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This demand, combined with meaningful contributions from our recent acquisitions, drove the company to $200 million in net sales and more than 50% revenue growth for a second consecutive quarter.
On organic basis, sales grew 20% compared to the prior year period which marks three consecutive quarters of 20% or more organic growth.
And as such, we are reaffirming our previous 2021 adjusted earnings per share guidance of $0.90 to $1.05 per share.
Net sales were up $68 million, an increase of 51%.
Excluding the impact of the Elkhart and Trilogy acquisitions, organic net sales increased 20% driven by price, which contributed 13%.
Higher volume mix contributed 7%.
Adjusted gross profit increased $7.2 million, while gross margin decreased from 35.6% in the prior year to 27.2% in the third quarter.
Included in cost of sales was a $1.6 million increase related to the LIFO inventory reserve.
Adjusted operating income decreased $3.1 million to $12.5 million due to increased SG&A, driven by the addition of Elkhart and Trilogy along with higher compensation cost and higher professional fees.
Adjusted SG&A as a percentage of sales decreased to 20.9% in the third quarter compared to 23.8% in the prior year as we are experiencing the benefits of our overall larger scale on our infrastructure.
Adjusted EBITDA was $17.3 million, a decrease of $2.3 million compared to the prior year.
Adjusted EBITDA margin was 8.6%.
And lastly, adjusted earnings per share was $0.23, a decrease of $0.07 or 23% compared to the prior year.
Beginning with Material Handling, net sales increased $63 million or 73%, including the Elkhart and Trilogy acquisition.
On an organic basis, Material Handling net sales increased 26%, driven by favorable price of 18%.
Strong volume mix contributed another 7% and FX, 1%.
Material Handling adjusted operating income decreased $1.3 million or 8% to $15.2 million.
In the Distribution segment, sales increased $5 million or 11%.
Volume mix contributed 6%, resulting from increases across both equipment and supplies and price contributed 5%.
Distribution's adjusted operating income decreased $700,000 to $4.4 million due to an increase in SG&A expenses, which were more than offset higher volume mix and favorable price-to-cost relationship.
Free cash flow was negative $13.8 million compared with positive free cash flow of $16.2 million for the third quarter of 2020.
Cash from operations decreased in the quarter due to increases in working capital, driven by a $14 million and an $8 million increase in accounts receivable and inventory, respectively, combined with a $3 million decrease in trade accounts payable.
Additionally, capital expenditures were $6 million in the quarter.
Year-to-date free cash flow was essentially flat, down $700,000.
Cash on hand at quarter end was $15 million.
We ended the third quarter with leverage at 1.8 times.
We anticipate net sales to increase in the mid- to high 40% range attributed to both organic growth and acquisitions.
Our previous sales guidance was in the mid-40% range.
Elkhart's annual net sales at the time of acquisition were approximately $100 million and Trilogy's annual net sales were roughly $35 million.
Taking these considerations into account, we are reaffirming our 2021 outlook for adjusted earnings per share of $0.90 to $1.05 per share.
Our guidance reflects a weighted average share count of 36.5 million shares and the addition of the newly acquired Trilogy business.
Our key modeling assumptions include depreciation and amortization expenses of approximately $22 million and capex of approximately $16 million to $19 million, up slightly from our previous capex guidance of $15 million to $18 million.
The effective tax rate is forecast to approximate 26%.
As we continue to execute the remainder of Horizon 1, we'll have the necessary foundation, knowledge and track record to move into Horizon two.
E-commerce is showing encouraging results with year-to-date sales up approximately 30%.
As a reminder, the integration of Elkhart has also gone well, helping us better serve our customers and capture growth synergies and $4 million to $6 million of cost synergies, both of which exceed expectations.
E-commerce is showing encouraging results with year-to-date sales up approximately 30%.
And as a reminder, the integration of Elkhart has also gone well, helping us better serve our customers and capture growth synergies and $4 million to $6 million of cost synergies, both of which exceeded our expectations.
The deployment of our certain leadership training is underway and 50 of our leaders have already completed this training and are applying it in their work lives.
We have an additional 50 going through the program in early 2022.
At our senior manager levels and above, we've increased our hiring and promotion of female minority candidates as a percent of total hirings by more than 100% versus past years.

Summary:
And as such, we are reaffirming our previous 2021 adjusted earnings per share guidance of $0.90 to $1.05 per share.
And lastly, adjusted earnings per share was $0.23, a decrease of $0.07 or 23% compared to the prior year.
We anticipate net sales to increase in the mid- to high 40% range attributed to both organic growth and acquisitions.
Our previous sales guidance was in the mid-40% range.
Taking these considerations into account, we are reaffirming our 2021 outlook for adjusted earnings per share of $0.90 to $1.05 per share.