Abhi Khandelwal
Senior Vice President and Chief Financial Officer at IDEX
Thanks, Eric. Turning to the consolidated financial results on slide six. Please note that all comparisons are against the prior year period unless stated otherwise. Also, the acquisition of Mott is reflected in IDEX consolidated and HST segment financials as of the close of the transaction on September 5th. Third quarter orders of $781 million were up approximately 10% on a reported basis and up 8% organically. We saw orders growth across the portfolio with HST seeing 20% organic growth in the quarter, half of which was partially driven by blanket order activity that will ship in 2025.
FSDP had low single-digit organic growth, while FMT was essentially flat. We did see slight sequential growth in FMT orders. Third quarter sales of $798 million were up 1% reported and flat organically compared to the prior year. We experienced organic growth of 4% in FSDP and 2% in FMT. HST had a 5% organic decline, driven by continued headwinds that I will cover in the upcoming slides.
Third quarter gross margin was 44.3% and adjusted gross margin was 44.6%, an expansion of 20 basis points and 40 basis points respectively. Gross margin expansion was driven by strong price cost, partially offset by higher employee-related cost. Third quarter adjusted EBITDA margin was 26.9%, down 150 basis points. With the acquisition of Mott, our biggest acquisition to date, we had higher than typical M&A spending, which negatively impacted our margins by approximately 40 basis points. We are accelerating the integration of Mott and are excited to see the realization of the expected commercial synergies.
We continue to leverage 80/20 across IDEX to deploy resources to growth and reduce complexity. I will discuss the drivers of third quarter adjusted EBITDA on the next slide in a moment. On a GAAP basis, our Q3 effective tax rate was 22.9% versus 20.2% in the prior year period. The prior year rate included certain one-time benefits, which contributed $0.11 of adjusted EPS in the prior year period. Third quarter net income was $119 million, resulting in GAAP EPS of $1.57. Adjusted net income was $144 million with an adjusted EPS of $1.90, down $0.22 or 10%. We achieved the higher-end of our guide. And while our guidance did not include contributions from Mott or its related financing costs, these amounts essentially offset one another during the quarter.
Free cash flow for the quarter was $192 million, a decrease of 7%. We achieved a conversion rate of 133% of adjusted net income, a 400 basis point improvement on a year-over-year basis. We have a strong balance sheet and this quarter, we paid over $50 million in cash dividends. We also funded the acquisition of Mott through the combination of approximately $212 million of cash, $279 million of borrowings from our revolving credit facility and $495 million net proceeds from the issuance of senior notes. We maintain a strong investment grade rating with a 2.4 gross leverage ratio at the close of September.
Moving on to slide seven, which details the adjusted EBITDA drivers. For the third quarter, adjusted EBITDA decreased by $11 million. Our organic sales volume decline of approximately 3% unfavorably impacted adjusted EBITDA by $9 million, flowing through at prior year adjusted gross margin rate. The negative volume flow through was partially offset by strong price cost spread of 100 basis points and operational productivity, resulting in a $10 million benefit over the prior year.
In the quarter, we saw unfavorable mix primarily in our industrial businesses and our dispensing businesses. We had higher employee related costs and higher transaction related expenses in connection with the acquisition of Mott. All these factors combined resulted in an unfavorable organic flow through. The impact of FX slightly increased adjusted EBITDA by $1 million and acquisitions, net of divestitures added $2 million on a quarter-over-quarter basis as the benefits from our acquisitions more than offset the impact on adjusted EBITDA from divested companies. I will now review segment level performance.
Turning to slide eight and FMT segment. In Q3, we experienced sequential and mid single-digit plus organic year-over-year growth in orders across the majority of our businesses. This growth was muted by continued Ag cycle headwinds and push out in chemical project activity, resulting in total flat organic orders growth for FMT. Net sales were up 2% organically. We had strong price capture across the segment and experienced high single-digit growth in our industrials and Intelligent Water businesses. Total segment growth was unfavorably impacted by demand softness in our Ag OEM and energy businesses.
