Senior Vice President, Chief Financial Officer and Treasurer at STERIS
Thank you, Julie. And good morning, everyone. It's once again my pleasure to be with you this morning to review the highlights of our third quarter performance.
For the quarter, constant currency organic revenue increased 9%. Growth was driven by organic volume as well as 100 basis points of price. Acquisitions added $333 million to revenue, which is broken down by segment in the press release tables. To assist you with your modeling within the Healthcare segment, of the approximately $210 million in acquired revenue, about 60% is consumable revenue from both Key and Cantel Medical. We passed the first year anniversary of the Key Surgical acquisition in mid-November. So this quarter, Key Surgical's revenue is split between organic and inorganic.
Gross margin for the quarter increased 90 basis points compared with the prior year to 45.1% as favorable productivity, pricing and acquisitions were offset by higher material and labor costs. We continue to face increased material labor costs, which totaled about $10 million in the quarter. As we look at the fourth quarter of the fiscal year, we expect increased pressure on material labor of approximately $20 million, about twice as much as we anticipated just one quarter ago. For the full fiscal year, we anticipate absorbing approximately $45 million in unplanned material labor costs, all while continuing to serve our customers and deliver a record year of performance.
EBIT margin for the quarter was 24% of revenue, an increase of 40 basis points from the third quarter last year. R&D expenses increased. And as anticipated, we are seeing operating expenses such as travel and sales and marketing costs return, somewhat limiting EBIT margin growth.
The adjusted effective tax rate in the quarter was 21%, higher than last year, but in line with our expectations. We now expect the full year tax rate to be approximately 21.5%, reflecting year-to-date actuals at our expectations for the fourth quarter. Net income in the quarter increased to $213.3 million and earnings per diluted share were $2.12.
Our balance sheet continues to be a source of strength for the company. At the end of the quarter, cash totaled $359.1 million. We continue to focus on debt repayment as evidenced by our leverage ratio at the end of the third quarter below 2.6 times. Year-to-date capital expenditures totaled $214.5 million, while depreciation and amortization totaled $319.3 million.
Free cash flow for the first nine months was $300.3 million. As anticipated, this has declined from the prior year due to costs associated with acquisitions and integration of the Cantel Medical acquisition and higher capital spending year-over-year.
I will now turn the call over to Dan for his remarks.