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2011 Annual Report

INDEPENDENT AND CAPABLE ALWAYS DEPENDABLE


independent

exceptional steadfast

skilled

dedicated EMPOWERED

capable indepen

At Job Options, Our Focus is On Dependability, Not Disability

S

ince establishing Job Options, Inc. (JOI) in 1987 as a nonprofit company, our ongoing commitment is to provide beneficial work opportunities for individuals who otherwise would be marginalized by society. Offering disabled people meaningful, fulfilling employment in government and commercial settings is the mission of Job Options. JOI is fortunate to have gained ground in many regions within the past year, realizing a substantial increase in revenue despite continuing economic challenges. To combat these financial obstacles, we will push into new areas of opportunity to vigorously seek the expansion of our services to customers, both in the private and government sectors. Only by the concentrated efforts of our staff can we further improve our revenue stream and thereby offer placement opportunities to new employees. CONTENTS Dependability Not Disability...............................................1 Michael Williams Profile................................................. 2–3 Hospital Environmental Services……....................................3 Steve Padgett Profile....................................................... 4–5 JOI Laundry and Linen Services...........................................4 Our Accomplishments........................................................6

Report to the Community...................................................7 FINANCIAL REPORT Independent Auditor’s Report.............................................8 Statement of Financial Position...........................................9 Assets.........................................................................9 Liabilities....................................................................9


ndent

exceptional steadfast

skilled

dedicated EMPOWERED

capable independent

Job Options’ greatest asset is our dedicated team members who go to work each day with the desire to do the best job possible. Their employment in our two commercial laundry plants, along with government positions, gives them an independence that builds pride and confidence. Their positive attitude and exceptional work ethic, often going the “extra mile” to do more than what is asked of them, is genuine. By placing our valued employees in positions where they earn wages, the benefit to these individuals and our communities is enormous. Their independence from government assistance gives each employee a deep satisfaction and pride in a job well done. Our success is measured not by revenue; it is the workers we hire who have built our valued reputation. Disability is no barrier to these hard working individuals who give true meaning to the phrase, “independent and capable always dependable.”

Statement of Activities and Changes in Net Assets..............10 Statement of Cash Flows..................................................11 Statement of Functional Expenses 2011.............................12 Statement of Functional Expenses 2010.............................13 Job Opportunities, Inc. Income Statement and Changes in Retained Earnings....................................13

Notes to Financial Statements..................................... 14–15 Our Awards......................................................................16 Management and Board of Directors.................................16 List of Services..................................................................17

ex


MICHAEL WILLIAMS NAVAL MEDICAL CENTER SAN DIEGO

Disability is no obstacle for Job Options’ Mike Williams

A

determination to succeed has been a constant in Mike Williams’ life. Though born with a birth defect that affected his leg, Mike persevered. His grit and drive showed when he played third base for Morse High’s baseball team, despite his disability. To Mike, adversity is just another challenge to overcome. After graduating from high school in 1982, Mike went to work driving a truck for Air Freight Shipping. Looking to move up, Mike applied to NASCO, a local shipbuilding company, but concern over his disability led the company to turn him down for employment. Mike learned about opportunities at Job Options, where he was quickly hired and placed at Naval Medical Center San Diego. He began working in housekeeping before transferring to the supplies division. Says Mike about his four-plus years at the Naval Medical

Center, “I do my job and take pride in it. Job Options has given me more than an opportunity; it’s given me a place in the world where I can be of help. It’s made a big difference in my life.” Recently, a new challenge presented itself when Mike made the decision to have his leg amputated. Mike said his doctor “.…gave me the courage to consider the operation and I’m glad I chose to do it.” Mike took a leave of absence from working at the hospital to recuperate, but when discussing the operation and subsequent fitting of a prosthetic, Mike was enthusiastic about the difference in his life. “Walking on my toes and the ball of my foot was getting very painful,” he said. “That’s the way I dealt with it since I was young. Now that I’m getting comfortable with my ‘new’ leg, I feel great!” Mike paused in his conversation and looked around the Naval Medical Center’s rehabilitation center. “A lot of these kids who came back from combat didn’t have choices…they lost limbs

INDEPENDENT + CAPABLE

“Job Options gave me a great opportunity when they hired me, and I want to make the best of it.”

