Thank you, Jim, and good morning, everyone. My comments today will include details related to our fourth quarter and full year results, plus some remarks about what we're seeing in the business currently, including some comments related to the developing impact from COVID-19.
As Jim just mentioned, we had a very strong fourth quarter. Relative to the estimates we provided in December, fourth quarter revenue of $946 million was $16 million higher than the top end of our guidance. And the $0.39 of adjusted earnings per share exceeded our estimated range by $0.05.
For revenue, the 3% organic decline in the Americas and 8% organic growth in EMEA were better than we estimated due to several factors, including favorable pricing benefits associated with our list price adjustments, and the related migration of customer contract pricing, strong project and day-to-day business, and stronger than expected revenue from our owned dealers and direct services businesses.
Asia Pacific finished below our estimates, due to the initial impacts of COVID-19, which reduced shipments in China at the end of the quarter by approximately $7 million.
Our reported earnings included a $21 million gain on the sale of PolyVision, plus net tax benefits related to being able to carry back the capital loss from this transaction against previously recognized capital gains. These benefits net of related variable compensation expense had the effect of increasing earnings by $0.16 per share.
For adjusted earnings, we exceeded the top end of our range by $0.05, due to the revenue strength I just reviewed, plus we had favorable gross margins and lower income tax expense compared to our estimates.
For gross margin, our sales organizations around the world have worked hard migrating clients to more current price lists, which contributed to the better than expected price realization in the quarter.
You'll recall that inflation was well ahead of pricing for much of fiscal 2019.
In addition, our operations teams did a nice job managing direct labor and overhead costs during the seasonally slower periods of January and February, the current quarter.
Across the segments, EMEA was the most significant contributor to our better than expected adjusted earnings performance. And I should highlight the 4.5% operating margin for the quarter includes $1.8 million of variable compensation expense related to the PolyVision divestiture, which reduced their 4.5% operating margin by approximately 100 basis points.
Lastly, income tax expense benefited from the reversal of a valuation allowance recorded against net operating loss carry forwards in the UK, plus we recorded some other net discreet tax benefits during the quarter.
Diving a little deeper into the year-over-year comparisons, we grew revenue by $34 million or 4% in the quarter, which was driven by $48 million from an extra week of shipments. On an organic basis, revenue declined 1%, compared to a very strong prior year.
For example, the organic decline of 3% in the Americas stacks on top of 17% organic growth in the fourth quarter of fiscal 2019.
Beyond the strength of the prior year, the year-over-year comparison was also impacted by the unfavorable shipment timing we mentioned last quarter, which included the impact from the timing of Thanksgiving as the holiday fell into the first week of Q4 of this fiscal year, compared to the last week of Q3 in fiscal 2019.
In EMEA, organic growth of 8% was driven by our largest customers. And the decline in the Other category was driven by the shipment delays related to COVID-19 in China.
For adjusted earnings, the $0.39 in the quarter compares to adjusted earnings of $0.29 in the prior year. The year-over-year comparison reflects the benefits of improved pricing, lower commodity costs, the extra week of shipments, favorable tax expense, and benefits from gross margin improvement and cost reduction initiatives, partially offset by the impact of the small organic revenue decline and higher interest costs related to our higher level of debt.
As it relates to orders in the quarter, the 7% order growth strengthened through the quarter with December being relatively flat, January coming in at plus 9% and February posting growth of 12%, and that's adjusted for the impact of the extra week. We achieved these growth rates despite the Other category posting a decline, as Asia Pacific was down approximately 25% in January and February, which we largely attribute to the initial impact of COVID-19 in China. It's also important to note that the strengthening trend in Q4 this year was in comparison to a weakening trend in the fourth quarter of the prior year, where in December grew 12%, January was up 7% and February declined 3%.
Moving to cash flow and the balance sheet, cash flow from operations was very strong in the fourth quarter, reaching $142 million and exceeding the prior year by nearly $60 million. The year-over-year improvement was driven by the strong earnings growth in the quarter, plus targeted improvements in working capital. Capital expenditures were $24 million in the quarter, bringing the full year to $73 million. We returned approximately [$17 million] to shareholders in the quarter through the payment of a cash dividend of $0.145 per share. Yesterday, we announced a $0.07 dividend for the fourth quarter, which will be paid in April and represents approximately a $9 million reduction from the dividend paid in January.
We did not repurchase any shares in the fourth quarter. But during the first few weeks of March, we repurchased 3 million shares for approximately $38.6 million under the 10b5 program we had in place that has now been completed.
