Debt increasing sequentially by 6% of which 3% was due to FX.
As a reminder, those two end-markets total more than 60% of our sales.
On a year-over-year basis, organic sales declined by 21% on top of an 11% year-over-year decline in the prior year quarter.
Adjusted EBITDA margin improved by 40 basis points to 11.3% versus 10.9% in the prior year quarter.
Operating expense as a percentage of sales increased 23% due to lower sales.
However, in total dollar terms decreased 18% year-over-year.
Our target for operating expense remains at 20%.
Adjusted earnings per share was $0.03 compared to $0.17 in the prior year quarter, reflecting the factors I just named as well as a higher adjusted effective tax rate.
Based on the monthly sales results in Q1, early indications from our October sales, assuming that there is no additional second wave of COVID-19 lockdowns in the quarter, we expect Q2 to see low to mid-single digit growth sequentially, which would be above our normal sequential growth pattern of 1% to 2%.
On the operational excellence side, simplification, modernization initiatives are on track to deliver approximately $80 million in benefits this year, increase of 67% over last year.
That will bring the total cumulative savings from inception of the program to $180 million, which is within the original target we set in December 2017, despite much lower volumes than were envisioned at that time.
This will result in significantly lower capex levels going forward, including this fiscal year where total capex is expected to be reduced by approximately 50% to be $110 million and $130 million.
This strategy opens a 40% increase in served market opportunity while offering better service, and tooling options to our customers.
For example, during the quarter, in the full-solution application space within general engineering, we introduced two best-in-class products, HPX Solid Carbide Drill which delivers 2 to 3 times more productivity than competing products, KCFM 45 face milling cutter, which offers greater flexibility and a cost-effective user friendly solution for a broad range of CNC machines.
Chris mentioned, demand trends improved off low levels throughout the quarter and outpaced the 10% sequential seasonal decline we normally experienced in Q1.
For the quarter, sales declined 23% year-over-year.
On organic basis, sales were down 21% year-over-year.
Foreign currency in a business divestiture, each had a negative effect of 1% in the quarter.
However, sales did increase 6% on a sequential basis, with approximately 3% attributed to foreign currency.
Adjusted gross profit margin of 27% was down 50 basis points year-over-year.
Year-over-year performance was primarily due to the effect of lower volumes and associated under-absorption, partially offset by the positive effect of the raw materials, which contributed approximately 650 basis points, incremental simplification/modernization benefits and temporary cost control actions.
Adjusted operating expenses of $93 million were down $21 million or 18% year-over-year.
Adjusted EBITDA margin was 11.3%, up 40 basis points from the previous-year quarter.
Adjusted operating margin of 2.9% was down 180 basis points year-over-year.
Adjusted effective tax rate in the quarter of 33.4% was higher year-over-year due to the combined effects of geographical mix and the continued effect of GILTI on the low level of U.S. taxable income.
Although we expect our adjusted effective tax rate to remain elevated in the low to mid 30% range with these lower levels of earnings, we still expect our tax rate to be in the low to mid 20% range when we return to higher levels of profitability.
We reported a GAAP earnings per share loss of $0.26 versus earnings per share of $0.08 in the prior year period, reflecting the reduced volumes and higher tax rate, partially offset by raw materials, simplification/modernization benefits and temporary cost control actions.
On an adjusted basis, earnings per share was $0.03 per share versus $0.17 in the prior year.
Effective operations this quarter amounted to negative $0.28, this compares positively to both the negative $0.60 in the prior year period and the negative $0.68 in Q4 of fiscal year 2020.
The largest factors contributing to the $0.28 was the effect of significantly lower volumes and associated under-absorption, partially offset by positive raw materials of $0.30 in strong cost control actions.
Simplification/modernization benefits increased again this quarter totaling $0.20 on top of $0.07 in the prior year.
This brings the total benefit since inception from simplification modernization to a $123 million.
As Chris mentioned, our expectations continue to be that simplification/modernization benefits will be approximately $0.80 for fiscal year 2021, driven by actions already taken or announced and bringing the total expected cumulative savings to $180 million by the end of fiscal year 2021.
