Also during the first quarter, we repurchased 65,407 shares of common stock in the open market. With that overview, I will now turn it over to our CFO, Ben Palmer.
Ben Palmer -- Chief Financial Officer
Thank you, Rick. Net sales for the second quarter of 2019 were, as Rick pointed out, a record at $88.7 million, an increase of 1.9% compared to the second quarter of last year. Average selling prices increased by 10%, and parts and accessories sales increased as well consistent with sales of larger models. Unit sales decreased as we focused on producing our newer, larger models where there was a lot of demand during the 2019 retail selling season.
Gross profit in the second quarter was $20.4 million, an increase of 4.9% compared with the second quarter of 2018. Gross margin during the quarter increased to 23% compared with 22.4% in the second quarter of 2018 due to this favorable model mix. Selling, general and administrative expenses were $9 million in the second quarter of 2019, an increase of $724,000 compared with $8.3 million in the second quarter of last year. These expenses increased due to expenses that increased with sales and profitability, such as incentive compensation, as well as higher research and development costs to support our new model development.
As a percentage of net sales, SG&A expenses increased to 10.2% in the second quarter of '19 compared to 9.6% in the second quarter of last year. Interest income during the second quarter of 2019 was $95,000, a slight increase compared with $85,000 during the second quarter of 2018. For the quarter ended June 30, 2019, we reported a record net income of $9.4 million, an increase of 4.3%, compared to net income of $9 million in the second quarter of 2018. Diluted earnings per share were $0.27 in the second quarter of this year, compared with $0.26 in the second quarter of 2018.
Our effective tax rate during the second quarter of 2019 was 18.3%, compared with 20% in the second quarter of 2018. Marine Products' domestic sales increased by 7% during the second quarter of 2019 compared to the second quarter of the prior year. In contrast, international sales declined by 40.5% in the second quarter of this year, and represented only 6.2% of net sales compared to 10.6% of net sales in the second quarter of last year. International sales decreased in many of our international markets.
The sales decrease was more pronounced in our Canadian markets, which continued to be negatively impacted by lingering effects of tariffs. Our cash balance at the end of the second quarter was $13 million, a decrease of $14.9 million compared to cash and marketable securities of $27.9 million at the end of the second quarter of last year. Our cash and marketable securities balance decreased because of higher working capital requirements, as well as higher dividends and cash used for share repurchases during the previous quarters. As of June 30, 2019, dealer inventories were slightly higher than at this time in '18, but approximately 10% lower than at the end of the first quarter, indicating strong dealer sales during this retail selling season.
Unit backlog at the end of the quarter was slightly lower than at this time last year. With that, I'll turn it back over to Rick.
Rick Hubbell -- President and Chief Executive Officer
Ben, thank you. We look forward to introducing our 2020 models to our dealer network at our annual dealer conference next month. We are developing several new models, which we believe will appeal to our dealers and retail customers, and we are eager to see their reaction. We are aware of the recent reports discussing weak retail sales in May and June, while we haven't seen any indications of weaknesses in the recreational boating market and note that the short-term data points often have some noise, which make them hard to interpret.
We'll be listening closely to our dealers' assessment of their markets during our dealer conference. I'd like to thank you for joining us this morning, and Brian, we can open up the lines for questions now.
Operator
[Operator instructions] We will now take our first question from Eric Wold from B. Riley. Please, go ahead. Your line is open.
Eric Wold -- B. Riley FBR, Inc. -- Analyst
Thank you. Good morning, guys. A couple of questions. I guess you made the comment about you're not seeing any weakness in your sales trends and obviously, the data can be tough on a short-term basis.
Can you maybe point to the maybe what caused your results to outperform kind of in general? And then are you seeing any regional strength or weakness around a country? And then last question, I know Canada is still having some lingering effects from the tariffs that are in there up until kind of mid-quarter. What are you kind of seeing now that we're kind of into Q3, maybe inventory kind of flows through there and when you'd expect the Canada to get to kind of more normalized growth rates?
Jim Landers -- Vice President of Corporate Finance
Eric, this is Jim. A lot of questions there. Let's try to take them one at a time, I'm happy to. In terms of the whole retail sales issue and how we're doing, we have called out some new models that we've done for the 2019 model year that have been successful for us, and we continue to hold the highest market share in our category in a couple of different areas, as we discussed.
