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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
FY16 continued trends begun in FY14: a continuation of the state’s funding crisis that has
significantly impacted our PK-12 clients, increased opportunities as more and more school districts
driven by new boards demanding accountability went out for due diligence selection processes,
and increased competition as the workload in the marketplace decreased. We entered FY16 with
themes of national expertise and service, but closed the year with an increased need to refocus
on client service. 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
make a call on our behalf or write a great reference letter. Loyalty and service will again be the
rallying cry in FY17 in an increasingly difficult and challenging marketplace.

The PK-12 Education Practice Area experienced a drop in net revenue in FY16 from the levels of
FY13, FY14, and FY15 as we worked through the last of the state school construction grant work.
More work is of the traditional smaller health life safety work which we are very efficient at
completing. Our backlog also continued to shrink as it had coming into FY 16 so that we have
entered FY17 with a backlog that is extremely small though we have pending a few new larger
projects with uncertain start dates. 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 FY15 (-18.5% labor and -4.5% expenses). We experienced a slight drop in
profitability on our net revenue primarily as a result of the large projects having been completed.

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
demonstrated an ability to get shortlisted and be considered for projects in Missouri. We began
the effort for what became our first Missouri PK-12 win in FY16 though we did not win it until early
FY17 – Northwest R-1 School District. We are continuing to see the successful completion of major
projects that can be used to continue to establish our credibility with potential clients – Mt. Vernon
HS, Wayne City PK-12 campus, Warren Park ES, Glen Ellyn STEAM Labs, Cary Grove HS Fine Arts
Center, and Science Lab renovations in both CHSD 155 and Morton THSD 201. This coming year
we hope to begin the design of another new elementary school in Cicero and a significant
addition to Morton West HS as well as continuing major renovation to Morton East High School. 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