Net sales for the third quarter of 2020 were $647.3 million, which is a 15.5% increase on a reported basis versus $560.6 million in Q3 of 2019.
On a currency neutral basis, sales increased 14.9%.
Generally, we are seeing most academic and Diagnostics Labs now running between 70% and 90% capacity and slowly continuing to improve.
Biopharma labs are broadly running at a slightly higher capacity rate of 80% to 90% and we continue to monitor the situation closely.
We estimate that COVID-19-related sales were about $98 million in the quarter.
Sales of the Life Science Group in the third quarter of 2020 were $324 million compared to $215.7 million in Q3 of 2019, which is a 50.2% increase on a reported basis and a 48.8% increase on a currency neutral basis.
Excluding Process Media sales, the Life Science business grew 53% on a currency neutral basis versus Q3 of 2019.
In addition, last month we launched two new PCR systems, the CFX Opus 96 and the CFX Opus 384, which strengthens our global response and contribution to the fight against the pandemic.
Sales of Clinical Diagnostics products in the third quarter were $322.2 million compared to $341.8 million in Q3 of 2019, which is a 5.7% decline on a reported basis and a 5.9% decline on a currency neutral basis.
The reported gross margin for the third quarter of 2020 was 56.7% on a GAAP basis and compares to 54.8% in Q3 of 2019.
Amortization related to prior acquisitions recorded in cost of goods sold was $4.8 million compared to $3.9 million in Q3 of 2019.
SG&A expenses for Q3 of 2020 were $198.2 million or 30.6% of sales compared to $201.6 million or 36% in Q3 of 2019.
Total amortization expense related to acquisitions recorded in SG&A for the quarter was $2.3 million versus $1.9 million in Q3 of 2019.
Research and development expense in Q3 was $59.5 million or 9.2% of sales compared to $47.9 million or 8.6% of sales in Q3 of 2019.
Q3 operating income was $109.6 million or 16.9% of sales compared to $57.5 million or 10.2% of sales in Q3 of 2019.
Looking below the operating line, the change in fair market value of equity securities holdings added $1,580 million of income to the reported results, and is substantially related to holdings of the shares of Sartorius AG.
Also during the quarter, interest and other income resulted in a net expense of $5.5 million compared to $2.1 million of expense last year.
The effective tax rate for the quarter was 21.9% compared to 22.8% in Q3 of 2019.
Reported net income for the third quarter was $1,315 million and diluted earnings per share were $43.64.
Looking at the non-GAAP results for the third quarter, in cost of goods sold, we have excluded $4.8 million of amortization of purchased intangibles and a small restructuring benefits.
These exclusions moved the gross margin for the third quarter of 2020 to a non-GAAP gross margin of 57.5% versus 56% in Q3 of 2019.
Non-GAAP SG&A in the third quarter of 2020 was 29.4% versus 35.5% in Q3 of 2019.
In SG&A, on a non-GAAP basis, we have excluded amortization of purchased intangibles of $2.3 million, legal related expenses of $6 million and restructuring and acquisition-related benefits of less than $1 million.
Non-GAAP R&D expense in the third quarter of 2020 was 9.2% versus 8.5% in Q3 of 2019.
The cumulative sum of these non-GAAP adjustments result in moving the quarterly operating margin from 16.9% on a GAAP basis to 18.8% on a non-GAAP basis.
These non-GAAP operating margin compares to a non-GAAP operating margin in Q3 of 2019 of 12%.
We have also excluded certain items below the operating line, which are the increase in value of the Sartorius Equity Holdings of 1,580 million and a small loss associated with venture investments.
The non-GAAP effective tax rate for the quarter was 22.5% compared to 25.5% in Q3 of 2019.
We now estimate the full year tax rate on a non-GAAP basis to be approximately 24%.
And finally, non-GAAP net income for the third quarter of 2020 was $90.3 million or $3 diluted earnings per share compared to $48.6 million and $1.61 per share in Q3 of 2019.
Total cash and short-term investments at the end of Q3 were $1,160 million, an increase of $123 million from the end of Q2 of 2020.
During the third quarter, our inventory increased by about $12 million from the second quarter of 2020.
We plan to use the cash on hand to repay the $425 million of outstanding senior notes in December.
In addition, the market value of our holdings in Sartorius AG has increased, which technically may deem us as an investment company under the 1940 Investment Company Act.
During the third quarter, we did not purchase any shares of our stock, we had a total of $273 million available for potential share buybacks.
For the third quarter of 2020, net cash generated from operating activities was $135.7 million, which compares to $99.8 million in Q3 of 2019.
The adjusted EBITDA for the third quarter of 2020 was 22.9% of sales.
The adjusted EBITDA in Q3 of 2019 was 17%.
Net capital expenditures for the third quarter of 2020 were $20 million and depreciation and amortization for the third quarter was $33.7 million.
We project that the full-year capex spend will likely be between $80 million and $90 million.
With that in mind, we currently believe that the full year 2020 year-over-year currency-neutral sales to be up 5.9% to 6.3%.
We estimate 27% to 28% currency-neutral revenue growth for Life Science and estimate about 7% currency-neutral revenue decline for the Diagnostics Group in 2020.
Full year non-GAAP gross margin is projected to be between 56.5% and 57%.
R&D is around 9%.
Full year GAAP operating margin between 16% and 16.5% and full-year adjusted EBITDA margin to be between 21% and 21.5%.

Summary:
Net sales for the third quarter of 2020 were $647.3 million, which is a 15.5% increase on a reported basis versus $560.6 million in Q3 of 2019.
Reported net income for the third quarter was $1,315 million and diluted earnings per share were $43.64.
With that in mind, we currently believe that the full year 2020 year-over-year currency-neutral sales to be up 5.9% to 6.3%.