[May 16, 2017] |
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Fedcap Reports First Half Fiscal Year 2017 Operating and Financial Results
Fedcap, a not-for-profit organization that develops relevant,
sustainable solutions for people to overcome barriers through four
practice areas: Economic Development, Workforce Development, Educational
Services, and Occupational Health, today reported its operating and
financial results for the first half of its 2017 fiscal year ended March
31, 2017.
Management Comment
"We are pleased to report that first half 2017 was a period of continued
success for Fedcap and the populations we serve," said Christine
McMahon, Fedcap's Chief Executive Officer. "We delivered services to
over 57,650 individuals, significantly more than in the same period last
year, thanks to effective execution on existing and new, large
contracts. Also, Single Stop USA served over 22,000 clients in the two
months following their acquisition by Fedcap in February 2017.
"Fedcap has been tapped increasingly by government agencies and private
sector participants to evaluate pressing problems, including substance
use disorders, re-entry of our veterans to civilian life, and barriers
facing children exiting foster care and the formerly incarcerated. In
addressing these front-burner issues, we have leveraged the diversified
knowledge and talent base that exists across our organization to develop
innovative solutions and approaches. This has resulted in a number of
significant contract awards and positioned Fedcap to complete
strategically important combinations," Ms. McMahon noted.
First Half 2017 Financial and Operating Metrics
First half fiscal year 2017 revenues were $122.3 million, an increase of
10% over the $111.2 million in revenues reported for first half FY16.
The improvement reflects both organic and acquisition growth, primarily
related to the Breaking the Cycle Project in Maine, the ENABLE Project
and acquisition of Single Stop USA. Importantly, Fedcap has succeeded in
significantly diversifying its revenue sources over the last several
years, bringing a broader array of services to at-risk populations.
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Economic Development accounted for 39% of Fedcap's total first
half FY17 revenues, and is comprised of business services operations
that directly employ the populations we serve. Revenues were $47.1
million, on pace to exceed $100 million for the second consecutive
year. In the first half of 2017, Fedcap employed over 1,560 people
in these businesses, the majority of whom have disabilities or other
barriers. Within this activity, the largest revenue driver was Total
Facilities Management, which includes work at such iconic sites as
the Statue of Liberty, Ellis Island, New York's Penn Station, New York
City Court Houses, Federal Aviation Administration installations in
New Jersey, as well as government and commercial office buildings in
New York, New Jersey, Washington, D.C. and Massachusetts. Other
components of Economic Development include: Manufacturing,
which provides outsourced assembly and production of electronic
products for our military, delivered by a workforce comprised of
people with disabilities; Business Solutions, which
provides all aspects of back office support to government and
commercial clients; Catering, which is a growing part of
our portfolio, Security Services, Staffing Solutions and Home
Health Care, where over 385 Fedcap-trained and licensed
professionals provide at-home care to those in need.
-
Workforce Development accounted for 36% of first half FY17
revenues, or $43.5 million, and represents the area in which Fedcap
serves the largest number of individuals through a broad range of
services. In the first half, we provided functional capacity
assessments, employment readiness training, vocational evaluations,
wellness services, counseling and job placement and job retention
services to a diversified group of individuals, each facing
significant barriers to employment. We are pleased to report that
Fedcap placed over 4,024 individuals in jobs in the first half of
fiscal 2017 including 468 "ReServists", retired professionals age 55+
whom we place with organizations to create social impact in education,
health care and poverty fighting.
-
Education and Occupational Health together accounted for over
$27.4 million in revenues, or 22% of first half FY17 revenue. This
year-on-year growth rate of 11% was mainly due to the full
contribution of the Easter Seals Rhode Island operations and our
growing body of work in the areas of Substance Use Disorder and
Recovery. We provide a broad array of programs in the areas of
behavioral health, evaluation & specialized training, assistance for
youth transitioning from foster care, and vocational rehabilitation
for individuals with disabilities. Over 400 individuals advanced
grade level, graduated from high school, matriculated to college,
graduated from college, or obtained vocational certification through
our Career Design School, which offers fully certified training in
Culinary Arts, Security, Facilities Management, Hospitality, Data
Entry/Digital Imaging and Office Skills.
First half 2017 operating expenses were $122.3 million, 88% of which
represented direct program expenses. Fedcap reported an operating profit
of $135,584 for the first half compared to $13,564 in the same period
last year.
At March 31, 2017, cash and marketable securities were $24.1 million,
down slightly from $27.9 million at the same time last year due to
capital and start up investments.
Key Contract Wins and Strategic Highlights
Fedcap was awarded or is in negotiations on:
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A $63 million, 6-year contract with Maine Department of Health and
Human Services to provide assessment, training and job placement
services to individuals currently on public assistance;
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A $10 million, 5-year contract with the New York State Office of
Temporary and Disability Assistance to expand Supplemental Nutritional
Assistance Program outreach and enrollment, awarded to Single Stop USA
subsidiary;
-
Won a major contract with a large Fortune 500 Company to help them
build an Alternative Workforce;
-
Acquisition of Single Stop USA, effective February 1, 2017;
-
Seacoast Pathways combined with Granite Pathways- a Fedcap
subsidiary- that serves as our anchor for the provision of behavioral
health services in the New England region;
-
ENABLE, a New Jersey-based program serving people with
intellectual/developmental disabilities, transitioned its operations
into Fedcap effective January 1, 2017.
Summary and Outlook
"Our first half fiscal 2017 results reflected strong demand for Fedcap's
high-impact services and our emphasis on achieving positive and
measurable results. We succeeded in substantially expanding the breadth
of our operations through the acquisition of Single Stop USA, which
provides coordinated access that connects people living in poverty to
the resources they need to obtain good jobs, attain higher education and
achieve financial self-sufficiency-all through a unique one-stop-shop.
