TWENTY 2012 annual report
see cover file
2 5 FIVE TWENTY-FIVE YEARS providing real jobs for capable people
YEARS
DEDICATION QUALITY SERVICE
CONTENTS The Work They Perform............................................................................................... 3 Twenty-Five Years Providing Real Jobs for Capable People..................................... 4-5 JOI Profile Yolanda Richardson................................................................................... 6 Hospital Environmental Services................................................................................. 7 JOI Profile Fernando Vera........................................................................................... 8 Linen and Laundry Services........................................................................................ 9 Awards of Merit.......................................................................................................... 10 Our Accomplishments............................................................................................... 11 Report to the Community.......................................................................................... 12 FINANCIAL REPORT Independent Auditor’s Report.................................................................................... 13 Statement of Financial Position................................................................................. 14
Assets............................................................................................................... 14
Liabilities........................................................................................................... 14 Statement of Activities and Changes in Net Assets.................................................. 15 Statement of Cash Flows.......................................................................................... 16 Statement of Functional Expenses 2011................................................................... 17 Statement of Functional Expenses 2012................................................................... 18 Notes to Financial Statements.............................................................................. 19-20 Richard Carrillo: In Memoriam .................................................................................. 21 Management and Board of Directors......................................................................... 21 Our Services.............................................................................................................. 22 ON OUR COVER The rewards of a job well-done reflects in the faces of our employees.
OPPORTUNITY
ACCOMPLISHMENT
INDIVIDUAL
The Work They Perform
F
or the past 25 years, Job Options’ commitment has never wavered from its mission to actively seek employment for individuals with psychological or physical disabilities. Throughout its history, Job Options has given more than
4,000 employees substantial opportunities in our military’s commissaries, food-service mess halls, hospitals, border facilities and in our laundries. As a result of these efforts, contracts with government and commercial entities have provided jobs that give our employees the ability to earn a living wage while benefitting their families and the communities in which they live. There is nothing more rewarding than witnessing the pride and satisfaction our employees gain from a job well done. For the past 25 years, we have recognized the importance of serving customers by providing quality performance through our employees’ dedicated labor. At Job Options, we are committed to increasing the opportunities for deserving individuals who can and want to work as we begin the
next quarter-century of service.
COMMITMENT SELF-
WORTH COMMUNITY
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Job Options 2012 Annual Report
Twenty-five Years Providing Real Jobs for Capable People
A
s we enter our 25th year of placing employees in government and commercial jobs, we would like to reflect on the early days of Job Options’ (JOI) founding.
25
Beginning as a division of Mental Health Systems in 1987, JOI’s not-for-profit services started small, obtaining our first contract with the Miramar Commissary. Our employees, then as now, were people with mental or physical disabilities that limited their ability to find meaningful work. “One of the most basic of Through the years we have increased our staff human desires is to be an active, as we added food, laundry, commissary productive member of society.” and hospital environmental service contracts. Our ongoing goal is to offer employment to deserving individuals and place them in positions where they can earn a living that offers a deep sense of achievement and independence. Our disabled employees work diligently to ensure the highest level of competence and service to clients. One of the most basic of human desires is to be an active, productive member of society. Job Options currently gives that opportunity to more than 950 employees who provide services for government and commercial clients. Throughout our first quarter-century, we have recognized the importance of serving customers with the best possible performance through our employees’ dedicated labor. Job Options is committed to continuing to expand client services and opportunities for individuals with disabilities.
Job Options 2012 Annual Report
JOI began operations–division of Mental Health Systems. First contract: Miramar
1987 1994
Laundry service established. First laundry contract with Navy bases
NISH Business Innovation Award–San Bernardino laundry. First contract awarded outside California–Hill AFB Commissary, Utah
2004
San Bernardino laundry facility opens. Began laundry service to commercial customers
2006 Awarded large custodial contract at 16 NAVFAC locations throughout Southwest U.S.
2009 2011
Laundry service grew with contracts from Glendale Adventist and three HCA hospitals in Los Angeles. Weed Army Hospital Environmental Services contract awarded. JOI named 11th largest AbilityOne supplier to federal government
Job Options CEO Dr. William Mead elected to NISH Board
2003
2007 NISH National Business Innovation Award–Naval Medical Center San Diego
Hospital Environmental Services established. Contract with Naval Medical Center San Diego
2001 2002
Revenue reached $20 million. 604 employed. Food service contract with Sodexo at Camp Pendleton begins
JOI split with MHS to form separate 501(c) 3
1997 1999
Reached $10 million in revenue. Expanded laundry services with Naval Medical Center San Diego
Page 5
Revenue reached $40 million. 801 employees. Growth in commercial laundry contracts to hospitals
2012 We know the importance of serving customers with the best possible performance through our employees’ dedicated labor.
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Job Options 2012 Annual Report
HOSPITAL ENVIRONMENTAL SERVICES
JOI PROFILE Yolanda Richardson
W
hen Yolanda Richardson was first hired at the Naval Medical Center in 2010, she was nervous. Her supervisor could tell Yolanda wanted to prove that she could do the job, but was overwhelmed with anxiety. She explained how hard she would work if given the opportunity, and that she was tired of working dead-end jobs at fast-food places. Friends told her of Job Options’ employment opportunities, and she immediately began applying. “I am a good worker, I could do anything they asked of me,” said Yolanda, “I just needed a chance to prove myself to them.”