Job Options, Inc. 2011 Annual Report

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JOB OPTIONS EXPANDS ITS HOSPITAL ENVIRONMENTAL SERVICES DIVISION and the ability to get around easily. When I see them and their struggles, I realize how fortunate I am.” In his off hours, Mike helps take care of his mom in Paradise Hills, where he grew up. He’s a sports fan and enjoys rooting for the Phoenix Suns, the Chargers and the Padres. Aside from sports, Mike likes to learn from history programs on TV. “Mom’s taken cooking classes and does all the cooking. I think that’s a big reason why friends come to visit. If it was me alone, I’d be making sandwiches and that’s all,” he says with a laugh. “My mother is a great cook,” he boasted. Before his operation, Mike played a lot of golf. Now he’s looking forward to getting back on the course. With a brighter future and the determination to continue a “normal” life, Mike says he would like to move into management of workers at Job Options. “I see myself advancing at Job Options.”

JOI EMPLOYEES FOLLOW STRINGENT HOSPITAL SANITATION REQUIREMENTS

J

OI’s largest and fastestgrowing Division is its Hospital Environmental Services Division (EVS). This Division provides cleaning, disinfection and sanitation services to help prevent hospital-associated infections. It maintains the cleanliness and sanitation of the hospital in operating rooms, labor and delivery rooms, the emergency department, patient treatment areas, sleeping rooms, labs, clinics and administrative areas. Hospital EVS, as opposed to traditional custodial services, is a much more intense and detailed process requiring a high level of training and a heightened focus on disinfection. Hospital EVS personnel receive specialized, ongoing training that insures contractual fulfillment. The process is administered by Job Options in accordance with strict policies and in compliance with a myriad of federal, state and local regulations. JOI’s management must also have detailed knowledge regarding the industry and its regulations; these employees are certified by organizations such as the Association for Healthcare Environment. To stay in compliance and monitor the performance of the hospital housekeeping staff, a versatile quality-control program is utilized to identify and correct deficiencies before they become problems. Quality control includes a large number of daily random inspections to identify any deficiencies thus aiding management in providing corrective training. JOI’s valued clients in Hospital Environmental Services include Naval Medical Center San Diego (the Navy’s largest hospital in the world), Veterans Administration Hospital at La Jolla, and the Martin Army Community Hospital at Fort Benning, Georgia. Page 3 |

Job Options, Inc. 2011 Annual Report


STEVE PADGETT MIRAMAR AIR STATION COMMISSARY

Steve Padgett goes “the extra mile” with his longtime employment with Job Options

T

he mission of Job Options is to hire disabled individuals in government and commercial positions, where they can be a valuable resource as they earn a living while being instilled with the pride of accomplishment. The success of Job Options is the result of workers such as Steve Padgett and the more than 800 others who form a community of dedicated employees. If one word could describe Job Options’ employee Steve Padgett, it would be “dependable.” Steve joined the Job Options’ staff at Miramar Air Station’s commissary where he has been employed for fifteen years. His enthusiasm to succeed and to be a valuable asset to Job Options and the commissary is borne out by his supervisors and co-workers. Following graduation from high school in Clairemont Mesa, Steve took a job at the Naval Training Center as a dishwasher, where he performed his duties admirably for twenty years. One day, while accompanying his mother to the Miramar Air Station commissary, he noticed Job Options personnel at work. His interest was piqued. He applied to Job Options and was quickly hired. Steve has been employed at the Miramar commissary as a shelf stocker, working the night shift after the commissary closes. Being on the night shift caused Steve to “give up my

