Resilient Results Reflected Diversified
Program and Revenue Sources
Continued to Increase Number of Individuals
Served
New Program Launches and Strategic
Acquisitions to Drive Future Growth
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The Fedcap Group announced its first half fiscal 2024
operational and financial results, ended March 31, 2024.
Commenting on the results, Christine McMahon, President and
CEO of The Fedcap Group noted, “We are pleased with the
resilience that Fedcap demonstrated during this period of difficult
economic and business conditions, which included growing fixed
costs coupled with reduced government funding for several of our
programs. Despite these challenges, we were able to increase the
number of individuals served and post stable financial results,
reflecting the diversity of our programs and revenue sources. As we
move ahead in the second half of fiscal 2024, we will continue to
prioritize organic growth, acquisitions, and new program launches
to deliver positive outcomes for clients and maintain consistent
financial results for the organization.”
“In the past six months, we completed several key initiatives,
culminating in the successful launch of our innovation incubator
and digital skills center, Civic Hall, in New York. Additionally,
we launched a new Apex Technical School solar training program in
Brooklyn, New York—increasing the education portfolio to 18
programs in four states, and we strategically expanded our presence
through key acquisitions, notably the Teaching the Autism Community
Trades School in Denver, Colorado. Our ongoing success in securing
new contracts has enabled us to extend our service reach,
exemplified by our latest workforce contract in Tennessee. Due to
our exceptional service delivery, we’ve earned an extension for our
UK Restart workforce contract. These are emblematic of initiatives
that have proven positive track records with respect to benefits to
individuals and society, and they are scalable to other geographies
in which we are providing services.”
Operational Highlights
The Fedcap Group operates across four key practice
areas—education, workforce development, health, and economic
development—through 23 nonprofit subsidiaries in 106 locations
across the United States, Canada, and the United Kingdom. In the
first half of fiscal 2024, The Fedcap Group served over 146,000
individuals, marking a 4.3% increase from the previous year.
Education The Education Practice, representing 17% of
total revenue, continued its rapid growth with new programs,
acquisitions, and locations. In the first half of fiscal 2024,
Fedcap opened Civic Hall, the state-of-the-art innovation incubator
and digital skills training center in the heart of the New York
tech sector; acquired the Teaching the Autism Community Trades
school in Denver, Colorado; and launched a new Apex Technical
School solar training program in Brooklyn, New York—increasing the
portfolio to 18 programs in four states.
Workforce Development As the largest practice area
contributing 40% of total revenue, the Workforce Development
Practice continued its strong performance. Over 12,000 individuals
were placed in jobs—a 113% increase since 2021. Notably, the
individuals trained and placed by Fedcap continue to achieve solid
job retention rates, with 89% retaining their positions for at
least 30 days, 81% for 90 days, and 79% for 180 days.
Health The Health Practice, representing 6% of total
revenue, continued its upward trajectory on the strength of the
Single Stop case management and benefits screening program. We
screened over 30,000 individuals for federal and state benefits
that yielded an average of $19,000 per household. Across the Fedcap
global footprint saw a 4.2% increase in wellness services
provided—serving nearly 25,000 people.
Economic Development Contributing 37% to total revenue,
the Economic Development Practice continues to provide sustainable,
well-paying employment. With a focus on fostering employment
opportunities for individuals with disabilities, The Fedcap Group
directly employed over 1,000 individuals at salary levels above the
industry average.
International Fedcap launched its international business
in 2017 and it has grown to 35 locations in Canada and the UK. In
the first half of fiscal 2024, its largest UK contract, Restart,
which serves the long term unemployed—was extended for an
additional two years.
FY2023 Financial Results
For the first half of FY2024, Fedcap achieved revenue of $183.5
million stable with the similar period in fiscal 2023 and in line
with its expectation for full fiscal year 2024 revenues of
approximately $375 million, making this another record year for the
Group.
As of March 31, 2024, The Fedcap Group had $27.5 million in cash
and investments, total assets of $409.9 million, and long-term debt
of $158.3 million. Notably, The Fedcap Group’s net assets increased
to $98.6 million—nearly tripling from fiscal 2020 levels.
The Fedcap Group maintains a robust business development
pipeline of more than $215 million and is tracking another $536.5
million in prospective opportunities. The Fedcap Group has achieved
a consistent win rate of 95% on recompetes.