“My work at the hospital keeps me busy, and I enjoy it—helping those who need it is what I do best. Job Options gave me a chance, and I took it!” Just as she began her work at the hospital, her brother became seriously ill. It was a stressful and ultimately tragic time for her, but she continued to work at her job and spent time with him until his passing. Her supervisor, Rodney Graham, says that not only can she do the job, but she has proven to be an exceptionally motivated employee. She gives 100% everyday despite still struggling with her occasional depression. She assists in the training of new employees and is proud to wear her Job Options uniform. Yolanda is one who never shies away from new challenges or helping others. “My work here keeps me busy, and I enjoy it— helping those who need it is what I do best. Job Options gave me a chance, and I took it!” Now, three years after beginning her employment with JOI, Yolanda works in Building 26 servicing the rooms of recovering military personnel. Yolanda brightens up their day, saying “These are my kids, I do whatever I can to make them comfortable and to know they have a friend.” The patients all refer to Yolanda as “Mayor of Building 26.” She is well liked and respected by management, her peers, and most importantly by those she serves at the Naval Medical Center, San Diego.
Yolanda playing basketball with her grandson Kevin in Balboa Park.
Job Options 2012 Annual Report
JOB OPTIONS EXPANDS ITS HOSPITAL ENVIRONMENTAL SERVICES DIVISION
J
ob Options’ Hospital Environmental Services (HES) plays a large role in preventing hospital-acquired infections. These infections result in nearly 99,000 deaths annually in the United States and cost healthcare facilities more than $20 billion dollars in additional costs each year. HES employees at JOI are highly trained individuals who receive ongoing weekly training to ensure that patients and customers are receiving the best possible care, while saving lives and money. We are responsible for providing Hospital Environmental Services at the following hospitals:
• Naval Medical Center: San Diego, California • Martin Army Community Hospital: Fort Benning, Georgia • VA Medical Center: La Jolla, California • Weed Army Community Hospital: Fort Irwin, California
In total, we clean approximately 3 million square feet of space at these hospitals every day. Job Options’ staff is trained not only in cleaning and sanitizing the facility where they work, but they also receive customer service, compliance and regulatory training. Our HES department is one of very few that interacts and services every healthcare facility department with the highest possible standard of quality control throughout our clients’ facilities. Our HES employees are on duty 24 hours a day, every day, to maintain strict cleanliness throughout the facilities they serve. Job Options’ HES services include: • Operating Room Cleaning • ICU Cleaning • Labor and Delivery Room Cleaning • Daily Patient Room and Discharge Cleaning • Nurseries • Pharmacies and Clinics • Radiology • Rehabilitation Facilities • Medical and Dental Labs • Restrooms • Emergency Cleaning • Medical Waste Transport and Disposal Our Hospital Environmental Division continues to be a strong segment of our revenue stream. In December 2012, HES achieved CIMS (Clean Industry Management Standard) Green Building certification with honors under the International Sanitary and Supply Association (ISSA). This is the highest certification in the industry which demonstrates that HES delivers consistent, quality service and is committed to efficient operations and continuous improvement.
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Job Options 2012 Annual Report
LAUNDRY AND LINEN SERVICES
JOI PROFILE Fernando Vera
F
ernando’s story is like many of Job Options’ dedicated workers: a willingness and ability to work. In Fernando’s case, a car crash in Mexico resulted in severed nerves in his left arm, a disability that left him unemployed for more than a year. He was left-handed, so in that time he had to learn to write with his right hand. Though he applied at many businesses, not one potential employer ever called him back. Instead of being discouraged, Fernando did not give up. By chance he came upon a newspaper ad for Job Options’ nonprofit employment services. He contacted Job Options and was quickly hired to work as a shelf stocker at the Navy’s 32nd Street Commissary. Though able to provide for his family, he faced new difficulties. With the advent of the 9/11 attacks, many military personnel were transferred away from the 32nd Street base, leaving Fernando and others with only a part-time work schedule. Fernando requested and was granted a transfer to JOI’s Chula Vista laundry, where he began working full-time sorting laundry. His winning personality and ability, despite a physical handicap, soon moved him to the position of Weight Master at the laundry, where he was responsible for weighing carts and generating invoices, along with sorting laundry. Recently, he’s added to his tasks by taking on
“All my friends say I’ve changed; you’re not the same. I tell them Job Options changed me ... I’m happy with my family and my work.” shipping and receiving duties. Fernando says “After my accident, I thanked God for giving me another chance, just as Job Options gave me a chance, and a better life.” He is philosophical about his injury and his ability to look past it and into the future. Fernando’s next goal is taking college classes with hopes to move into a supervisory position with Job Options. His success, like that of more than 950 current Job Options’ employees, has led to a better life for Fernando and his family.
Fernando and his family relaxing together on the weekend.
Job Options 2012 Annual Report
Page 9
SPOTLIGHT ON JOI LINEN AND LAUNDRY SERVICES PROVIDING superior quality and service for 25 years
A
t Job Options, our ability to provide exceptional laundry services to military and commercial customers has resulted in a multi-plant business that currently processes over 14 million pounds annually.
By adhering to ISO 9001-2008 certification guidelines at our two California facilities in Chula Vista and San Bernardino that now encompass over 40,000 square feet, we are mindful of our customers’ need for quality and dependability with every item we process. To provide this quality, we have invested over $7 million to-date in capital assets to support our laundry operations. Our Customer Quality Guarantee assures each of our clients that they can expect nothing less than the best in our laundry services. Through the AbilityOne Program, our federal contracts provide disabled workers who take pride in their daily tasks, meaningful wages and benefits that assist them in attaining independence. In addition to our federal contracts, we have a growing presence in the commercial hospital linen and laundry market that compliments our federal business.
“Our Customer Quality Guarantee assures each of our clients that they can expect nothing less than the best in laundry and delivery services.”
Our quality linen and laundry services include: • 24-hour Guaranteed Pickup and Delivery, Seven Days a Week • Both COG and Full Linen Rental Programs • Custom Programs to Fit Clients’ Operational Requirements • Emergency Linen Services • Direct Linen Sales • Linen Management Programs
San Bernardino laundry facility.