social life,” though on his days off he goes to the VFW hall in Kearny Mesa where he plays darts with friends and always sticks to his “two-beer limit,” as he puts it. Steve’s supervisors have rewarded him with several “Extra Mile” certificates and a $250 cash award for his work. Steve has been nominated for the NISH William Usdane Award, and in 2008 he attended the Grassroots Advocacy Convention in Washington D.C. There he met and talked with local political representatives about his job at JOI and what the program has done for him. Steve’s selfless determination to be the best he can be is exemplified by what it takes to get to and from his job. From home he takes the bus and is at the commissary, ready to work, at 10:00 p.m. When his shift is finished, Steve walks to the Main Gate (rain or shine) and waits in the pre-dawn hours for the busses to begin running to take him home. Once at home, he rests for a bit before walking to the Boys’ and Girls’ Club in Clairemont where he swims fifty yards repeatedly and does water aerobics to keep in shape. Steve Padgett’s story is one that is repeated over and over through Job Options’ program of employment. His success and dedication to his job benefits not only himself and his family, but also the community in which he lives.

SPOTLIGHT ON JOI LINEN AND LAUNDRY SERVICES PROVIDING SUPERIOR QUALITY AND SERVICE FOR 25 YEARS At Job Options, our ability to provide exceptional laundry services to commercial and military customers has resulted in the retention of a majority of our customers as we continue to pursue new contracts. With a focus on hospital contracts along with resort, spa and high-end hotels, Job Options’ laundries in San Bernardino and Chula Vista provide premier service and on-time delivery through our fleet of trucks. By adhering to ISO 9001-2008 certification guidelines at our stateof-the-art facilities, we are mindful of our customers’ need for quality and sanitation with every item we process. Our Customer Quality Guarantee assures each of our clients that they can expect nothing less than the best in laundry and delivery services. Through the AbilityOne program, our federal contracts provide disabled workers who take pride in their daily tasks while earning meaningful wages to assist them in their independence. We process over 12 million pounds of laundry yearly – a figure that would be difficult to attain without our dedicated workforce. JOB OPTIONS PRODUCTS AND SERVICES INCLUDE:

• Processing of customer-owned goods (COG)

• Custom programs to fit clients’ operational requirements

• Direct linen sales

• Flat work and finishing

• Full-service textile rental, dry cleaning

• 24-hour guaranteed turnaround delivery seven days a week

• Bed linens, terries, table linens, napkins and uniforms

• Emergency linen services

Job Options, Inc. 2011 Annual Report

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INDEPENDENT + CAPABLE “Because of Job Options, I traveled to Washington, D.C. to tell our government representatives about the JOI programs and what they have done for me.”

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Job Options, Inc. 2011 Annual Report


our accomplishments Job Options, Inc. (JOI) generated 11% growth in revenue last year to $43.8M as employment grew from 799 to over 850 employees. While the bottom line was negatively impacted by a higher than expected loss from a new account, the Martin Army Hospital

at Fort Benning, Georgia, we still generated $300K of net contribution. Here we highlight the year’s results and how JOI is reinvesting profits to provide further opportunities for people with disabilities to gain meaningful employment.

HOSPITAL ENVIRONMENTAL SERVICES

large hospitality accounts. In January 2012, we began expansion of our San Bernardino Laundry Facility to meet the needs of the customer.

O

ur $3.3M annual account in Fort Benning is strategically critical for us as it expands our presence outside of the Southwestern U.S. This is our initial service effort with the U.S. Army Medical Corps. JOI began service at this location in January 2011, making a much larger than anticipated investment in restoring the condition of this hospital, which had deteriorated significantly under the previous contractor. The best indicator to demonstrate the job we have done at Fort Benning is shown through surveys conducted by an independent firm that assesses the condition of hospitals on a 1-100 scale. Prior to taking over the contract, the hospital had a score of 55. In November our score was 98, the highest rating any hospital has been given by this firm. While this restoration caused a short term substantial loss on the project, the effort resulted in a satisfied customer and contractual compliance. As the year progressed, the project has improved financially and we believe we are better positioned for future business development opportunities with Army MEDCOM.

