Operating expenses were up 2% compared to the first nine months of 2011 due to acquired and new sales centers, with base business operating expenses declining 1%. Operating income for the first nine months of 2012 increased 11% to $155.2 million compared to $139.4 million in the same period last year. Excluding the goodwill impairment, year to date adjusted operating income increased 16% to $162.1 million.
Earnings per share for the first nine months of 2012 increased 12% to a record $1.87 per diluted share on net income of $90.0 million, compared to $1.67 per diluted share on net income of $82.1 million in the comparable 2011 period. Adjusted net income for the first nine months increased 18% to $96.9 million, while adjusted diluted EPS increased 20% to a record $2.01.
The balance sheet reflects improved working capital management with improved collections on customer accounts and higher inventory turns versus last year. Total net receivables increased 9% due primarily to the increase in net sales and higher vendor receivables, while inventory levels were up 3% including a 2% increase from recent acquisitions. Total debt outstanding at September 30, 2012 was $214.3 million, down $54.4 million compared to September 30, 2011.
Cash provided by operations was $124.5 million in the first nine months of 2012 compared to $32.0 million in the first nine months of 2011. This improvement reflects the increase in net income, favorable timing differences related to the inventory purchase and payment cycle and a benefit related to the deferral of our third quarter 2012 estimated federal tax payments. Share repurchases in the first nine months of 2012 totaled $53.3 million, or 1.5 million shares. Adjusted EBITDA (as defined in the addendum to this release) was $53.0 million in the third quarter of 2012 compared to $45.8 million in the third quarter of 2011, and $177.5 million for the nine months ended September 30, 2012 compared to $153.6 million for the nine months ended September 30, 2011.