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Job Options 2012 Annual Report
PERFORMANCE Awards of merit
The quality of service we deliver to our customers is a result of our employees’ ability to get the job done efficiently, professionally and with pride. Job Options and its employees have been the recipients of many awards and accolades throughout our history.
An Outstanding JOI Employee
S
teve Credle joined JOI in 1990 as a shelf stocker at the Miramar Commissary, a job that presented significant physical challenges. The laborious tasks were compounded by Steve’s disability that makes it extremely difficult to perform these motions or even walk for any distance without pain. Despite these challenges, he performed at a superior level and was eventually promoted to overseeing order writers. In his more than 22 years with Job Options, Steve’s work ethic and attitude have been outstanding. His dedication to job excellence was again recognized in March 1999 when he joined the Human Resources Department. Today, Steve holds the title of Human Resources Manager, overseeing JOI’s system that tracks hours worked and productivity for more than 950 JOI employees. He also oversees purchases of products and services for JOI’s worksites. Steve is a proud member of JOI’s Grassroots lobbying team that maintains regular contact with federal and state legislators. He’s traveled to Washington D.C. on several occasions to lobby on behalf of persons with disabilities. In 2012 Steve was the honored recipient of the Evelyne Villines Award for his unrelenting efforts on behalf of disabled workers. When he reached his 20th year at Job Options, Steve declared “If I could afford it, I’d work here for free!” He is a living testimony of the positive impact the AbilityOne program brings to those with significant disabilities. Steve’s co-workers have the highest regard for him and the challenges he has overcome, as well as the accomplishments for which he has been honored during his career with JOI.
ACCOMPLISHMENTS
Introducing Steve Credle:
2013
CIMS GB Certification with Honors– Hospital Environmental Services and Facilities Division
2012
NISH Pacific West Region Evelyne Villines Award: Steve Credle
2012
NCWC Management Excellence Award– West Region: Carol Whiteley
2011
Chula Vista Laundry Plant Accreditation: Healthcare Laundry Accreditation Council
2010
NISH Pacific West Region William M. Usdane Award: Rosamaria Santana
2009
NISH National Business Innovation Award
2008
NISH Board Award for Performance Excellence: Randy Williams
2007
NISH Award for Outstanding Performance
2006
Governmental Relations Grassroots Excellence Award
2006
NISH National Business Innovation Award
2006
NAVFAC SW FEAD San Diego Safety Award– Facilities Maintenance Category, Janitorial Services: Naval Medical Center San Diego
2005
NISH National William M. Usdane Award: James Bandy
2004
Fastest-Growing Company Award: San Diego Business Journal
2002
NISH National Evelyne Villines Award: Jim Smith
ABILITY
PERSONAL REWARD
Job Options 2012 Annual Report
Page 11
our accomplishments Job Options is quickly approaching $50 million in annual revenue as the company begins its second quarter-century of service. We are optimistic that the investments and actions the company has made positions us to continue to grow our business by responding with superior and timely service.
contracts nearly doubled the annual pounds of laundry we process. As we continue to improve performance, we are well positioned for gains in market share. To accommodate this growth we have added over $1 million of inventory investment and approximately 18,000 square feet of manufacturing capability. Additionally, we increased our investment in our laundry plant and equipment by almost $750,000 over the past year to expand our capacity. Acquisition of these new accounts has the Linen and Laundry Division’s revenue approaching $10 million annually.
CIMS Certification in HES In December 2012, our Hospital Environmental Services Division achieved CIMS (Clean Industry Management Standard) Green Building certification with honors under the International Sanitary and Supply Association (ISSA). This is the highest certification in the industry which demonstrates that our Division is structured to deliver consistent, quality service and committed to efficient operations and continuous improvement.
Evolving Management Structure To better manage our growth, we made a number of changes to our organization. Jeffrey A. Johnson was promoted from COO to CEO in April 2012. In conjunction with this change, Al Salcedo was promoted to Chief of Operations, Hospital Environmental Services and Laundry Operations in October. Al will have responsibility for those two Divisions and the two Divisional Managers. With the passing of Richard Carrillo in 2012, Diane Santos has assumed his role as Director of Contracting. Diane comes to us following a 20-year career with the Navy as a contracting officer. We look forward to her contributions.
New Account Growth in Hospital Environmental Services (HES) In 2012, we secured a new AbilityOne contract for HES at Weed Army Hospital, Fort Irwin, California. This contract began in March of 2013 and eventually will encompass the new community hospital that is scheduled to open in 2014 at Fort Irwin. We also added two new medical clinics at NMC Balboa and began providing services to the emergency room at that hospital. Once the new Army hospitals are completed at Fort Benning and Fort Irwin in 2014, our HES business will have annual revenues of over $17 million.
DIVISIONAL REVENU
%
14
% 33
COMMISSARY: $9
FACILITIES: $6,545
% 12
% 15
3%
%
23
Laundry Business Development and Operations Expansion
HOSPITAL: $14,80
LAUNDRY: $6,267, FOOD SERVICES:
ADMIN: $1,136,000
DIVISIONAL REVENUE: 2011/2012
%
%
14
33
COMMISSARY: $9,910,000 FACILITIES: $6,545,000
COMMISSARY: $9,910,000
LAUNDRY: $6,267,000
FACILITIES: $6,545,000
FOOD SERVICES: $5,647,000
HOSPITAL: $14,806,000
ADMIN: $1,136,000
%
12
HOSPITAL: $14,806,000
%
%
3%
23
12 %
%
15
DIVISIONAL REVENUE: 2011/2012
15
%
%
14
33
During the fiscal year we began service to Adventist Hospital in Glendale, California, and three Hospital Corporation of America hospitals in the greater Los Angeles area in December 2012. The HCA hospitals are in Los Robles, West Hills and Riverside Memorial Hospital. These %
3%
23
LAUNDRY: $6,267,000 FOOD SERVICES: $5,647,000 ADMIN: $1,136,000
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Job Options 2012 Annual Report
report to the community Job Options has continued to gain significant revenue growth in the 2012 fiscal year. Our focus now, as it always has been, is the acquisition of new commercial accounts. Additionally, we are dedicated to improving and upgrading our current government and commercial contracts while committed to fulfilling our mission.
