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A GROWING FUTURE 2010 annual report committed to individual success

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CONTENTS Promise For a Growing Future ...................................................................... 1 Profile: Patricia Cruz .................................................................................. 2–3 Profile: John Varghese ................................................................................ 4–5 Our Accomplishments . ................................................................................... 6 Report to the Community ............................................................................... 7 Financial Report Independent Auditor’s Report ....................................................................... 8

promise for a growing future

Statements of Financial Position .................................................................. 9 Assets ............................................................................................................. 9 Liabilities and Net Assets............................................................................ 9 Statements of Activities and Changes in Net Assets ........................... 10 Statements of Cash Flows .......................................................................... 11 Statement of Functional Expenses 2010 ................................................ 12

O

ur continued growth over the past year is the result of our

Statement of Functional Expenses 2009 ................................................ 13

commitment to place qualified individuals

Notes to Financial Statements ............................................................ 14–15

into meaningful employment. More than

Management and Board of Directors ....................................................... 16 Our Awards . ................................................................................................... 16 Our Services . ................................................................................................. 17

75% of the direct labor hours worked are by employees with a disability. We continue to strive to provide the highest quality service to our government and

ON OUR COVER John Varghese and Patricia Cruz’s contribution to Job Options helps provide a healthy future for themselves and the company.

commercial customers.

Over the history of our company, we have employed more than 4,000 individuals with disabilities. Their desire to step up to a good paying, meaningful position is the primary reason for Job Options’ continuing success. Our enthusiastic and able employees are the foundation upon which we build our core strengths, allowing JOI to expand into new markets and viable locations within the United States. More importantly, the pride and reward of a “day’s pay for a day’s work” has given our employees pride and a sense of being an active participant in their communities, as they contribute to their families’ income and build a career where none may have previously existed. In this report, we are proud to recognize the strength and dedication of our employees, who have gone beyond what is expected of them. It is our employees who give us the ability to grow our business. This past year, we have responded to the economic uncertainty with an aggressive development and facility improvement plan that has increased our presence in new service areas. Our goal is to expand the base we have established since 1987, through our commitment to pursue new avenues of growth, as we strengthen our resolve to give even more disabled individuals the opportunities for a growing future.

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JOI HONOREE

Born in Chula Vista, Patricia graduated from

this year’s FAST FACTS

high school and attended community college

the chula vista laundry facility

before going to work for her sister. From that job she moved on to Goodwill Industries. It was

patricia cruz

• Invested $1.1 million for the Braun Batch Tunnel Washer and Extraction System

there that a social worker told her about an opportunity with Job Options. Patricia began work at the JOI-managed 32nd Street Navy Commis-

P

atricia Cruz has worked at the Job Options’ laundry facility in Chula Vista for nearly

where she works at the fast-paced sheet-folding

• Increased labor productivity over 19%

machine and also folds towels. “Patricia knows

12 years. In that time, she has attained perfect

her job and does it well. I wish I had a dozen

attendance—never late to begin her day–and

more like her,” says her manager, Joe Orlando.

movies, meeting new people and visiting with

was named Employee of the Year in 2007.

She helps new employees when they begin

friends. She is excited to have recently bought

• Processed 5.6 million pounds annually with capacity to expand to 12 million pounds

Patricia has been honored with numerous

working at the laundry and has willingly stepped

an iPad® and uses it to look at fashion sites and

• Saved $345K annually due to modernization

in when a fellow worker missed a day.

to follow celebrities on the web. Along with her

A GROWING FUTURE

“Extra Mile” awards for going beyond her job description.

“Once I worked all three shifts at different

“Patricia knows her job and does it so well. I wish the laundry had a dozen Patricia’s.” Joe Orlando, Manager, Chula Vista Laundry

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• Reduced water consumption by 14.8 million gallons annually

sary before transferring to JOI’s laundry division,

mom, Patricia goes to church on Sundays.

times,” Patricia recalled, “but now the laundry

“Because of my work at Job Options’ laundry,

is much bigger, with new machines. We can

I’m a stronger person,” says Patricia. “My goal?

handle it all with one shift. We can take on all

To go to cosmetology school and own my own

jobs now,” she proudly proclaims.

beauty salon…and to get my driver’s license!”

