Good day, ladies and gentlemen. This is your ViaVid operator. Welcome to the Miller Industries second quarter 2016 results conference call. As a reminder, all participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. At this time, I would like to turn the conference over to Max Dutcher of FTI Consulting. Please go ahead, Max.
Thank you. Good morning, everyone. I would like to welcome you to the Miller Industries conference call. We are here to discuss the company's 2016 second quarter results, which were released after close of market yesterday. With us from management today are Bill Miller, Chairman of the Board, Jeff Badgley, Co-CEO, Will Miller, President and Co-CEO, Vince Mish, Executive Vice President and CFO, Frank Madonia, Executive Vice President, Secretary and General Counsel, and Debbie Whitmire, Vice President and Corporate Controller. Today's call will begin with formal remarks from management, followed by a question and answer period. Please note in this morning's conference call, management may make forward-looking statements in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
I'd like to call your attention to the risks related to these statements, which are more fully described in the company's annual report filed on Form 10-K and other filings with the Securities and Exchange Commission. With these formalities out of the way, I'd like to turn the call over to Jeff. Please go ahead, Jeff.
Thank you. Good morning. We're pleased to discuss our second quarter performance with you today. It was a solid quarter for Miller Industries, one which built on a strong start to 2016. Demand for our products has remained healthy, which led to a solid top and bottom line financial performance in the quarter. Results were driven by a solid pipeline of business, which led to growth in revenue achieved during the quarter based on recovering economic conditions and improving customer sentiment. We reported 2016 second quarter sales of $156.1 million compared to $151.5 million in the prior year period. Net income was $6.6 million, or $0.58 per share, compared to net income of $5.9 million or $0.52 per share in 2015 second quarter. We remain on track with our initiatives to consolidate and expand our Pennsylvania manufacturing operations.
Our projects to enhance our Ooltewah and Greenville, Tennessee plants have been initiated. I'll turn the call over to Vince, who will review the second quarter and six months financial results. After that, I'll be back with comments on the market environment and some closing remarks. Mr. Mish?
Thanks, Jeff, good morning, everyone. Net sales for the second quarter of 2016 were $156.1 million, versus $151.5 million for the 2015 second quarter, a 3.0% year-over-year increase. Cost of operations increased 2.3% to $137.1 million in the 2016 second quarter, compared to $134 million last year. Gross profit was $19.0 million or 12.2% of net sales in the second quarter of 2016, compared to $17.5 million or 11.6% of net sales in the second quarter of 2015. SG&A expenses were $8.3 million in the second quarter of 2016, compared to $7.6 million in the second quarter of 2015. As a percentage of sales, SG&A increased to 5.3% from 5% in the prior year period. The increase in expenses was primarily related to increases in staffing levels.
Other income expense net for the second quarter was a net gain of $128,000, compared to a net gain of $256,000 in the second quarter of 2015. Interest expense in the 2016 second quarter was $259,000, compared to $245,000 in the second quarter of 2015. Net income in the 2016 second quarter was $6.6 million, or $0.58 per diluted share. Net income in the 2015 second quarter was $5.9 million, or $0.52 per diluted share. Let me briefly review our results for the six months ended June 30, 2016. Net sales for the first six months of 2016 were $304.9 million, compared to $278.3 million in the prior year period, an increase of 9.6%. Gross profit for the six months ended June 30, 2016 was $32.0 million or 10.5% of sales, compared to $29.5 million or 10.6% of sales for the first six months of 2015.
Net income in the first six months of 2016 was $9.9 million, or $0.88 per diluted share, which is an increase of 11.4% over net income in the first six months of 2015 of $8.9 million or $0.79 per diluted share. Turning to our balance sheet. Cash and cash equivalents as of June 30, 2016, were $29.6 million, compared to $33.3 million at March 31st, 2016, and $38.4 million at December 31st, 2015. Accounts receivable on June 30, 2016 totaled $138.4 million compared to $129.1 million as of March 31st, 2016, and $109.2 million at December 31st, 2015. Inventories were $69.3 million as of June 30, 2016 compared to $71.4 million as of March 31st, 2016 and $66.2 million at December 31st, 2015.