COMMISSARY CLAIMS SETTLEMENT We successfully negotiated with the Defense Commissary Agency a settlement for services performed at four of our commissaries, dating back to Fiscal 07/08 for cases stored in the warehouses that were over and above what was specified in the contract. The settlement amounted to over $400K, which assisted in absorbing some of the significant short-term losses experienced on the Fort Benning contract.

LAUNDRY BUSINESS DEVELOPMENT AND OPERATIONS EXPANSION

We are increasingly operating in a federal environment that has reduced budgets and is seeking significant cost reductions on contracts. We are attempting to find creative ways to use new technology and automation to reduce labor costs and thereby meet the federal government’s demands. A great example of how we utilize new technology to reduce cost is the use of what is known as a square scrubber in our hospital contracts, and also in additional custodial operations. This machine uses a vibration and a sanding pad to remove floor wax, thereby enabling JOI to avoid the use of chemical strippers. This reduces stripping and waxing time by as much as 40%, resulting in significant labor savings.

%

%

16

30

With continued improvement in the economy, we expect moderate growth over the foreseeable future. We have taken steps to prepare for possible budget and cost reductions implemented by the federal government in the near future, by seeking new business generated in the commercial sector. DIVISION We believe by having 30 16 % % COMM diversified contracts in the commercial CUST 14 and government % 15 HOSP % arenas we will be 23 LAUN 2% % able to offset any FOOD negative impact ADMI to our bottom line in the event of DIVISIONAL REVENUE: 2010/2011 federal government COMMISSARY: $10,049,000 cutbacks. CUSTODIAL: $6,440,000

14

DIVISIONAL REVENUE: 2010/2011

%

%

15

COMMISSARY: $10,049,000 2%

FOOD SERVICES: $5,931,000

HOSPITAL: $13,506,000

ADMIN: $1,146,000

2%

LAUNDRY: $6,696,000

14

%

15

23 %

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LAUNDRY: $6,696,000

CUSTODIAL: $6,440,000

FOOD SERVICES: $5,931,000 ADMIN: $1,146,000

Job Options, Inc. 2011 Annual Report

HOSPITAL: $13,506,000

%

%

23

%

%

16

30

We have invested significant resources in expanding our laundry operations. JOI bid on most major laundry contracts in the Southern California area; however, we were not successful in meeting our fiscal 10/11 goals. We continue to aggressively pursue new contracts with our focus remaining on hospitals and

TECHNOLOGY DEPLOYMENT TO REDUCE COSTS


report to the community Despite an ongoing weak national economy, Job Options experienced revenue growth in the 2011 fiscal year. We continue to focus

on acquiring new commercial accounts while maintaining, improving and upgrading our current government and commercial contracts.

J

ob Options is a San Diego-based not-forprofit organization whose 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 shelfstocking 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.

Protection) and the U.S. Postal Service. 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.

We currently have long-term contracts with the U.S. Department of Defense, General Services Administration, Veterans Administration, Homeland Security (U.S. Customs and Border

The company is comprised of seven Divisions: Hospital Environmental Services, NAVFAC and Base Custodial, Food Services, Professional–Administrative, Laundry and Commissary Services.

Job Options is now in its 25th year of operation. Over the past ten years, our annual rate of growth has been over 17%. This growth resulted in JOI generating revenue of over $43 million in fiscal 2010–2011. To meet the requirements of our contracts, JOI currently employs over 850 people, the majority of whom have a physical, psychological, developmental or emotional disability. JOI is entirely self-funded through the contract revenue we receive from various governmental and commercial entities. We are not dependent on any gifts or grants to fund our operations. Therefore, we have an ongoing responsibility to operate within budget.