Patricia lives with her mother and brother not far

Patricia’s devotion to her mother and siblings,

from the laundry. Her mom drives her to work

her strong work ethic and enthusiasm will take

in the morning and she takes the bus home.

her a long way to reaching her future goals.

• Employs 47 individuals, 22 with disabilities • Customers include: Naval Medical Center Balboa Hospital Fleet Industrial Supply–U.S. Navy Camp Pendleton Marine Corps Base U.S. Border Protection Services 32nd Naval Base North Island Navy Base, Coronado

Outside of work, Patricia enjoys going to the

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JOI HONOREE

Unfortunately, John’s arrival in town coincided

this year’s FAST FACTS

with the downturn in the economy and he found

naval medical center

it difficult to find steady work. Often he would work one or two days, which was not enough to

• Contract held for past 11 years

pay for an apartment. He was living on the street,

john varghese

O

• Contract value: $9,588,000

not improve.

• 1.8 million square feet of cleanable space

John found shelter at the St. Vincent DePaul

• Contract includes over 500 patient rooms in five buildings, with 16 satellite medical/dental clinics on nine Navy bases

riginally from India, Naval Hospital

Village, where a job counselor told him about

employee John Varghese was schooled

the Department of Rehabilitation’s TMI (Towards

in Kenya and received a horticultural degree in India. Following graduation from university, John moved to New York to work as a sales-

Maximum Independence) program that assists in finding jobs for homeless individuals. His case manager set up an interview with Job Options Human Resources department. John was hired at

spires us all, demonstrating his commitment and appreciation for a good position.”

A GROWING FUTURE

man in the pharmaceutical industry for Bayer.

JOI’s San Ysidro Border Crossing worksite and

John says that having an A2 designation “earns

He was successful and built a good life for

then transferred to Camp Pendleton. In 2009,

me more money and with Job Options I have a

himself and his wife. His marriage, arranged

John accepted a position at the Naval Medical

retirement fund too.”

in India, failed, which sent John into a spiral

Center adjacent to Balboa Park, much closer to

On the weekends, John enjoys playing tennis,

of misfortune that ultimately led him to San

his apartment.

reading mystery novels and following news and

Diego, where he set out to make a fresh start.

As an A2 custodian, John is responsible for

his favorite soccer team, Manchester United, on

keeping the second floor of Building One in spar-

the internet. John reflects on the twists and turns

kling condition. His supervisors say John excels

of his life and says he doesn’t regret what he has

at his job where he sweeps, strips wax, buffs

been through. He remarks, “Here at the hospital,

and mops daily. According to Special Projects

I do my job and enjoy the friendship I have with

Manager, Cesar Martinez, “John arrives for work

co-workers and supervisors. “I can tell you this:

an hour early—and never misses a day. He in-

Job Options saved my life.”

“John arrives for work an hour early–and never misses a day. He inspires us all.” 4

reaching a bottom in his life that he feared would

Cesar Martinez, Special Projects Manager, Naval Medical Center

• 2 00 custodians employed • Disabled personnel account for 85% of direct labor hours • N MC received a 95% rating during the most recent Joint Commission on Accreditation of Healthcare Organizations (JCAHO) evaluation • J OI recipient of Letter of Recognition from Head of Material Management Department • N MC is the most technologically advanced Navy treatment center in the world

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Hospital Environmental Services Business Development In January 2011, we expanded our geographic presence into the Southeastern United States by implementing a $3.3 million annual contract at Martin Army Community Hospital at Fort Benning, Georgia. The contract is the first step in Job Options having a national presence in the AbilityOne Program. While we are faced with many challenges at this facility, this contract is important to the future growth of JOI and the AbilityOne program. Our successful performance at this facility has the potential to open more opportunities to perform Hospital Environmental Services at Army Medcom hospitals throughout the United States. We inherited a hospital whose condition was not up to industry standards and we are committing considerable resources on improving the condition of the hospital, quickly and effectively. Given the level of resources we are expending, we do not anticipate that this contract will be profitable in Fiscal 2010–2011. We anticipate that once we have brought the hospital to industry and contractual standards we will be able to maintain it at the resource levels estimated, thereby operating profitably. Laundry Business Expansion We decided last year to target the healthcare market (hospitals) in our laundry business development

