You have all overcome a lot over these past 18 months, and I'm very proud of you.
On a year-to-date basis, our businesses have delivered 19% organic net sales growth and 36% EBITDA growth.
Our third quarter net sales grew 18.1%, driven by growth across all business units, with standout performance from HHI.
This double-digit top line performance also reflects 14% total company growth against our 2019 levels and reflects our actions over the last few years to reignite the flywheel of growth for our trusted brands.
Third quarter net income from continuing operations was $34.9 million, and adjusted EBITDA was $167.4 million, mainly driven by HHI's organic growth.
What I'm actually most proud of this quarter is the discipline exhibited by all four business units, as our EBITDA this quarter included an additional $19 million in innovation, marketing and advertising spend versus the period a year ago.
Adjusted earnings per share grew 15.4% despite headwinds from inflation and incremental investments in marketing and advertising, as our teams continue to focus on driving efficiencies from our Global Productivity Improvement Program and implementing pricing actions.
We were also opportunistic this quarter with a share repurchase program, buying back over $10 million worth of Spectrum Brands shares.
But despite these continued headwinds, we remain committed to delivering on our earnings framework with mid-teens net sales and adjusted EBITDA growth and adjusted free cash flow of $260 million to $280 million.
Our balance sheet this quarter remained strong with net leverage of 3.6 times, and we have over $600 million in total liquidity.
We also successfully closed on the Rejuvenate acquisition during the quarter for approximately $300 million, adding a fourth category to our ever-expanding Home & Garden business.
We continue to target net leverage in the 3 times to 4 times range.
Net sales increased 18.1%.
Excluding the impact of $25.9 million of favorable foreign exchange and acquisition sales of $34.3 million, organic net sales increased 12%.
Gross profit increased $58.5 million and gross margins of 35%, declined just 40 basis points from a year ago due to higher freight and input costs, partially offset by higher volumes, improved efficiencies from our GPIP initiative and favorable mix.
SG&A expense of $275.4 million, increased 22.5% at 23.7% of net sales, with the dollar increase driven by higher volumes, higher advertising and marketing investments, higher distribution and incentive costs, higher transaction-related costs and SG&A from our recent acquisitions.
Operating income of $98 million was driven by higher volumes, improved productivity and lower restructuring costs, partially offset by higher freight and input costs and marketing and advertising investments.
Adjusted diluted earnings per share improved to $1.57, driven by favorable volumes and improved productivity.
Adjusted EBITDA increased 1.8% from the prior year, primarily driven by HHI.
Q3 interest expense from continuing operations of $31.4 million, decreased $4.7 million due to our lower cost of debt.
Cash taxes during the quarter of $8.6 million were $4.8 million higher than last year.
Depreciation and amortization from continuing operations of $38.6 million was $3.6 million higher than the prior year.
Separately, share and incentive-based compensation decreased from $14.2 million last year to $7.5 million this year, driven by the change to incentive compensation payout methodology.
Cash payments for transactions were $16 million, up from $7.2 million last year.
And restructuring and related payments were $5.1 million versus $25.2 million last year.
The company had a quarter-end cash balance of $130 million and $478 million available on its $600 million Cash Flow Revolver.
Total debt outstanding was approximately $2.7 billion, consisting of $2.1 billion of senior unsecured notes, $497 million of term loans and revolver draws and $156 million of finance leases and other obligations.
Additionally, net leverage is 3.6 times.
And during the quarter, the company repurchased 115,000 shares for $10.2 million.
Capex was $15.2 million in Q3 versus $12.9 million last year.
We are reiterating our earnings framework for the year as we continue to expect mid-teens reported net sales growth in 2021, with foreign exchange expected to have a positive impact based on current rates.
This includes benefits from higher volumes, our GPIP efficiencies, approximately 11 months of results from the recent Armitage transaction in Global Pet Care and now includes approximately 4 months of Rejuvenate for Home & Garden, offset by net tariff headwinds of about $30 million to $35 million driven by the expiration of previously disclosed retrospective tariff exclusions in 2020.
