News from Fedcap
Fedcap Reports Fiscal Year 2015 Operating and Financial Results
--Served more than 70,000 individuals through job placements, educational services, training, assessments and behavioral & health services--
--Launched innovative programs to expand opportunities for key populations--
--Increased operating revenues* by 24%--
--Program expenses accounted for 88% of operating expenses--
--Completed the acquisition of Easter Seals NY on September 1, 2015--
NEW YORK, N.Y. (December 16, 2015) – 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 fiscal year ended September 30, 2015.
“Fiscal 2015 was a year of effective execution for Fedcap and we are pleased to report to our funders, donors, and to all stakeholders on our positive outcomes, our strong financial position, and Fedcap’s outlook for 2016,” said Christine McMahon, Chief Executive Officer.
“By disclosing our operating and financial results on a timely, semi-annual basis, we are building the framework for important discussions with our key constituents and establishing a benchmark for the not-for-profit industry.”
“Fedcap served over 70,000 individuals with disabilities and other barriers in fiscal 2015, thanks to substantial contract awards and grants across our four practice areas. Additionally, we benefitted from a one-month operational contribution from our acquisition of Easter Seals NY, which further strengthened our Education and Occupational Health programs, as well as expanded our geographic reach. We are pleased to report a double-digit increase in operating revenues for the fiscal year. This increase was in part due to the assignment of the WeCARE Region 1 program contract for Manhattan, Staten Island and the Bronx. The contract was assigned to Fedcap by the NYC Human Resources Administration in April 2015.”
“In fiscal 2015, we invested in new program/product development as well as in both our reporting systems and technology upgrades. These investments are designed to ensure our ability to continue providing positive outcomes to an expanded client base. As an example, we launched a pilot program for foster parents in New York City and Los Angeles, funded by a $1.6 million grant from the Hilton Foundation, which provides Fedcap-developed tools to enable these foster parents to promote college education to the youth under their care. In addition, Fedcap initiated the National Center for Innovation and System Improvement (NCISI), a webinar platform that improves employment opportunities and outcomes for clients with intellectual disabilities. The content for NCISI leverages Fedcap’s success in completing a contract with the State of Rhode Island in 2014, in which we used our assessment, training and placement expertise to gain competitive employment for individuals who were previously earning $3 per day in sheltered workshops.”
“Our infrastructure spending has been focused on strengthening operating and financial controls in order to assess our programs and services against requisite milestones and to account for the flexibility needed to address changing economic realities across our entire organization. We also expanded our risk management activities in fiscal 2015, providing assessment and response protocols to supervisory personnel throughout our organization.”
2015 Fiscal Year Financial and Operating Metrics
Fiscal year 2015 revenues were $173.9 million. This represented a 23.7% increase over the $140.6 million in operating revenues reported for fiscal year 2014, and a 5.4% increase over the fiscal year total revenues of $165.1 million, which included $24.5 million in proceeds from the sale of real estate.
- Economic Development accounted for 59% of Fedcap’s total fiscal 2015 revenues, and is comprised of business services operations that directly employ the populations we serve. Revenues were $102.3 million, exceeding $100 million for the first time in Fedcap’s history, and represented year-on-year revenue growth of 16%. In 2015, Fedcap employed 1,559 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 350 Fedcap-trained and licensed professionals provide at-home care to those in need.
- Workforce Development accounted for 29% of total 2015 revenues, or $50.8 million, and represents the area in which Fedcap serves the largest number of individuals through a broad range of services. In fiscal 2015, 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 succeeded in placing over 7,600 clients in jobs in fiscal year 2015 including 456 “ReServists”, professionals age 55+ whom we place with organizations that need and welcome their expertise.
- Education and Occupational Health together accounted for over $13.3 million in revenues, or 8% of total fiscal 2015 revenue. This reflected a growth rate of 66% over the prior year, in part attributable to the one-month contribution of the Easter Seals New York acquisition 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. A total of over 3,100 individuals advanced a 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 year 2015 operating expenses were $173.7 million, of which 88% represented direct program expenses. Fedcap reported an operating profit of $179,241 for the year compared to $14.6 million in fiscal 2014, which included the one-time gain on the sale of our former headquarters on West 14th Street in Manhattan.
At September 30, 2015, cash and marketable securities were $29.6 million, up from $23.6 million at the same time last year.
On September 1, 2015, Fedcap completed the acquisition of Easter Seals New York, which operates facilities and programs for over 8,000 individuals with disabilities in New York State and generates annual revenues of approximately $30 million. Its diverse array of programs includes:
- Integrated employment services for persons with intellectual disabilities, including Autism;
- Pre-school, early intervention and after school programs located throughout New York State;
- Specialized medical, diagnostic and treatment services;
- Outpatient behavioral health services, including substance abuse treatment and recovery services;
- Services for veterans, including women veterans.
Easter Seals adds significant scale to Fedcap’s Occupational Health and Education programs and brings our operating activities to new areas of New York State, including Rochester, Albany and Monticello, Westchester and Long Island. This acquisition also added significant talent, a new donor base and over 111,000 square feet of real estate assets to our portfolio.
Summary and Outlook
“In fiscal 2015, Fedcap significantly increased the number of individuals served, while maintaining the strong financial position that is critical to the sustainability of a growing organization. Our ability to effectively expand our services has been enhanced by the acquisitions we have completed over the past five years. We have strategically combined with excellent, like-minded non-profits, each operating under its own brand but bringing talent and experience to the entire organization. These combinations have enhanced our ability to successfully pursue a broad range of federal, state, and city-funded contracts, as well as develop programs and products that are of interest to large grant‑making entities.”
“Looking ahead to fiscal 2016, we expect the funding environment for the not-for-profit industry to remain challenging, and we are moving ahead with several initiatives to enhance Fedcap’s ability to continue to perform well on existing contracts, win new contract awards, and gain funding for innovative products and programs. By continuing to offer additional services across our family of brands, Fedcap is positioned to help an expanded universe of clients overcome barriers and achieve economic well-being. We look forward to continuing to report progress in the periods ahead,” Ms. McMahon concluded.
*Operating revenues exclude the proceeds from the one-time sale of a real estate asset in fiscal 2014.
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:
Date: 12/16/15 at 11:00am EST
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Fedcap Rehabilitation Services, Inc. and Subsidiaries
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