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Management Additions In addition to Brian Priest, we also added Al Salcedo to our management ranks in August 2010 as Director of Quality Control, Continuous Improvement and Business Development. Al is a graduate of the U.S. Naval Academy and worked in operations and procurement for the Navy in his 20–year career before coming to JOI. We are excited about the in-depth knowledge and contacts that Al possesses within the Navy’s operations and the enthusiasm he brings to JOI. Smart Options For our business development efforts in the nongovernmental marketplace, we have adopted a new trade name–Smart Options–and a tagline “Your Door to Greater Options.” We implemented this strategy to better communicate our commercial services and personify our message of providing superior quality services.

Job Options is a San Diego-based not-for-profit organization whose primary mission is to provide meaningful employment for people with disabilities. We meet this goal by employing individuals in basic services such as janitorial, food service, laundry, hospital environmental services, administrative services, commissary-inventory management and shelf-stocking for 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-WagnerO’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 the direct labor hours expended under these contracts. We have long-term contracts with the U.S. Department of Defense, General Services Administration, Veterans Administration, Homeland Security (U.S. Customs and Border Protection) and the U.S. Postal Service. Our largest customer is the Department of Defense, giving us a substantial presence at many of the Navy and Marine Corps bases throughout Southern California. Approxi-

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JOB OPTIONS DIVISIONAL REVENUE 09/10

mately 90% of our current employees work in federal government facilities, with the remaining 10% in the commercial sector.

Food Service (16%)

Hospital (25.3%)

JOI is now in its 22nd 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 $39 million in fiscal 2009–2010. To meet the requirements of our contracts, Job Options currently employs over 800 people, the majority of whom have a physical, psychological, developmental or emotional disability. Job Options is entirely self-funded through the contract revenue we receive from numerous governmental and commercial entities. We do not depend on any gifts or grants to fund our operations. Therefore, we have an ongoing responsibility to operate within budget. In 2006 through 2007, we reorganized our Custodial Division into three separate groups: Hospital Environmental Services, NAVFAC and Base Custodial to more effectively service our customers. This resulted in the company having seven Divisions: Food Service, Professional and Administrative Services, Laundry, Commissary, Hospital Environmental Services, NAVFAC and Base Custodial.

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W

e believe JOI is poised to continue substantial growth in the near term as we pursue selected commercial opportunities and expansion in the AbilityOne Program.

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report to the community

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efforts. We have long-term experience with a number of large military hospitals throughout Southern California. To assist us in this endeavor, we hired Brian Priest in 2010 to serve as our Business Development Director of Healthcare Laundry. Before joining JOI, Brian held a position with Angelica Textile Services that has the largest share of this market segment. As part of our expansion plan, we will double the size of our San Bernardino Plant. It is a $2.5 million capital investment slated for completion this year. Our plans for this facility will qualify for both Leadership In Energy and Environmental Design (LEED) and Healthcare Laundry Accreditation Council (HLAC). These accreditations will provide us with a competitive advantage, as it would be one of the only laundry plants to have these designations in Southern California. Our investment in additional business development and improved facilities is paying off. In February 2010, we were awarded the contract for Loma Linda Hospital’s new facility in Murrieta, California.

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Despite being confronted with an environment of budget pressures and cutbacks within our federal government business, and the ongoing effects of the economic downturn in the commercial market, we are pleased to report revenues increased in fiscal 2009–2010 to $39.6 million with a net contribution of $567,000. Here we highlight how JOI is reinvesting these profits in our businesses to provide further opportunities for people with disabilities to gain meaningful employment.

$6.260M

$6.258M

Custodial (15.9%)

$9.571M

Laundry (15.9%)

Food Service Custodial Admin Commissary Laundry Hospital

$6.299M

$9.934M

$1.023M Admin (2.6%)

Commissary (24.4%)

2010: Number of Job Options Employees 800 EMPLOYEES

our accomplishments

MILLIONS

Job Options Revenue 40 35 30 25 20 15 10 5 0

600 400 200 0

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04

05

06

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ASSETS CURRENT ASSETS Cash and cash equivalents Inventory Contracts receivable, net allowance of $77,398 Receivables – other Prepaid expense

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, 2010 and 2009, 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.