As Jim mentioned, our liquidity position is very strong. We had more than $700 million of liquidity at the end of Q4 between our cash and COLI balances, which is the highest level of liquidity in nearly 10 years.
We have no near term refinancing needs. Remember, in the fourth quarter of last year, we issued $450 million of 10-year senior notes and repaid our $250 million notes that were due in 2021. And last month, we renewed and expanded our 5-year global credit facility, which totals $250 million and has a $125 million accordion feature.
From a cash perspective, we do not have any plans for additional share repurchases, and we are significantly reducing our spending as Jim mentioned, and we described more fully in the release. But we will be funding seasonal disbursements in the first quarter, including our annual employee bonus programs and profit sharing plans.
As a result and out of an abundance of caution given the uncertainty related to the spread of COVID-19, we chose to further strengthen our liquidity by borrowing the full amount currently available under our new credit facility or $250 million.
We also decided to retain the full proceeds from the sale of PolyVision and therefore we did not retire the $41 million of debt we had initially planned.
We estimate approximately 70% to 75% of our cost of sales, before variable compensation expense, varies with revenue, largely direct labor, material, freight and distribution costs; and approximately 10% to 15% of operating expenses, before variable compensation expense, also varies with the overall level of activity in our business, largely from travel and entertainment costs, contractor temporary labor and other discretionary items.
Variable compensation largely varies with our level of profitability, given our historical emphasis on ROIC as a target metric.
Beyond these variable costs, employee expenses represent the largest part of our fixed cost structure, with occupancy and other costs representing a much smaller portion. And Jim summarized our actions in the Americas targeted toward reducing our run rate of employee costs.
As we look ahead to fiscal 2021, while the potential impact of COVID-19 does not provide us the visibility to estimate an outlook for the quarter or the year, I will share that our backlog at the beginning of the quarter was approximately $585 million or 17% higher than prior year. But we expect a significant portion to be delayed due to the disruption related to shelter in place restrictions in various places.
As a reference point, last year, our beginning backlog represented approximately 60% of our first quarter revenue.
Through the first three weeks of the fiscal quarter, we estimate our revenue was approximately 10% higher than it was at this point last year.
Our organic order patterns have been relatively flat compared to the prior year.
We have thus far not seen a significant number of customer project cancellations, but we have seen some requests to pause projects and some timelines have been pushed out. And these patterns can be expected to change as more communities move to shelter in place requirements.
And lastly, our mock up levels and customer visits are down versus last year as you might expect. The recent drop in the price of oil is also a new consideration that could have an impact on our results. Approximately 3% of fiscal 2020 revenue in the Americas was in the energy vertical market.
Our business in the Middle East, Central Asia, Russia and Africa markets can also be impacted by the price of oil and represented approximately 7% of our EMEA revenue in fiscal 2020.
Lastly, approximately 5% to 10% of our fiscal 2020 cost of goods sold in the Americas is linked to petroleum prices; for example, plastics, transportation carriers, and fuel expenses.
So while demand could be impacted, deflation in this commodity category could provide some offset.
I also want to provide some other data points to take into consideration as you update your financial models for next year.
Our fiscal 2020 adjusted earnings of $1.50 per share excludes the gain on sale of PolyVision in the fourth quarter.
However, there are a few additional items non-recurring in nature that happened in the year that we highlighted in our earnings releases, which had the effect of increasing our earnings by approximately $0.11 per share after taking into consideration the related variable compensation and income tax effects. They include the additional week in our fourth quarter, which had an estimated $0.03 positive effect on earnings per share.
Our effective tax rate benefited from a favorable geographic mix of business and some net discreet tax benefits, which together lowered our effective rate below our ongoing estimate of 27% and increased earnings by approximately $0.04 per share, net of related variable compensation expense.
And lastly, with the divestiture of PolyVision in the fourth quarter, we have deconsolidated their results, which had an approximate $0.04 positive effect on earnings per share in the fiscal year.
So for purposes of the building your year-over-year models, we think that $1.39 is a good estimated baseline for recurring earnings per share fiscal in 2020.
Lastly, a couple of other data points for your fiscal 2021 modeling.
We expect interest expense to approximate $31 million for next year, assuming current levels of debt for the entire year, including the recent $250 million draw against our line of credit. And as I said earlier, we continue to estimate our effective tax rate will approximate 27% for the year. And as it relates to uses of cash, we typically expect capital expenditures to fall within a range of 2.5% to 3% of sales. But this year could be lower as we are delaying or canceling several longer term initiatives in light of the growing uncertainty.
From there, I'll turn it back to Jim.