AMP 2014 Annual Report

ANNUAL R E P O R T

14

Applied Measurement Professionals, Inc.

What REALLY Matters

President’s Letter

From My Perspective Family, friends, and faith in something greater than ourselves. Certainly relationships, generosity, love, happiness, health, security and profession also all fall within the realm of what really matters to me. I imagine some of these fit with your beliefs, and I’m sure you have others as well. It’s important that we think of these things often and strive to let them, not our daily distractions, drive our thoughts and actions.

I’ll be honest, when my marketing staff first asked me to write the welcome letter for this year’s annual report with the theme “What Really Matters” I might have been a little wary, but the more I thought about it, the more I became excited about the opportunity. For me, and hopefully for you, work does not top the list of what matters most, but it is still very important as it is foundational to the pursuit of these greater endeavors. Naturally, this being our annual report, we will focus on what we think is important to our valued business partners and what they trust us to provide.

What REALLY Matters

Just like you, we hear and track all the latest “big buzz” ideas in testing. However, we don’t just go making major decisions to offer some new twist to what we know works and protects our clients without first doing the research to make sure it actually adds benefit and value. When we do find some new technology or other tool that has merit, naturally, we implement it as quickly as prudent. Beyond that, we like to concentrate our energy on the things we know provide value to our customers and the candidates we are fortunate to serve. Someone once told me, and I believe, the key to maximizing work efficiency is separating the little things that matter from the little things that don’t. We firmly believe Legal Defensibility of your examination program, Reliable Results, Candidate Convenience and Easy Access to Meaningful Data are the cornerstones of our service to you and your various stake holders.

I hope you enjoy reading more about what we feel really matters and, as always, if you have any questions or would just like to talk, please do not hesitate to call me. My talented staff and I are here to serve you.

Gary A. Smith President and CEO

The older I get, the more I realize that it’s the little things that count; little things can move mountains when they inspire and motivate people.

Candidate Convenience

Our clients are our valued business partners.

We meet with them at conferences and development meetings, discuss services, and renew our relationships for contract term after contract term (often for 20 years or more). On a daily basis though, it is our clients’ candidates with whom we interact the most. Every day they visit our website, schedule using our online software, and call our Candidate Support Center to ask questions or schedule an appointment. On test day, our proctors walk them through what is often a stressful event, guiding them from check-in, to feeling comfortable with the computer, all the way to receiving their results. Throughout this process, candidates get many communications from AMP: eligibility notices, scheduling confirmations, appointment reminders, score reports and often many other depending on the services AMP is providing. We have built our entire operational structure and AMP Assessment Center Network around the concept of candidate convenience and security.

We continue this focus as we explore and launch new products and services as well.

A few of our most recent additions that focused on candidate convenience include: zz Continued expansion of the “My Home Page” for candidates to view previous correspondence, access a copy of their score reports, save appointments to their online calendar, and manage their testing appointments. zz Opt-in for text alerts to remind candidates of their testing appointments while they are on the go.

zz Mobile scheduling allowing candidates to complete their scheduling process from their smart phones or tablets. zz Upgrades to our internal phone system to further improve our ability to direct candidates and efficiently handle high call volumes.

Is it all working? Do candidates find AMP’s services convenient? We don’t like to leave it to chance, so we ask them. Candidates respond to satisfaction surveys after scheduling and after completing their test. The answer is yes all around – candidates do find our processes convenient. zz 97% found it easy to schedule their testing appointment zz 95% found it easy to locate their testing location zz 99% found the testing software easy to use The same can be said for our association management division where we work hard to serve our clients’ members or certificants. Our enhanced services, such as online membership databases, e-communities, customer support center, extranet sites, and conference phone apps provide our clients’ members with that added bit of convenience that can make all the difference in our busy lives.

We are grateful that our clients put their trust in AMP and allow us to service their candidates and members.

Reliable Results

The heart of what we do is to differentiate between those candidates who are minimally competent to practice and those who are not.

All the services, all the meetings, all the hard work really boils down to this. It is such an important distinction. Consider a doctor or nurse treating a patient, a real estate agent advising first time home buyers, a veterinarian treating a beloved family pet, or a contractor responsible for the safety of an office building. The public deserves to feel confident these professionals’ credentials or licenses weren’t arbitrarily granted, but were based on a meaningful decision. That is the importance of reliable results.

Quality = Reliable Results. Quality is one of our core values, and it is a belief by which we operate every day. Through our strategic planning sessions, our staff was continually drawn back to the core values of quality, integrity and credibility. We don’t just talk the talk, we walk the walk, living those values in everything we do here at AMP. It makes a difference – just ask some of our long term staff why they stay with AMP – it is usually because we do what we say and we do it right.

