The following table presents selected financial data of the Company and its subsidiaries as of and for each of the five years, as follows:
The following table summarizes, by segment, the operations of the Company for the periods indicated:
The following table sets forth certain financial data as a percentage of consolidated net operating revenues of the Company for the periods indicated:
Consolidated net operating revenues for the year ended December 31, 1995 increased 7 percent or $10.4 million over the prior year. The Company's consolidated operating income for 1995 was $4,598,000, which exceeded the comparable 1994 amount by 26 percent. The Company had consolidated net income of $4,290,000 in 1995, reflecting an increase of over 39 percent in relation to last year's net income of $3,079,000.
quarter. The initial aspects of this restructuring plan, which included staff reductions, consolidation of selected activities and relocation of certain functions, lowered selling, marketing and customer service costs below normal levels. As this restructuring activity progressed further into 1994, the Company began to upgrade staffing and facilities, and invest in new marketing and product literature and information systems development designed to capitalize on new marketing and customer service capabilities. In 1995, the Company continued to add to the new marketing and sales organizations, as well as further the development of advanced clinical and knowledge-based products for the healthcare marketplace, thus leading to higher overall costs for the selling, marketing and customer service functions.
General and administrative expenses for 1995 decreased 26 percent when compared to the prior year. The decline these expenses primarily reflects the Company's reorganization of certain management responsibilities at the beginning of 1995, which included the transfer of personnel from general and administrative positions to sales and operational roles, and substantial improvements made in accounts receivable management thereby reducing expenses associated with the collection of outstanding accounts. Additionally, the inclusion in the prior year's expenses of non-recurring investment advisory fees for implementation of the stockholder rights plan and corporate governance matters, also contributed to the favorable variance.
Consolidated net operating revenues for the year ended December 31, 1994 were $142 million, an increase of $7.7 million or 6 percent over 1993 revenues. The Company achieved consolidated operating income of $3.6 million for 1994, which surpassed the $5.1 million of consolidated operating losses incurred in the prior year. This 1993 loss included a one-time $4.9 million fourth quarter charge for restructuring and other non-recurring items. The Company's consolidated net income for 1994 was $3.1 million versus a consolidated net loss for 1993 of $5.7 million.
Other operating revenues represent sales from the Company's pharmaceutical distribution segment conducted through its subsidiary Newport Pharmaceuticals de Costa Rica (NPCR). The decrease in 1994 revenues for this segment reflected increased competition from products in NPCR's traditional markets, somewhat offset by NPCR's expansion into the distribution of additional product offerings in newer markets.
Cost of sales as a percent of consolidated net operating revenues decreased in 1994 to 82.7 percent from the comparable 1993 percentage of 87.8 percent. This decrease in the cost of sales percentage was due to significant operating efficiencies achieved during the year through on-going process improvement activities at the Company's mail service pharmacy operations, and the integration and streamlining of operating activities instituted within the claims processing business. Additionally, the implementation of aggressive drug purchasing strategies, which include purchase and market performance discounts, and enhanced formulary management led to further cost of sales reductions.
Selling, marketing and customer service expenses increased 3.5 percent from the prior year. However, as a percentage of net operating revenues, these expenses remained constant. In early 1994, the Company benefited from lower costs attained by consolidation of functions and generally lower spending levels for these activities. As the year progressed, and as favorable projections for new business became more tangible, additional investments were made in staffing and facilities, and for marketing and product literature, and systems development which were designed to enhance client service and position the Company to capture new revenue opportunities.
Interest income increased $204,000 over the prior year as a result of higher interest rates earned on the increased amount of invested cash. Interest expense for the same periods declined due to lower levels of debt outstanding. Other non-operating expense includes a modest amount of foreign currency exchange losses.
The Company's 1994 provision for income taxes increased $319,000 from the prior year. This increase was the result of the Company's attainment of profit for 1994 versus losses incurred last year. Federal and state income tax expenses were primarily offset by the utilization of net operating loss carryforwards. The Company continues to maintain significant net operating loss carryforwards which should offset future tax liabilities.
At the end of 1995, the Company had cash and cash equivalents of $13.2 million which is sufficient to meet its operating and other cash needs. The Company funds its operational and capital expenditure requirements through cash flow from operations and periodically receives cash through the exercise of stock options. Nevertheless, management is engaged in establishing new credit facility arrangements which are designed to meet the anticipated future growth requirements of the Company.
The Company's cash requirements for 1996 are expected to be financed through internally generated cash flows.
Consolidated financial statements of the Company at December 31, 1995, and 1994, and for the years ended December 31, 1995, 1994 and 1993, and the independent public accountants reports thereon as referenced in Item 14 herein, are incorporated herein by this reference.