Ladies and gentlemen, and welcome to the Wayside Technology Group Conference Call. Later, we will conduct a question and answer As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Melanie Caponegro, Ms. Caponegro, you may begin your conference at this time.
Thank you, and good morning. Welcome to Wayside Technologies Second Quarter Twenty Nineteen earnings call. Before turning the call over to Dale Foster, President of Lifeboat Distribution, I'll dispense with the customary cautionary language and comment about the webcast for this earnings release is available at the company's investor relations website at waysidetechnology.com. Today's call, including all questions and answers, is being webcast live and rebroadcast will be available at www.wasteidetechnology.com
for / sitecontent/webcast.
I'd like to remind you that certain comments made in the conference call and webcast are considered forward looking statements under the Private Securities Litigation Reform Act of 1995. Those statements are subject to risks uncertainties that could cause actual results to differ materially. Additional information concerning these risks and uncertainties is contained in our Form 10 Q and 10 K filed with the SEC. Wayside Technology Group, Inc. Sees no obligation to update and does not intend to update SEC rules.
You'll find reconciliation charts in the earnings release and forms 8 K we filed with SEC. Now, I would like to turn the call over to Dale.
Thanks, Melanie, and good morning, everyone. Thank you for joining us today to discuss our second quarter 2019 operating results. This quarter, we saw some tangible results from investments we made in vendor recruitment and sales and marketing over the past 18 months with revenues increasing 15% over the second quarter last year, and gross margin dollars increasing $1,300,000 or 20%. We also saw the leverage this new model can achieve with non GAAP net income increasing $1,000,000 or 117 percent over the same quarter last year. It is also noteworthy that this strategy of building upon LIFO's position in the market.
In the technology market defined by new entrants and disruption, LIFO has developed a unique presence with a diverse line card and 20 plus years of history in the channel. In 2018, we expanded our vendor recruitment and field sales organization increase the breadth of our vendor relationships and provide a higher level of sales interaction to our partners to support their growth initiatives. 2019 is clearly beginning to show the return on this investment in the form of increased gross profits as we remain focused on providing the highest level of support to our existing vendor partners, along with expanding relationships with new and emerging technology innovators. Our year to date results similar improvements with gross profits climbing $1,700,000 or 12 percent with $900,000 dropping through to our net income line. As we continue to execute on the strategic plan to become the leading distributor for new and emerging technology companies, we consistently tune our sales and marketing investments to drive and field day sales positions and adding outside sales team members in several additional territories.
These investments are allowing us to reach incremental resellers or their vendor partners. These field sales resources will enable us to cross sell multiple emerging brands and our to our base of value added resellers as well. From a marketing standpoint, we've begun to offer our GSA contract vehicle with our vendor partners. We are actively teaming our vendor our valued resellers with our manufacturer partners on GSA contracts. We've launched new relationships with outstanding security players such as Improvin Garland Technology.
We've also launched a relationship with the Imante in the rapidly involving container space, and we just recently added ARC Serve to the backup space to our backup space to complement our portfolio in storage vendors. I will now turn over the call to Mike VC, our CFO and Vice President of Finance to review our operating results in more detail.
Thanks, Dale. I'll view our financial results for the 2nd quarter, then discuss our balance sheet and liquidity. Overall, net sales for the quarter increased 15% to $50,700,000 compared to $3,900,000 extend net sales were down $8,000,000 compared to $6,500,000 for the same period last year. LIFO distribution gross profit for the quarter increased 35% to $7,100,000 compared to $5,300,000 for the second quarter last year due to growth in several of our more significant product lines. Incremental sales from new product lines and approximately $400,000 due to changes in vendor rebates and early pay discounts.
Our techxtend business declined, in part, as a result of the decreased extended payment sales terms, which we determined were not providing medical return on capital required to fund them. The decline in this line of business has had a negative impact on dated net sales and gross profit, but has freed up capital to invest in our core lifeboat business. Gross profit margin as a percentage of sales increased mix of products recorded on a net basis under ASC 606. During the second quarter of 2019, approximately 9 point 7% of our net revenues were from security maintenance and other products, which we reported on a net basis, were an effective 100% gross margin. Compared to 8.7 percent in the same quarter last year.
This shift in product mix had the effect of increasing gross profit as a percentage of net sales by 90 basis points. This increase was partially offset by lower gross profit margins on software and hardware products recorded on a gross basis. Total selling, general and administrative expenses for the quarter increased by $200,000 to $5,500,000 compared to $5,300,000 for the same quarter in 2018. These increases were partially offset by lower sales for the quarter For the second quarter of 2019, the company recorded a provision for income taxes of $500,000 compared to $100,000 for the same period in the prior year. The company's second quarter of 2018 provision for income taxes was impacted by limitations on the deductibility of executive compensation resulting from Section 1 62M of the internal revenue code.
End adjustments see the accrual for state income taxes and states which have enacted economic nexus, Stat The company's effective tax rate for the 3 months ended June 30, 2019, was 22.8% compared to the company's of tax rate on ordinary income before separation expenses of 24.1 percent in the same period in 2018. As a result, income for the quarter ended June 30, 2019 was $1,900,000 compared to a net loss of $1,100,000 for the same period in 2018. The 2nd quarter results for 2019 2018 were impacted by $100,000 $2,000,000 of separation expenses, net of taxes respectively. Therefore, we presented non GAAP net income, excluding the impact of separation expenses, net of taxes in our earnings release. On a non GAAP basis, net income was $1,900,000 for the second quarter of 2019 compared to $900,000 for the same period in 2018.