In addition, as David mentioned, we have factored in $120 million to $130 million of input cost inflation compared to a year ago primarily in the second half of the fiscal year.
Fiscal 2021 adjusted free cash flow from continuing operations is expected to be between $260 million and $280 million.
Depreciation and amortization is expected to be between $180 million and $190 million, including stock-based compensation of approximately $30 million to $35 million.
Full year interest expense is expected to be between $130 million and $135 million.
Both restructuring and transaction-related cash spending as well as capital expenditures are expected to be between $70 million and $80 million.
Cash taxes are expected to be between $35 million and $40 million, and we do not anticipate being a significant US federal cash taxpayer during fiscal 2021 as we continue to use net operating loss carryforwards.
We ended the prior year with approximately $800 million of usable federal NOLs.
For adjusted EPS, we use a tax rate of 25%, which includes state taxes.
Regarding our capital allocation strategy, we continue to target a net leverage range of 3 times to 4 times adjusted EBITDA.
First, we continue to plan for incremental brand support investments of approximately $45 million for the year as we continue to raise awareness, consideration and purchase intent.
Second, recall the Q4 results this fiscal year will have 60 reselling days compared to the prior year.
Third, we continue to manage through inflationary pressures, which are still expected to be $120 million to $130 million higher than last year.
Fourth, Q4 results this fiscal year will include the change to our incentive compensation program that was enacted in Q4 last year, positively impacting comparability by about $12.7 million compared to the prior year in Q4.
Third quarter reported net sales increased 48.8% and organic net sales increased 46.7%.
EBITDA increased 56%, primarily driven by volume growth and productivity improvements and partially offset by higher freight and input costs and higher advertising investments.
This represents our fourth consecutive quarter of strong double-digit sales growth for HHI, as well as 18% growth compared to 2019 levels.
We will continue to invest in innovation, marketing and advertising and are seeing positive results in retail POS and benefits from recent commercial wins with Clayton Homes, Shea Homes and another -- and a number of other top 100 US builders.
Also contains SmartKey technology, which allows users to rekey their own locks to any Kwikset key in about 15 seconds.
Reported inorganic net sales increased 9.5% and 4.2%, respectively.
Adjusted EBITDA decreased to $11.8 million.
Reported net sales grew 6.5%, while organic sales declined 7.2%.
Adjusted EBITDA declined 2.8%.
Our Global Pet Care business has been a very strong performer for several years, with 11 consecutive quarters of sales growth.
Our new partner is a Fortune 500 world-class service provider with extensive experience working with some of the largest companies in the consumer product space.
While our partnership goes back almost 10 years, this quarter, we completed one of our most successful fundraising campaigns ever through Well Aware's Shower Strike Program.
Third quarter reported net sales increased just less than 1%.
Organic sales declined 3% and adjusted EBITDA decreased 3.8%.
Recall that net sales for the business last year were over $60 million.
This program continues to be our most important strategic initiative as we transform our global operating model, and we remain on track to deliver our total gross savings target of at least $200 million by the end of fiscal 2022.
As we said during our last quarter, we continue to expect these gross headwinds to be approximately $120 million to $130 million higher than fiscal 2020 levels.
Second, our third quarter financial results reflect adjusted EBITDA growth, despite inflationary headwinds, which stepped up in the quarter and continued challenges with our supply chain, but most importantly, it covered an incremental $19 million investment in innovation, marketing and advertising.
Additionally, the backdrop of low interest rates, the US consumer with approximately $2.5 trillion in liquid assets, combined with a strong housing market and a permanent demand shift higher for our Pet and Home & Garden product offerings paints the picture of a very strong macro demand environment for our company.

Summary:
Adjusted diluted earnings per share improved to $1.57, driven by favorable volumes and improved productivity.
We are reiterating our earnings framework for the year as we continue to expect mid-teens reported net sales growth in 2021, with foreign exchange expected to have a positive impact based on current rates.