Accounts payable on June 30, 2016 were $79.3 million compared to $88.2 million as of March 31st, 2016 and $73.4 million at December 31st, 2015. As of June 30th, 2016, we have borrowed $20 million under our $50 million unsecured revolving credit facility as part of the financing of our capital projects. The company also announced that its board of directors approved our quarterly cash dividend of $0.17 per share payable September 19th, 2016 to shareholders of record at the close of business on September 12th, 2016. I'll turn the call back to Jeff for further remarks.
Thank you, Vince. The second quarter rounded out a strong first half of the year for Miller Industries. Demand continues to be strong in our domestic markets based on recovering economic conditions and improving customer sentiment. To enhance our operations, we are continuing to execute on multiple capital projects to expand our production capabilities. Overall, we are very pleased with the quarter. We maintain a strong balance sheet that puts us in a position of strength to operate our business. We remain committed to enhancing shareholder value through our strong cash flow and our quarterly dividend of $0.17 per share. As we move into the third quarter, we retain our positive outlook knowing we are well positioned to take advantage of the attractive opportunities that we see in our marketplace.
In closing, I'd like to thank our employees, our shareholders, our suppliers, and certainly our customers for their ongoing support of Miller Industries. With that, we're ready to take your questions. Thank you.
Thank you, sir. If you would like to join that queue for questions, you can do so by pressing star one on your telephone keypad. If you're joining us with the speaker phone, just make sure that your mute function is turned off to allow us to receive that signal. Again, that's star one at this time to join the queue for questions, and we'll pause for just a moment. All right. It looks like our first question of the day comes from Walter Lang with Avondale Partners.
Guys, good quarter.
Thank you, Walter.
Hey, your commentary on positive sentiment from customers, does that extend to non-domestic customers as well?
It varies in the regions worldwide. We've seen [fence] towards the end of the second quarter. We've seen a not so positive in the U.K., We really haven't seen any changes in the French market and Germany.
We see still strong demand in the Asian markets, Japan. It varies, Walter.
Okay. Your credit facility extended first to $30 million, now you've taken it up to $50 million. Do you envision accessing that entire line?
This is Vince. Walter, I wouldn't anticipate accessing the entire line, a lot of it depends on timing, just as it has. It's a matter when the capital improvements come aboard and how much business we have and how much receivables go up as we get things out the door. I don't anticipate we'll get the whole.
Right. You'll have a buffer in there. Just hypothetically, what if the work had been complete at the end of, in Pennsylvania, had been completed as of the end of June? Could you take advantage right now of the increased capacity throughput? I know it's hypothetical.
Yeah. It is extremely hypothetical.
Yeah.
The two plants in Pennsylvania did a great job during this process of plant expansion and consolidation. Certainly, the plant that we are building will increase capacity greatly. I do not know that if you completed it the end of June that you would recognize immediate results. Because obviously, you have got to get your suppliers online. You have got people to train a little bit. Yeah, you would see some of it, Walter, but you are not going to explode.
Yeah, Jeff, this is Bill. actually, Greenville has actually picked up. They have added capacity from a standpoint of the car carriers in the interim, switching from other products. We have had a pickup even before we are finished.
Okay. Just the last question on, Vince commented on increased staffing levels. I assume that is a result of increased demand, right? It equates.
That's a good assumption. Yes.
Okay. All right. That's enough. I appreciate your time. Great quarter.
Thanks, Walter.
Thank you.
Appreciate your support. Always good to hear from you.
Same here.
All right. Ladies and gentlemen, it looks like we have no further questions from the audience. I'd like to turn the floor back to management for any additional or closing remarks.
Well, we certainly are very happy with our performance during the first half of 2016, and we look forward to reporting the Q3 results in the near future. Thank you very much.
All right. Ladies and gentlemen, this concludes today's event. Thank you for attending this presentation. You may now disconnect.