Quarterly operating income of $23.4 million represents a 58.1% increase over the $14.8 million for the same period a year ago. Net income for the quarter was $14.0 million and diluted earnings per share were $0.32. Excluding a benefit realized for reducing the effective tax rate from 30.0% to 28.5%, net income would have been $13.5 million or $0.31 per share.
On a sequential basis, sales increased 1.7% from the $128.3 million reported for the second quarter of 2000. Third quarter sales were limited by capacity constraints on surface mount products, which should be alleviated by planned capacity additions in the fourth quarter. Gross margin improved to 31.5% of sales compared with 30.8% in the second quarter. Operating income increased 5.9% from the $22.1 million reported last quarter while net income was up 15.7% from $12.1 million. Diluted earnings per share gained 14.3% from $0.28.
For the nine month period ended September 30, 2000, revenue increased 22.8% from $304.3 million to $373.8 million while operating income was up 71.5% from $37.6 million to $64.5 million. Diluted earnings per share improved by 95.2% from $0.42 to $0.82.
All geographic markets remained strong with each showing double-digit sales gains when compared to the year ago quarter. Particular strength was seen in China and Japan. These two regions now represent 19% of our sales, up from 16% a year ago, validating our product quality, strong customer relationships and regional manufacturing strategy. All key end-markets also reported good growth with power supply and telecom markets registering double-digit year-on-year growth.
The Company continued to generate significant levels of cash and further reduced its debt position in the quarter. The Company repaid an additional $22 million on its revolving credit facility in the quarter and has repaid a total of $46 million under the facility during the first nine months of the year. Total long-term debt has been reduced from $276.5 million at 1999 year end to $230.5 million on September 30, 2000, including $172.5 million in Convertible Subordinated Notes.
New products continued to help fuel growth with sales from new products more than doubling over the comparable period of 1999. Year to date the Company has 133 new products, up from the 72 new products introduced in the similar period last year. The MOSFET business remains on track with 46 design wins registered to date.
We are extremely pleased to report another quarter of record sales and earnings, stated Ronald A. Ostertag, Chairman and Chief Executive Officer. Our focus on new power management product development, including MOSFET and analog products as well as new product introductions in our core rectifier and small signal business, will continue to fuel our growth. With 80% of our fourth quarter sales already in our backlog, continued sales gains in the automotive, power supply and telecom end-markets, and improved factory performance we remain very optimistic about our continued performance as we enter 2001.
