They include first, a review of certain factors impacting our income statement; second, selected items, which includes Nortech’s cash flow statement; and lastly, a brief review of the balance sheet. As usual, if you have specific questions about these items or any of our quarterly financial results, I will be happy to address them during the Q&A portion of this afternoon’s call. In Q3 2023, revenue totaled $33.4 million. This represents a 5.4% decline from revenue of $35.3 million in the third quarter of 2022, yet is still up nearly 5% on a year-to-date basis. This performance is particularly noteworthy as it compares to strong results in the respective prior year period. In fact, we’ve been able to achieve substantial revenue growth over the trailing 12-month period despite the stronger historical comparison.
Nortech’s year-to-date 2023 revenue performance was driven by growth in our medical category, while our industrial and aerospace and defense categories remained relatively consistent over the period. For the first 9 months of 2023, the medical market was up $5.5 million or 10.1% as compared to the first 9 months of 2022, with the majority of the increase coming from medical component products. For the year-to-date period, revenue from the industrial category was $29 million, unchanged from the prior year, while the aerospace and defense market totaled $14.5 million, down slightly from $15.2 million in the prior year. Included in the financial performance for the year-to-date period of 2023, gross profit totaled $16.3 million or 15.8% compared to gross profit of $15.4 million or 15.6% in the prior year period.
Third quarter 2023 operating expenses totaled $4.2 million, a $4.3 million – a 4.3% decrease from the third quarter ‘22 operating expense of $4.4 million. The $188,000 decrease in year-over-year operating expense was driven primarily by a $161,000 reduction in third quarter product research and development expenses. Despite the decline in year-over-year R&D expenses, we believe that this level of investment is sufficient to support new technologies. As a result of performance in the third quarter, net income through the first 9 months of 2023 totaled $2.5 million or $0.87 per diluted share compared to $2.4 million or $0.83 per diluted share for the first 9 months of 2022. Moving to the balance sheet and cash flow statement. First, through the first 9 months of 2023, net cash provided by operating activities totaled $2.2 million, more than double the level generated in a similar 2022 period.
During the third quarter, as a result of previously outlined slowdown in customer demand, inventory levels of $21.5 million was up from the prior quarter inventories, yet remained down from inventory of $22.4 million at December 31, 2022. Receivables at September 30, 2023, were $16 million, down from $17.4 million in the prior quarter and unchanged from $16 million at December 31, 2022. This is in line with the seasonal pattern that we have seen evolve over the past couple of years. The first half of the year has been typically marked by higher receivable levels. While cash collections accelerate during the summer months and second half receivable levels declined. Resultingly, we believe it will generate modest levels of free cash flow going forward.
We ended the third quarter of 2023 with $7.5 million of borrowing capacity on our $16 million line of credit with Bank of America. This credit agreement is important in giving Nortech the flexibility to manage through the headwinds we experienced in the last few years and the previously mentioned seasonal fluctuations we see in our receivables and collections. At September 30, 2023, cash and equivalents totaled $1.1 million, down from $1.9 million at the end of the prior quarter. We believe that our existing financing arrangements, anticipated cash flows from operations and cash on hand will be sufficient to satisfy our working capital needs for the remainder of 2023 as well as any capital expenditures and debt repayments. On a final note, let me reiterate that our top financial priorities for 2023 remain unchanged.
First, we are extremely focused on continuing to strengthen our balance sheet and mitigate impacts we may see some changes in the economic environment or seasonality. Next, we will take further advantage of opportunities to align our operations and infrastructure with the market demand that we are seeing to deliver sustainable free cash flow growth. Our confidence results from growth momentum we saw in 2022 that has sustained thus far in 2023, coupled with disciplined leading operations execution, expense management and R&D innovation, we believe Nortech can deliver on our objective. With that, I’ll turn it back over to Jay for his closing comments.
