NEW YORK--(BUSINESS WIRE)--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 2016 fiscal year ended March 31, 2016.
“We are pleased to report that first half 2016 was a period of continued progress for Fedcap and the populations we serve,” said Christine McMahon, Fedcap’s Chief Executive Officer. “We succeeded in bringing the “Power of Possible” to over 43,272 individuals, significantly more than in the same period last year, thanks to effective execution on existing and new contracts as well as the acquisition of Easter Seals NY.
“Today, Fedcap’s expanded range of services cover the broad areas of behavioral and health, education, training, and job placement, supported by comprehensive assessment and readiness programs.
“The significant double-digit increase in first half revenues was enabled by ongoing investments in talent and infrastructure to ensure that our results are sustainable, and that we retain the capacity for continuous innovation. In the first half of fiscal 2016, we launched our “Moving the Needle” Series through Fedcap’s National Center for Innovation and System Improvement, providing practical technical assistance and training to over 1,880 people on gaining employment for youth transitioning from foster care, individuals with disabilities, the previously incarcerated, and individuals with mental illness and addiction.
“Fedcap’s focus on measurable outcomes for individuals with barriers has been recognized by government and service organizations across the region. Over the last several months, we have built out our footprint in New Hampshire, Maine, Maryland and Delaware, through new contract awards and combinations that will allow us to leverage our know-how and to impact an expanded population.”
First Half 2016 Financial and Operating Metrics
First half fiscal year 2016 revenues were $111.2 million, an increase of 44.4% over the $77.0 million in revenues reported for first half FY15. The improvement reflects both organic and acquisition growth, primarily related the WeCARE Region 1 contract awarded in April 2015 and the acquisition of Easter Seals New York, which was completed in September 2015. 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 45.4% of Fedcap’s total first half FY16 revenues, and is comprised of business services operations that directly employ the populations we serve. Revenues were $50.5 million, on pace to exceed $100 million. In the first half of 2016, Fedcap employed over 1,500 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 34.6% of first half FY16 revenues, or $38.5 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 3,700 individuals in jobs in the first half of fiscal 2016 including 155 “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 $18.3 million in revenues, or 16.5% of first half FY16 revenue. This year-on-year growth rate of almost three times the prior year’s revenues was mainly due to the full contribution of the Easter Seals New York operations and our growing body of work in the area of Substance Use Disorders 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 2016 operating expenses were $111.2 million, 88% of which represented direct program expenses. Fedcap reported an operating profit of $13,564 for the first half compared to $208,450 in the same period last year.
At March 31, 2016, cash and marketable securities were $27.9 million, up from $21.8 million at the same time last year.
Key Contract Wins and Strategic Highlights
Fedcap was awarded or 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 $3.5 million pilot project with Rikers Department of Corrections to provide clinical services and employment training to reduce violence and support successful re-entry;
- A $1 million annual contract in Delaware to provide facilities management services; and
- A $1.2 million, 2-year contract in New York City to provide out of school youth with training in high growth sectors and employment.
- Granite Pathways of New Hampshire merged into Fedcap, serving as our anchor for the provision of behavioral health services.
- Hope Forward, a Maryland-based agency serving youth transitioning from foster care, merged into Fedcap.
- Fedcap received a donation of a Long Island-based Red Mango franchise. Housed under the Easter Seals NY brand and directed by our culinary staff, Fedcap is using this frozen yogurt/smoothie store to bring on-the-job training and employment to returning veterans.
- Easter Seals NY became an approved NYSID provider, giving them the opportunity to bid for workforce-related contracts in Upstate New York, where they are a well-known provider of education and health services.
Summary and Outlook
“Our first half results reflect the significant demand for high-impact services that have a direct, positive impact on the lives of individuals with barriers, their families and the communities in which they live. Fedcap is fully focused on achieving positive, measurable results for the populations we serve and to continually finding new ways to address existing and emerging issues. At the same time, we are mindful of the dynamics of the political landscape, the funding environment and the risks inherent in running a large, public-facing entity, all of which require disciplined management and financial controls.
“Through a combination of organic and acquisition growth, we have built a family of brands that have given the entire Fedcap organization deep domain experience that we can successfully leverage to effectively serve clients, to win federal, state and city-funded contracts and to secure foundation grants. We look forward to continuing our progress in 2016 and to keeping an open dialogue with all of our stakeholders,” Ms. McMahon noted.
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 2015, Fedcap’s educational, vocational training, job placement, post placement support and advocacy programs helped more than 70,000 individuals rebuild their lives and build a pathway to long term economic well-being.
Conference Call Details:
|5/25/16 at 10:00am EST|
|Toll free: 1 (888) 349-0106 (U.S.)|
Fedcap Rehabilitation Services, Inc. and Subsidiaries
Consolidated Statement of Activities
Six Months Ended
|Salaries and benefits||$||69,434,523||$||45,985,603||$||98,596,857|
|Depreciation and amortization||1,874,242||1,605,507||3,318,960|
|Net operating ratio||0.01%||0.27%||0.10%|
|Program Expense Ratio||88%||92%||88%|
|Personnel cost ratio||62%||61%||56%|
|Six Months Ended March 31||Fiscal year|
|Cash and short term investments||$||27,928,271||$||21,826,840||$||29,138,362|
|Accounts Receivable (net)||36,883,677||23,433,735||32,079,699|
|Total Current Assets||$||67,640,571||$||46,908,302||$||64,214,312|
|Fixed Assets (net)||76,919,116||68,352,893||77,020,702|
|Accounts Payable and Accrued Liabilities||$||28,947,186||$||14,317,320||$||27,978,124|
|Advance from government agency||900,000||1,144,650||1,800,000|
|Other Current Liabilities||1,034,679||1,103,900||1,082,588|
|Total Current Liabilities||$||31,659,286||$||17,285,812||$||31,698,001|
|Long Term Debt||$||61,254,556||$||54,003,595||$||61,401,834|
|Line of Credit||16,350,615||8,253,273||12,466,630|
|Total Net Assets||$||34,944,851||$||34,960,492||$||34,931,283|
|Total Liabilities & Net Assets||$||145,894,566||$||115,663,417||142,468,096|
|A/R Turnover Ratio||3.70||6.00||5.50|
|A/R Average Days Outstanding||54||64||67|
|Debt Coverage Ratio||4.78||4.56||2.04|