A
s a San Diego-based not-for-profit organization, Job Options’ (JOI) primary mission is to provide meaningful employment for people with disabilities. We meet this goal by employing individuals in services such as janitorial, food service, laundry, administrative services, hospital environmental services, commissary-inventory management and shelf-stocking services to government and commercial customers. Most of our employment opportunities are with various agencies within the federal government and are offered under the provisions of AbilityOne, formerly known as the Javits-Wagner-O’Day program. AbilityOne enables certain federal government contracts to be set-aside for firms that primarily employ individuals with disabilities. Under this legislation, people with disabilities must work a minimum of 75% of direct labor hours expended under these contracts.
We have long-term contracts with the U.S. Department of Defense, General Services Administration, Veterans Administration and Homeland Security (U.S. Customs and Border Protection). Our largest customer is the Department of Defense, with a substantial presence at many of the Navy and Marine Corps bases throughout Southern California. Approximately 90% of our current employees work in federal government facilities, with the remaining 10% in the commercial sector. Job Options is now in its 26th year of operation. Over the past ten years, our annual rate of growth has been over 15%. This growth resulted in JOI generating revenue of over $44 million in fiscal 2011–2012. To meet the requirements of our contracts, JOI currently employs over 953 people, the majority of whom have a physical, psychological, developmental or emotional disability. JOI is entirely self-funded through the contract revenue received from various government and commercial accounts. We are not dependent on any gifts or grants to fund our operations. It is our responsibility to operate within our budgetary confines. The company is comprised of six Divisions: Hospital Environmental Services, Facilities, Food Services, Professional/Administrative, Laundry and Commissary Services Divisions.
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00
01
04
05
06
07
08
09
10
11
12
Number of Job Option Employees 1997–2011/12
ar
03
ye
02
00 10 0 80 0 60 0 40 0 20 0
97 98 /98 99 /99 00 /00 01 /01 02 /02 03 /03 04 /04 05 /05 06 /06 07 /07 08 /08 09 /09 10 /10 11 /11 /1 2
S
97
#
Historical Revenue 1997/98–2011/12
35 30 25 20 15 10 5
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Job Options 2012 Annual Report
Statements of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Statements of Activities and Changes in Net Assets. . . . . . . . . . . . . . . . . . 15 Statements of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Statements of Functional Expenses 2012. . . . . . . . . . . . . . . . . . . . . . . . . . 17 Statements of Functional Expenses 2011. . . . . . . . . . . . . . . . . . . . . . . . . . 18 Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19-20
financial report
Independent Auditor’s Report To the Board of Directors Job Options, Inc. We have audited the accompanying statements of financial position of Job Options, Inc., a California Not-for-Profit Corporation (the “Organization”) as of September 30, 2012 and 2011 and the related statements of activities, changes in net assets, functional expenses and cash flows for the years then ended. These financial statements are the responsibility of the Organization’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Job Options, Inc., a California Notfor-profit Corporation as of September 30, 2012 and 2011 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
MCLEAN, ROTHERHAM & CO., CPAs San Diego, California February 1, 2013
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Job Options 2012 Annual Report
Statements of Financial Position For the Years ended SEPTEMBER 30, 2012 AND 2011
ASSETS 2012 2011 CURRENT ASSETS Cash and cash equivalents $ 2,576,775 $ Inventory 311,863 Contracts receivable, net of allowance of $83,334 5,730,280 Receivables other 41,430 Prepaid expense 173,252
630,266 223,881 7,864,471 24,975 272,383
Total Current Assets 8,833,600 9,015,976 PROPERTY and EQUIPMENT Equipment 6,202,381 5,032,697 Furniture and fixtures 51,590 6,592 Leasehold improvements 415,140 370,608 Building 1,344,173 1,322,048 Land 100,539 100,539 Automobiles 536,095 501,906 Less: Accumulated depreciation (4,409,635) (3,502,657) Net Property and Equipment 4,240,283 Non-current Assets Investment – Job Opportunities, Inc. Deposits Total Assets
5,000 85,725
$ 13,164,608
3,831,733 5,000 63,387
$ 12,916,096
LIABILITIES AND NET ASSETS Current Liabilities Accounts payable and other liabilities $ 1,036,971 $ Accrued payroll and payroll related expenses 2,666,597 Notes payable, current 559,707
1,986,797 2,112,134 437,422
Total Current Liabilities 4,263,275 4,536,353 Notes Payable, net of current portion 2,114,044 1,892,736 Total Liabilities
6,377,319 6,429,089
Net Assets – unrestricted 6,787,289 6,487,007 Total Liabilities and Net Assets
$ 13,164,608
The accompanying notes are an integral part of these financial statements.