Today, the Fedcap family of brands provides a platform of services and
solutions that can be effectively deployed to address the needs of our
broad-based client populations across the country.
"We were awarded significant contracts in the first half, and notably
succeeded in being chosen by Amazon, to assist them in achieving their
vision of an Alternative Workforce, comprised of individuals with
disabilities and barriers to employment. At the end of our fiscal 2017
first half, Fedcap had a business development pipeline of over $100
million, the highest in our history. This pipeline represents contract
and funding opportunities that we are bidding on in order to put into
practice solutions that have yielded positive outcomes for at-risk
populations.
"Fedcap ended the first half of fiscal 2017 in a strong financial
position, and we continue to operate with rigorous financial and risk
management controls and procedures to ensure that Fedcap remains a
sustainable organization with sufficient infrastructure and resources to
effectively serve clients, win federal, state and city-funded contracts
and to secure foundation grants. We look forward to continuing our
progress in 2017 and to keeping an open dialogue with all of our
stakeholders," Ms. McMahon noted.
About Fedcap
A not-for-profit founded in 1935, Fedcap develops innovative,
creative and sustainable solutions that help people overcome barriers to
economic well-being. In FY 2017, Fedcap's educational, vocational
training, job placement, post placement support and advocacy programs
helped more than 90,000 individuals rebuild their lives and build a
pathway to long term economic well-being.
Conference Call Details:
Date: 5/16/17 at 11:00am EST
Phone (News - Alert): Toll free: 1-844-792-3735
Link to Webcast: http://services.choruscall.com/links/fedcap170516.html
Financials:
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Fedcap Rehabilitation Services, Inc. and Subsidiaries
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Statement of Financial Position
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Six Months Ended March 31
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Fiscal Year
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2017
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2016
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2016
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Unaudited
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Audited
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ASSETS
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Cash and short term investments
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$
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24,051,625
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$
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27,928,271
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$
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28,314,309
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Accounts Receivable (net)
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40,726,227
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36,883,677
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34,482,750
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Inventories (net)
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338,795
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446,236
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414,939
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Prepaid Expenses
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3,262,986
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2,382,387
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2,826,486
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Total Current Assets
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$
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68,379,633
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$
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67,640,571
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$
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66,038,484
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Fixed Assets (net)
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75,036,530
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76,919,116
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75,855,170
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Other Assets
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2,852,461
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1,334,877
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1,172,682
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Total Assets
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$
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146,268,623
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$
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145,894,566
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$
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143,066,336
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Liabilities
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Accounts Payable and Accrued Liabilities
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$
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31,881,009
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$
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28,947,186
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$
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26,530,000
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Notes Payable
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649,772
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777,421
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754,995
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Advance from government agency
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-
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900,000
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-
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Other Current Liabilities
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238,401
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1,034,679
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1,156,919
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Total Current Liabilities
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$
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32,769,181
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$
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31,659,286
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$
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28,441,914
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Long Term Debt
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$
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60,893,455
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$
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61,254,556
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$
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60,615,740
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Line of Credit
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15,747,209
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16,350,615
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16,486,698
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Other Liabilities
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1,393,058
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1,685,258
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2,191,849
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Total Liabilities
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$
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110,802,903
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$
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110,949,715
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$
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107,736,201
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Net Assets
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Unrestricted
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$
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32,730,534
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$
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32,328,484
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$
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33,176,435
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Temporarily Restricted
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2,114,997
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2,031,938
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|
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1,569,272
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Permanently Restricted
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620,189
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584,429
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584,428
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Total Net Assets
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$
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35,465,720
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$
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34,944,851
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$
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35,330,135
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Total Liabilities & Net Assets
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$
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146,268,623
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145,894,566
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143,066,336
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Current Ratio
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2.09
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2.14
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2.32
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A/R Turnover Ratio
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3.05
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3.70
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5.50
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A/R Average Days Outstanding
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52
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|
|
98
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|
|
67
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Debt Coverage Ratio
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|
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2.84
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|
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2.46
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|
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2.04
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Consolidated Statement of Activities and Changes in Net Assets
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6 Months Ended
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Fiscal Year
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March 31
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Ended September
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2017
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2016
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2016
|
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UNAUDITED
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Audited
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REVENUE
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$
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122,285,460
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$
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111,223,789
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$
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228,429,042
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EXPENSES
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|
|
|
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Salaries and benefits
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$
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76,991,988
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$
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69,434,523
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$
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141,026,223
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Occupancy
|
|
|
7,364,582
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|
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6,401,754
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|
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13,642,766
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Subcontractors
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|
|
12,793,420
|
|
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11,237,278
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|
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27,191,804
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Depreciation and amortization
|
|
|
2,043,673
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|
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1,874,242
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|
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3,318,960
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Interest expense
|
|
|
1,550,634
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|
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1,729,244
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|
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3,476,490
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Other expense
|
|
|
21,405,579
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|
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20,533,184
|
|
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39,373,948
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TOTAL EXPENSES
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$
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122,149,876
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$
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111,210,225
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$
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228,030,190
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OPER PROFIT/(LOSS)
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$
|
135,584
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$
|
13,564
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$
|
398,852
|
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Operating Ratios
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Net operating ratio
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0.11%
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0.01%
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0.17%
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Program Expense Ratio
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88%
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88%
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88%
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Personnel cost ratio
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63%
|
|
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62%
|
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62%
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View source version on businesswire.com: http://www.businesswire.com/news/home/20170516005855/en/
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