Statements of Financial Position For the Years Ended September 30, 2010 and 2009

$ 1,176,612 151,151  6,023,194  87,233 367,891 

$ 997,693 178,867 6,994,807 – 96,584

Total Current Assets

7,806,081 

8,267,951

PROPERTY AND EQUIPMENT Equipment Furniture and fixtures Leasehold improvements Building Land Automobiles Less: Accumulated depreciation

4,859,816  5,352  367,354  1,322,048  100,539  453,661  (2,986,120) 

3,610,400 5,352 315,755 1,322,048 100,539 355,712 (2,527,552)

Net Property and Equipment

4,122,650 

3,182,254

– 5,000 29,067

240,435

$ 11,962,798

$ 11,808,055

$ 1,477,761 1,582,628 429,447

$ 2,342,742 1,497,442 406,978

3,489,836

4,247,162

2,286,393

1,941,134

5,776,229

6,188,296

6,186,569 11,962,798

5,619,759 11,808,055

NON-CURRENT ASSETS Construction in process Investment–Job Opportunities Inc. Deposits Total Assets

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Job Options, Inc., a California Not-for-profit Corporation as of September 30, 2010 and 2009, 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.

117,415

LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable and other liabilities Accrued payroll and payroll related expenses Notes payable, current

The supplementary statement of income and changes in retained earnings for Job Opportunities, Inc., which is the responsibility of management, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Total Current Liabilities NOTES PAYABLE, NET OF CURRENT PORTION Total Liabilities NET ASSETS - UNRESTRICTED Total Liabilities and Net Assets

MCLEAN, ROTHERHAM & CO., CPAs San Diego, California February 21, 2011 8

2009

A CALIFORNIA NOT-FOR-PROFIT CORPORATION

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.

2010

JOB OPTIONS, INC.

financials

Statements of Financial Position........................................... 9 Statements of Activities and Changes in Net Assets..........10 Statements of Cash Flows.. ..................................................11 Statements of Functional Expenses 2010............................12 Statements of Functional Expenses 2009...........................13 Notes to Financial Statements.. .....................................14–15

The accompanying notes are an integral part of these financial statements.

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Statements of Activities and Changes in Net Assets For the Years Ended September 30, 2010 and 2009

2010

$ 37,568,589 15,357 37,583,946

DIRECT EXPENSE Employee salaries Employee benefits Subcontractor services General Supplies NISH commission Utilities Depreciation Equipment costs Outside services Travel Bank services and interest Insurance Facility rents Bad debt expense Professional fees Telephone Office expense Building maintenance Licenses and tax Staff development Dues and subscriptions

$ 16,049,893 7,262,487 6,007,185 991,358  1,251,543  420,057 569,400 659,321 208,896 49,794 152,159 124,175 171,866 – 10,929 78,265 51,376 35,846 13,410 14,389 220

$ 15,502,673 6,802,524 5,475,606 1,091,070 1,244,003 536,279 431,333 524,808 178,593 64,840 119,615 128,182 146,395 110,291 7,498 69,362 55,256 44,253 12,614 5,691 294

34,122,569

Statements of Cash Flows For the Years Ended September 30, 2010 and 2009

2010

CASH FLOW FROM OPERATING ACTIVITIES: Excess of revenues over expenses $ 566,810 Add charges to revenue not requiring use of cash:  Depreciation 570,972 Adjustments to reconcile excess of revenue over expenses to net cash flow from operating activities  (Increase)/ decrease in contracts and accounts receivable 884,380 (Increase)/ decrease in inventory 27,716 (Increase)/ decrease in prepaid expense (271,307) (Increase)/ decrease in deposits 88,348 (Increase)/ decrease in accounts payable and other liabilities (779,795) Net Cash (used)by operating activities CASH FLOW FROM INVESTING ACTIVITIES: Acquisition of property and equipment Purchase of investments Construction in process Disposal of equipment Net Cash (used) by investing activities CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from additional notes payable Principal payments on notes payable

$ 818,410 432,905

(606,497) 28,413 (3,137) (20,049) 183,922

1,087,124

833,967

(1,314,461) (5000) – 43,529

(268,030) – (240,435) 13,156

(1,275,932)

(495,309)

890,391 (522,664)

177,148 (391,578)

