60 YEARS 1954
2014 ANNIVERSARY
2014 Annual Review
Contents
Letter From The President . . . . . . . . . . . . . . . . . . . .1 Officers & Directors . . . . . . . . . . . . . . . . . . . . . . .3 Vision & Values . . . . . . . . . . . . . . . . . . . . . . . . . .7 History of Allgeier, Martin and Associates . . . . . . . . . . . 11 Financial Highlights . . . . . . . . . . . . . . . . . . . . . . 17 2014 Operational Highlights . . . . . . . . . . . . . . . . . . 25 Profit Sharing Plan . . . . . . . . . . . . . . . . . . . . . . . 31 ESOP Plan Summary . . . . . . . . . . . . . . . . . . . . . . 39
Dear Shareholders and Employees: Allgeier, Martin has closed the books on its 60th year, and through your continuing efforts it was another productive year. The enclosed annual report highlights the company’s activities during 2014, and provides a summary of the firm’s financial position at the year’s end. During 2014, the annual revenues reached a new high of slightly more than $15.9 million. Approximately $12.1 million of these revenues directly benefited employees in the form of wages, social security tax payments, insurance premiums, and contributions to individuals’ profit sharing accounts. Company contributions to the profit sharing plan amounted to approximately 17 percent of participants annual wages in 2014. Allgeier, Martin is clearly well thought of on a technical level, as evidenced by our list of long-term clients, and our ability to thoroughly address their engineering and surveying needs. Our efforts are always undertaken with the client’s best interests in mind, and this does not go unnoticed. As a group of individuals, and as a company, we are also recognized for our willingness to give back to the community and to assist those around us. Any company is only as good as the individuals who comprise it, and for that reason Allgeier, Martin is a very good company with a bright future. Thank you to all employees for your efforts. I look forward to a productive 2015, and wish you the best. Sincerely,
Dean A. Willis P.E. President
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Officers & Directors
3
Officers William M. Thompson . . . . . . . . . Senior Vice President & Chairman of the Board Dean A. Willis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . President Steven C. McNabb . . . . . . . . . . . . . . . . . . . . . . . . . . First Vice-President Glen R. Davidson . . . . . . . . . . . . . . . . . .Executive Vice-President & Treasurer Karl G. Kinler . . . . . . . . . . . . . . . . . . . . . . . . . . . . Senior Vice-President A. Eugene Spears . . . . . . . . . . . . . . . . . . . . . . . . . . Senior Vice-President Barton J. Nichols . . . . . . . . . . . . . . . . . . . . . . . Vice-President & Secretary Christopher L. Erisman . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice-President Kurt E. Higgins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice-President Joseph P. Wilson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice-President Michael R. Atkinson . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice President Randall J. Adair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice President James Eric DeGruson . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice President Monnie D. Sears . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assistant Secretary
4
Directors Glen R. Davidson
Steven C. McNabb
Christopher L. Erisman
Barton J. Nichols
Kurt E. Higgins
William M. Thompson
Karl G. Kinler
Dean A. Willis
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6
Vision & Values
7
8
Over the past 60 years, Allgeier, Martin and Associates has sought to be our clients’ most trusted engineering advisor. This continues to be our vision going forward. The values that guide us in pursuit of this vision, and distinguish us from others, include being truthful in our business dealings, being thorough in our work, demonstrating personal responsibility, and showing respect for others. 9
10
History of Allgeier, Martin and Associates, Inc.
11
12
1954
We began operations in Lamar, Missouri on January 1, 1954. Our original staff consisted of eight engineers, two draftsmen, and a secretary. Founding partners were Kent W. Martin and Elmer M. Allgeier, and the associate partners were Emmett G. Green, Vernon R. Lawson, and Charles (Charlie) C. Davidson. In the spring of that year, the firm relocates to Joplin, occupying 4,000 square feet of rented office space at 1204 South Main Street. From the beginning, we have focused on transmission, distribution, substation planning and design, civil engineering, and architecture.
1965
In just over ten years, Allgeier, Martin had grown to over 60 employees, which led to the construction of our new offices at 2820 South Range Line Road in Joplin. The Range Line facilities were expanded five times over the following 46 years, to provide over 20,000 square feet of work space.
