Gross Profit. Gross profit for 2001 was $146.7 million, a 51.5% increase over $96.8 million for 2000. Gross profit margin for 2001 and 2000 was 63.6% and 65.6%, respectively. Gross profit margin was negatively impacted by more sales in 2001 that were generated by independent consultants who typically are paid higher commissions. However, this was partially offset by the larger percentage of total sales in 2001 generated by our compensation consulting group which had a positive impact on our gross profit margin. We expect a continued improvement in our gross profit margins in future years from the increasing compensation consulting revenue and expected stronger sales results from our employee consultants.
The companies we acquire are typically privately owned and structured as S corporations with the income taxed directly to the shareholders. Our evaluation focus is on the quality of the management and future earnings and growth potential of the target company. In several of our acquisitions, we also acquire the financial value embedded in a book of recurring renewal business that is expected to be realized for many years after the acquisition takes place. We typically structure a majority of the purchase price in cash. We acquire little in the way of tangible assets, thus creating a substantial amount of intangible assets on our balance sheet.
Pearl Meyer is a New York City based consulting firm specializing in executive compensation and retention programs. The Pearl Meyer organization became our fourth operating segment. Prior to the acquisition, there was no material relationship with Pearl Meyer.
As of December 31, -------------------------------- ---------- ---------- ---------- 2001 2000 1999 Cash and cash equivalents $10,207 $7,598 $4,832 Working capital $6,295 $(2,317) $(1,821) Current ratio-- to one 1.11 .95 .93 Shareholders' equity per common $11.87 $8.88 $6.47 share(1) Debt to total capitalization(2) 3.5% 36.5% 40.7%
Compensation Banking Healthcare Resource Group Practice Group Total ---------------- --------- ------------ ---------- ---------------- --------- ------------ ---------- 2002 $52,160 $36,011 $5,914 $94,085 2003 46,457 31,739 5,745 83,941 2004 39,128 24,279 5,308 68,715 2005 31,562 24,955 4,886 61,403 2006 27,996 25,366 4,546 57,908 2007 25,557 24,267 4,176 54,000 2008 23,460 24,621 3,525 51,606 2009 23,409 25,027 2,808 51,244 2010 22,820 25,612 2,083 50,515 2011 23,008 26,301 1,368 50,677 ---------------- --------- ------------ ---------- ---------------- --------- ------------ ---------- Total December 31, $315,557 $268,178 $40,359 $624,094 ================ ========= ============ ========== ================ ========= ============ ==========
We believe that our cash flow from operations will continue to provide sufficient funds to service our debt obligations. However, as our business grows, our working capital and capital expenditures requirements will also continue to increase. There can be no assurance, that the net cash flows from operations will be sufficient to meet our anticipated requirements or that we will not require additional debt or equity financing within this time frame. We may continue to issue stock to finance future acquisitions.