Fedcap Posts Fiscal Year 2017 Operating and Financial Results
Fedcap reported its operating and financial results for its 2017 fiscal year ended September 30.
"This was an excellent year for Fedcap. By executing on a balanced strategy of organic and acquisition growth, we were able to provide an expanded array of services to a significantly greater number of individuals in need," said Christine McMahon, Fedcap's Chief Executive Officer. "The scale we have gained thanks to several years of back-to-back, double-digit revenue growth has provided Fedcap with resources to invest in program development and infrastructure improvements to support the continued growth that we see on the horizon.
"In fiscal 2017, the addition of new programs and organizations substantially increased Fedcap's platform of services and solutions, and brought in Seacoast Pathways in a combination with Granite Pathways - a Fedcap subsidiary - that serves as our anchor for the provision of behavioral health services in the New England region. This has put us front and center in addressing the opioid addiction epidemic, which has been particularly devastating in New Hampshire and Maine; ENABLE, a New Jersey-based program serving people with intellectual/developmental disabilities, transitioned its operations into Fedcap effective January 1. The Dixon Center, which connects our veterans and their families with programs offered in more than 20,000 communities across the country, joined us in May of this year.
"In February of this year, we acquired 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-sufficiencyall through a unique one-stop-shop. SingleStop has substantially increased the number of individuals that we can assist and brings technology tools that we can leverage to further broaden its reach.
"We have identified approximately $30 million in revenue synergies, representing contracts that neither Fedcap nor the organizations or programs we have combined with over the last several years could have won on their own. This has made a substantial, positive difference for the populations we serve and has strengthened the brands that comprise today's Fedcap."
In a release on December 13, the Company provided the following 2017 financial and operating metrics:
Fiscal year 2017 revenues were $257.5 million, an increase of 12.8 percent over the $228.4 million in revenues reported for FY16. The improvement reflects both organic and acquisition growth, primarily related to the first full year of operations for Breaking the Cycle Project in Maine, 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 37 percent of Fedcap's total FY17 revenues, and is comprised of business services operations that directly employ the populations we serve. Revenues were $93.9 million, exceeding $90 million for the second consecutive year. In 2017, Fedcap employed over 1,550 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 also accounted for 39 percent of total FY17 revenues, or $100.6 million, and represents the area in which Fedcap serves the largest number of individuals through a broad range of services. Workforce Development was the largest area of growth in fiscal 2017, increasing from $76.4 million in 2016 to $100.6 million in 2017, a growth rate of 31.5 percent. This growth was an equal split of merger and organic growth, with M&A marked by the combination with Single Stop USA in February 2017 and the full contribution of the Maine operations, where we are the sole provider of TANF services through the Breaking The Cycle contract. 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 agencies placed over 12,000 individuals in jobs in fiscal 2017 including almost 500 "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 $53.2 million in revenues, or 21 percent of FY17 revenue. Growth was marked by the expansion of the Fedcap School in NJ, the operations of Easter Seals Rhode Island which combined September of 2016 and counseling and intervention services for people with Substance Use disorders and Recovery in New Hampshire. 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 2,500 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.
Fiscal 2017 operating expenses were $257.2 million, 88 percent of which represented direct program expenses. Fedcap reported an operating profit of $265,982 for the FY 2017 compared to $398,850 in the prior year.
At September 30, cash and marketable securities were $26.7 million, down slightly from $28.3 million in the prior year, attributable to capital and start up investments.
Key Contract Wins in 2017
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;
-A major contract with a large Fortune 500 company to help them build an Alternative Workforce;
-Awarded $1.2 million expansion of ReServe's DFTA contract with NYC;
-Awarded $11.9 million NYC Career Compass contract;
-Wildcat was awarded $2.1 million Neighborhood Improvement Grants throughout NYC boroughs;
-Awarded $9 million contract to provide TANF services in Washington, D.C.
Summary and Outlook
"Fedcap's emphasis on achieving positive, measurable results has been a key differentiator, enabling us to continue to win large government contracts and to gain the trust of funders and donors. Today, the Fedcap family of brands provides a platform of services and solutions that can be effectively deployed to address the needs of broad-based client populations across the country. At the end of fiscal 2017, Fedcap had a business development pipeline valued at 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 those solutions that have yielded positive outcomes for at-risk populations.
"At the same time, we have a pipeline of business combinations that promise to significantly expand the size and scope of our operations. In November 2017, we acquired a Northern Virginia-based agency that provides services to developmentally disabled individuals and employment on federal custodial and janitorial contracts, strengthening our presence in the mid-Atlantic region. We have a mutual agreement to acquire Easter Seals Central Texas, expanding our education services in the US, and a mutual agreement with Kennedy Scott, a U.K-based workforce development agency, which will represent a major step for us in expanding our international footprint.
"These developments have set the stage for another year of growth for Fedcap in fiscal 2018, supported by Fedcap's strong fiscal-year financial position and our commitment to disciplined risk management controls and procedures. We look forward to continuing our progress in 2018 and to keeping an open dialogue with all of our stakeholders," Ms. McMahon noted.
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THE DAILY VIEW
Tea Forté Introduces ‘Matcha’ Collection
Convenience meets tradition in Tea Forté’s new Ceremonial Matcha Bowl Set and the Matcha Single Steeps.
The company said its spring harvested, shade grown, stone ground, organic matcha tea is best served in a centuries-old Japanese tea ceremony called chanoyu: a preparation technique known for its centering meditative qualities.
"The launch of Tea Forté's Matcha collection represents our continued commitment to wellness and cultivating all the potential mental and physical health benefits of tea," says Tea Forté CEO Michael Gebrael. "In addition to our high quality Pure Matcha, we've also blended four distinct flavored Matcha varieties. Prepackaged in pouches measured out for a single serving, our Single Steeps Matcha is ideal for the office, travel, or to keep with you for a boost anytime."
Tea Forté noted its handcrafted ceremonial tea bowl, handmade bamboo whisk and measuring ladle “encourages serene enjoyment of our premium Kosher, gluten-free and vegan matcha blends.” These include: Pure Matcha, Chocolate Matcha, Coconut Matcha, Ginger Matcha, and Chai Matcha.
According to a release, in addition to its distinctive taste, matcha is prized for its health benefits. Steeped green tea contains only the antioxidants that can be extracted in water, while with matcha, the whole leaf is consumed.
Available now in select stores and online at teaforte.com.
Expedia.com has released a year-end look at U.S. traveler behavior and trends for 2017, analyzing data to identify the most in-demand destinations, hotels, activities and more.
Among other insights, the roundup revealed:
- Labor Day was the busiest weekend for car rental
- Disney Theme Parks topped the list of things to do
- The average hotel stay was two nights
- Top destinations based on 2017 air travel included major global cities like New York, London and Bangkok
- Popular tourist destinations included Orlando, Cancun and Las Vegas