Page 15 - Annual Report 2016 - Cover & Divider Pages.indd

Our valuation this year requires a bit more explanation than in most years. To begin, we missed our
projections and earned less revenue year over year. However, we responded quickly to
circumstances- maintained profitability and managed our money carefully. Throughout this
period, we kept cash in the bank, and never resorted to our line of credit. Prairie Capital Advisors
took both data points into consideration when calculating FGM’s value for the year. Our Enterprise
value, that is the value calculated based on operations, fell significantly. Our Equity Value, taking
into consideration our strong balance sheet, lifted the value of the firm. Overall, Prairie Capital
concluded a total value for FGM Architects in 2016 of $4,218,000 a 4.7% decrease from 2015.
Here’s where things get a little complicated. We are in a period of transition with some shares of
stock being divested by retiring partners, while other shareholders are acquiring shares. The net
result of these transactions is we have fewer shares of stock in circulation today than we did a
year ago. Consequently, the price per share of our stock increased to $424.86 from $415.49 in
2015. In a nutshell, we fell short of expectations in our performance during FY16, but were
rewarded for strong management and careful stewardship of the business. We will need to work
hard this year to move once again toward growth and increased profitability, two subjects that
will be discussed elsewhere in this report.
It’s appropriate we recognize significant contributions and notable milestones when we meet at
this annual event, and I’d like to celebrate a good friend, and a great Architect. Jim Harter, a
Principal and member of our Board of Directors, passed away late in the year. Jim headed up our
Belleville/ O’Fallon office for many years. He was truly an “old school” professional who sweated
all the details and knew how to take care of our clients. Jim served as a mentor to many and after
his “retirement” continued to work part time, which for Jim meant 6AM to Noon, performing QC
checks on drawings and specifications. We thank Jim for his many contributions, and are sure he’s
already got his drafting board unpacked and his tee square ready at that big Architectural firm
in the clouds.