But there's nothing outside of that that would make us immune to any changes. But we do want to emphasize that we haven't seen any weakness in our markets. We just wanted to acknowledge those reports, which have recently come out, which we --
Ben Palmer -- Chief Financial Officer
And then, I think -- yeah. And then you asked the question about different regions and then Canada. Both good questions. Not a whole lot of color to provide.
We're not really seeing any particular changes in regional strength or weaknesses at this point. It's pretty consistent over about kind of prior year and recent quarters, so no real change there. And with respect to Canada and the tariffs, it's a little bit hard to tell. Of course, our international sales, again, is a small number.
There was some relief a few months ago from Canada. We haven't yet seen the flow-through in terms of orders due to that. We're hopeful that there will be some improvement, but it's very dealer specific as well. So unfortunately, we can't say that for us that it's a definite positive that we're seeing benefits coming through in terms of dealer orders and our international orders again will be a small percentage of the total.
It's a little bit spotty -- the visibility into that can a little bit spotty. So unfortunately, that's really all I can provide at this point.
Eric Wold -- B. Riley FBR, Inc. -- Analyst
No, that's very helpful. And congratulations on the strong results.
Ben Palmer -- Chief Financial Officer
Thank you so much.
Jim Landers -- Vice President of Corporate Finance
Thanks, Eric.
Operator
We will now take our next question from Louis Mosher from Mayfax Investors. Please, go ahead. Your line is open.
Unknown speaker
Good morning. Nice earnings. I was interested in knowing that -- I haven't followed your company too closely up until I saw the report today, which was very, very good. If the company has a buyback program of stock, and if not, is there any possibility of doing so?
Ben Palmer -- Chief Financial Officer
We do have a buyback program that is in place. We did repurchase some shares during the second quarter, a little over 65,000 shares. So that is something that we do watch closely and that is something we routinely try to do to return some cash to shareholders. So that's 65,000 shares during the second quarter of this year.
Unknown speaker
What's the total buyback potential?
Ben Palmer -- Chief Financial Officer
I think we have, and we can easily go back to the Board, but we have well over a million that is authorized by the board of directors. So the exact number, actually $1.8 million under the current authorization.
Unknown speaker
Yes. I guess the last question would be, to analysts that follow the stock nicely, is this an anomaly this quarter? Is it unusual? Or do you see any consistency going forward?
Jim Landers -- Vice President of Corporate Finance
I think we had some interference here.
Ben Palmer -- Chief Financial Officer
And your question was about the number of analysts that are covering us? Is that correct?
Unknown speaker
No. I said basically you've got a couple of analysts in there that their estimates were beaten considerably above your earnings report. I was wondering if the earnings for the quarter -- for this quarter was sort of an anomaly inasmuch as they were so high versus the estimates and if this trend is going to continue?
Jim Landers -- Vice President of Corporate Finance
Louis, this is Jim Landers. We do not give guidance. So we're not going to be able to talk about what we think the coming quarters are going to be. Since you're new to the story, we might mention that second quarter is usually seasonally our best quarter.
The two analysts who follow us are great. We've seen them recently. They know our business. You would have to ask them about what their estimates are and how they're tracking.
Unknown speaker
OK. Thanks very much.
Jim Landers -- Vice President of Corporate Finance
Thanks for your interest.
Operator
[Operator instructions] We will now take our next question from Ronald Bookbinder from IFS Securities. Please, go ahead. Your line is open.
Ronald Bookbinder -- IFS Securities -- Analyst
Good morning. And yes, congratulations on a nice quarter, especially given what the reports from Big Data were. Looking at the Big Data compared to what you guys are seeing, is it larger boats or smaller boats, aluminum versus fiberglass, where do you think the biggest differential is compared to what Big Data was saying?
Jim Landers -- Vice President of Corporate Finance
Ron, we're not sure what Big Data was saying. So I don't know if we can reasonably address that. And we certainly think about other segments of the boat market that are doing better than us or worse. What I'm about to say is not overly helpful.