1978
Allgeier, Martin was incorporated on September 1, 1978. The directors were Elmer M. Allgeier, Kent W. Martin, Vernon R. Lawson, Emmett G. Green, and Charlie Davidson. On that day, Elmer Allgeier retired from the company, and sold his shares to the remaining directors. Kent Martin was elected President of the new Corporation, and Vernon Lawson, Emmett Green, and Charlie Davidson were elected as Vice Presidents.
1992
In 1992, we become a 100% employee-owned company through the development of an Employee Stock Ownership Plan (ESOP). Ownership is divided between shares held by the ESOP, and restricted shares that are held selected employees. Operating revenue tops $6 million.
2006
In 2006, Allgeier, Martin and Associates acquired Wilson Hydro, a smaller civil engineering firm that specialized in hydrology and stormwater systems design. Along with the acquisition, we also gained a secondary office in Rolla, Missouri staffed with three civil engineers. Our operating revenues were in excess of $10 million for the first time that year, and our employee count had grown to 109.
2011
Allgeier, Martin moved its corporate office to a new 32,000 square foot office building located at 7231 East 24th Street in Joplin, Missouri. The new building is fresh and modern, and brings all corporate operations (with the exception of the Rolla office) under one roof for the first time since the early 1970’s. Our operating revenue tops $13 million for the second time in three years, and the number of our staff grew to 116 by the year’s end.
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Original Logo
The earliest of the Allgeier, Martin and Associates logos featured customized mid-century modern typeface rendering the “AMA.” The crossbars of the “A” were stylized to create further balance and connect to the outward bounding box that contained the logo.
Tepee Wigwam Tepee
This mark, affectionately referred to as the “Tepee Wigwam Tepee Logo” was developed in the mid 1970’s. It featured another personalized typeface and a new combination of the letters “AMA.” The result was a connection of the downward strokes of each letter into one new custom abstract shape. 14
The Early 1970’s
The first adaptation to the original logo updated to a more contemporary typeface, but retained the stylized crossbars of the “A’s” while removing the bounding box. This logo also had some overlap in use with the following “Tepee Wigwam Tepee” version.
The Late 1970’s
Created in the late 1970’s, this version of the logo contained a fusion of graphic elements from its predecessors. It kept the combination “AMA” but continued the trend of updating the typeface. It also reintroduced the stylized crossbar of the final “A.” For the first time, this logo also included the formal name of the company.
Current Logo
Designed in 1982, this version of the logo dropped the second “A� to symbolize the transitions within the company’s leadership. This logo has had the longest stretch of constant use and recognition.
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2014 Financial Highlights
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Statements of Assets, Liabilities, & Stockholders’ Equity | Cash Basis For Years Ending December 31, 2014 - 2009 2014
2013
2012
2011
2010
2009
$2,998,066
$2,533,907
$1,976,229
$1,578,120
$1,732,338
$1,557,999
Assets: Cash and cash equivalents Prepaid expenses
$222,151
$220,619
$155,459
$180,784
$238,080
$160,481
Land
$78,740
$78,740
$78,740
$78,740
$78,740
$78,740
Property and equipment (net)
$52,598
$56,381
$70,256
$98,324
$55,198
$93,469
Other assets
$7,676
$6,659
$8,782
$8,661
$10,070
$162,861
Total Assets
$3,359,231
$2,896,306
$2,289,466
$1,944,629
$2,114,426
$2,053,550
$5,028
$13,003
$13,876
$12,936
$13,729
$11,175
Liabilities: Deferred reimbursements Notes payable
-
-
-
-
-
-
Other liabilities
$1,215
$1,052
$126
$122
$389
$14,092
-
-
$15,975
-
-
-
Accrued profit sharing plan
$1,250,000
$950,000
$950,000
$950,000
$850,000
$1,000,000
Total Liabilities
$1,256,243
$964,055
$979,977
$963,058
$864,118
$1,025,267
$1,905,240
$1,855,346
$1,765,840
$1,602,661
$1,582,325
$1,379,816
-348,933
-$214,797
-$387,895
-$561,260
-$337,580
-$373,892
$90,585
-$187,506
-$112,258
-$174,484
-$1,555
-$22,099
$456,096
$479,207
$43,802
$114,654
$7,118
$44,458
Total Stockholder’s Equity
$2,102,988
$1,932,250
$1,309,489
$981,571
$1,250,308
$1,028,283
Total Liabilities & Stockholder’s Equity
$3,359,231
$2,896,305
$2,289,466
$1,944,629
$2,114,426
$2,053,550
$992,371
$1,301,785
$1,282,358
$1,108,985
$1,295,222
$1,456,052
$1,640,819
$1,579,609
$1,427,949
$1,386,724
$1,501,000
$1,508,430
Client Prepayment
Stockholder’s Equity: Capital stock (plus Paid in Capital) Treasury stock Retained earnings Excess Revenues over Expenses
Additional Information Accounts Receivable (Adjusted) Work in Process
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Financial statements are prepared on the cash basis of accounting, a comprehensive basis of accounting other than generally accepted accounting principles.
