Page 58 - 2016 FGM Annual Report

was driven downward by the last full year of the University of Chicago Lab Schools project. Overall,
we showed a loss of approximately 9.5%; without the Lab Schools project, we were slightly over 3%
profitable. With the Lab Schools project in the Close Out Phase after eight years, we look forward to
more positive results in financial performance in upcoming years.

Wassaja Hall, our second student residence project at the University of Illinois Urbana Champaign
was, by all measures, completed successfully, including client satisfaction and profitability. Two
major projects at Northwestern University, the baseball stadium (Rocky & Berenice Miller Park) and a
$2.8M furniture selection project at Kresge Hall continued to demonstrate we have put a long
history of poor (financially) performing projects behind us at NU. We are in the midst of construction
on the first phase of the Wheaton College Performing Arts Center and expect to begin construction
documents for Phase 2 in April. Our addition to the Engineering Building at Southern Illinois University
Edwardsville is also under construction and due to be completed this spring.

The number of business development opportunities took another drop this year after a small
upward spike in FY 2015. The average project size (measured by construction cost) halted the
downward slide we had seen for a few years and remained at $9M.

There is a longstanding wish list of major projects in the wings for Illinois colleges and universities and
a growing number of deferred maintenance improvements. The budget stalemate has
exacerbated the situation, which explains why institutions are turning to creative financing (P3 and
Performance Contracting) where possible, seeking outside donors for higher profile projects, and
prioritizing critical infrastructure projects that address life safety concerns, accessibility, and building
envelope failures. We are seeking to adapt to these circumstances, which, unfortunately, will not
be solved even with the passage of our next state budget.

As we look at FY 2017, we have supplemented our growing and diverse portfolio with several
completed projects that increase our credibility with clients and potential teaming partners; this
should enable us to strongly pursue the limited opportunities that will be available to us in Illinois and
Missouri. We will continue to carefully consider potential projects in other nearby states and will
assist the firm in any next steps along the path of geographical expansion.

Financial Performance
FY 2016 reflected a slight reduction in net revenue from FY 2015, suggesting the steeper decline of
the past three years has leveled out. We entered FY2017 with a backlog of work valued at
approximately $1.8 M in net revenue.