remain on target to hit at least $100 million of cost savings by fiscal 2023.
We would achieve an annual adjusted operating margin between 12.5% and 13.1%.
At those levels of adjusted operating margin, our incremental margins will be around 25% in the back half of this year and north of the 20%, we originally envisioned for full year fiscal 2022.
All 6,500 of us will remain restless until we achieve our mission to be the best industrial distributor in the world.

Summary:
Earnings per share were $1.25 as compared to $0.32 in the same period prior year.
Adjusted earnings per share were $1.29 as compared to adjusted earnings per share of a $1.03 in the prior year period, an increase of 25%.