CIRCOR delivered another solid quarter, and we're entering the back half of the year with high confidence that we'll achieve our 2021 guidance.
Our Q2 performance was highlighted by 27% organic orders growth in our Industrial business as both short- and long-cycle demand remained strong.
Book-to-bill in Industrial was 1.2, consistent with the first quarter.
Our free cash flow conversion was 115%, a sign that our efforts to improve working capital are taking hold.
Based on our strong orders performance in the first half, our $436 million backlog and all the work we've done to streamline our operations, we're well-positioned for a very strong second half.
Organic orders of $210 million in the quarter were up 4% versus prior year.
We saw a strong year-over-year increase of 27% in Industrial driven by improvements in virtually all of our end markets.
As expected, orders were down 31% in Aerospace & Defense due to the timing of large defense orders.
Our backlog remained strong at $436 million, up 4% sequentially.
Our backlog in Industrial is $248 million, up 26% since the end of last year.
Organic revenue was $190 million, down 2% versus prior year and up 5% sequentially.
Sequentially, Industrial was up 7% as revenue starts to ramp from strong orders in Q1 and Q2.
Adjusted operating income was $14.6 million, representing a margin of 7.7%, up 80 basis points from previous quarter and down 80 basis points from prior year.
Finally, we delivered $0.35 of adjusted earnings per share and generated free cash flow of $8 million as the team continues to drive working capital improvements across the company.
Industrial organic orders were up 27% versus last year and 1% sequentially.
Our book-to-bill ratio for the quarter and for the first half was 1.2, which will support double-digit second-half revenue growth and represents a revenue inflection point post-COVID.
As expected, Industrial organic revenue was down 1% versus last year and up 7% sequentially.
Adjusted operating margin was 8%, down 200 basis points versus last year, which reflects the downstream volume and aftermarket mix challenges in the quarter.
Aerospace & Defense orders of $54 million were down 31% versus last year and 26% sequentially.
Versus prior quarter, the lower orders were driven by the timing of large orders for the Joint Strike Fighter and CVN-80 and 81 aircraft carriers.
As expected, revenue in the quarter was $61 million, down 5% year over year and up 1% from prior quarter.
Finally, operating margin was 19.9% in the quarter, down 120 basis points year over year.
Sequentially, margins expanded 210 basis points due to pricing actions and material productivity.
Free cash flow in the quarter was $8 million, a significant improvement versus prior year.
We paid down $40 million of debt in Q2 with free cash flow and the proceeds from the sale of a noncore industrial product line.
We ended the quarter with $451 million of net debt, and we are on track to improve our leverage by greater than one turn this year.
In the third quarter, we expect revenue to be up 8% to 10% organically.
We're expecting adjusted earnings per share of $0.55 to $0.60 in the third quarter, a 53% to 67% increase versus prior year.
3Q free cash flow conversion is expected to be between 120% and 140%.
Organic revenue growth is expected to be in the range of 2% to 4%, with adjusted earnings per share of $2.10 to $2.30.
Free cash flow conversion remains at 85% to 95%.
We have high confidence in our second-half margin outlook, and we expect to exit the year with 4Q operating margin of 13% to 15% for the company.
For Q3 Industrial revenue, we expect solid improvement year over year with growth between 7% and 11%.
Our longer-cycle end markets are expected to be up 5% to 9%.
Finally, pricing is expected to net roughly 1%, consistent with prior quarters.
Revenue in the third quarter is expected to be up 12% to 15% versus prior year.
Growth in defense revenue was primarily driven by strong volume on smaller OEM programs such as the Boeing P-8 Poseidon and various missile switch programs.
Commercial aerospace is expected to be up between 15% and 20% in the third quarter.
Revenue from commercial air framers will be up roughly 50%, mostly driven by increased A320 volume and favorable comparisons to last year.
Aftermarket is expected to be up roughly 30%, in line with increased aircraft utilization.
Finally, pricing is expected to be a net benefit of 3% for defense and 5% for commercial due to price increases secured earlier in the year, a higher level of spot orders and an increase in commercial aftermarket volume.
We launched 21 new products through the first half of the year and remain on track to deliver 45 new products in 2021.
On margin expansion, we're building on our CIRCOR operating system and simplification program by kicking off 80/20 at three of our largest Industrial businesses.
It was an independent global survey with participation from roughly 70 of our largest customers.
Our Net Promoter Score of 67 is exceptional and is a testament to our product quality and technical customer support.

Summary:
CIRCOR delivered another solid quarter, and we're entering the back half of the year with high confidence that we'll achieve our 2021 guidance.
Organic revenue was $190 million, down 2% versus prior year and up 5% sequentially.
Finally, we delivered $0.35 of adjusted earnings per share and generated free cash flow of $8 million as the team continues to drive working capital improvements across the company.
We're expecting adjusted earnings per share of $0.55 to $0.60 in the third quarter, a 53% to 67% increase versus prior year.
Organic revenue growth is expected to be in the range of 2% to 4%, with adjusted earnings per share of $2.10 to $2.30.
Revenue in the third quarter is expected to be up 12% to 15% versus prior year.