367,727

(214,430)

NET INCREASE / (DECREASE) IN CASH

178,919

124,228

32,551,180

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

997,693

873,465

4,657,465 38,780,034 566,810

4,214,356 36,765,536 818,410

CASH AND CASH EQUIVALENTS AT END OF YEAR

$ 1,176,612

$997,693

NET ASSETS AT BEGINNING OF YEAR

5,619,759

4,801,349

$ 182,651

$ 153,514

NET ASSETS AT END OF YEAR

6,186,569

5,619,759

ADMINISTRATIVE EXPENSE Total Expense Change in Unrestricted Net Assets

The accompanying notes are an integral part of these financial statements.

Net cash provided by financing activities

2009

A CALIFORNIA NOT-FOR-PROFIT CORPORATION

$ 39,339,902 6,942  39,346,844

Total Direct Expense

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2009

REVENUE Contract revenue Interest and investment income Total Revenue

JOB OPTIONS, INC.

financials

SUPPLEMENTAL INFORMATION: Interest paid

The accompanying notes are an integral part of these financial statements.

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TOTAL

2010

Statement of Functional Expenses For the Year Ended September 30, 2010

TOTAL

Employee salaries Employee benefits and other Employee expense Management Fee Sub–contractor services General supplies NISH and other commissions

Totals

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MANAGEMENT AND GENERAL

$ 16,112,358

$16,049,893

62,465

7,317,959 4,152,376 6,007,185 991,215 1,251,543

7,262,487 – 6,007,185 991,358 1,251,543

55,472 4,152,376 – (143) –

420,057 570,972 661,349 211,041 54,287 171,866 225,459 206,816 60,889 138,000 4,529 79,659 57,358 35,846 21,417 26,865 990

420,057 569,400 659,321 208,896 49,794 171,866 124,175 152,159 10,929 – – 78,265 51,378 35,846 13,410 14,389 220

– 1,572 2,028 2,145 4,493 – 101,284 54,657 49,960 138,000 4,529 1,394 5,980 – 8,007 12,476 770

$ 38,780,036

$ 34,122,571

$4,657,465

The accompanying notes are an integral part of these financial statements.

Statement of Functional Expenses For the Year Ended September 30, 2009

Totals

Income Statement and Changes in Retained Earnings For the Year Ended September 30, 2010 (Unaudited)

The accompanying notes are an integral part of these financial statements.

MANAGEMENT AND GENERAL

$ 15,526,673

$15,502,673

24,000

6,794,723 3,918,456 5,475,606 1,091,429 1,244003 536,279 432,905 560,854 180,566 65,016 146,395 212,886 190,122 29,352 110,291 13,006 69,418 58,254 38,000 44,253 20,324 5,691 1,034

6,802,524 – 5,475,606 1,091,070 1,244,003 536,279 431,333 524,808 178,593 64,840 146,395 128,182 119,615 7,498 110,291 – 69,362 55,256 – 44,253 12,614 5,691 294

(7,801) 3,918,456 – 359 – – 1,572 36,046 1,973 176 – 84,704 70,507 21,854 – 13,006 56 2,998 38,000 – 7,710 – 740

$ 36,765,536

$ 32,551,180

$ 4,214,356

REVENUE Contract revenue  Total Revenue  DIRECT EXPENSE Employee salaries  Employee benefits  General Supplies Management fees Equipment costs Facility rents Telephone  Insurance  Bank services  Licenses and tax  Office expense  Travel Outside services Utilities  Total Expense Change in Unrestricted Net Assets RETAINED EARNINGS AT BEGINNING OF YEAR RETAINED EARNINGS AT END OF YEAR

A CALIFORNIA NOT-FOR-PROFIT CORPORATION

Utilities Depreciation Equipment costs Outside services Travel and entertainment Rent Insurance Bank services and interest Professional fees Bad debt expense Loss on disposal of assets Telephone Office expense Building maintenance Licenses and taxes Staff development Dues and subscriptions

PROGRAM SERVICE

Employee salaries Employee benefits and other employee expense Management Fee Sub–contractor services General supplies NISH and other commissions Utilities Depreciation Equipment costs Outside services Travel and entertainment Rent Insurance Bank services and interest Professional fees Bad debt expense Loss on disposal of assets Telephone Office Expense Settlements Building maintenance Licenses and taxes Staff development Dues and subscriptions

