Additionally, service revenue associated with crude assay work was stable during the third quarter of this year, but down a little when compared to the third quarter of last year, which was elevated in our European operations ahead of the sanctions that became effective late last year. Product sales, which is more equally tied to the U.S. and international activity, were $32.5 million for the quarter, down 6% sequentially, and down 15% from last year. Despite the decrease in U.S. onshore activity during the third quarter of 2023, product sales in the U.S. were flat sequentially. The sequential decrease in our product sales in the third quarter is primarily associated with lower international product sales. The year-over-year decrease is due to lower sales in both the U.S. and international markets.
Some international product sales scheduled to be delivered in the third quarter of 2023 were delivered in October. Additionally, in 2023, some recurring international product orders, which typically fall in the third quarter, are planned for the fourth quarter. Moving on to cost of services, ex-items for the quarter, was approximately 74% of service revenue, an improvement from 76% in the prior quarter and 77% compared to the prior year. We continue to see improvements in absorption of costs and utilization of our global laboratory network and anticipate additional improvement with continuous growth and service revenue. Cost of sales, ex-items in the third quarter, was 85% of revenue compared to 84% last quarter, which increased slightly this quarter due to reduced manufacturing efficiencies associated with lower international sales.
G&A, ex-items for the quarter, was $9.5 million, a slight increase from prior quarter, which was $8.7 million. For 2023, we expect G&A, ex-items to be approximately $38 million to $39 million. Depreciation and amortization for the quarter was $3.9 million flat compared to last quarter. EBIT, ex-items for the quarter was $16 million, an increase of over 2% compared to last quarter, and yielding an EBIT margin of 13%, which expanded approximately 60 basis points sequentially. Year-over-year, EBIT, ex-items increased $2.7 million, or up 20%, and EBIT margins expanded 220 basis points. Our operating income for the quarter on a GAAP basis was $14.7 million. Interest expense of $3.1 million was relatively flat compared to $3.2 million last quarter.
On September 30th of 2023, the company retired $75 million in senior notes, which carried a fixed interest rate of 4.1%. We used $71 million of the borrowing capacity under our bank credit facility to partially fund the maturity of these notes. The credit facility has a variable interest rate, and currently, the borrowing rate under the facility is approximately 8%. As such, we expect interest expense to increase approximately $600,000 next quarter. Income tax expense at an effective tax rate of 20% and ex-items was $2.6 million for the quarter. On a GAAP basis, tax expense was $2.3 million for the quarter, which was also at an effective tax rate of 20%. The effective tax rate will continue to be somewhat sensitive to the geographic mix of earnings across the globe, and the impact of items discreet to each quarter.
However, we continue to project the company’s effective tax rate to be approximately 20%. Net income, ex-items for the quarter was $10.3 million, up from $9.8 million last quarter and $8.2 million from the same quarter last year. On a GAAP basis, we recorded net income of $9.3 million for the quarter. Earnings per diluted share, ex-items, was $0.22 for the quarter, up from $0.21 last quarter and up from $0.18 compared to the third quarter of last year. On a GAAP basis, earnings per diluted share was $0.19 for the quarter. Turning to the balance sheet, receivables was $104.1 million and decreased approximately $2.8 million from the prior quarter. Our DSOs for the third quarter improved slightly to 71 days from 72 days in the last quarter. Inventory was $75.1 million at the end of this quarter, up approximately $3.4 million from last quarter end.