$ 12,916,096
Job Options 2012 Annual Report
Statements of Activities and Changes in Net Assets For the Years ended SEPTEMBER 30, 2012 and 2011
2012
2011
REVEnue Contract revenue $ 44,310,124 $ 43,777,068 Interest and investment income 1,569 948
Total Revenue 44,311,693 43,778,016
DIRECT EXpense Employee salaries $ 18,487,133 $ 17,832,404 Employee benefits 8,809,310 8,529,480 Subcontractor services 5,761,215 5,718,735 General supplies 1,566,593 1,619,611 NISH commission 1,480,019 1,460,052 Equipment costs 482,124 610,350 Depreciation 684,456 581,736 Utilities 454,703 525,353 Travel and entertainment 276,349 307,961 Outside services 253,476 268,536 Facility rents 229,700 220,574 Insurance 101,917 133,800 Bank services and interest 90,553 125,607 Telephone 91,931 76,185 Office expense 56,962 65,857 Miscellaneous - 20,817 Licenses and tax 13,388 16,213 Building maintenance 4,966 14,124 Staff development (31,709) 9,047 Professional fees 17,089 7,867 Dues and subscriptions 792 465 Gain or loss on disposal of assets 28,751 (10,598) Total Direct Expense 38,859,718 38,134,176 Administrative Expense
5,151,693 5,343,402
Total Expense 44,011,411 43,477,578 Change in Unrestricted Net Assets
300,282
300,438
Net Assets at Beginning of Year 6,487,007 6,186,569 Net Assets at End of Year
The accompanying notes are an integral part of these financial statements.
$ 6,787,289
$ 6,487,007
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Job Options 2012 Annual Report
Statements of Cash Flows For the Years ended SEPTEMBER 30, 2012 AND 2011
2012 2011 CASh flow from operating activities Excess of revenues over expenses $ Add charges to revenue not requiring use of cash: Depreciation Adjustments to reconcile excess of revenue over expenses to net cash flow from operating activities (Increase)/decrease in contracts and accounts receivable (Increase)/decrease in inventory (Increase)/decrease in prepaid expense (Increase)/decrease in deposits Increase/(decrease) in accounts payable and other liabilities
300,282
$
300,437
687,348
583,308
2,117,736 (1,779,019) (87,982) (72,730) 99,131 95,508 (22,338) (34,320) (395,363) 1,038,542
Net Cash Provided/(Used) By Operating Activities 2,698,814
Cash flow from investing activities Acquisition of property and equipment (1,143,649) Disposal of equipment 47,752
131,726
(323,649) 31,260
Net Cash Provided/(Used) By Investing Activities (1,095,897)
(292,389)
Cash FlOw from financing activities Proceeds from additional notes payable 950,575 Principal payments on notes payable (606,983)
73,029 (458,712)
Net Cash Provided/(Used) By Financing Activities
343,592
(385,683)
Net increase/(decrease) in cash and cash equivalents 1,946,509 (546,346) Cash and cash equivalents beginning of year
630,266
1,176,612
Cash and cash equivalents at end of year
$
2,576,775
$
630,266
Supplemental information Interest paid
$
126,818
$
139,606
The accompanying notes are an integral part of these financial statements.
Job Options 2012 Annual Report
Statements of Functional Expenses 2011 For the Year ended SEPTEMBER 30, 2011
2011 TOTAL Employee salaries $ 17,918,107 $ Employee benefits 8,740,019 Management fee 4,606,689 Sub-contractor services 5,718,735 General supplies 1,620,145 NISH and other commissions 1,460,052 Utilities 525,468 Depreciation 583,308 Equipment costs 647,208 Outside services 268,763 Travel and entertainment 317,025 Rent 232,248 Insurance 256,844 Bank services and interest 163,083 Professional fees 16,521 Bad debt expense 150,000 Loss on disposal of assets 15,759 Telephone 76,332 Miscellaneous 42,924 Office expense 68,688 Building maintenance 14,124 Licenses and taxes 23,451 Staff development 9,047 Dues and subscriptions 3,038 Totals $ 43,477,578 $
The accompanying notes are an integral part of these financial statements.
PROGRAM SERVICE
MANAGEMENT and GENERAL
17,832,404 $ 85,703 8,529,480 210,539 – 4,606,689 5,718,735 – 1,619,611 534 1,460,052 – 525,353 115 581,736 1,572 610,350 36,858 268,536 227 307,961 9,064 220,574 11,674 133,800 123,044 125,607 37,476 7,867 8,654 – 150,000 (10,598) 26,357 76,185 147 20,817 22,107 65,857 2,831 14,124 – 16,213 7,238 9,047 465 2,573 38,134,176
$ 5,343,402
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Job Options 2012 Annual Report
Statement of Functional Expenses 2012 For the Year ended SEPTEMBER 30, 2011
2012 PROGRAM SERVICE
TOTAL
MANAGEMENT AND GENERAL
Employee salaries $ 19,013,798 $ 18,487,133 $ 526,665 Employee benefits 9,048,000 8,809,310 238,690 Management fee 3,841,590 – 3,841,590 Sub-contractor services 5,761,215 5,761,215 – General supplies 1,567,126 1,566,593 533 NISH and other commissions 1,480,019 1,480,019 – Utilities 461,939 454,703 7,236 Depreciation 687,348 684,456 2,892 Equipment costs 529,400 482,124 47,276 Outside services 256,489 253,476 3,013 Travel and entertainment 310,585 276,349 34,236 Rent 274,943 229,700 45,243 Insurance 233,090 101,917 131,173 Bank services and interest 153,743 90,553 63,190 Professional fees 30,105 17,089 13,016 Bad debt expense 120,000 – 120,000 Loss on disposal of assets 28,751 28,751 Telephone 85,466 91,931 (6,465) Miscellaneous 44,214 - 44,214 Office expense 74,711 56,962 17,749 Building maintenance 5,300 4,966 334 Licenses and taxes 26,288 13,388 12,900 Staff development (28,946) (31,709) 2,763 Dues and subscriptions 6,237 792 5,445
Totals
$
44,011,411
The accompanying notes are an integral part of these financial statements.
