We executed a strong second quarter with sales of $326.1 million, improving 7% year-over-year and 15% quarter-over-quarter on higher volume despite the significant level of macroeconomic challenges resulting from COVID-19.
We maintained a strong gross profit margin of 45.9% due to a combination of sales mix and lower material costs on improved overhead absorption.
This, when coupled with our effective expense management, resulted in a 35% year-over-year increase in our income from operations to $72.2 million and strong earnings of $1.22 per diluted share.
The outcome of these efforts is directly evidenced by our 280 basis point improvement in our total operating expenses as a percent of sales for the second quarter of 2020 compared to the second quarter of 2019.
So far in the first few weeks of July, our net sales have increased approximately 10% compared to July of 2019.
Brian will provide additional detail regarding our reinstated financial outlook for the full year of 2020 shortly.
I continue to believe our business is very well positioned, given our strong brand reputation and loyal customer base which has been built over 64 years, our deep-rooted industry relationships, our many, many talented employees and our superior customer service standards, industry-leading high quality trusted products, a high level financial flexibility and a healthy balance sheet and solid liquidity position.
As Karen highlighted, our consolidated sales were strong, increasing 7% to $326.1 million.
Within the North America segment, sales increased 10.7% to $286.8 million due primarily to the return of Lowe's and the corresponding higher sales volume necessary to support the rollout of our products into their stores.
In Europe, sales decreased 14.4% to $37.4 million mainly due to government-mandated COVID-19 related closures which resulted in lower sales volume.
Europe sales were further negatively impacted by $1.2 million from foreign currency translation resulting from Europe currencies weakening against the United States dollar.
Wood Construction products represented 86% of total sales, compared to 84% and Concrete Construction products represented 14% of total sales compared to 16%.
Gross profit increased by 11.6% to $149.8 million resulting in a gross margin of 45.9%.
Gross margin increased by 190 basis points, primarily due to improved material costs which were partially offset by higher warehouse and shipping costs.
On a segment basis, our gross margin in North America improved to 47.4% compared to 45.1% while in Europe our gross margin decreased to 35.1% compared to 37%.
From a product perspective, our second quarter gross margin on wood products was 46.2% compared to 43.4% in the prior-year quarter and was 40.7% for concrete products compared to 44% in the prior-year quarter.
Research and development and engineering expenses increased 10.3% to $12.2 million primarily due to increases in cash profit sharing expense and personnel costs.
Selling expenses decreased 6.5% to $26.8 million due to declines in travel, fuel and entertainment expenses, professional fees and promotional expenses, which were partly offset by increases in cash profit sharing, stock based compensation and personnel costs.
On a segment basis, selling expenses in North America were down 4.3% and in Europe they decreased 13.3%.
General and administrative expenses decreased 8.1% to $38.6 million, primarily due to declines in professional and consulting fees and travel and entertainment expenses, which were partly offset by increases in cash profit sharing, stock based compensation, computer hardware and software expenses and depreciation and amortization.
On a segment level general and administrative expenses in North America decreased 7.9%.
In Europe, G&A decreased by 13.6%.
Total operating expenses were $77.7 million, a decrease of $3.4 million or approximately 4.2%.
As a percentage of sales, total operating expenses were 23.8%, an improvement of 280 basis points compared to 26.6%.
Stock-based compensation expense included adjustments to performance-based shares of 5.2 million in the second quarter of 2020.
Our strong gross margin and diligent management of costs and operating expenses helped drive a 34.6% increase in consolidated income from operations to $72.2 million compared to $53.7 million.
In North America, income from operations increased 41% to $72.2 million due to the strength of our gross profit margin coupled with reduced operating expenses.
In Europe, income from operations was $2.7 million compared to $4.7 million due to a combination of lower sales and slightly higher operating expense.
On a consolidated basis, our operating income margin of 22.1% increased by approximately 450 basis points.
The effective tax rate decreased to 25.8% from 26.4%, primarily due to a reduction in foreign losses subject to valuation allowances.
Accordingly, net income totaled $53.5 million or $1.22 per fully diluted share compared to $39.6 million or $0.88 per fully diluted share.
At June 30th cash and cash equivalents totaled $315.4 million, an increase of $13.7 million compared to the balance at March 31st.
Our inventory position of $265.4 million at June 30th increased $9.6 million from our balance at March 31st, in line with the seasonal increase in inventory we typically experienced in the summer and fall months due to increased construction activity.
We generated strong cash flow from operations of $29.3 million for the second quarter of 2020, a decrease of $14.6 million or 33.2%.
During the second quarter, we used approximately $7.3 million for capital expenditures which included a minimal amount for our ongoing SAP implementation project.
In regard to stockholder returns, we paid $10.2 million in dividend to our stockholders during the second quarter.
On July 13th, our Board of Directors declared a quarterly cash dividend of $0.23 per share which will be payable on October 22nd to stockholders of record as of October 1st.
Net sales are estimated to increase in the range of 1.5% to 4% compared to the full year ended December 31, 2019.
Gross margin is estimated to be in the range of approximately 43% to 45%.
Operating expenses as a percentage of net sales are estimated to be in the range of approximately 27% to 29% and the effective tax rate is estimated to be in the range of 24% to 26%, including both federal and state income taxes.
For the second quarter of 2020 we generated strong cash flow from operations of $30 million for the second quarter of 2020, a decrease of $14 million or 31.2%.

Summary:
We executed a strong second quarter with sales of $326.1 million, improving 7% year-over-year and 15% quarter-over-quarter on higher volume despite the significant level of macroeconomic challenges resulting from COVID-19.
This, when coupled with our effective expense management, resulted in a 35% year-over-year increase in our income from operations to $72.2 million and strong earnings of $1.22 per diluted share.
Brian will provide additional detail regarding our reinstated financial outlook for the full year of 2020 shortly.
As Karen highlighted, our consolidated sales were strong, increasing 7% to $326.1 million.
Accordingly, net income totaled $53.5 million or $1.22 per fully diluted share compared to $39.6 million or $0.88 per fully diluted share.
Net sales are estimated to increase in the range of 1.5% to 4% compared to the full year ended December 31, 2019.