Statement of Revenues and Expenses | Cash Basis For Years Ending December 31, 2014 - 2010 2014
2013
2012
2011
2010
Revenues: Fees Collected
$15,923,897 $14,405,279
Deposit on plans Other income Total Revenues
$13,777,575 $13,073,538 $12,892,548
-
$15,810
$15,335
$28,450
$32,730
$67,549
$36,209
$8,638
$64,727
$20,384
$15,991,446 $14,457,298 $13,784,272
$13,166,715 $12,945,662
Expenses: Salaries and compensation
$8,818,020
$8,404,392
$8,142,486
$7,923,193
$8,028,470
Employee taxes and benefits
$1,769,645
$1,655,348
$1,636,322
$1,561,457
$1,514,132
Employee profit sharing plans
$1,522,063
$1,220,269
$1,215,062
$1,204,544
$1,113,105
Office equipment and expense
$99,782
$93,912
$94,336
$76,465
$65,858
Field equipment and expense
$623,268
$610,005
$714,084
$609,443
$535,362
Subcontracted services
$698,265
$184,171
$215,119
$234,244
$223,306
Liability insurance expense
$304,464
$308,785
$285,226
$271,805
$277,042
Utilities, rent and maintenance
$546,231
$532,702
$542,758
$465,421
$282,788
Depreciation and amortization
$324,827
$341,387
$338,810
$311,674
$386,813
Professional services
$41,983
$107,139
$85,910
$92,713
$90,252
Administrative expenses
$67,065
$151,534
$215,729
$187,273
$199,577
Data processing expenses
$193,362
$98,562
Professional and promotion
$176,635
$140,594
$112,686
$105,405
$106,372
$40,322
$41,468
$38,343
$25,778
Other expenses
$43,296
Total Expenses
$15,228,906
$13,889,122 $13,639,996 $13,081,980 $12,848,855
Excess Revenues over Expenses Before Taxes
$762,540
$568,176
$144,276
$84,735
$96,807
Income Taxes
$306,444
$88,969
$117,377
$29,919
Excess Revenues Over Expenses After Taxes
$456,096
$479,207
$26,899
$114,654
Financial statements are prepared on the cash basis of accounting, a comprehensive basis of accounting other than generally accepted accounting principles.
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– In 2014 – 2014 Expenses
57.9% Of Expenses For
Allgeier, Martin and Associates, Inc.