$
38,859,718
$
5,151,693
Job Options 2012 Annual Report
notes to financial statements
NOTE 1 – NATURE OF BUSINESS
Job Options, Inc. (the “Organization”) contracts with federal agencies and private companies to provide a variety of services, including janitorial, grounds maintenance, shelf stocking and laundry throughout Southern California, Utah and Georgia. Work is performed primarily under time and material and negotiated price contracts. The workforce consists principally of capable individuals with severe mental, physical or psychological disabilities. On-the-job training and continued support is provided to assist employees in reaching their fullest potential. The Organization works closely with the Department of Rehabilitation and other non-profit agencies that assist individuals with disabilities and currently employs over 900 individuals.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements of Job Options, Inc. (JOI) have been prepared in accordance with accounting principles generally accepted in the United States of America on an accrual basis of accounting.
Basis of Presentation
Accounting principles generally accepted in the United States of America require that the Organization present information about its financial position and activities in three classes of net assets: unrestricted, temporarily restricted and permanently restricted. In these reporting periods, the Organization had only unrestricted net assets. The Organization reports contributions as restricted if they are received with donor stipulations that limit the use of the donated asset. When a donorimposed restriction expires, that is, when the time restriction expires, or the purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets. When restrictions on contributions are satisfied in the same period as the receipt of the contribution, the Organization reports both the revenue and the related expense in the unrestricted net assets.
Cash and Cash Equivalents Cash equivalents consist of short-term highly liquid investments that are readily converted to cash with an original maturity of 3 months or less.
Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value Generally accepted accounting principles (GAAP) provide guidance on how fair value should be determined when financial statement elements are required to be measured at fair value. Valuation techniques are ranked in three levels depending on the degree of objectivity of the inputs used with each level: Level 1 inputs – quoted prices in active markets for identical assets Level 2 inputs – quoted prices in active or inactive markets for the same or similar assets Level 3 inputs – estimates using best information available when there is little or no market
Short-Term Investments In accordance with accounting principles generally accepted in the United States of America, the Organization accounts for its short-term investments with a readily determinable market value by recording and reporting those investments at fair value. Information about the income earned from shortterm investments is discussed in Note three.
Depreciation and Fixed Assets The Organization capitalizes all fixed asset acquisitions and major improvements with a cost basis of $1000 or more with a determinable life greater than one year at the acquisition cost. Replacement, maintenance and repairs, which do not improve or extend the life of the respective asset, are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful life of the asset. Amortization expense and accumulated amortization have been included in depreciation expense and accumulated depreciation, respectively.
Retirement Plans The Organization has three departments, NMC, Georgia and Food
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Service, which are covered under union contracts for health and welfare and pension benefits. Contributions for these benefits are carried in employee benefits. Employees in other divisions are paid $.90 per hour as part of the mandated health and welfare benefit. Additional contributions of varying amounts for health and welfare are paid to outside administrators. These contributions are also carried in employee benefits.
Income Taxes The Organization is a non-profit Corporation exempt from income taxes, except for unrelated business income, under Internal Revenue Code Section 501 (C)(3). There was no unrelated business income for the year ended September 30, 2012.
Functional Expense The costs of providing the Organization’s programs have been summarized on a functional basis in these financial statements. Based on management’s estimates, costs have been allocated between programs and supporting services as they relate to those functions.
Contracts Receivable and Accounts Receivable
Contracts receivable consists of balances due for services provided pursuant to written and verbal contracts with various public and private agencies. Generally accepted accounting principles in the United States of America require that an allowance for doubtful accounts be established for accounts receivable. It is the Organizations’ policy to evaluate the collectability of receivables on a regular and ongoing basis, if deemed necessary, an adjustment to the allowance for bad debt account is recorded. Accordingly, contracts and accounts receivable are shown net of an allowance for doubtful accounts.
Administrative Expense Administrative expense shown on the statement of activities reflects all costs associated with administration/management and general. Based on management’s estimates, administrative costs have been allocated between programs and supporting services as they relate to those functions as reflected in the statements of functional expense.
NOTE 3 – SHORT-TERM INVESTMENTS Short-term investment income was comprised of interest and dividends in the amount of $1,569 and $948 for the years ended September 30, 2012 and 2011, respectively.
NOTE 4 – CONCENTRATION OF CREDIT RISK The Organization, at various times during the year, may maintain cash balances in excess of the FDIC limit in a high quality financial institution. The FDIC limit is currently $250,000 for interest bearing accounts and unlimited for non-interest bearing accounts through December 2012. As of September 30, 2012, the Organization’s non-interest bearing operating account was $513,106.
NOTE 5 – RELATED PARTIES – MENTAL HEALTH SYSTEMS, INC.
Beginning in the year ended September 30, 1994, Mental Health Systems, Inc. (MHS) assisted in establishing Job Options, Inc., as a non-profit entity administering vocational rehabilitation programs for MHS. Although JOI is no longer administering vocational rehabilitation programs for MHS, they have entered into other business transactions since that time. As of September 30, 2012 and 2011, the Organization had the following outstanding liabilities and lease commitments with MHS: The Organization has entered into an operating lease agreement with MHS for laundry equipment. The lease commenced December 15, 1997 and matures December 15, 2012. Monthly lease payments decrease annually in years one through eight and become fixed in years nine through fifteen. Monthly lease payments during the year ended September 30, 2012 and September 30, 2011 were $1,800. Total lease payments during the years ended September 30, 2012 and 2011, were $21,600 and $21,600, respectively. Aggregate future lease payment liabilities are $5,399 for the year ending September 30, 2013. Organization has the ability to cancel lease with thirty days notice. The Organization would then incur a penalty of three months rent. The Organization has entered into a second operating lease agreement with MHS for laundry equipment. The lease commenced February 1, 1998, and matures February 1, 2013 and requires monthly lease payments of $885. Total lease payments during each of the years ended September 30, 2011 and 2010 were $10,620. Aggregate future lease payment liabilities were $3,541 for the year ending September 30, 2013. Organization has
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Job Options 2012 Annual Report
the ability to cancel lease with thirty days notice. The Organization would then incur a penalty of three months rent.