Reliability is equally important within our association management division. Our

clients count on their management team to provide accurate membership and financial data to lead decision making and plan for the future. AMP stands by the reliability and quality of the information maintained and processed for our clients. We treat your data like our data – which means it is accurate, safe and accessible.

The quality and reliability of our services is what we offer our clients, and it generally keeps them happy and engaged with AMP. “I’m impressed with how on top of things AMP has been for us. It is a nice change from our previous testing company.”

– Hand Therapy Certification Commission “I can’t tell you how impressed I am with AMP, and with the improved quality of our exam. This has been a long time coming, and is definitely a step in the right direction for our organization.”

– National Cancer Registrars Association “Thanks to you and all the staff at AMP for your help, don’t think I would make it through without AMP’s expertise with all of this.”

– Association of Boards of Certification

Legal Defensibility

Ensuring a legally defensible examination is the cornerstone of everything we do.

We all want the latest and greatest technology and added conveniences, but legal defensibility is a must. Without it, each organization and every credential is at risk. If it weren’t for the overarching need for legal defensibility, many more testing sponsors could handle more services in-house, but in reality the processes are complex and the price for errors are potentially enormous.

The knowledge and safety a credible vendor brings to the process is priceless.

Everything AMP does, from setting up item banks and developing test forms to administering and scoring examinations, is done with the building blocks of legal defensibility in mind. In fact, it is our quality test development services which often keep our clients around for 10, 20 or even 30 years.

Sometimes it even brings them back after testing the waters with a “flashier” testing company. How do we reach that pinnacle of quality that ensures legal defensibility and keeps our clients sleeping soundly at night?

1. First, we employ professional staff with quality credentials and the same commitment we value as a company. Our hiring processes focus on fit and attitude just as much as skills. We can teach fundamental know-how, but a good attitude and commitment to perfection are

a true find. Once we have those staff members, we keep them happy with excellent benefits, a caring working environment, and the knowledge that their work makes a difference in the world of public protection.

2. Next, we standardize and document.

Over more than 30 years of providing testing services, we have learned how to provide the most error-free processes.

We have documented our approach, and we ensure each employee has the know-how and tools to replicate our approach. A series of procedures and checklists means that no matter which AMP employee is on a client’s team, they receive the same high-level of quality assistance. We call it the “AMP way.”

3. Finally, we DO NOT lose sight of what is important. Those building blocks of legal defensibility remain our guides. As clients make changes to their programs, we are proud to support them and assist in their growth. However, when changes threaten the core purpose of the program, we will do our job and consult with our client. Our knowledge and experience will be put to use with the client, guiding them on the pathway to make the best choices without sacrificing integrity.

Access to Meaningful Data

Data is power these days.

The flow of information gives us the power to draw conclusions, make decisions and predict trends. At AMP, we understand that our clients’ data belongs to them. It should be available to inform how we make decisions, budget, plan and grow. We use a number of great tools to process data and present it in meaningful ways. The most frequent is our VIP Client Portal – available to all our clients because we view each and every one, regardless of size, as very important.

This portal is available 24/7/365 at no added cost. The array of standard reports provide a wide range of capabilities for searching and reporting on data. Custom reports are also available to meet the very unique needs of some of our business partners. Once programmed, these reports are available for generation on-demand. We continually upgrade the portal and standard reports to meet the changing needs of certification boards and licensure entities.

technology approaches, we first listen to our clients’ needs. How do you plan to use the data? Who will be accessing the reports?

What other systems need to access the data? This allows us to work together and create the most beneficial technology solution. Even when our clients work with a third-party for certification management needs, integration with AMP’s systems can further enhance the overall user experience.

Need even more immediate data access?

Data integration allows the most complex systems to share data in a seamless fashion. Whether it is full integration, web-services or SFTP programming, our information technology staff can build an integration model that meets the most unique program needs. Rather than presenting canned

What is next? Data dashboards are becoming more popular, so we are working on providing our clients with the next level of reporting power in the form of dashboard reports. Soon, the most useful data will be available at a glance with easy to read graphics and meaningful comparisons. Just more power at our clients’ fingertips.

Of course, data is no good if it isn’t accurate. We pride ourselves on the accuracy of all data provided. Our systems are developed 100% in-house to ensure they meet our exacting standards for error-free delivery. This also ensures that we never have to make due with an out-of-the-box solution to a need. We create all our systems around our staff’s needs and our client’s use. That is reflected in the scope and accuracy of our reporting services and tools.

Community Matters

While we are dedicated to our roles in the credentialing and association management worlds, we remain equally aware of our responsibilities to our work family and the world around us.

For that reason, we celebrate our work culture regularly by dining together, playing a bit and giving back to the community.