Salaries & Compensation
57. 9%
We n t t o S a l a r i e s & C o m p e n s a t i o n
F o r E v e r y $ 1 0 0 P a i d i n Wa g e s
$56.73 $17.80
Contributed to Benef its, and
Contributed to Retirement Plans
Salaries & Compensation: 57.9% Employee Taxes & Benefits: 10% Employee Profit Sharing Plan: 10% Subcontracted Services: 4.6%
G&T Cooperatives
Repre sented 33.4% of Ou r Client s, a nd
M u n i c i p a l , C o u n t y, & State Governments
Represented 29% of Our Client Base
Together They Form 62.4% of All Business 20
Field Equipment & Expense: 4.1% Utilities, Rent, Maintenance: 3.6% Office, Administrative, & Data Processing: 2.4% Liability Insurance Expense: 2% Professional Services, Promotion, & Misc.: 1.7%
$57 of Benefits Per $100 Paid in Wages - 2014
Types of Clients - 2014
G &T C ooper ative
33.4%
Retirement Plan
$17.80
Retirement Plan: $17.80
G&T Cooperative: 33.4% Government - Municipal, County, & State: 29%
Insurance: $16.27 Distribution Cooperative: 14.9% Paid Time Off: $10.22
Utilities: 12.8% Other Design Professionals: 5.2%
Taxes: $8.62 Other: 3.4% 401(k) Match: $3.82
Industrial: 1.4% 21
Annual Revenues F o r
2 0 1 4
E q u a l
$15,991,446 $17 $16 $15 $14 $13 $12 $11
Millions
$10 $9 $8 $7 $6 $5 $4 $3 $2 $1 0
1994 22
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014 23
24
2014 Operational Highlights
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Information Technology
26
aled Drawings 10-11-11\C06.dwg, Layout1, 10/12/2011 3:55:05 PM, Mjones
• Self-accreditation audit was accomplished on all network and user (client) Microsoft products. This included company wide use of MS Exchange e-mail and the standardization of Microsoft Office 2010 for all clients. • Deployment of 2015 Autodesk suite, and modifications required for client compatibility, was accomplished. • PDFExchangePro was installed and is being used as the standard for PDF file creation and manipulation – this allows for file parsing and reorganization, and Optical Character Recognition at a fraction of the cost of other applications. • A fully functional network storage and server co-location site was developed downstairs. If required, all network services can be run from downstairs, and a full backup of all network data exists off-site and downstairs on a Network Area Storage device. Deployment of localized sectional switches began that will provide additional Disaster Recovery support if an event leads to network connectivity failure in the server room. These local switches can easily be re-routed downstairs to obtain network access for all users. • The Avaya phone system was expanded, and now supports 150 digital telephony ports and associated voice mail files. • Uninterruptible Power Supplies were installed for all clients computers and servers throughout the company. These provide all computers a minimum of 40 minutes of operation in a power outage situation. • Field-based data collection devices are being used to collect transmission staking survey data, and make the data immediately retrievable by designers. In many instances, this process has shortened the work cycle from 2 weeks to 2 days. These devices and applications continue to be refined for “best fit” for our particular customized use.
Printing
• The civil and electric HP plotters have been removed from service, and the KIP 7800 wide-body color laser printer is now taking near 100% of the large format load. • A new Savan C5100s high-speed color production printer replaced the Xerox digital press in our print room. Print quality improved significantly with this new hardware acquisition.
Training & Conferences
• Training for MS Project 2010 was accomplished in meeting rooms for targeted employees. Several smaller “lunch-n-learn” sessions were held throughout the year on topics including training on the use of the PDFExchangePro software, new shipping procedures, and various departmental specific meetings, as well as product presentations sponsored by vendors. • Allgeier, Martin also hosted a national meeting of the American Society of Civil Engineers’ Design of Steel Transmission Pole Structures Committee.
Retirements
126
Don Watts Nancy Hirshey David Thornton Sachie Langston
EMPLOYEES
as of 12/31/2014 payroll
34 Years 31 Years 27 Years 10 Years
New Employees Dottie Bland Jonathan Arzet Mark Hendricks Anthony Otero Shane Rogers Justin Severs JoBeth Shumaker Brett Smith Larry Stewart Jerry Wellington Blake Watson John Birner Vince Brackney David Riggs
Electrical Electrical Electrical Administrative Electrical Electrical Administrative Electrical Civil Electrical Civil Civil Electrical Electrical
44
EMPLOYEES
Participated in the Joplin Metro Credit Union.
Clerk/Assistant Technician ROW Representative Graphic Designer Survey Crew Member Drafter Accountant Technician Resident Project Representative Resident Project Representative Engineer Survey Party Chief Drafter Drafter
Flu shots were made available at no expense to all employees, spouses, and eligible dependents.
48
INDIVIDUALS
Received the vaccination.
$18,437 COMPANY CONTRIBUTIONS To Charities & Others.
108
EMPLOYEES
made individual contributions to the 401(k) plan as of 12/31/2014. Total individual contributions in 2014 were $394,689 to conventional 401(k) plans, and $123,272 was contributed to Roth 401(k) plans.
96
EMPLOYEES
Participated in the Medical Expense Reimbursement Plan. Contributions to the plan for health insurance premiums & out-of-pocket expenses totaled
$445,445.
