Ron South
Senior Vice President and Chief Financial Officer at Henry Schein
Thank you, Stanley and good morning, everyone. Turning to our third quarter sales results, I will provide details on total sales -- total sales growth, as well as LCI sales growth, which is internally generated sales in local currencies compared with the prior year and excludes acquisitions. Global sales were $3.2 billion, with sales growth of 0.4% compared with the third quarter of 2023. This reflects 3.2% growth from acquisitions and a 0.2% decrease from foreign currency exchange rates. LCI sales for the quarter decreased 2.6% for the quarter, which includes a 0.4% decrease from lower PPE sales. As Stan noted, our underlying sales for the quarter reflect continued improving sales trends in our distribution businesses.
Our GAAP operating margin for the third quarter of 2024 was 4.94%, a 140 basis point decline compared with the prior year GAAP operating margin. On a non-GAAP basis, operating margin for the third quarter was 7.64%, a 45 basis point decline compared with the prior year non-GAAP operating margin. We had good operating income growth in our Dental Specialties and technology and value added services businesses, offset by a decrease in our distribution businesses resulting from lower sales following last year's cyber incident.
Third quarter 2024 GAAP net income was $99 million or $0.78 per diluted share. This compares with prior year GAAP net income of $137 million or $1.05 per diluted share. Our third quarter 2024 non-GAAP net income was $155 million or $1.22 per diluted share. This compares with prior year non-GAAP net income of $173 million or $1.32 per diluted share. Our third quarter GAAP and non-GAAP results include a remeasurement gain resulting from the purchase of a controlling interest of a previously held non-controlling equity investment.
This business has performed well since we made our initial investment and as a result of our decision to take majority ownership, we recognized a remeasurement gain of $19 million pre-tax or $0.11 per diluted share in the quarter. This is similar to a remeasurement gain of $18 million pretax or $0.10 per diluted share that we recorded in the second quarter of 2023.
We regularly make non-controlling investments in companies with high growth potential as part of our strategic plan. Leveraging our expertise, we have helped these businesses grow and become more profitable. The foreign currency exchange impact on our third quarter diluted EPS was unfavorable by approximately $0.01 versus the prior year. Adjusted EBITDA for the third quarter of 2024 was $268 million, compared to the third quarter 2023 adjusted EBITDA of $278 million.
Turning to our third quarter sales results. Global dental sales were $1.9 billion with sales decreasing 1.6%. LCI sales decreased 1.6% or 1.0% when excluding PPE sales. Global dental merchandise LCI sales decreased 2.5% versus the prior year with an LCI decline in North America of 4.9% and international LCI sales growth of 0.9%. Note that when excluding PPE products, global dental merchandise LCI sales decreased 1.9%, North America merchandise LCI sales decreased 4.0% and international merchandise LCI sales growth was 1.0%.
We believe the overall dental market continues to be generally flat with the shift in sales to lower cost products and lower PPE pricing. We also believe we had a sequential improvement in market share in the third quarter compared to the second quarter. Our global dental equipment LCI sales increased 1.8% with flat sales in North America and 5.6% growth internationally. We expect modest overall equipment sales growth for the year in both North America and internationally.
Dental specialty product sales were approximately $258 million and grew slightly compared to the prior year. As Stan mentioned earlier, this was driven by solid dental implant, biomaterials and endodontic sales globally, offset by sales weakness in our orthodontic business, resulting from restructuring of the business and the transitioning of our clear aligner business from Reveal to Smilers, a product developed by Biotech Dental, which we acquired last year. Note that our dental specialty acquisitions that we completed last year have now all annualized as of this quarter, so our total sales growth is equal to internal sales growth.
Global technology and value added services sales during the third quarter were $221 million, with total sales growth of 5.1%. The LCI sales decline of 1.1% included a 3.1% decline in North America and 13.4% growth internationally. Our value added services revenue was bolstered by the LPS acquisition. This is a leading transaction advisory services business that we purchased in August of 2023. The timing of revenues recorded by LPS distorted internal sales growth numbers during the quarter and we believe that total sales growth of 5.1% for the Technology and Value Added Services segment is most reflective of the growth of the business.
