Our gross profit margin expanded 200 basis points from the prior quarter to a record 32.4%, significantly exceeding our estimated sustainable range of 28% to 30% on net sales of $2.09 billion.
Our increased gross profit margin, combined with diligent expense control, increased our non-GAAP earnings per diluted share to $1.80, a 37.5% increase from the prior quarter, and generated strong cash flow from operations of $296.3 million.
Our shipments surpassed our expectations, increasing 5.9% over the prior quarter despite typical third quarter normal seasonal customer shutdowns and vacation schedules.
Despite these mill price increases, our average selling price per ton sold in the third quarter was down 4.3% compared to the second quarter, primarily as a result of product mix changes that Karla will discuss in more detail.
The 200 basis points improvement in our gross profit margin to a record 32.4% was the major highlight of our third quarter financial performance, which drove a 40.6% increase in our non-GAAP pre-tax income over the prior quarter.
As such, we remain cautiously optimistic that demand for nonresidential construction activity will continue to improve through the end of the year based on healthy backlogs and positive customer sentiment.
As a result, we believe we are well positioned to maintain our presence as a dominant player in the energy spaces and support any further recovery in that market.
We have increased our 2020 capital expenditure budget by $80 million to a total of $270 million in response to opportunities to better service our customers, including the toll processing expansion in Texas and to maintain and upgrade our equipment to provide our customers with the highest-quality products and services.
In regard to stockholder returns, we are pleased to maintain our payment of a regularly quarterly dividend, as we have for 61 consecutive years, without ever suspending payment or reducing our dividend rate.
We've increased our dividend 27 times since our 1994 IPO, including the most recent increase of 13.6% in the first quarter of 2020.
And we are pleased to have achieved our companywide goal of 4.7 inventory turns during the third quarter.
It is through their efforts that the unique aspects of our business model were able to really shine through, enabling us to achieve significant gross profit margin expansion to a record 32.4%.
Our net sales of $2.09 billion for the third quarter of 2020 decreased 22.4% from the third quarter of 2019, with our tons sold down 13.1% and our average selling price down 11%.
Compared to the second quarter of 2020, net sales increased 3.3%, with our tons sold up 5.9% and our average selling price per ton sold down 4.3%.
Our tons sold exceeded our expectations of flat to up 2% from the prior quarter as demand in many of our end markets improved, with the most notable strength in nonresidential construction.
Although not included in our tons sold metric, the significant rebound in our toll processing operations contributed meaningfully to our increased sales, with toll processing volumes up 81.5% from the lows experienced in the second quarter of 2020.
And our average selling price per ton sold declined 4.3% compared to the second quarter.
The most significant shift was a 14.9% decrease in our aerospace tons sold in the third quarter, the majority of which was heat-treated aluminum and titanium products, which represent some of the higher-priced products we sell.
Our gross profit margin for the third quarter of 2020 was a record at 32.4% and well above our estimated sustainable range of 28% to 30%.
This ties our record gross profit margin set in the fourth quarter of 2019 when we recorded LIFO income of $81 million compared to LIFO income of $12.5 million in the current quarter.
On a non-GAAP FIFO basis, which we believe is the best measure of our day-to-day operations, our gross profit margin of 31.8% increased 300 basis points from 28.8% in the third quarter of 2019 and increased 160 basis points from 30.2% in the second quarter of 2020.
We recorded LIFO income of $12.5 million or $0.15 of earnings per diluted share in the third quarter of 2020 compared to LIFO income of $40 million or $0.44 of earnings per share in the third quarter of 2019 and LIFO income of $5 million or $0.06 of earnings per share in the second quarter of 2020.
And given our current estimate of $50 million of annual LIFO income in 2020, we expect to record $12.5 million of LIFO income in the fourth quarter of 2020.
And our LIFO reserve was $100.1 million at September 30.
Our third quarter non-GAAP SG&A expenses decreased $75.2 million or 14.5% compared to the third quarter of 2019 on a 13.1% reduction in shipments.
The decline in SG&A expense was mainly due to reduced variable expenses, such as plant supplies and freight costs, along with lower average head count, which was down 13.8%; as well as lower performance-based compensation.
When compared to the second quarter of 2020, our non-GAAP SG&A expenses increased only 2.6% on a 5.9% increase in our tons shipped, demonstrating the efficiencies gained through our state-of-the-art processing equipment along with our continuous improvement and innovation initiative.
During the third quarter of 2020, we recorded impairment and restructuring charges of $14.6 million as we continued to close or merge a few of our smaller locations and wrote off certain intangibles due to our outlook for a more challenging environment in certain markets.
