Fedcap Reports First Half Fiscal Year 2017 Operating and Financial Results

--Served more than 90,000 individuals with disabilities and other barriers--

--Achieved 10% revenue growth driven by organic and acquisition initiatives--

-- Maintained program expenses at 88% of operating expenses--

--Leveraged positive outcomes in new geographies--

--Acquired Single Stop USA in February 2017--

NEW YORK--()--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.

“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.”

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.

  • 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:

  • 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;
  • 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: Toll free: 1-844-792-3735

Link to Webcast: http://services.choruscall.com/links/fedcap170516.html

Financials:

 

Fedcap Rehabilitation Services, Inc. and Subsidiaries

Statement of Financial Position

 
  Six Months Ended March 31   Fiscal Year
2017   2016 2016
Unaudited Audited
ASSETS
Cash and short term investments $ 24,051,625 $ 27,928,271 $ 28,314,309
Accounts Receivable (net) 40,726,227 36,883,677 34,482,750
Inventories (net) 338,795 446,236 414,939
Prepaid Expenses   3,262,986   2,382,387   2,826,486
Total Current Assets $ 68,379,633 $ 67,640,571 $ 66,038,484
 
Fixed Assets (net) 75,036,530 76,919,116 75,855,170
Other Assets   2,852,461   1,334,877   1,172,682
Total Assets $ 146,268,623 $ 145,894,566 $ 143,066,336
 
Liabilities
Accounts Payable and Accrued Liabilities $ 31,881,009 $ 28,947,186 $ 26,530,000
Notes Payable 649,772 777,421 754,995
Advance from government agency - 900,000 -
Other Current Liabilities   238,401   1,034,679   1,156,919
Total Current Liabilities $ 32,769,181 $ 31,659,286 $ 28,441,914
 
 
Long Term Debt $ 60,893,455 $ 61,254,556 $ 60,615,740
Line of Credit 15,747,209 16,350,615 16,486,698
Other Liabilities   1,393,058   1,685,258   2,191,849
Total Liabilities $ 110,802,903 $ 110,949,715 $ 107,736,201
 
Net Assets
Unrestricted $ 32,730,534 $ 32,328,484 $ 33,176,435
Temporarily Restricted 2,114,997 2,031,938 1,569,272
Permanently Restricted   620,189   584,429   584,428
Total Net Assets $ 35,465,720 $ 34,944,851 $ 35,330,135
     
Total Liabilities & Net Assets $ 146,268,623   145,894,566   143,066,336
 
 
 
Current Ratio 2.09 2.14 2.32
A/R Turnover Ratio 3.05 3.70 5.50
A/R Average Days Outstanding 52 98 67
Debt Coverage Ratio 2.84 2.46 2.04
 
 

Consolidated Statement of Activities and Changes in Net Assets

 
  6 Months Ended   Fiscal Year
March 31 Ended September
2017   2016 2016
UNAUDITED Audited
     
REVENUE $ 122,285,460 $ 111,223,789 $ 228,429,042
 
EXPENSES
Salaries and benefits $ 76,991,988 $ 69,434,523 $ 141,026,223
Occupancy 7,364,582 6,401,754 13,642,766
Subcontractors 12,793,420 11,237,278 27,191,804
Depreciation and amortization 2,043,673 1,874,242 3,318,960
Interest expense 1,550,634 1,729,244 3,476,490
Other expense   21,405,579   20,533,184   39,373,948
TOTAL EXPENSES $ 122,149,876 $ 111,210,225 $ 228,030,190
     
OPER PROFIT/(LOSS) $ 135,584 $ 13,564 $ 398,852
 
 
Operating Ratios
Net operating ratio 0.11% 0.01% 0.17%
Program Expense Ratio 88% 88% 88%
Personnel cost ratio 63% 62% 62%
 

Contacts

Fedcap
Karen Wegmann, 212-727-4200

Recent Stories

RSS feed for Fedcap