The company said financial planning revenues decreased primarily because of the attrition of financial planners in its independent channel and decreased production by those remaining in that channel. The independent channel generated 48 percent of fees while Gilman-owned sites produced 42 percent. Variable annuity sales fell to $11.9 million, down 28.4 percent from $16.6 million for fiscal 2006, which the company said stemmed from its efforts to diversify its income sources. Recurring revenue (advisory fees and trails) dropped to $14 million for the most recently ended year, off 22.8 percent from $4.1 million the prior year.

The decline in revenue led to a drop in commission expense, which dipped to $22.4 million for fiscal 2009, a decrease of 23.9 percent from $29.4 million a year ago. Gilman held the line on executive compensation, with president and CEO Michael Ryan's salary at $350,000 for both years and Ryan, the only officer to get a bonus, saw that drop to $92,922 for 2009 from $166,369 in 2008. Chairman James Ciocia, a registered representative for the company's Prime Capital Services subsidiary, pulled in $400,000 in commissions on his own business productions.

The tax preparation and accounting business, which grew with two acquisitions during the most recently ended year, reached $7.4 million for fiscal 2009, up 11.9 percent from $6.6 million

Meanwhile, the company recounted the issues it faces relative to a cease and desist order issued by the SEC on June 30. That order stemmed from the SEC's allegations that the company, the Prime Capital subsidiary, Ryan, Rose M. Rudden, Prime Capital's chief compliance officer and other current and former employees alleged engaged in fraudulent sales of variable annuities to senior citizens from Jan. 1, 2002 through Aug. 1, 2005. It also alleged that Ryan, Rudden and two representatives had failed to supervise variable annuity transactions. In December, the same officers, representatives entities received Wells Notices, which are notifications that the SEC staff is considering recommending that the SEC bring civil actions against the recipients to determine if they have committed violations of federal securities laws.

The company had ended suits regarding the annuity sales with its insurance company settling the claims, while Gilman has also accrued $344,000 for potential fines and disgorgement.

To meet its capital needs, the company raised the sale of $1,785,000 in notes bearing 10 percent interest and $100,000 in common stock. Ted Finkelstein, VP, general counsel and secretary, said the proceeds are being used for working capital. Gilman had a $3.4 million working capital deficit on June 30.