The ski/wakeboard market has performed pretty strongly. The aluminum pontoon boat market has been strong, maybe a little less strong right now, but I'm just repeating data that we all have -- or reports we all have access to. So larger boats have done well for us and that from the first two quarters of this year, and we feel good about that. That -- and it helps our financial metrics.
Ronald Bookbinder -- IFS Securities -- Analyst
OK. And international, it's been down so much primarily because of Canada and the lingering effects, as you said, from the tariffs. Do you expect it to bounce back next year, or do you think that we might stay at this level going forward?
Ben Palmer -- Chief Financial Officer
This is Ben, Ronald. It's hard to say. Again, it's still a relatively small percentage for us. Several years ago, it was as much as 30% of our net sales.
So we've been able to grow through domestically to overcome the weakness internationally. In terms of what's going to happen next year, it's uncertain. We're not necessarily seeing any signs that it's again picking up. I talked about earlier about Canada in particular, that despite some -- clearance of some of the headwinds, we've not seen our dealers rush in with additional orders immediately.
So for us, we would -- we hope it's better, but at this point, we're not expecting that international will turn around and be a significant contributor to our results next year, any different than it has been in the most recent quarter.
Ronald Bookbinder -- IFS Securities -- Analyst
And as you look to newer models to develop, is it still going to be a continued shift to larger outboards going forward?
Ben Palmer -- Chief Financial Officer
At this point, yes. I mean, we've -- our folks have worked really hard and successfully to move along with the trends, which are really strong for the outboards, and so we've been able to pivot and take advantage of that. And so yes, both outboards and the larger models we see at this point continuing to be strong. And we've got a new good product out there that we think will help continue to support our sales.
Ronald Bookbinder -- IFS Securities -- Analyst
And labor, have you seen any relief yet in labor or does that continue to press higher?
Ben Palmer -- Chief Financial Officer
In terms of labor and the ability to retain employee -- attract and retain employees continues to be a challenge. We've thus far been able to meet the challenge. There is some, I don't know if I call it upward pressure, but there's -- we're looking at our compensation programs, retention and quality, and so forth. And there've been some compensation adjustments that we've obviously made, but we don't necessarily see that picking up if there's huge wage inflation.
But it's something we're trying to respond to, again more from a retention and quality perspective.
Ronald Bookbinder -- IFS Securities -- Analyst
OK. Great. Thank you for taking my questions, and good luck for the back half of the year.
Ben Palmer -- Chief Financial Officer
Thank you.
Jim Landers -- Vice President of Corporate Finance
Thank you, Ron.
Operator
[Operator instructions] We'll now take our next question from Eric Wold from B. Riley. Please, go ahead. Your line is open.
Eric Wold -- B. Riley FBR, Inc. -- Analyst
Hey, thanks, guys. Quick follow-up question. This might be a tough one to answer, but the strength you're seeing in large boat demand, is there -- is any of that a function you think of the smaller boat buyer being hesitant and not purchasing? Or is it more just a function of that's where you're rolling out the new models in larger boats and that's where the consumer is migrating versus the other function?
Jim Landers -- Vice President of Corporate Finance
Eric, this is Jim. We think the trends that we've discussed are a result of our focus on that market and our successful designs this year, so -- and successful products. I think it's difficult to extrapolate our results to any larger consumer trends. I'll just be cautious about doing that.
Eric Wold -- B. Riley FBR, Inc. -- Analyst
Thanks.
Jim Landers -- Vice President of Corporate Finance
Thanks.
Operator
At this time, there appears to be no further questions. I'd like to turn the conference back to you, Mr. Landers, for any closing or additional remarks.
Jim Landers -- Vice President of Corporate Finance
Brian, thank you very much. We appreciate it. We appreciate everybody who called in this morning for your questions. Hope everyone has a good day, and we will talk to you soon.
Operator
And as a reminder that the conference call will be replayed on www.marineproductscorp.com within two hours following the completion of the call. Thank you.
Duration: 21 minutes
Jim Landers -- Vice President of Corporate Finance
Rick Hubbell -- President and Chief Executive Officer
Ben Palmer -- Chief Financial Officer
Eric Wold -- B. Riley FBR, Inc. -- Analyst
Unknown speaker
Ronald Bookbinder -- IFS Securities -- Analyst
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