Full year income from operations for prepaid decreased 3% due to lower sales. Turning to the balance sheet with liquidity and cash flow on Slide 12. For the full year, we generated $34 million of cash from operating activities and invested $6.4 million in net capital expenditures, which resulted in free cash flow of $27.6 million. This compared to the free cash flow of $13.5 million in 2022. We were able to double free cash flow despite the net income decline due to strong improvement in working capital and reduced net capital expenditures as we tightly managed all spending in the challenging sales environment. On the balance sheet, at year-end, we added $12.4 million of cash and no borrowings outstanding on our $75 million ABL revolver. We had $268 million of senior notes outstanding at year-end, a reduction from $285 million at the end of 2022 as we repurchased $17 million of notes in the open market during the course of the year.
Our net leverage ratio of 3.1x at the end of the year was relatively consistent with the 2022 level of 3x despite lower adjusted EBITDA as we reduced our net debt. Our capital structure and allocation priorities remain focused on maintaining ample liquidity, investing in the business, including possible strategic acquisitions, deleveraging the balance sheet and returning funds to stockholders. As you recall, in the fourth quarter of last year, we announced a $20 million share repurchase program with the authorization expiring at the end of 2024. Later in the quarter, we announced an agreement with our majority stockholder to purchase shares from them based on a multiple of our open market repurchases through March 31, 2024. In the fourth quarter, we initiated the open market program, buying back $250,000 worth of shares, including what we have repurchased in the first two months of 2024, we have bought back more than $1 million in shares since beginning the program.
Based on our agreement with our majority stockholder, we will repurchase from them in April, an amount equal to 3x the repurchases we made in the open market from December through March with settlement at 98% of the average price of our open market repurchases. In total, including that agreement through February, we have repurchased or committed to repurchase more than $4 million out of the $20 million authorization. Turning to our ’24 financial outlook on Slide 13. As John mentioned, we expect the customer inventory rebalancing to continue into 2024. Consequently, we expect first quarter sales to be similar to the fourth quarter of 2023 level. Over the course of the year, we believe the market will gradually return to growth, and we currently expect sales declines in the first half of the year to be offset by growth in the second half.
For the full year, we are projecting slight increases in both net sales and adjusted EBITDA. We are not projecting positive operating leverage in 2024 due to the relatively low sales growth expectations, and we are expecting cost savings initiatives to generally offset the impact of investments to support future growth and employee incentive compensation returning to more normalized levels. In the first quarter, we expect adjusted EBITDA margins to be lower than the fourth quarter of 2023 due to having minimal employee incentive compensation accruals in last year’s fourth quarter. Free cash flow for 2024 is expected to be $5 million to $10 million lower than the $27.6 million we generated in 2023 due to increased capital spending to invest for future growth.
The CapEx increases include approximately $5 million of expected investment in the new production facility in Indiana, including incremental operating expenses and capital spending, we expect to spend about $20 million for this project, of which approximately $13 million will impact our cash flow over 2024 and 2025. Once complete, this will double our size in Indiana and result in about a 10% increase in our overall real estate operating footprint. We expect free cash flow generation in 2024 to occur mainly in the fourth quarter, primarily due to the back half weighted sales growth as well as the impact of inventory build during the first three quarters due to purchase commitments we have in place for contactless chips. First quarter cash flow will also be impacted by the $5 million Executive Retention Award payment.
We currently expect a year-end 2024 net leverage ratio to be between 3x and 3.5x depending on cash flow generation and share repurchase execution, among other factors. Overall, we expect 2024 to be a rebound year for the business once we clear the channel inventory rebalancing and expect to see more normalized trends in the back half of the year. I will now pass the call back to John for some closing remarks on Slide 14. John?
