And our Bangalore, India plant, which was closed on March 26, is reopening this week.
This quarter, we decreased our operating expenses by 18% year-over-year in dollar terms, maintaining our operating expense at a target of 20% despite substantially reduced sales.
This was achieved by early and aggressive cost control actions, such as furloughs in the U.S. and similar actions around the world, reduced discretionary spending and extensive travel restrictions.
Organic sales declined by 17% in the quarter versus 3% growth in the third quarter last year.
General engineering and aerospace also saw year-over-year percentage declines in the high teens this quarter as well and sequential declines from Q2, with the 737 MAX production challenges continuing and lower demand expectations worldwide due to COVID-19.
Adjusted EBITDA margin decreased 80 basis points year-over-year to 18.6% on revenues that were down almost 20%.
And sequentially, the margin improved by 720 basis points on lower sales.
This was partially offset by positive raw materials, which contributed 280 basis points year-over-year as well as increased simplification/modernization benefits, lower variable compensation and the previously discussed cost control actions.
Adjusted earnings per share decreased year-over-year to $0.46 versus $0.77 in the prior year quarter, but increased sequentially by $0.31.
Preliminary April sales were down approximately 35% year-over-year, which speaks to the severity of the market headwinds.
Overall, we are pleased, having achieved an incremental $34 million savings fiscal year-to-date, and we still expect full year savings this fiscal year to be modestly higher than the $40 million achieved last year despite lower volumes.
On our last earnings call, we indicated that our expectation was that approximately 90% of the incremental capital spend associated with simplification/modernization will be complete by this fiscal year-end, and the remaining 10%, as we previously discussed, will be reserved for future volume needs.
So really, not much change in our schedule, and we remain confident in delivering our adjusted EBITDA targets once markets recover such that we can achieve sales in the range of $2.5 billion to $2.6 billion.
Sales declined 19% year-over-year or negative 17% on an organic basis to $483 million.
Foreign currency had a negative effect of 1% and our divestiture contributed another negative 1%.
Adjusted gross profit margin of 33.3% was down 170 basis points year-over-year, though up sequentially from 26.8% in the second quarter.
The year-over-year performance was largely the result of the effect of lower volumes, partially offset by the positive effect of raw materials in the amount of approximately 280 basis points and increasing benefits from simplification/modernization.
As Chris mentioned, adjusted operating expenses of $99 million were down 18% year-over-year and increased only 30 basis points to 20.4% on significantly lower sales.
Taken together, adjusted operating margin of 12.2% was down 210 basis points year-over-year, though improved 740 basis points sequentially.
Reported earnings per share was $0.03 versus $0.82 in the prior period.
On an adjusted basis, earnings per share was $0.46 per share versus $0.77 per share in the previous year.
The effect of operations this quarter amounted to negative $0.39.
This compares to negative $0.02 in the prior year period and negative $0.62 in the second quarter.
The largest factors contributing to the $0.39 was the effect of significantly lower volumes and associated under absorption.
This was partially offset by positive raw materials of $0.16 and lower variable compensation.
Simplification/modernization contributed $0.15 in the quarter, on top of the $0.11 in the prior year quarter and up from the $0.10 last quarter.
This brings our year-to-date simplification/modernization savings of $0.32.
As Chris mentioned, our expectation for this fiscal year is that these simplification/modernization benefits will be modestly higher than the $0.40 we achieved last year.
The savings from our FY 2020 restructuring actions are now expected to deliver $30 million to $35 million in run rate annualized savings by the end of FY 2020.
The slight decrease of $5 million is due to the significantly lower volume assumption in the fourth quarter.
We remain on track with our FY 2021 restructuring actions that are expected to contribute an additional $25 million to $30 million of annualized run rate savings by the end of FY 2021.
Industrial sales in Q3 declined 17% organically compared to 1% growth in the prior year.
All regions posted year-over-year sales decreases with the largest decline in EMEA at negative 19%, followed by the Americas at 16% and Asia Pacific at 12%.
The decline in Asia Pacific was partially affected by the lower demand associated with the early onset of COVID-19 in China and continued lower end market demand in India.
