Page 102 - FINAL Combined CB2_Neat

T R E A S U R E R ’ S R E P O R T

In the Chairman’s Report, the financial performance in 2017 was summarized as success requiring
herculean efforts. To understand the full story of the achievement, we started the year near
breakeven in October, then had three consecutive months of net losses in November, December,
and January. Even though things turned around in February, we were in a net loss position after
the first six months of the year. The second half of the year came in strong with net profits of over
$1 million. The year ended with Operating Profits of $803,246, an impressive $575,042 increase over
last year. Although Net Revenue saw more than a $500,000 decline this year, overhead
decreased over $800,000. Other noteworthy accomplishments:

Fiscal 2017 Fiscal 2016
• Project multipliers and
utilization increased Net Revenue $ 10,470,875 $ 11,030,000
• The strength of the
Balance Sheet improved Project Labor $ 3,095,375 $ 3,398,306
with increases to both
the cash and accounts Effective Multiplier 3.38 3.25
receivable balances
• No debt Utilization 52.3% 51.9%
• No tax liability
Overhead $ 6,572,254 $ 7,403,491

Operating Profit $ 803,246 $ 228,204

Percent Profit 7.7% 2.1%

The table above highlights some key metrics for comparison purposes. The effective multiplier,
calculated by dividing net revenue by direct labor, saw an increase to 3.38, up from 3.25 last year.
This indicates how well the firm is managing project profitability. Utilization, which indicates how
busy we are, is calculated by dividing direct labor by the total cost of labor for the firm. This ratio
also increased to 52.3%, from 51.9%, but falls short of our recent high of 56.2% in 2013 and the 60%
goal last reached in 2009. Most notably, operating profit on net revenue is up from 2.1% last year
to 7.7% this year.

NET REVENUE

The beginning of the year continued to see declining net revenues, a trend that lingered from the
prior year. The downward trend ended in February as projects that were put on hold were finally
started. Net revenue continued to increase for the remainder of the year, ending the year with a
strong backlog of work. The marketing efforts from prior years paid off with new work in the Federal
Market. While last year was thought to be the end of reporting for the Federal practice area,
revenues for 2017 were too much to ignore.