The company’s financial stability has been significantly
strengthened by its strategic intent to diversify revenue sources,
notably by augmenting the percentage of fee-for-service government
contracts. Currently, these programs represent 14% of Group
revenues, but based on the current program pipeline, Fedcap
anticipates that fee-for-service contracts will increase to from
20% to 25% of revenues by the end of fiscal 2025 and grow from
there in subsequent years. This change in mix will provide Fedcap
with further resilience in future periods.
Outlook
“The Fedcap Group will continue to diversify its business
operations and revenue sources through a mix of new programs,
service footprint expansions, and acquisitions to optimize our
funding from a variety of revenue types and programs.”
“Looking ahead to the remainder of fiscal 2024 and beyond, we
will continue to focus on high demand markets for our services,
including addressing health issues that serve as barriers to work,
exporting our successful clean energy program to the UK, and
deploying innovative programs to meet the needs of the perpetually
underserved disability community. At the same time, we will
maintain our commitment to education and training, with a view
toward assisting individuals gain meaningful employment in sectors
that offer good starting salaries and significant opportunities for
advancement,” Ms. McMahon concluded.
Please see the presentation linked here.
About The Fedcap Group For nearly ninety years, The
Fedcap Group has developed scalable, innovative, and potentially
disruptive solutions to some of society’s most pressing needs. The
Fedcap Group provides educational services to every age group,
vocational training, and job attainment in high-growth industries,
as well as support services such as behavioral health services—all
targeted to helping people achieve long-term self-sufficiency. The
Fedcap Group also invests its time and resources in broader system
change—working in partnership with federal, state, and local
government to improve the way services are designed, funded, and
delivered.
The Fedcap Group Financial
Statements
Consolidated Statement of
Financial Position
As of March 31
2024
2023 Oracle
Unaudited
Unaudited
ASSETS
Cash and short-term investments
$
27,532,603
$
47,403,126
Accounts Receivable (net)
71,015,737
58,455,385
Restricted Current Assets
2,772,958
-
Inventories (net)
431,609
381,693
Prepaid Expenses and Other Assets
3,679,193
4,356,848
Total Current Assets
$
105,432,101
$
110,597,051
Fixed Assets (net)
149,546,296
132,036,836
ROU Assets
92,666,217
106,078,979
Restricted Assets
41,586,051
-
Beneficial Remainder Trust
5,243,759
4,604,131
Other Assets
15,487,547
11,531,491
Total Assets
$
409,961,971
$
364,848,488
Liabilities
Accounts Payable and Accrued
Liabilities
$
39,028,546
$
38,758,371
Notes Payable
1,219,854
1,149,088
Advance from Government Agency
-
86,022
Financing Lease Liabilities
1,384,407
863,266
ROU Liabilities
10,280,139
11,561,557
Other Current Liabilities
11,976,185
11,750,523
Total Current Liabilities
63,889,131
64,168,828
Long Term Debt
$
102,262,471
$
104,135,230
ROU Liabilities
89,158,740
97,935,529
Line of Credit
40,651,429
29,345,101
Other Liabilities
15,451,907
18,579,368
Total Liabilities
311,413,678
314,164,056
Net Assets
Without Donor Restrictions
$
43,202,216
$
41,702,439
With Donor Restrictions
55,346,077
8,981,993
Total Net Assets
$
98,548,293
$
50,684,432
Total Liabilities & Net
Assets
$
409,961,971
$
364,848,488
Consolidated Statement of
Activities
for the period ended March 31,
2024 & 2023
2024
2023
Unaudited
Audited
REVENUE
$
183,453,743
$
186,059,451
EXPENSES
Salaries and benefits
$
96,035,362
$
96,626,671
Occupancy
16,031,407
12,415,538
Subcontractors
16,920,855
18,320,797
Depreciation and amortization
4,122,298
3,762,494
Interest expense
3,124,578
3,149,454
Other expense
45,111,455
49,384,057
TOTAL EXPENSES
$
181,345,955
$
183,659,011
OPER PROFIT/(LOSS)
$
2,107,788
$
2,400,440
Operating Ratios
Net operating ratio
1.15
%
1.29
%
Program Expense Ratio
88
%
88
%
Personnel cost ratio
53
%
53
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507993089/en/
Jim Malatras, 212-727-4200, (JMalatras@fedcap.org)