The increase in gross profit reflects the Company's aggressive growth strategy as exemplified by continued growth in its traditional customer base and the acquisitions of SSD, XGN, SLB and FOI.
This decrease is primarily due to the fact that the accounting treatment for the operations of SSD, XGN and SLB and other new operations undertaken by the Company require the deduction of cost of service to derive gross profit as opposed to the businesses the Company was engaged in during the fiscal year 2006 which recorded commissions earned on airline bookings and whose cost of service was minimal as compared to the commissions earned.
The increase in SG & A reflects the acquisitions of SSD, XGN, SLB and FOI, and the decrease in SG & A as a percentage of revenues reflects the fact that certain expenses did not grow proportionate with the increase in the Company's revenues.
The increase in net income reflects the continued growth in the Company's business and the acquisitions of SSD, XGN, SLB and FOI.
During 2007 we paid the debts incurred in connection with the acquisitions of SSD, SLB and XGN, respectively.