Gross margin increased across all 3 segments.
SG&A decreased by 100 basis points as a percentage of revenue generated strong cash from operations of $19.4 million and free cash flow of $13.4 million.
On a per share basis free cash flow was $0.46 for the third quarter.
Consolidated gross margin increased 160 basis points.
Cash from operations of $40.5 million with free cash flow of $22.5 million.
Debt paydown of $23.3 million exclusive of the $4.8 million paid for New Century Software our latest acquisition.
However our strong momentum developed over the past 2 quarters encountered some headwinds coming into the fourth quarter of 2019.
Based on what we are seeing and hearing underground we believe we are gaining market share and except for a few locations we have retained a vast majority of the customers served by our close to 90 labs across the U.S. Canada and Europe.
Even by conservative estimates we serve a $14 billion industry within the NDT spend of the business not counting the greater spend generated in the data and mechanical sectors in which we participate.
Looking at results for the third quarter consolidated revenues were up 5.5% to $192 million.
Organic growth was 2.1% with acquisitions contributing 4.4% offset by a 1% decline due to unfavorable currency translation.
Consolidated gross profit for the quarter was $57.8 million a 10% increase over the year ago quarter.
Consolidated gross profit margins improved significantly to 30.1% for the third quarter compared with 28.7% in the prior year quarter an increase of 140 basis points.
Operating income improved for the third quarter to $10.8 million compared with $3 million in the comparable period last year.
On a non-GAAP basis adjusted operating income was $11.2 million compared to $10.1 million last year an increase of 10%.
Net income for the third quarter was $3.1 million compared with a net loss of $1 million for the same period last year.
Adjusted EBITDA was up 7% to $22.4 million for the third quarter of 2019.
As a percentage of revenue adjusted EBITDA improved to 11.6% for the third quarter compared to 11.4% in the same period last year.
We stated last quarter that we had anticipated a continued strengthening of our cash flow generation coming into the back half of the year and we achieved that with third quarter cash from operations of $19.4 million and free cash flow of $13.4 million.
On a per share basis free cash flow was $0.46 for the third quarter this was consistently strong on a sequential basis over the second quarter and a significant improvement over the prior period last year.
Services revenue increased by almost 8% in the third quarter.
Organic revenue grew a little over 2%.
And acquisitions primarily Onstream incrementally added nearly 6% to revenue growth.
The Services segment generated a gross profit margin of 28.4% for the quarter an improvement of 90 basis points compared to the year ago period of 27.5%.
International revenues in the third quarter were up 5.4% organically offset by 4.4% unfavorable currency rates for a 1% nominal increase.
For the third quarter International reported a 31.6% gross profit margin compared to 29.7% a year ago which represents a 190 basis point improvement.
Products and Systems revenue decreased slightly in the third quarter to $5.5 million due to the sale of a subsidiary that was divested in 2018.
Gross profit margin increased for this segment to 49.6% compared with 45.6% in the prior year due to a favorable product sales mix.
We had another prudent quarter in maintaining strong cost control with a below inflation increase of 1% in SG&A year-over-year.
As a percentage of revenue SG&A was down 22% from 23% in the same period last year a decrease of 1 full percentage point once again reflecting our focus on improving operating leverage.
The company's net debt defined as total debt less cash and cash equivalents was $252.9 million as of September 30 2019 compared to $265.1 million at December 31 2018.
The company has paid down over $23 million of total debt during the first nine months of this year.
The company additionally paid a total of $7.7 million for acquisitions and income taxes related to the net settlement of share-based awards during the nine months ended September 30 2019.
As defined in our credit agreement our leverage ratio was approximately 3.6x as of September 30 2019.
Our effective tax rate was approximately 61% for the third quarter of 2019 including a $1.4 million or $0.05 per share write-off of certain deferred tax assets.
Consequently the company's full year outlook is now lower than originally anticipated for the fourth quarter and accordingly the company is lowering its guidance for full year 2019 as follows: total revenues are expected to be between $740 million to $750 million; adjusted EBITDA is expected to be between $70 million to $75 million; capital expenditures are expected to be under $25 million; and free cash flow is expected to be between $28 million to $32 million.

Summary:
Consequently the company's full year outlook is now lower than originally anticipated for the fourth quarter and accordingly the company is lowering its guidance for full year 2019 as follows: total revenues are expected to be between $740 million to $750 million; adjusted EBITDA is expected to be between $70 million to $75 million; capital expenditures are expected to be under $25 million; and free cash flow is expected to be between $28 million to $32 million.