NOTE 6 – RELATED PARTY – BEHAVIORAL MANAGEMENT SERVICES, INC.
The Organization entered into an agreement with Behavioral Management Services, Inc. (BMS) as of April 1, 2004. BMS is a for-profit entity which has been organized to provide administrative services to the Organization. Officers of Job Options, Inc. (JOI) are also officers of BMS. Management fees were $3,841,590 and $4,606,689 for the years ended September 30, 2012 and 2011 respectively. The Organization’s agreement with BMS ended as of August 1, 2012. All management of BMS became employees of Job Options, Inc.
NOTE 7 – RELATED PARTY – Job opportunities, inc. Job Opportunities, Inc. is for-profit corporation that is 100% wholly owned by Job Options, Inc. The Company was incorporated March 13, 2010 in the State of California. The purpose of the Corporation is to provide vocational rehabilitation services on contracts that may not be available for Job Options, Inc. The investment in Job Opportunities Inc. is $5,000 and is reflected on the balance sheet as a non-current investment. Job Opportunities, Inc. had no activity for the year ended September 30, 2012.
NOTE 8 – OPERATING LEASE COMMITMENTS The Organization has entered into various operating lease agreements for equipment, vehicles and office space. The leases expire at various dates throughout the years ending September 30, 2017. Future minimum payments, by year and in the aggregate, under noncancelable operating leases with initial or remaining terms of one year or more consisted of the following as of September 30:
The effective interest rate as of September 30, 2012 was 6.94%. There is an additional $1,152 of sales tax included in notes payable as of September 30, 2012 related to the Celtic capital lease. In 2004 the Organization entered into a construction loan agreement with NCB Development Corporation in the amount of $181,571 for the construction of a facility. During the year ended September 30, 2005, additional proceeds of $503,429 were added to the loan. During the year ended September 30, 2007 additional proceeds of $433,906 were added to the loan. The balance as of September 30, 2012 and 2011 was $888,637 and $948,094, respectively. Effective interest rate was 8.375 % through 4/7/11 at which point the rate will fluctuate at 3.5% over the weekly average yield of US Treasury Securities. The current rate is 5.755%. The loan will mature March 27, 2016. The Organization entered a lease/purchase agreement with Wirth Business Credit for equipment that will be theirs at the termination of the lease. Payments are $4,692 and are for 48 months. Interest is 12%. The balance as of September 30, 2012 and 2011 was $16,725 and $67,650, respectively. The Organization entered into a loan agreement with California Bank and Trust for the purchase of equipment in the amount of $814,000 that will mature December 21, 2014. Interest rate is 3.5% over the lender’s LIBOR rate. The current interest rate is 6.24%. The balance as of September 30, 2012 and 2011 was $397,705 and $557,687, respectively. The Organization entered into a capital lease with Celtic Leasing during the year that matures December 30, 2015 for assets purchased in the amount of $900,563. Effective interest rate will be at 4.615%. Included in the purchase price is $64,801 of sales tax. Balance as of September 30,2012 was $744,052. The Organization has various car loans outstanding with maturities through 2017. There were new loans in the amount of $50,102. The balance in these loans was $130,257 and $120,460 as of September 30, 2012 and 2011, respectively.. Aggregate future maturities of long-term debt are as follows:
Years ending September 30, $ 592,687
Years ending September 30:
2013
2014 386,793
2013
2015 77,400
2014 551,911
2016 and thereafter
2015 417,888
2016 1,140,183
2017
1,791
$ 1,314,493
NOTE 9 – FAIR VALUE MEASUREMENTS Investments are reported at fair value in the accompanying statement of financial position. The fair value measurement accounting literature establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels: Level 2 Fair Value Measurements The fair value of the Job Opportunities, Inc. stock is based on cost as there is no current market for the stock. There were no Level 3 investments.
(Level 2)
(Level 2)
December 31
2012
2011
Stock – Job Opportunities Inc.
5,000
5,000
Job Opportunities, Inc. is a for-profit company that is 100% owned by the Organization. See Note 7 for further discussion.
NOTE 10 – NOTES PAYABLE Notes payable consist of the following: The Organization had available a revolving line of credit from NCB Development Corporation that was reduced from $1,000,000 to $582,500. The interest rate started at 8.25% and will fluctuate at 3.5% over the weekly average yield of U.S. Treasury Securities. Principal and interest in the amount of $4,867 will be paid monthly with any accrued interest and principal balance due in full on the maturity date of April 1, 2016. The balance as of September 30, 2012 and September 30, 2011 was $480,599 and $510,662, respectively . The Organization entered into a capital lease with Celtic Leasing during the year ended September 30, 2007. The agreement allowed for the purchase of equipment up to $367,822. As of September 30, 2012, the principal balance was $14,816.
$ 559,707
Total
Less current portion
Long-term debt 9/30/11
$
4,062 2,673,751 559,707 2,114,044
NOTE 11 – HEALTH AND WELFARE MONEY PURCHASE PENSION PLAN Included in accounts payable and other liabilities as of September 30, 2012 and 2011 were $360,960 and $357,025, respectively, due to various trusts for health and welfare pensions. Included in employee benefits expense were $4,317,891 and $4,103,124, of health and welfare benefits for the years ended September 30, 2012 and 2011, respectively.