14 UNITS
of blood were donated in 2014 by employees at blood drives conducted by the Community Blood Center. 27
60 YEARS 1954
2014 ANNIVERSARY
28
60th Anniversary Banquet
Cosmopolitan Event Center • Saturday, September 27, 2014
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Profit Sharing Plan
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Profit Sharing Plan
The year 2014 profit allocation of $1,250,000 is not reflected in the following tabulation. The actual contribution will be made in March, 2015. $18
Profit Sharing Plan Summary
$17 $16 $15 $14
12/31/2014
$18,949,828
$22,057,708
61,797
25,506
Employee 401(k)
410,798
396,689
Employee Roth
104,863
123,272
Employer Profit Sharing
650,000
949,823
Employer Match
270,269
272,063
(2,027,245)
(1,162,766)
(189)
(297)
-
177
3,637,587
1,118,403
$22,057,708
$23,780,578
Account Summary Account Value Beginning of Period Contributions Rollover
$13 $12 $11
Millions
12/31/2013
$10
Withdrawals
$9
Forfeitures
$8
Fees Investment Gain (Loss) Account Value End of Period
$7
Summary of Sources
$6
Employee Rollover
$453,980
$467,859
Employee 401(k)
6,243,864
6,705,838
$5
Employee Roth
$4 $3
Employee Profit Sharing Employer Match Total
402,252
480,122
12,458,907
13,361,037
2,498,705
2,765,722
$22,057,708
$23,780,578
$2 $1 0
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 32
As of 12/31/2014 there were 118 employees participating in the Profit Sharing Plan. Of these, 102 (86%) were also participating in the 401(k) portion of the Plan. Those individuals participating in the 401(k) Plan deferred an average of 6.7% of salary.
C
U
M
U
L
A
T
I
V
E
COMPANY CONTRIBUTIONS
To Profit Sharing Plan For 2014 Equal
$17,384,260
6 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 33
$1600
The Employee Profit Sharing Plan was originally established by the Board of Directors in 1981. The Plan has been amended and improved over the years, and now includes Roth and conventional 401(k) provisions with company match of employees’ deferrals, and daily valuations of employee’s accounts. The Plan allows employees to contribute either pre-tax or after-tax dollars and the associated company match to their own self-directed retirement account, while also allowing for additional company contributions to the Plan. These additional company contributions are determined by the Board at the end of each year after reviewing company profits. At year-end 2014, the Board of Directors elected to contribute $1,250,000 to the Plan. Plan participants receive quarterly statements which reflect individual contributions, company contributions, and previous earnings, and they also have daily access to their accounts via Internet access or by telephone. In 1992 the Employee Stock Ownership Plan (ESOP) was established with stock purchased from
$1500 $1400 $1300 $1200
Thousands
$1100 $1000 $900 $800 $700
PROFIT
SHARING
CONTRIBUTIONS F o r
2 0 1 4
E q u a l
$1,522,063
$600 $500
Profit Sharing
401k Match
ESOP
Total
$400 $300 $200 $100 0
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 34
Kent Martin, Vernon Lawson and Emmett Green. Company contributions to the ESOP allowed it to be fully funded by 1995. Employees who are participants in the ESOP, or who are eligible to become participants in years when contributions are made to the ESOP, receive distributions of the stock purchased by the ESOP with those contributions. Stock values dictate account balances in the ESOP, and these balances are reported annually to ESOP participants. The following charts depict company contributions to the Employee Stock Ownership and Profit Sharing Plans since inception of the Profit Sharing Plan in 1981. Total individual 401(k) contributions are not shown.
6 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 35
36
DATE
REVISION
DWN. BY:
CC
CM
ESOP Plan Summary
STORM WATER POLLUTION PREVENTION PLAN
37
Employee Stock Ownership Plan
The ESOP balance on 12/31/2013 was $1,737,380; this included 9,881 shares of company stock valued at $175.57 per share, plus a cash account balance of $2,573. Participants redeemed approximately 764 shares of stock from the ESOP in 2014, with a total value of $134,135, leaving 9,117 shares of stock in the ESOP on 12/31/2014. The annual independent ESOP stock valuation has not yet been completed; therefore the 12/31/2014 ESOP balance and associated number of ESOP shares have not been determined
200 190 180 170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 38
Stipulated Stock Prices A s of D ecember 21, 2 013
$175.57/share
6 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 39