$63.6 million reported in the third quarter of 2010. This included an increase of 40% in our Service Fee Revenue
business to $22.9 million, compared with $16.4 million for the 2010 third quarter. This increase is attributable to increased service fees generated from new and existing service contract relationships. Of this $6.5 million or 40% increase
year-over-year, approximately $4 million was generated from client programs implemented over the past 12 months.
In addition, we had an approximate $3.5 million increase in existing client activity for clients in place during both the September
2011 and 2010 quarters. Effectively, on a same-store sales basis, our service fee revenue for these existing clients grow at an organic rate of 22% versus the prior year. This strong same-store sales growth is an exciting development within our
service fee business. As we are now seeing a higher portion of our service fee revenue growth coming from increases within existing clients, as opposed to just new client programs.
The overall increase in our service fee revenue helped to offset
a decrease in our Business and Retail Connect business segment, which includes our Supplies Distributors operations. Revenue for Business and Retail Connect was $37.9 million for the third quarter of 2011, as compared to $39.3 million for the 2010
third quarter. This decrease in the Business and Retail Connect business segment was primarily attributable to a decrease in revenue from our Supplies Distributors business activity.
As we indicated in our prior quarter call, our largest client
relationship in this segment proactively communicated to us several months ago certain realignment and restructuring activities that they are beginning to implement in order to streamline their business. We do believe these changes will result in
reduced product revenue and profitability for this segment, as we look to the future.
Our consolidated gross profit for the third quarter 2011 increased to $7.9 million or 13% of net revenues, excluding pass-through revenue, as compared to $7.3 million or 13.2% of net revenue, excluding
pass-through revenue, in the third quarter of 2010. The gross profit percentage for our service fee business was 23% in the September 2011 quarter, as compared to 27% in the same period of the prior year. This 23% gross profit percentage performance
was lower than our targeted stated objective of 25% to 30% and was impacted this quarter by lower gross margins on certain new and/or high-growth clients, including the impact of incremental costs incurred this quarter in implementing processes
targeted to drive future, long-term operating efficiencies.
Our gross profit percentage for the Business and Retail Connect product revenue business was 6.9% in the third quarter of 2011, down just slightly from the prior year performance of 7.4%. Both periods as
reported, included the benefit of certain incremental gross margin earned on product sales, resulting from product price increases, as well as the impact of certain incremental inventory cost reductions.
SG&A for the quarter increased by approximately $0.8 million
to $9.4 million as compared to $8.6 million for the same period a year ago. The increase in SG&A is primarily attributable to increased non-cash stock compensation expense, sales and marketing costs and personnel related expenses, as we continue
to make investments to support current and future growth.
In addition, as Mark has mentioned previously, we are in the process of expanding our call center operations and are planning to open a new facility in the Dallas area early next year. We are also
evaluating a new headquarters location here in the Dallas area, as our existing lease runs out in early calendar year 2012. In addition, during this past quarter, we also moved into a larger call center and distribution facility in
During the September quarter, we incurred
approximately $0.3 million of incremental costs to put toward these relocation related activities and we expect that we will continue to incur ongoing incremental related relocation related costs over the next several