Our industrials day rates remained steady from Q2 with no change in overall market conditions. The strength in year-over-year organic growth in our industrial business was partially due to prior year comps. Our Intelligent Water portfolio continues to see strength in the North American municipal market, with strong governmental funding to support ongoing investments.
Our energy business are seeing headwinds from weather related North-America, slowdown in propane truck builds and distributor destocking and decreased demand for propane in Europe. Our Ag OEM business remains challenged by the market slowdown. Despite this downturn, our teams remain focused tackling the market headwinds and leveraging 80/20 to redeploy resources. Adjusted EBITDA margin decreased 160 basis points due to higher employee-related costs, higher discretionary spending and unfavorable mix, partially offset by price cost.
Moving on to slide nine and our HST segment. Orders grew sequentially and experienced a year-over-year organic growth of 20%. Growth was partially driven by blanket orders in life science and performance pneumatics businesses. Year-over-year comps were also a factor as Life Sciences, Analytical Instrumentation and semiconductor markets bottomed the same period last year. Our innovation funnel in life sciences remains active, while there is no change in our outlook. Net sales were down 5% organically. Although we had strong price capture, it did not entirely offset the volume declines, driven by continued challenges in the end markets we serve.
Our Life Sciences and Analytical Instrumentation businesses demand was steady sequentially from Q2 to Q3. Defense, aerospace and satellite communication end-markets remain strong. We saw double-digit growth in the quarter. Within Semicon, what we are seeing is a push-up in the end-market recovery to the second half of next year. Our HST industrial light businesses continue to experience project delays. As I commented earlier, the acquisition of Mott is reflected in HST's segment financials as of the close of the transaction on September 5th.
The integration of Mott is moving at a brisk pace. Q3 adjusted EBITDA margin for HST declined 40 basis points year-over-year, primarily due to lower volume and higher employee related cost, partially offset by price cost, favorable operational productivity, cost out work the teams have done to align with the current environment and the net accretive impact of acquisitions and divestitures.
Now turning to slide 10. I'd like to take a moment to recognize our FSDP team's performance delivered record sales and adjusted EBITDA in the quarter. Orders in our Fire & Safety, Diversified Products segment were up 4% organically, driven by Fire & Safety, low double-digit growth, partially offset by declines in Dispensing and BAND-IT. Net sales were up 4% organically. We had strong price capture and higher volumes, mainly driven by Fire & Safety and BAND-IT. Our Fire & Safety businesses continue to see growth in North America fire OEMs and we are ramping production to meet their needs.
BAND-IT experienced growth driven by strong aerospace demand, offsetting declines in industrial and auto. Our Dispensing business experienced declines as expected, driven by headwinds from the North American big box retailer refresh cycle. Growth from the India market had been an offset to this headwind through the first half of this year due to timing of projects in the emerging markets landing in the first half of 2024. Q3 adjusted EBITDA margin declined 20 basis points year-over-year, primarily due to unfavorable mix with positive price cost offsetting higher employee related cost.
With that, I would like to provide an update on our outlook for the fourth quarter and full-year on slide 11. For the fourth quarter, we project organic sales to increase 3% to 4% compared to the prior year. We anticipate an adjusted EBITDA margin of approximately 27% with GAAP EPS in the range of $1.64 to $1.69 and adjusted EPS in the range of $2.01 to $2.06. On a year-over-year basis, we expect mid to high single-digit organic growth in FMT and FSDP. In HST, we expect flat sales growth.
Our full-year adjusted EPS outlook remains unchanged and we expect organic revenues to decline 1% to 2% with an adjusted EBITDA margin of approximately 27%. We project GAAP diluted EPS to range from $6.65 to $6.70 and adjusted EPS to range from $7.85 to $7.90 in line with our prior guidance. The full-year revenue guidance implies high single digit organic sales decline in HST and low-single digit growth in FMT and FSDP.
With that, I'll turn it over to Eric for closing remarks.