Incremental savings from our restructuring actions contributed to $17 million of the $22 million in simplification/modernization savings this quarter.
Slide 7 and 8 detailed the performance of our segments this quarter.
Metal cutting sales in the first quarter declined 23% organically on top of an 11% decline in the prior year period.
All regions posted year-over-year sales decreases, the largest decline in the Americas at negative 29% followed by EMEA at 24%, Asia Pacific posted the smallest year-over-year decline at 9%.
Performance in Asia Pacific reflects more positive economic activity in the region with approximately 10% growth in China year-over-year, partially offsetting weakness in other countries such as India.
From an end market perspective, although improving sequentially, we still experienced year-over-year declines in transportation of 21% and general engineering of 20%.
Adjusted operating margin came in at 1% compared to 7.9% in the prior year quarter.
The decrease was primarily driven by a decline in volume and mix, partially offset by incremental simplification/modernization benefits, temporary cost control actions and raw materials that contributed 230 basis points.
Organic sales declined 18% on top of a decline of 11% in the prior year period.
Other factors affecting infrastructure total sales were a divestiture of 4%, partially offset by a benefit from business days of 1%.
Regionally, again the largest decline was in the Americas at 27% then EMEA at 9%, but this time followed by a 1% growth in Asia Pacific.
By end market, the results were primarily driven by energy, which was down 31% year-over-year, reflecting the effect of the significant decline in the U.S. land only rig count.
General engineering was down 14%, earthworks was down 11%, reflecting a continued production decline in Appalachian coal.
Adjusted operating margin of 6.5% was up 700 basis points year-over-year.
This increase was mainly driven by favorable raw materials, which contributed 1,330 basis points, simplification/modernization benefits and temporary cost control actions partially offset by lower volumes and associated under-absorption.
Our current debt maturity profile is made up of two $300 million notes maturing in February of 2022 and June of 2028 as well as a U.S. $700 million revolver that matures in June of 2023.
At quarter end, we had combined cash and revolver availability of approximately $760 million and largely repaid the $500 million revolver draw from last quarter.
Primary working capital decreased year-over-year to $623 million, but was up sequentially as the decrease in inventory was more than offset by an increase in accounts receivable and accounts payable.
On a percentage of sales basis primary working capital increased to 36.4%, a reflection of the continued decline in sales.
Capital expenditures were $39 million, a decrease of approximately $33 million from prior year as expected.
We continue to expect fiscal year '21 capital expenditures will be between $110 million to $130 million with the majority in the first half.
Our first quarter free operating cash flow was negative $29 million that represents a year-over-year improvement of $15 million, largely reflecting the decline in capital expenditures.
In addition, we paid the dividend of $17 million in the quarter.
Sequentially, the increase in cost in the second quarter will be in the range of $5 million to $10 million.
The tungsten prices remaining in the $210[Phonetic] to $230[Phonetic] range, raw materials are expected to continue to be a tailwind in the second quarter, although at a reduced rate in neutral, for the second half on a year-over-year basis.
Although, depreciation, amortization was flat year-over-year in the first quarter, we still expect it to be $10 million to $20 million higher for the full year, starting in the second quarter, as our new equipment comes online.
As a reminder, our target for working capital remains 30%.
We expect to be at target savings of $180 million for the program by the end of this fiscal year, despite much lower volumes.
So I'm fully confident we will achieve our adjusted EBITDA profitability target of 24% to 26%, when markets recover such that sales reach the target sales range of 2.5 to [Technical Issues].

Summary:
Adjusted earnings per share was $0.03 compared to $0.17 in the prior year quarter, reflecting the factors I just named as well as a higher adjusted effective tax rate.
We reported a GAAP earnings per share loss of $0.26 versus earnings per share of $0.08 in the prior year period, reflecting the reduced volumes and higher tax rate, partially offset by raw materials, simplification/modernization benefits and temporary cost control actions.
On an adjusted basis, earnings per share was $0.03 per share versus $0.17 in the prior year.