The net impact of errors relating to claims payable to pharmacies for periods ended June 30, 2006 or prior and the related write-off of an uncollectible receivable resulted in a net increase of $692 of our operating income (increase of $1,523 of our gross profit) and was recorded during the quarter ended September 30, 2006 (the “Claims Payable Error”).
We assessed the impact that the above mentioned errors had on our operating income, as well as other financial statement line items, during the fiscal year ended June 30, 2007. These errors resulted in a $211 net decrease of our operating income which we consider to be immaterial, individually and in the aggregate, to current and prior periods.
The $183,772 or 21.3%, decrease in revenue during the fiscal year ended June 30, 2007 is primarily the result of a 25.6% decrease in the amount of adjusted prescriptions partially offset by a 5.8% increase in the gross revenue per adjusted prescription. The decrease in the amount of adjusted prescriptions is primarily attributable to a 20.9% decrease in covered lives during the fiscal year ended June 30, 2007 as compared to the fiscal year ended June 30, 2006 resulting from the loss of various customers. The increase in revenue per adjusted prescription is primarily the result of a change in customer mix.
Income before the provision for income taxes decreased $15,382, or 92.3%, from $16,672 for the fiscal year ended June 30, 2006 to $1,290 for the fiscal year ended June 30, 2007. The decrease primarily relates to the $4,051 decrease in our gross profit as well as the $11,629 increase in our selling, general and administrative expenses, offset by the $298 net increase in other income as noted above.
After deducting these two charges from net income, there remained net income (loss) available to common stockholders of $(5,983) for the fiscal year ended June 30, 2007 as compared to $3,582 for the fiscal year ended June 30, 2006.
Our effective tax rate was 42.1% for the fiscal year ended June 30, 2006 as compared to 39.3% for the fiscal year ended June 30, 2005. The increase in the effective tax rate for the fiscal year ended June 30, 2006 primarily resulted from the expensing of employee stock options in accordance with SFAS 123R. This compensation expense for incentive stock options, which is not deductible for income tax purposes, increased our effective tax rate by approximately 4%.
As an approved PDP sponsor, in order for us to maintain our risk bearing licensures and continue to apply for additional licensures in the various states, we must fulfill statutory, capital and surplus requirements. We currently maintain $5.2 million in a cash account to fulfill such requirements. We do not intend to continue to provide our PDP to individual enrollees in 2008 and CMS has acknowledged our intent to provide the PDP Medicare benefits solely to employer groups. In addition, we will only be providing non-risk bearing Medicare benefits to employer groups that will reimburse us directly for any prescription drug costs. We do not intend to offer our PDP to employer groups in instances where we could be subject to
We anticipate that current cash positions, together with anticipated cash flows from operations and our borrowing capabilities, will be sufficient to satisfy our contemplated cash requirements for at least 24 months. This is based upon current levels of capital expenditures and anticipated operating results for the