The following table summarizes certain selected financial data, which should be read in conjunction with the Company's consolidated financial statements and notes thereto and with Management's Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this report. The selected financial data below as of and for each of the fiscal years in the five year period ended October 31, 1999 are derived from the audited consolidated financial statements of the Company.
Costs of services provided, which consist primarily of claims and cancellation costs, increased by approximately $7,129,000, or 42%, to approximately $23,975,000 for the year ended October 31, 1998, as compared to approximately $16,846,000 for the year ended October 31, 1997. As a percentage of revenues, cost of services provided increased to 49% for the year ended October 31, 1998 as compared to 44% in the same period in 1997. Claims and cancellation costs are directly affected by the total number of unexpired contracts under administration, which has increased on a yearly basis.
Gross margin increased by approximately $4,226,000, or 20%, to approximately $25,308,000 for the year ended October 31, 1998, as compared to approximately $21,082,000 for the year ended October 31, 1997. This increase is primarily attributable to the increase in revenues as described above. Gross margin for the year ended October 31, 1998 was 51% as compared to 56% for the year ended October 30, 1997. This decrease is primarily attributable to an increase in the relative percentage of revenue represented by deferred contract revenue, which has a low gross margin, as compared to administrative fees which have a higher gross margin.
CONTINGENCY PAYABLE 2,516,188 1,951,856 ---------- ---------- Total liabilities 47,736,672 35,291,178 ---------- ----------
Net cash provided by financing activities 51,928 52,923 6,556,850 ------- ------ ----------
On November 1, 1992, the Company granted certain officers and employees non-qualified stock options for the purchase of up to 184,000 shares of common stock and on May 5, 1993, such non- qualified stock options were formally included in the Company's 1993 Stock Option Plan (the "Plan") adopted as of such date. Under the Plan, as amended, 344,000 shares of common stock have been reserved for issuance upon exercise of incentive stock options or non-qualified stock options to be granted to officers and employees who are instrumental to the success of the Company. The majority of options are exercisable in increments of 20% of the underlying option shares per annum following the first anniversary of the issuance date. However, no option shall be exercisable after the expiration of ten years from the date the option was granted.
Fiscal year Amount ----------- ------ 2000 $ 650,000 2001 666,000 2002 465,000 2003 462,000 2004 479,000 Thereafter 137,000 -------- $2,859,000 ==========
Rent expense totaled approximately $636,000, $578,000 and $479,000 for the years ended October 31, 1999, 1998 and 1997, respectively.
Revenues $10,308,175 $11,792,534 $13,775,114 $13,407,603 Operating income 504,340 877,493 1,120,190 971,156 Net income 806,253 746,602 915,187 835,760 Basic earnings per share .17 .16 .20 .18 Diluted earnings per share .16 .15 .19 .17