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Job Options, Inc. 2011 Annual Report


Statements of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Statements of Activities and Changes in Net Assets. . . . . . . . . . . . . . . . . 10 Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Statements of Functional Expenses 2011. . . . . . . . . . . . . . . . . . . . . . . . . 12 Statements of Functional Expenses 2010. . . . . . . . . . . . . . . . . . . . . . . . . 13 Job Opportunities, Inc. Statement and Changes in Retained Earnings. . . 13 Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14–15

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, 2011 and 2010 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 Not-for-profit Corporation as of September 30, 2011 and 2010 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. 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.

MCLEAN, ROTHERHAM & CO., CPAs San Diego, California March 15, 2012

Job Options, Inc. 2011 Annual Report

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JOB OPTIONS, INC.

A CALIFORNIA NOT-FOR-PROFIT CORPORATION

STATEMENTS OF FINANCIAL POSITION FOR THE YEARS ENDED SEPTEMBER 30, 2011 AND 2010

ASSETS

2011

2010

CURRENT ASSETS Cash and cash equivalents $ 630,266 $ 1,176,612 Inventory 223,881 151,151 Contracts receivable, net of allowance of $70,134 7,864,471 6,023,194 Receivable other 24,975 87,233 Prepaid expense 272,383 367,891 Total Current Assets 9,015,976 7,806,081 PROPERTY AND EQUIPMENT Equipment 5,032,697 4,859,816 Furniture and fixtures 6,592 5,352 Leasehold improvements 370,608 367,354 Building 1,322,048 1,322,048 Land 100,539 100,539 Automobiles 501,906 453,661 Less: Accumulated depreciation (3,502,657) (2,986,120) Net Property and Equipment 3,831,733 4,122,650 NON-CURRENT ASSETS Investment – Job Opportunities, Inc. Deposits Total Assets

5,000 63,387

$ 12,916,096

5,000 29,067

$ 11,962,798

LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable and other liabilities $ 1,986,797 $ 1,477,761 Accrued payroll and payroll related expenses 2,112,134 1,582,628 Notes payable, current 437,422 429,447 Total Current Liabilities 4,536,353 3,489,836 NOTES PAYABLE, NET OF CURRENT PORTION 1,892,736 2,286,393 Total Liabilities 6,429,089 5,776,229 NET ASSETS – UNRESTRICTED 6,487,007 6,186,569 Total Liabilities and Net Assets

$ 12,916,096

$ 11,962,798

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

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Job Options, Inc. 2011 Annual Report


JOB OPTIONS, INC.

A CALIFORNIA NOT-FOR-PROFIT CORPORATION

STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEARS ENDED SEPTEMBER 30, 2011 AND 2010

2011

2010

REVENUE Contract revenue $ 43,777,068 $ 39,339,902 Interest and investment income 948 6,942

Total Revenue 43,778,016 39,346,844

DIRECT EXPENSE Employee salaries $ 17,832,404 $ 16,049,893 Employee benefits 8,529,480 7,262,487 Subcontractor services 5,718,735 6,007,185 General supplies 1,619,611 991,358 NISH commission 1,460,052 1,251,543 Equipment cost 610,350 659,321 Depreciation 581,736 569,400 Utilities 525,353 420,057 Travel 307,961 49,794 Outside services 268,536 208,896 Facility rents 220,574 171,866 Insurance 133,800 124,175 Bank services and interest 125,607 152,159 Telephone 76,185 78,265 Office expense 65,857 51,376 Miscellaneous 20,817 – Licenses and tax 16,213 13,410 Building maintenance 14,124 35,846 Staff development 9,047 14,389 Professional fees 7,867 10,929 Dues and subscriptions 465 220 Gain or loss on disposal of assets (10,598) – Total Direct Expense 38,134,176 34,122,569 ADMINISTRATIVE EXPENSE 5,343,402 4,657,465 Total Expense 43,477,578 38,780,034 Change in Unrestricted Net Assets

300,438

566,810

NET ASSETS AT BEGINNING OF YEAR 6,186,569 5,619,759 NET ASSETS AT END OF YEAR

$ 6,487,007

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

Job Options, Inc. 2011 Annual Report

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$ 6,186,569


JOB OPTIONS, INC.