PROGRAM SERVICE

JOB OPTIONS, INC.

financials

$ 309,420 309,420 $ 135,240 73,995 39,065 33,553 18,782 2,489 1,969 1,943 1,666 1,357 627 260 242 54 311,233 (1,813) – $ (1,813)

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For the Years Ended September 30, 2010 and 2009

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 and Utah. 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 nonprofit agencies that assist individuals with disabilities and currently employs over 800 individuals.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements of Job Options, Inc. 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

The Organization reports contributions as restricted if they are received with donor stipulations that limit the use of the donated asset. When a donor-imposed 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 three months or less. The Organization’s cash equivalents include $392,870 invested in the Dreyfus Government Prime Cash Management Fund for which the average maturity cannot exceed 60 days.

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires

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Fair Value The carrying amounts reported in the statements of financial position for cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their immediate short-term maturity.

Depreciation and Fixed Assets

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 Organization’s 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.

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.

Administrative Expense

Short–Term Investments

Short-term investment income was comprised of interest and dividends in the amount of $6,942 and $15,357 for the years ended September 30, 2010 and 2009, respectively.

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 short-term investments is discussed in Note Three.

Retirement Plans The Organization has two departments, NMC and Food 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, 2010.

Functional Expenses 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.

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

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, 2010, the Organization’s non-interest bearing operating account was $1,230,052 of which $392,870 is maintained in a Dreyfus Government Prime Cash Management Fund which is not covered by FDIC.

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. (JOI), 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, 2010 and 2009, 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, 2010 and September 30, 2009 were $1,800. Total lease payments during the years ended September 30, 2010 and 2009, were $21,600 and $21,600, respectively. Aggregate future lease payment liabilities are $10,798 for the year ending September 30, 2011. The 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, 2010 and 2009 were $10,620. Aggregate future lease payment liabilities were $5,312 for the year ending September 30, 2011.

NOTE 6 – RELATED PARTY – BEHAVIORAL MANAGEMENT SYSTEMS, INC. The Organization has entered into all agreement with Behavioral Management Systems, 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. are also officers of BMS. Management fees were $4,152,376 and $3,918,456 for the years ended September 30, 2010 and 2009 respectively.

NOTE 7 – RELATED PARTY – JOB OPPORTUNITIES, INC. Job Opportunities, Inc. is a 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 noncurrent investment. Job Opportunities, Inc. had a loss of ($1,813) with gross revenues of $309,420 for the year ended September 30, 2010.

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, 2015. 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:

Years ending September 30, 2011 2012 2013 2014 2015 and thereafter

$ 578,024 408,662 381,823 328,285 73,878 $ 1,770,672

NOTE 9 – 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 US 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, 2010 and September 30, 2009 was $529,978 and $543,441, 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, 2010, the principal balance was $181,227. The effective interest rate as of September 30, 2010 was 6.94%. There is an additional $16,566 of sales tax included in notes payable as of September 30, 2010 related to the Celtic capital lease. The Organization entered into a capital lease with Celtic Leasing during the year ended September 30, 2008. Additional equipment was purchased in the amount of $189,083. As of September 30, 2010, the principal balance was $84,058. The effective interest rate as of September 30, 2010 was 7.68%. 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, 2010 and 2009 was $988,899 and $1,016,791, respectively. Effective interest rate is 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 loan will mature March 27, 2016. During the year ended September 30, 2005, the Organization entered into an equipment loan agreement with NCB in the amount of $500,000. Additional proceeds of $196,720 were added to the loan. The interest rate is the NCB Commercial Loan Base Rate which is currently 6.22%. This loan will mature October 1, 2010. The balance as of September 30, 2010 and 2009 was $17,269 and $195,625, respectively.