From an end market perspective, the weakness in demand remains broad-based, with the biggest declines in transportation and general engineering, down 17% and 18%, respectively.
Sales in aerospace experienced a significant decline, both year-over-year and sequentially, driven by the 737 MAX production halt and corresponding effect on the supply chain as well as demand declines associated with COVID-19.
Adjusted operating margin came in at 13.1% compared to 18.3% in the prior year.
This decrease was primarily driven by the decline in volume, partially offset by increased simplification/modernization benefits and a 90 basis point benefit from raw materials.
On a sequential basis, the adjusted operating margin increased approximately 240 basis points despite lower sales.
Sales declined 16% organically against positive 3% in the prior year period.
Regionally, the largest decline this quarter was in Asia Pacific, down 25%, EMEA down 14% and the Americas down 10%.
Adjusted operating margin for the quarter was 4.9%, and an increase year-over-year due to increased simplification/modernization benefits, a raw material benefit of 240 basis points and lower variable compensation, partially offset by volume declines.
Organic sales declined 17% versus positive 6% in the prior year period.
Regionally, the largest decline was in the Americas at 21%, then Asia Pacific at 16% and EMEA at 6%.
By end market, these results were primarily driven by energy, which was down 29% year-over-year, given the extreme drop in oil prices and the corresponding significant decline in the U.S. land-only rig count.
General engineering and earthworks were down 17% and 6%, respectively.
Adjusted operating margin of 13% improved 130 basis points from the prior year margin of 11.7%.
This improvement was mainly driven by favorable raw materials that contribute 550 basis points, coupled with simplification/modernization benefits and aggressive cost actions, partially offset by significantly lower volumes.
Our current debt maturity profile is made up of two $300 million notes maturing in February 2022 and June 2028 as well as a USD700 million revolver that matures in June of 2023.
As of March 31, we had combined cash and revolver availability of approximately $750 million.
As Chris mentioned, in April, in an abundance of caution, we pre-emptively drew $500 million on our revolver.
We have two financial covenants in our revolver, which is our net debt-to-EBITDA ratio of 3.5 times and an EBITDA to interest ratio of 3.5 times.
Primary working capital decreased both sequentially and year-over-year to $656 million.
On a percentage of sales basis, it increased to 33.4%, a reflection of the decline in sales in the quarter.
Net capital expenditures were $57 million, the same level as the prior year.
We now expect capital expenditures for the fiscal year to be approximately $240 million, which is at the low end of our original outlook.
Our third quarter free operating cash flow was $2 million and represents a year-over-year decline of $37 million, reflecting lower income due to volume and increased cash restructuring costs.
We expect to deliver increased free operating cash flow in the fourth quarter compared to the third quarter, but given the current market environment, we expect free operating cash flow for the full year to be slightly negative given the $240 million of capital expenditures and cash restructuring charges.
Overall, I remain confident in the strength of our balance sheet even in the face of the current macro uncertainty.
Dividends were approximately flat year-over-year at $17 million.
Should demand trends deteriorate more significantly than we currently anticipate, we know our dividend program, like other cash flow and cost control actions, is a lever that could be used to preserve cash and liquidity.
Furthermore, we are approaching the end of the incremental capex for the program, significantly lowering the overall capital spend in FY 2021.

Summary:
And our Bangalore, India plant, which was closed on March 26, is reopening this week.
This was achieved by early and aggressive cost control actions, such as furloughs in the U.S. and similar actions around the world, reduced discretionary spending and extensive travel restrictions.
Sales declined 19% year-over-year or negative 17% on an organic basis to $483 million.
Reported earnings per share was $0.03 versus $0.82 in the prior period.
The decline in Asia Pacific was partially affected by the lower demand associated with the early onset of COVID-19 in China and continued lower end market demand in India.
Overall, I remain confident in the strength of our balance sheet even in the face of the current macro uncertainty.
Should demand trends deteriorate more significantly than we currently anticipate, we know our dividend program, like other cash flow and cost control actions, is a lever that could be used to preserve cash and liquidity.
Furthermore, we are approaching the end of the incremental capex for the program, significantly lowering the overall capital spend in FY 2021.