We recorded an additional $14.6 million in nonrecurring charges, comprised of settlement charges related to the termination of multiple small, frozen, defined benefit plans and settlement of an obligation in our SERP plan.
We also recorded $1.8 million in debt restructuring charges related to our financing activities in the quarter for total nonrecurring charges of $31 million in the third quarter of 2020.
We remain solidly profitable in the third quarter of 2020, with non-GAAP pre-tax income of $158 million and a non-GAAP pre-tax margin of 7.6%.
Our effective income tax rate for the third quarter was 22.6%, down from 25% in the third quarter of 2019 and up from 20.9% in the second quarter of 2020.
And at this time, we estimate our effective tax rate for the full year of 2020 will be approximately 22.5%.
Non-GAAP net income attributable to Reliance for the third quarter of 2020 was $120.9 million, resulting non-GAAP earnings per diluted share of $1.87, down from $2.39 in the third quarter of 2019 and mainly due to lower pricing, demand levels; and up from $1.36 in the second quarter of 2020 due to our strong gross profit margin and recovering demand.
On a GAAP basis, our earnings per diluted share were $1.51 in the third quarter 2020.
We generated strong cash flow of -- from operations of $296.3 million during the third quarter and $942.8 million during the first nine months of 2020 due to our continued profitable operations and effective working capital management, including a continued focus on rightsizing our inventory levels, which resulted in achieving our inventory turn goal of 4.7 times.
During the quarter, we issued $400 million of 1.3% 5-year senior notes and $500 million of 2.15% 10-year senior notes through a public offering.
Additionally, in early September, we entered into an amended and restated $1.5 billion five year unsecured revolving credit facility that replaced our previous credit agreement and includes an increase option for up to an additional $1 billion.
At September 30, 2020, our total debt outstanding was $1.66 billion, resulting in a net-debt-to-total-capital ratio of 17.3%.
Our net debt-to-EBITDA multiple was 1.1 times.
And as of the end of the third quarter, no borrowings were outstanding on our $1.5 billion revolving credit facility.
In regard to capital allocation, our increased 2020 capital expenditure budget of $270 million includes additional strategic investments to address our customers' needs and drive organic growth.
In the third quarter of 2020, we invested $38.2 million in capital expenditures and returned $41.2 million to our stockholders through dividends and share repurchases.
While macroeconomic uncertainty stemming from the COVID-19 pandemic continues, based on current expectations and market conditions, we anticipate that overall demand will continue to slowly improve in the fourth quarter of 2020.
As a result, we estimate our tons sold will be down 4% to 6% in the fourth quarter of 2020 compared to the third quarter of 2020.
As a result, we expect our average selling price in the fourth quarter of 2020 will be flat to up 2% compared to the third quarter of 2020.
Based on these expectations, we currently anticipate non-GAAP earnings per diluted share in the range of $1.30 to $1.40 for the fourth quarter of 2020.

Summary:
As such, we remain cautiously optimistic that demand for nonresidential construction activity will continue to improve through the end of the year based on healthy backlogs and positive customer sentiment.
As a result, we believe we are well positioned to maintain our presence as a dominant player in the energy spaces and support any further recovery in that market.
Our net sales of $2.09 billion for the third quarter of 2020 decreased 22.4% from the third quarter of 2019, with our tons sold down 13.1% and our average selling price down 11%.
Our tons sold exceeded our expectations of flat to up 2% from the prior quarter as demand in many of our end markets improved, with the most notable strength in nonresidential construction.
Our third quarter non-GAAP SG&A expenses decreased $75.2 million or 14.5% compared to the third quarter of 2019 on a 13.1% reduction in shipments.
Non-GAAP net income attributable to Reliance for the third quarter of 2020 was $120.9 million, resulting non-GAAP earnings per diluted share of $1.87, down from $2.39 in the third quarter of 2019 and mainly due to lower pricing, demand levels; and up from $1.36 in the second quarter of 2020 due to our strong gross profit margin and recovering demand.
On a GAAP basis, our earnings per diluted share were $1.51 in the third quarter 2020.
While macroeconomic uncertainty stemming from the COVID-19 pandemic continues, based on current expectations and market conditions, we anticipate that overall demand will continue to slowly improve in the fourth quarter of 2020.
As a result, we estimate our tons sold will be down 4% to 6% in the fourth quarter of 2020 compared to the third quarter of 2020.
As a result, we expect our average selling price in the fourth quarter of 2020 will be flat to up 2% compared to the third quarter of 2020.
Based on these expectations, we currently anticipate non-GAAP earnings per diluted share in the range of $1.30 to $1.40 for the fourth quarter of 2020.