NOTE 12 – CONTRACTS AND ACCOUNTS RECEIVABLE – ALLOWANCE FOR DOUBTFUL ACCOUNTS Consistent with generally accepted accounting principles in the United States of America, contracts receivable as of September 30, 2012 and 2011, are shown net of an allowance for doubtful accounts in the amount of $83,334 and $70,134, respectively. The Organization recorded bad debt of $120,000 and $150,000 for the years ended September 30, 2012 and 2011, respectively.
NOTE 13 – SUBSEQUENT EVENTS Subsequent events were considered and evaluated through the date of this report. No subsequent events occurred that would have required disclosure in these financial statements.
Job Options 2012 Annual Report
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RICHARD CARRILLO: In Memoriam
T
hhe true worth of a person’s life is measured by the lives he changed for the better and the friends he made along the way. Richard Carrillo, JOI’s Director of Contracting and Governmental Affairs, passed away last September, leaving a legacy of love and commitment to those in need. While his ten years of service with Job Options was marked by many notable successes, including his ability to forge successful business relationships with clients, his lasting legacy is the friendships he so easily maintained with co-workers through his positive, friendly attitude and his ongoing desire to help those in need.
His loss has been deeply felt by all of us at Job Options. Richard had an unshakable commitment that brought awareness to local and federal politicians regarding the exceptional services provided by persons with disabilities. For his exemplary work on behalf of the company, Richard was honored with the NISH National Award for Achievement in Governmental Affairs in 2008. Richard’s lasting legacy is mirrored in those with disabilities who now live productive and fruitful lives due to his tireless efforts. He will be missed by all who came in contact with such an extraordinary individual.
MANAGEMENT Jeffrey Johnson Chief Executive Officer jjohnson@joboptionsinc.org Bill Eastwood, MA Associate Director beastwood@joboptionsinc.org William R. Mead, Ph.D. Associate Director bmead@joboptionsinc.org
Al Salcedo Chief of Operations- Hospital Environmental Services and Linen and Laundry Divisions asalcedo@joboptionsinc.org Margaret Ann Peña NAVFAC Division Manager Facilities Division Manager mpena@joboptionsinc.org
Char Healy Chief Financial Officer chealy@joboptionsinc.org
Gladis Jarquin Administrative Services Division Manager/Safety Officer gjarquin@joboptionsinc.org
Doug Baker Food Service Division Manager dbaker@joboptionsinc.org
Peg Daly Navfac Contract Manager pdaly@joboptionsinc.org
Brian Priest Healthcare Laundry Division Director of Business Development and Account Management bpriest@joboptionsinc.org
Joe Ryan Director of Laundry Operations jryan@joboptionsinc.org
Nazar Masry Hospital Environmental Services Division Manager nmasry@joboptionsinc.org Carol Whiteley Commissary Division Manager cwhiteley@joboptionsinc.org Valorie Seidl Human Resources Director vseidl@joboptionsinc.org Juan Agundis Director of Information Technology jagundis@joboptionsinc.org Steve Credle Human Resources Manager scredle@joboptionsinc.org Diane Santos Director of Contracts dsantos@joboptionsinc.org
BOARD OF DIRECTORS Patrick O’Sullivan
Verlyn Soderstrom
Dr. Richard Skay
Bruce Whitcomb, Chairman
Richard Woodaman
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Job Options 2012 Annual Report
our services Job Options plays a key role in providing award-winning services in a wide range of areas to commercial businesses and government agencies.
administrative services Bilingual Services Customer Service Data Entry Office Support Project Management Word Processing
hospital environmental services Clinic, Pharmacy and Laboratory Cleaning Exam/Treatment Room Cleaning Labor and Delivery Room Cleaning Medical Waste Transfer and Disposal Office/Administrative Cleaning Operating and Emergency Room Cleaning Patient Room Cleaning
building and custodial services Carpet Cleaning and Bonneting Common Area Cleaning Floor Maintenance Food Preparation Area Cleaning Furniture and Office Cleaning Restroom Cleaning, Sanitizing and Re-Supply Waste Container Maintenance Window Cleaning Vacuuming and Dusting commissary and warehousing Forklift Handling Inventory – Tracking, Management and Order Writing Material Management and Logistics Shelf Stocking Truck Loading and Unloading grounds and landscape maintenance Beds Maintenance Lawn Care – Planting, Trimming, Weeding, Watering Irrigation Systems Street Sweeping
Concept and Design by STUDIO 2055 | Photography by Richard Dowdy | studio2055.com
hospitality and food services Cashiers Cooking and Baking Food Ordering Food Service Budget Development Inventory Procurement Kitchen Cleaning Menu Planning Plate, Silverware Bar Replenishment Pot Washing Restaurant Area Cleaning Scullery Self-serve Bar Replenishment Silverware and Table Setting Replenishment Table Busing and Cleaning linen and laundry services Amenities Bed Linens and Terry Dust Control (mats, wet mops, dust mops) Flat Work, Finishing, Dry Cleaning Folding Item Rental and COG Pick-up and Delivery Table Linens and Napkins Uniforms
PRIDE
COMMITMENT SELF-
WORTH QUALITY
YEARS
ISO 9001:2008 certification
providing real jobs for capable people
Corporate Office
Laundry Plant
Laundry plant
Food ServiceS
3465 Camino Del Rio South Suite 300 San Diego, CA 92108 T 619.688.1784 F 619.688.9884 W joboptionsinc.org
Chula Vista Plant 2248 Main Street, Suite 10 Chula Vista, CA 91911 T 619.575.7627 F 619.424.8768
San Bernardino Plant 1110 S. Washington Avenue San Bernardino, CA 92408 T 909.890.4612 F 909.890.4673
560 Greenbrier Drive Suite 103 Oceanside, CA 92054 T 760.547.2480 F 760.547.2485
Š2013 Job Options, Inc. 04/13