In 2014, AMP staff bound together to support many great charities, including the Olathe Mayor’s Christmas Tree Fund, Salvation Army, American Heart Association, Johnson County Community College, Harvesters Food Bank, Care of Poor People, American Red Cross, Great Plains SPCA, Pulmonary

Fibrosis Foundation, Donate Life, Braden’s Hope for Childhood Cancer, Natalie’s A.R.T. Foundation, Royals Charities and other deserving organizations. In addition, we supported our youth by hosting an educational day of events on Take Your Child to Work day and encouraged staff to make smart transportation choices through our Green Transportation Reward Program.

Mission Statement Applied Measurement Professionals, Inc. (AMP) is a private stock corporation located in the greater Kansas City area. It was incorporated in the state of Kansas in 1982 as a wholly owned subsidiary of the National Board for Respiratory Care, Inc. AMP’s corporate mission is to provide certification organizations, governmental agencies, associations and private industry with test development and administration, psychometrics, association management, and data management services that meet the highest professional and ethical standards. To tailor these services to fulfill the unique requirements of each client by providing innovative and accessible professional, technical and managerial staffs to best serve our business partners thoughout all phases of product/service delivery.

Our Clients

Our clients are a big part of our AMP family. In 2014, we were honored to work with many outstanding organizations.

Money Matters

Statement of Income

Good, sound financial stewardship matters.

(unaudited)

Years ended December 31, 2014 and 2013

This is but one reason we directly employ two talented CPAs and supporting staff to oversee our financial matters. We continually work to strengthen our financial position so we are able to upgrade equipment and infrastructure to enhance our services and grow the AMP Assessment Center Network. In 2014, we purchased almost $1 million in new equipment to do just that, and paid for these improvements with current cash flow.

REVENUE

As detailed in the Statement of Income, total revenue increased by almost $2.6 million or more than 9%. This included a modest increase in association management services and a fairly substantial rise in testing revenue, predominantly driven by our real estate and healthcare markets. While expenses rose some too, holding that increase to under 3% allowed our net income before taxes and bonuses to grow nicely. We remain committed to retaining the industry’s most talented people by providing much of the net income back to staff through profit sharing and bonuses. This growth also fuels our ability to improve the services that matter most to our business partners.

EXPENSES

21,857,717

Applied Research Products

1,698,128

1,664,085

Association Management

3,415,956

3,130,938

824,353

883,597

$30,134,781

$27,536,337

Test Development and Administration

8,688,331

8,215,101

Personnel - Before Bonuses

11,921,791

11,667,917

General and Administrative

3,537,683

3,569,987

—

—

188,251

218,966

$24,336,056

$23,671,971

Publishing, Software and Other Income TOTAL REVENUE

Interest Expense Publishing Expense TOTAL EXPENSES (before taxes and bonuses)

NET INCOME (before taxes and bonuses)

(unaudited)

December 31, 2014 and 2013

2014

Current Assets Other Assets Property and Equipment Less Accumulated Depreciation Net Property and Equipment TOTAL ASSETS

2013

10,255,839

8,869,437

915,574

867,575

6,679,919

6,182,407

4,948,452

4,733,912 1,731,467

1,448,495

$12,902,880

$11,185,507

LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Long-term Debt Other long-term Liabilities Stockholders’ Equity TOTAL LIABILITIES AND EQUITY

4,428,251

2013

24,196,344

Balance Sheet ASSETS

2014

Testing Revenue

3,668,283

—

—

904,041

805,253

7,570,588

6,711,971

$12,902,880

$11,185,507

$5,798,725 $3,864,366

Financial transparency also matters. As a privately held company, we are not required to disclose our financial statements. So, why do we do it? We do it because we think it’s the right thing to do and because it matters. When carefully selecting a business partner of most any kind, one should feel confident their partner has the resources to do what they say and will be able to do it over time. It is also comforting to work with someone that trusts the relationship enough to share potentially sensitive information in an open and free manner.

We are fortunate to continually strengthen our balance sheet by increasing our cash positions and remaining free of bank debt. Current ratio (ability to meet short-term obligations) remains strong at 2.3 to 1. Stockholders’ equity rose by almost 13% and the debt-equity ratio (measure of financial leverage) was also strong at .70. We remain grateful to our valued business partners and pledge our ongoing commitment to wisely use our resources to provide the very best products and services.

Executive Office 18000 W. 105th Street Olathe, Kansas 66061.7543 913.895.4600 913.895.4650 FAX info@goAMP.com www.goAMP.com

Regional Offices Atlanta, GA (Lilburn and Marietta)

Georgetown, SC Jefferson City, MO Macon, GA Savannah, GA Springfield, IL Springfield, MO St. Louis, MO Washington, DC