Local currency sales increased 7% in the quarter, our growth was relatively broad-based throughout the world.
Sales were $938 million in the quarter, an increase of 7% in local currency.
On the U.S. dollar basis, sales increased 11% as currency benefited sales by 4% in the quarter.
On Slide number 4, we show sales growth by region.
Local currency sales increased 8% in the Americas, 7% in Europe, and 8% in Asia, rest of the world.
Local currency sales increased 12% in China in the quarter.
Local currency sales increased 2% in the Americas, 1% in Europe and 3% in Asia/rest of the world.
China local currency sales grew 7% in 2020.
On Slide number 6, we outlined local currency sales growth by product area.
For the fourth quarter laboratory sales increased 12%, industrial increased 1%, with core industrial up 5%, and product Inspection down 5%.
Food Retail increased 7% in the quarter.
We estimate that we benefited 1% to 2% from COVID tailwinds in the quarter related to our pipette business for covered testing.
Laboratory sales increased 5%, industrial declined 1% with core industrial up 2%, and Product Inspection down 7%.
Food Retail declined 4% in 2020.
Gross margin in the quarter was 59.6%, a 60 basis point increase over the prior-year level of 59%.
R&D amounted to $39.9 million, which represents a 6% increase in local currency.
SG&A, amounted to $226.4 million, a 5% increase in local currency over the previous year.
Adjusted operating profit amounted to $292.8 million in the quarter, which is a 14% increase over the prior year amount of $256.3 million.
Operating margins increased 80 basis points in the quarter to 31.2%.
Currency benefited operating profit growth by approximately 2%, but actually hurt operating margin expansion by about 50 basis points.
Amortization amounted to $14.7 million in the quarter.
Interest expense was $9.5 million in the quarter and other income amounted to $3.7 million.
We reduced our effective tax rate for the full year from 20.5% to 19.5%.
Moving to fully diluted shares, which amounted to $24 million in the quarter and is a 3% decline from the prior year.
Adjusted earnings per share for the quarter was $9.26, a 19% increase over the prior year amount of $7.78.
Currency benefited adjusted earnings per share by approximately 2% in the quarter.
On a reported basis in the quarter, earnings per share was $9.03 as compared to $7.84 in the prior year.
Reported earnings per share in the quarter includes $0.12 of purchased intangible amortization and $0.11 of restructuring.
We also had 2 offsetting items for income taxes.
We had a $0.20 increase due to the difference between our quarterly and annual tax rate due to the timing of stock option exercises.
This was offset by a $0.20 benefit from adjusting our tax rate to 19.5% for the first three quarters.
Local currency sales increased 2% in 2020 while adjusted operating income increased 8% and adjusted operating margins were up 130 basis points.
Adjusted earnings per share amounted to $25.72, an increase of 13% over the prior year amount of $22.77.
In the quarter, adjusted free cash flow amounted to $218 million, which is an increase of 20% on a per share basis, as compared to the prior year.
DSO declined approximately 3.5 days in the quarter to 36.5 days as compared to the prior year.
ITO came in at 4.3 times.
For the full year 2020, adjusted free cash flow was $648 million as compared to the prior year amount of $531 million.
On a per share basis, this is a 26% increase in earnings flow-through of more than 100%.
For the full year 2021, we now expect local currency sales growth will be in the range of 5% to 7% as compared to 2020.
We expect full year adjusted earnings per share will be in the range of $29.20 to $29.80, which is a growth rate of 14% to 16%.
This compares to previous adjusted earnings per share guidance in the range of $27.50 to $28.30.
With respect to the first quarter, we would expect local currency sales growth to be in the range of 11% to 13% and expected adjusted earnings per share to be in the range of $5.55 to $5.70, a growth rate of 39% to 43%.
We expect interest expense to be approximately $40 million in 2021 and total amortization to be approximately $55 million.
Other income, which is below operating profit, will be approximately $9 million in 2021.
As I mentioned earlier, we would expect our effective tax rate in 2021 to also remain at 19.5%.
In terms of free cash flow for the year, we expect it to be approximately $690 million.
We will continue to repurchase shares and expect to end 2021 in a targeted range of approximately 1.5 times leverage ratio.
With respect to the impact of currency on sales growth, we expect currency to increase sales growth by approximately 3.5% in 2021 and 5% in the first quarter.
In terms of adjusted EPS, currency will benefit growth by approximately 3% in 2021.
In terms of Industrial business, Core Industrial did well in the quarter with a 5% increase driven by double-digit growth in China.
Product Inspection came in weaker than we had anticipated with a 5% decline in the quarter.
Food retailing came in better than we expected with 7% growth overall and growth in all regions.
Sales in Europe increased 7% in the quarter with excellent growth in Lab and good growth in core industrial and food retail.
Americas increased 8% in the quarter with excellent growth in Lab offset by flat results in both product inspection and core industrial.
Finally, Asia/Rest of the World grew 8% in the quarter with both Lab and Core Industrial doing very well.
As mentioned, China have 12% growth in the quarter with excellent growth across product lines.
One final comment on the business, Service and Consumables were up 13% in the quarter and 8% for the full year.
Our almost 3,000 service technicians are an important competitive advantage for us.
Emerging markets, an important growth driver are 35% of sales today compared with 25% in 2007.
Similarly, our faster growing Laboratory business is now 54% of sales, up from 44%.
Finally, Service and Consumable is now 33% of sales as compared to 28%.

Summary:
On the U.S. dollar basis, sales increased 11% as currency benefited sales by 4% in the quarter.
Laboratory sales increased 5%, industrial declined 1% with core industrial up 2%, and Product Inspection down 7%.
Adjusted earnings per share for the quarter was $9.26, a 19% increase over the prior year amount of $7.78.
On a reported basis in the quarter, earnings per share was $9.03 as compared to $7.84 in the prior year.
For the full year 2021, we now expect local currency sales growth will be in the range of 5% to 7% as compared to 2020.
We expect full year adjusted earnings per share will be in the range of $29.20 to $29.80, which is a growth rate of 14% to 16%.