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P K - 1 2 E D U C A T I O N P R A C T I C E

INTRODUCTION
FY17 represented a stabilization from the downward trends begun in FY14 even though the state’s
funding crisis has continued to significantly impact our PK-12 clients. There has continued to be
increased opportunities as more and more school districts, driven by new Boards of Education
demanding accountability went out for due diligence selection processes. This increased
competition as the workload in the marketplace decreased. We entered FY17 with a focus on
providing excellent client service and following former client representatives who have moved to
new districts. We still need all the same expertise but we need to be very focused on building solid
relationships at all levels of the client – Buildings and Grounds, Chief School Business Officials and
Superintendents. We need to have great references who will not only be positive, but might
actually make a call on our behalf or write a great reference letter. Loyalty and service will again
be the rallying cry in FY18 in a still difficult and challenging marketplace.

The PK-12 Education Practice Area net revenue stabilized in FY17 from the level of FY16 decreasing
approximately 2% but was considerably lower than the revenue in the years FY13, FY14, and FY15
when we worked through the last of the state school construction grant work. More of our work is
health life safety work, master planning, and facility analyses. We are actually very efficient at
completing this type of work. Three major projects – the new Sherlock Elementary School, the
Freshman Academy Addition and Renovation at Morton West HS, and the Renovation at Morton
East HS were also completed with good profitability levels. Our backlog grew from FY17 so that
we have entered FY18 in a more solid position than we have for a while. Strategic efforts at Resilient
Design and Geographic Expansion combined with less new work caused us to exceed our
marketing budget but these costs were down sharply from FY16 (-23.7% labor and -10.7%
expenses). We experienced an increase in profitability on our net revenue due to the larger
projects and amount of work overall.

Increased attention to the quality of our documents this past year led to a drop in the cost of
errors. Our continued focus on profitability and general overall improvement in the percentage of
projects achieving profitability enabled us to surpass our overall profitability target for the PK-12
Education practice.

FGM continues to be a recognized player in the PK-12 education market within Illinois and we
have now demonstrated an ability to win work in Missouri. We won four new districts in Missouri in
FY17 – Northwest R-I School District, Louisiana R-II School District, St. Clair R-XII School District, and
Dunklin R-V School District (on our third try). Fewer major projects were completed this past year
though there were many smaller renovation projects completed. This year saw major design and
documentation efforts on the three major projects for Cicero SD 99 and J. Sterling Morton THSD
201. Current master planning efforts for Cicero, Morton and Bloomingdale we hope will lead to
continuing projects for those districts. We continue to develop our in-house expertise in the major
knowledge areas that are critical to the PK-12 education practice area:

▪ Curriculum and educational philosophy
▪ Educational facility programming, planning and design
▪ Educational project funding, including grants
▪ Building systems and materials
▪ Interior design, graphic design/wayfinding, and furnishings
▪ Health/life safety and maintenance
▪ Sustainability