Representing an increase over 100%. Diluted earnings per share $4.1 compared to a diluted net loss of $0.25 for the same period expenses net of taxes was $0.43 for the second quarter of 2019 compared to $0.20 per share for the same period in 2018. On a year to date $4,000,000 compared to $2,500,000 for the same period in 2018. While non GAAP diluted earnings per share was $0.75 compared to $0.55 the same period in the prior equivalents of $9,400,000 have zero outstanding borrowings under our $20,000,000 credit facility. The decrease in our cash balance reflects a short term impact resulting from changes in as well as increased sales to one of our customers with extended payment terms.
Stockholders' equities stood at $42,800,000 compared to 40 point $1,000,000 at the end of last year. Total working capital, including cash, was $38,900,000 compared to 36,200,000 end of last year. 19 compared to 16% in the same period last year. We calculate return on investment capital by dividing non GAAP net income, excluding separation expenses, net of taxes by stockholders' equity, less cash. We returned a significant portion of our earnings to stockholders in the form of a dividend.
On August 6, 2019, the Board of Directors declared a quarterly dividend of $0.17 per share of its common stock, payable on August 23, 2019, to shareholders of record on August 19, 2019. I will now turn the call back to Dale Foster for concluding remarks.
You, Mike. I would like to thank all of our employees whose hard work continues to make this a great company a place to work. Your initiatives are noteworthy. I would also like thank our vendors and customers who have been wonderful in working together to achieve our mutual goals. Lastly, I would like to recognize Board of Directors and shareholders for their ongoing support and encouragement as we continue to execute our long term strategic business plan.
With that, please open the call to our investor and analyst community
you. Our first question comes from Louis Moser. Your line is now open.
Good morning. I was just wondering, I followed the stock for many years and there are two things that I had in mind. Earnings that you've just produced, which seems to be very good. Is this an anomaly or is this something that you're confident of generating on a going forward basis based on the configuration of the different sales people that you've added and software that they're now selling to the customers?
Yes. Hi, Louis. This is Mike Veezy. The way we look at the business, we have 2 segments in our business, tech extend and lifeboat. And our tech extend business, as we've discussed in the past, tends to fluctuate quarter to quarter.
It's kind of a deal oriented business, big deal 1 quarter, smaller deal to next. Over the past year and a half, we've been focusing on building the Lifeboat businesses, which is a little more predictable. There's step functions as we add vendor relationships and growth driven by various things, acceptance of our vendors, products in the marketplace, our vendors, year end, play into it. So we believe we're focused. That being said, we believe we're focusing on the more sustainable part of our business in Lifeboat.
We think it's within our strategy that's putting a market niche for, emerging technologies or disruptive technologies It's not a stagnant market. There's always new entrants and we feel we have an advantage there. So to the extent from a strategy perspective, we think we're trying to execute in a sustainable part of the market from a, anything could in point of view, you know, that's always a risk in any business. So tomorrow, the technology spending could be down and things like that. So we're always subject to those same risks.
So that's, I think, the way to view it.
I also noticed that there are no analysts following the company Is there any effort in terms to get more exposure for the stock? It's grocery since you've got a really nice dividend and you've got a good balance sheet. And, yeah, it seemed to be more moving in the positive direction in terms of how you're configuring your Salesforce and products?
Yes. The answer is yes. We've had a lot of changes, in the company over the past year and we have begun some outbound awareness at conferences and follow-up meetings with people. In terms of getting analysts coverage in the small cap universe right now. As you're probably aware, that has changed a little bit.
So we do have an eye towards trying to get some interest and get people writing on us. We feel we may have to, just create some general awareness in the market through conferences and execute on a couple of quarters under our business strategy perhaps to really get that in place. So, definitely something that we're working I
would put it under the
more general category of creating market awareness and, establishing that we could execute upon our strategy.
Yes, so a large amount of shorts in the stock is linked to me. Statistics that I'm looking at. I suppose that is.
I don't know if there's a specific reason. To be honest with you, there's not a lot of trading in our stock. So I don't know that the numbers that, you're looking at reflect a, it depends how we quantify a lot of sure interest in the stock. So, I don't think we have the ability to nothing known that we think would drive that in terms industry fundamentals or it's not like a best buy situation where somebody's betting, I think betting against the industry or anything like that.
I don't remember when the the stock was around 'eighteen and change at one point and that's consistently going down. But if, at this point, because of the, the quality you just did, seems to be the emphasis on changing your format and it's been successful. Now is the time to really try to get some public interest. So, as you say, I hope you continue to look for analysts that might help you and give you that kind of interest because certainly help get the prices stock up. And, today, there's a fair amount of interest in it.
Some people modestly reported came out late today. So I think that it looks positive and I wish you guys best of luck in continuing to do a good job.
I appreciate that.
Thank you. At this time, there are no further questions. Please continue with any closing remarks.
Yes, we'd like to thank everybody for joining us for our quarterly conference call and look forward to next call after our third quarter. Thank you.
Now, this concludes today's conference call. You may disconnect at this time and thank you for your joining.