The Company leases approximately 2,700 square feet of space at its executive office in Jericho, New York under a lease which expires in November 1998. The Company maintained its National Operations Center for its hospital bill audit operations in Dallas, Texas. This facility consists of 4,500 square feet of space on an amended lease which expires in July 1998. The Company is presently seeking a sublessee to occupy the space. RPM leases approximately 3,900 square feet of office space in Spokane, Washington. This lease expires in June 2000. RPM also maintains an office in Moses Lake, Washington which is leased on a month-to-month basis.
The following table sets forth certain selected financial data with respect to the Company for each of the years in the five year period ended March 31, 1997. The information set forth below should be read in conjunction with the financial statements and the notes thereto included elsewhere herein.
(1) There were no cash dividends paid per Common Share during this period. (2) See note (2) to the consolidated financial statements in this Annual Report on Form 10-K
Over the past several years, the hospital bill audit ("HBA") industry as a whole suffered a decline in demand for its services and the number of hospital bill audits being performed. This negative trend accelerated during Fiscal 1997 and management determined that the Company's HBA division would not be able to continue to generate net earnings on a going forward basis in the upcoming fiscal year. The Company then entered into an agreement to sell the HBA division to one of its competitors in April 1997. As defined in the agreement, the Company will be entitled to payments based upon the net revenues generated over the period ending April 30, 2000. Due to the uncertainty of the future of hospital bill auditing as a viable cost containment alternative, management does not anticipate the potential value of these payments to be material. The financial statements have been reclassified to exclude the operating results of the HBA division from the continuing operations and account for them as discontinued operations (see Note 2 to the Consolidated Financial Statements.) The following discussion relates only to the Company's continuing operations, unless otherwise noted.
For the fiscal year ended March 31, 1997 ("Fiscal 1997"), the Company had net earnings from continuing operations of $94,514 or $.02 per share, coupled with net earnings of $210,767 from discontinued operations, resulting in total net earnings after discontinued operations of $305,281 or $.07 per share. During the fiscal year ended March 31, 1996 ("Fiscal 1996"), the Company had net earnings of $156,934 or $.04 per share from continuing operations with earnings of $580,704 from discontinued operations producing total net earnings of $737,638 or $.17 per share. The Company had a net loss from operations of $287,285, a net loss per share of $.07, for the fiscal year ended March 31, 1995 ("Fiscal 1995"), net earnings of $351,782 from discontinued operations and net earnings of $64,497 after discontinued operations, or net earnings per share of $.02.
The cost of services was 42.3% as a percentage of revenues for Fiscal 1997 as compared to 44.8% as a percentage of revenues for Fiscal 1996. This decrease was caused in part by an increase in vocational rehabilitation services provided to self-insured clients, which are billed at higher rates than those provided under the L & I contracts. For Fiscal 1996, the cost of services for vocational rehabilitation services was 44.8% as a percentage of related revenues, compared to 48.8% of related revenues during Fiscal 1995.
available cash balances (as the Company liquidated its investments in marketable securities) combined with a rise in prevailing market rates. During Fiscal 1997, 1996 and 1995, the Company realized gains on the sales of marketable securities of $285,356 $470,652 and $50,988, respectively. Miscellaneous income, representing ancillary revenues, amounted to $46,296 in Fiscal 1997, as compared with ancillary revenues of $91,277 for Fiscal 1996 and $95,282 for Fiscal 1995.
At March 31, 1997, the Company had working capital of $7,607,725 as compared to working capital of $7,569,169 at March 31, 1996.
The Financial Accounting Standards Board has issued Statement No. 128, "Earnings per Share" (SFAS 128"). SFAS 128 establishes standards for the computation and presentation of earnings per share ("EPS"). The provisions of SFAS 128 are effective for financial statements issued for periods ending after December 15, 1997, including interim periods. SFAS 128 does not permit early application and requires restatement of all prior period EPS data presented. In the opinion of management, adoption of SFAS 128 will not have a material effect on the Company's previously reported EPS.