News from Fedcap

Fedcap Reports FY17 Operating Results

On December 13th Fedcap presented the sixth in a series of bi-annual webinars to discuss financial and operating results for FY17. The ongoing webinars are designed to provide key stakeholders with regular and timely disclosures about financial and operational performance, mission-related impact, and trends and challenges for the Fedcap family of brands.

The presentation covered our four practice areas- economic development, workforce development, education and occupational health – which are integrated across 12 brands into a regional framework. At least 185 individuals representing 40 different companies from across the country participated in the webinar – the largest audience to date.

Fedcap President and CEO Christine McMahon said the webinar series exemplifies the agencies’ commitment to transparency. Financial and operational performance has been – and must be – mission driven, and aligned with strategic objectives. These include successful outcomes for the individuals we serve, expanding expertise in core markets, leveraging successful programs in new formats and geographies, applying cutting edge technologies, and serving as a growth platform for the entire family of agencies. Ms. McMahon thanked the community of stakeholders for their commitment to innovation, risk management, growth, and staying true to Fedcap’s founding principles of providing opportunities to people with barriers to economic well-being.

A hallmark of 2017 performance was growth in revenue, and impact on individuals, families and communities. Impact is growing exponentially. The combined agencies served over 182,000 people in 2017, up from 107,000 last year. Over 12,200 people were placed in jobs, an increase of 1,200 placements from 2016. Fedcap’s growing footprint extends they agencies’ impact to isues of national concern such addiction and substance misues, recidivism rates, young people transitioning from foster care, returnign veterans and children in poverty. Organic and acquisition growth, cornerstones of our strategic vision, provide the scale to effect this impact.

The presentation highlighted key contracts in 2017 that contributed to organic growth, including a statewide Breaking the Cycle TANF in Maine; a TANF contract in Rhode Island to serve youth and young adults; two large workforce development contracts in Washington, D.C., and two innovative projects on Riker’s Island to reduce violence and overall recidivism, and improve outcomes for women.

Acquisition growth was achieved through combinations with Single Stop USA and Seacoast Pathways, and new programs like the Dixon Center, which serves veterans and their families, and Enable, a vocational rehabilitation program in New Jersey. Other agency combinations are in development for 2018. Financial growth in FY17 was highlighted by a strong balance sheet, a growing family of brands leading to financial synergies and benefits from added qualifications and expertise, and a robust contract and acquisition pipeline with a 37 percent year-over-year win rate. Revenue highlights for FY17 include 13 percent year-over-year revenue growth, contributing to a combined annual growth rate of 19 percent since 2010. The agencies realized $257 million of revenue this year. Combinations alone resulted in $30 million in revenue synergies.

The NYC Economic Development Corporation issued a $10 million bond to finance pivotal projects including a $3.9 million renovation of corporate headquarters at 633 3rd Avenue, a $6 million capital improvement project at 210 43rd Street, and a $1.1 million Oracle ERP upgrade. The upgrade will support agency growth.

FY17 saw continued revenue diversification in the practice areas. Economic development, which accounted for 93 percent of revenue in 2010, is now 40 percent of revenue due to growth in the other practice areas. Further highlights include program expenses accounting for 88 percent of operating expenses, total assets exceeded $150 million, and a $11.5 million investment fund.

A lively Q&A session followed the presentation. Ms. McMahon fielded questions about acquisitions and growth, specifically about criteria for choosing combination targets and maintaining brand identity. Fedcap seeks to combine with agencies with similar missions, and where combination amplifies the strengths of both organizations and makes possible work that neither could complete alone. Maintaining brand identity is at the core of Fedcap’s philosophy, and will be enabled by planned technology upgrades. Ms. McMahon answered questions about diversification and expansion of the Fedcap footprint. The establishment of four practice areas helped management organize and diversity the agency’s work, and Ms. McMahon pointed to a robust pipeline of combinations and programs as evidence that our commitment to diversification remains as strong as ever.