Page 20 - Annual Report 2016 - Cover & Divider Pages.indd

P R E S I D E N T ’ S R E P O R T

As I reported in the Chairman’s welcome, 2016 was a year filled with unexpected twists and turns.
We dealt with delays and cancellations of projects by once again implementing reductions in
force and taking a hard look at overhead costs. In the last few years, we have reduced
Administrative Staff by two, Marketing/Business Development Staff by two and will be making a
reduction in our Accounting Staff in 2017. We have also reduced our IT support staff by one person
and have drastically reduced the use of our managed services consultant SWC. In summary, our
net revenue fell by just over $1,000,000 to $11,030,000, and we successfully reduced expenses by
just over $500,000 resulting in profit of $228,204 or 2.1% of net revenue. We continue to seek
efficiencies in our operations and will invest in software, such as NewForma and the latest versions
of Vision- IAccess that will allow us to do more with less, but we are reaching a point where
operating efficiencies alone are not the answer. We need to look for ways to once again increase
our revenue as the means by which we increase profitability. This brings us to our strategic initiatives
that were discussed at length at the shareholders meeting last year. We all understand the
political/ economic climate in Illinois will not likely change soon, and work in our core markets will
be depressed. We must look for growth in our strategic areas- following is a summary of activities:
Corporate Practice Area: Last year, we generated just over one million dollars in revenue from our
new Corporate Practice area, almost all this revenue, however, came from two existing clients
Aldi and Wiss Janey Elstner. Our Strategic Leadership Committee concluded we needed to make
strategic hires to begin to actively market work to new clients. This has been a slow process, but
we have successfully recruited a new leader for the Corporate Practice Area, Scot Fairfield. Scot
is returning to FGM after a detour into the Design/ Build world working with one of our strategic
partners, River City Construction. During his previous tenure at FGM, Scot was successful in building
a practice in Central Illinois and creating our Peoria office. He has a demonstrated track record
in business development- and we feel confident Scot will help us find new clients and expand this
market. As I mentioned in my Chairman’s welcome, there is expansion in the metropolitan areas
of Chicago and St Louis that should provide opportunities for FGM. We are also currently
negotiating with a Design Principal with a substantial Corporate portfolio who will work alongside
Scot as a marketing duo.

Geographic Expansion: Our first serious efforts at geographic expansion, of course, took place
with the opening of the St Louis office. This office has steadily grown, and I won’t steal any thunder
from the practice area reports by detailing any of the new clients. I would like to mention the
milestone of securing our first PK-12 client in Missouri, Northwest R1. Our success in landing this
commission is due, in no small part, to the efforts of Steve Raskin, who joined FGM at this time last
year as a PK-12 Principal. Steve has made a real impact already and proves once again the right
people, rather than the right location make the difference. Other individuals have been exploring
partnerships to win work in Wisconsin, Indiana and Iowa. We have won a project outside of Green
Bay and have competed for several other Wisconsin opportunities. In Northern Indiana, we have
identified an Engineering firm willing to act as a strategic partner, and are seeking an Architectural
partner who might act as an Architect of Record. We have also cultivated a relationship with KAI,
an A/E/C firm in St Louis that also operates offices in Dallas, Omaha and Atlanta. Early in 2016, we
retained the services of a Mergers and Acquisition consultant to identify acquisition targets in a
number of Midwestern cities. This effort was put on hold while we dealt with the third quarter
downturn referenced elsewhere in this report, but we hope to resume once we can improve our
financial picture.