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, 2010 and 2009 was $112,844 and $152,951, 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, 2010 was $707,564. The Organization has various car loans outstanding with maturities through 2015. The balance in these loans was $77,435 and $18,548 as of September 30,2010 and 2009, respectively. Aggregate future maturities of long-term debt are as follows: Years ending September 30: 2011 2012 2013 2014 2015 Thereafter Total Less current portion Long–term debt

$ 429,448 389,190 286,382 258,275 111,091 1,241,454 2,715,840 429,447 $ 2,286,393

NOTE 10 – HEALTH AND WELFARE MONEY PURCHASE PENSION PLAN Included in accounts payable and other liabilities as of September 30, 2010 and 2009 were $240,140 and $240,322, respectively, due to various trusts for health and welfare pensions. Included in employee benefits expense were $3,420,521 and $3,410,554, of health and welfare benefits for the years ended September 30, 2010 and 2009, respectively.

NOTE 11– 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, 2010 and 2009, are shown net of an allowance for doubtful accounts in the amount of $77,398 and $159,134, respectively. The Organization recorded bad debt of $138,000 and $110,291 for the years ended September 30, 2010 and 2009, respectively.

15

A CALIFORNIA NOT-FOR-PROFIT CORPORATION

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.

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.

JOB OPTIONS, INC.

financials

Notes to Financial Statements


administrative services

our awards

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

Bill Eastwood, MA Chief Administrative Officer beastwood@joboptionsinc.org Jeffrey Johnson Chief Operating Officer jjohnson@joboptionsinc.org Char Healy Chief Financial Officer chealy@joboptionsinc.org Doug Baker Food Service Division Manager dbaker@joboptionsinc.org

Al Salcedo Director of Quality and Continuous Improvement asalcedo@joboptionsinc.org Margaret Ann Penã NAVFAC Division Manager Facilities Division Manager mpena@joboptionsinc.org Gladis Jarquin Administrative Services Division Manager/Safety Officer gjarquin@joboptionsinc.org Peg Daly NAVFAC Contract Manager pdaly@joboptionsinc.org

Nasar 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 PTS Administrator and Purchasing scredle@joboptionsinc.org

2006

NAVFAC SW FEAD San Diego Safety Award

– Facilities Maintenance Category,

Janitorial Services for Naval Medical Center

2006

NISH National Business Innovation Award

2006

Grassroots Excellence Award

Governmental Relations

2005

NISH National William M. Usdane Award

– James Bandy

2004

Fastest Growing Company Award

– San Diego Business Journal

Celia Ballesteros

Dr. Richard Skay

Bruce Whitcomb, Chairman

2002

NISH National Evilyne Villines Award

Patrick O’Sullivan

Verlyn Soderstrom

Richard Woodaman

– Jim Smith

Brian Priest Healthcare Laundry Division Director of Business Development and Account Management bpriest@joboptionsinc.org

Joe Ryan Director of Laundry Operations jryan@joboptionsinc.org

Richard Carrillo Director of Contracts Governmental Relations rcarrillo@joboptionsinc.org

Job Options plays a key role in providing services in a wide range of areas to business and government.

Bilingual Services Customer Service Data Entry Office Support Project Management Word Processing 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/landscape maintenance Beds Maintenance Lawn Care – Planting, Trimming, Weeding, Watering Irrigation Systems Street Sweeping

board of directors

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

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

Concept and Design by STUDIO 2055 | Photography by Richard Dowdy | studio2055.com ©2011 Job Options, Inc. 06/11

A CALIFORNIA NOT-FOR-PROFIT CORPORATION

16

2010

William R. Mead, Ph.D. Chief Executive Officer bmead@joboptionsinc.org

services

JOB OPTIONS, INC.

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.

management

hospital environmental services

17


providing real jobs for capable people www.joboptionsinc.org

Corporate Office

Laundry Plant

Laundry Plant

Food Services

3465 Camino Del Rio South

Chula Vista Plant

San Bernardino Plant

560 Greenbrier Drive

Suite 300

2248 Main Street, Suite 10

1110 S. Washington Avenue

Suite 103

San Diego, CA 92108

Chula Vista, CA 91911

San Bernardino, CA 92408

Oceanside, CA 92054

Phone: 619-688-1784

Phone: 619-575-7627

Phone: 909-386-0342

Phone: 760-547-2480

Fax: 619-688-9884

Fax: 619-424-8768

Fax: 909-890-4673

Fax: 760-547-2485

ISO 9001:2008 certification

Job Options, Inc. Annual Report 2010  

Job Options (JOI) was founded in 1987 with a mission of offering meaningful employment for people with disabilities. Most of our employees a...

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