For the third quarter, Specialty Products, Technology and Value-Added Services businesses contributed over 40% of total non-GAAP operating income. Global medical sales during the third quarter were $1.1 billion with sales growth of 2.9% and a decrease in LCI sales of 4.8%. Excluding sales of PPE products, LCI sales decreased 4.6%. As Stan noted, our sales reflected less demand for respiratory diagnostic products and flu and COVID vaccines along with related products. Sales were also impacted by the ongoing migration to generic alternatives for certain branded pharmaceuticals.
Our home solutions business had strong growth, which was driven by our strategic acquisitions. Restructuring expenses in the third quarter were $48 million or $0.26 per diluted share. This includes $12 million incurred as part of the plan announced in the third quarter of 2022, which was completed on July 31, 2024 and $36 million incurred as part of the 2024-2025 restructuring initiative announced last quarter. These expenses mainly relate to severance benefits and costs related to exiting certain facilities.
Actions approved in the third quarter under the new initiative are estimated to provide over $50 million in annual run-rate savings and we believe this indicates strong progress towards our goal of $75 million to $100 million in annual run-rate savings by the end of 2025. Our third quarter GAAP results include $10 million in pre-tax proceeds as part of our cyber insurance claim, which is excluded from our non-GAAP results. At the end of the quarter, we had already collected $20 million and anticipate collecting most of our $60 million claim by the end of this year.
Regarding share repurchases, we repurchased approximately 2 million shares of common stock in the open market during the third quarter at an average price of $69.09 per share for a total of $135 million. We had $455 million authorized and available for future stock repurchases at the end of the quarter. We expect to continue to repurchase shares in the fourth quarter.
Turning to our cash flow. We had good operating cash flow of $151 million for the third quarter, which compares with operating cash flow of $231 million last year. Year-to-date, operating cash flow was $644 million, which is $112 million more than last year. Turning to our updated 2024 financial guidance. At this time, we are not able to provide without unreasonable effort and estimate of restructuring costs associated with the new restructuring plan for 2024, although we expect this to primarily include severance pay and facility related costs. Therefore, we are not providing GAAP guidance.
Our 2024 guidance is for current continuing operations, as well as acquisitions that have closed and does not include the impact of potential future acquisitions or future share repurchases. Guidance also assumes that foreign currency exchange rates are generally consistent with current levels and the end markets remain consistent with current market conditions. Our 2024 total sales growth is now expected to be 4% to 5% over 2023 compared to prior guidance of 4% to 6% growth. For 2024, we are increasing non-GAAP diluted EPS attributable to Henry Schein, Inc. to be in the range of $4.74 to $4.82 compared with prior guidance of $4.70 to $4.82 and reflects growth of 5% to 7% compared with 2023 non-GAAP diluted EPS of $4.50, as a result of better than expected results in the third quarter.
This guidance reflects an estimated non-GAAP effective tax rate of 25%. Consistent with prior guidance, we continue to expect our 2024 adjusted EBITDA to grow in the low double-digit percentages versus 2023 adjusted EBITDA of $984 million. We expect adjusted EBITDA to grow faster than non-GAAP diluted EPS because of higher interest expense, a higher effective tax rate and higher depreciation as a result of the strategic investments we have made to execute on our strategic plan.
I will conclude my remarks with some comments on 2025. We plan to issue 2025 guidance as usual on our Q4 earnings call this coming February. As you have heard today, we expect modest improvement in the dental and medical markets next year and we expect to continue to grow faster than the markets, supported by some of our recent investments, new product launches and focused execution and continued cyber recovery. We are on target to achieve our restructuring goal and this should help offset headwinds from higher depreciation expense resulting from our global e-commerce platform and additional investments in technology. We expect this e-commerce platform to accelerate growth once fully launched in the United States.
With that, I'll now turn the call back to Stanley.