A CALIFORNIA NOT-FOR-PROFIT CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2011 AND 2010

2011

2010

CASH FLOW FROM OPERATING ACTIVITIES Excess of revenues over expenses $ 300,437 $ 566,810 Add charges to revenue not requiring use of cash: Depreciation 583,308 570,972 Adjustments to reconcile excess of revenue over expenses to net cash flow from operating activities (Increase)/decrease in contracts and accounts receivable (1,779,019) 884,380 (Increase)/decrease in inventory (72,730) 27,716 (Increase)/decrease in prepaid expense 95,508 (271,307) (Increase)/decrease in deposits (34,320) 88,348 Increase/(decrease) in accounts payable and other liabilities 1,038,542 (779,795)

Net Cash Provided By Operating Activities

131,726 1,087,124

CASH FLOW FROM INVESTING ACTIVITIES Acquisition of property and equipment (323,649) (1,314,461) Purchase of investments – (5,000) Disposal of equipment 31,260 43,529

Net Cash (Used) By Investing Activities (292,389) (1,275,932)

CASH FLOW FROM FINANCING ACTIVITIES Proceeds from additional notes payable 73,029 890,391 Principal payments on notes payable (458,712) (522,664)

Net Cash Provided By Financing Activities (385,683)

367,727

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (546,346)

178,919

CASH AND CASH EQUIVALENTS BEGINNING OF YEAR

997,693

1,176,612

CASH AND CASH EQUIVALENTS AT END OF YEAR

$

630,266

$ 1,176,612

SUPPLEMENTAL INFORMATION Interest paid

$

139,606

$

182,651

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

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Job Options, Inc. 2011 Annual Report


JOB OPTIONS, INC.

A CALIFORNIA NOT-FOR-PROFIT CORPORATION

STATEMENTS OF FUNCTIONAL EXPENSES 2011

FOR THE YEAR ENDED SEPTEMBER 30, 2011

2011 PROGRAM SERVICE

TOTAL

MANAGEMENT AND GENERAL

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 Gain or 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

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

Totals

$ 43,477,578

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

Job Options, Inc. 2011 Annual Report

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$

$ 5,343,402


JOB OPTIONS, INC.

A CALIFORNIA NOT-FOR-PROFIT CORPORATION

STATEMENTS OF FUNCTIONAL EXPENSES 2010 FOR THE YEAR ENDED SEPTEMBER 30, 2010

2010 TOTAL

Employee salaries $ 16,112,358 $ Employee benefits 7,317,959 Management fee 4,152,376 Sub-contractor services 6,007,185 General supplies 991,215 NISH and other commissions 1,251,543 Utilities 420,057 Depreciation 570,972 Equipment costs 661,349 Outside services 211,041 Travel and entertainment 54,287 Rent 171,866 Insurance 225,459 Bank services and interest 206,816 Professional fees 60,889 Bad debt expense 138,000 Loss on disposal of assets 4,529 Telephone 79,659 Office expense 57,358 Building maintenance 35,846 Licenses and taxes 21,417 Staff development 26,865 Dues and subscriptions 990 Totals $ 38,780,036 $

PROGRAM SERVICE

MANAGEMENT AND GENERAL

16,049,893 $ 62,465 7,262,487 55,472 – 4,152,376 6,007,185 – 991,358 (143) 1,251,543 – 420,057 – 569,400 1,572 659,321 2,028 208,896 2,145 49,794 4,493 171,866 – 124,175 101,284 152,159 54,657 10,929 49,960 – 138,000 – 4,529 78,265 1,394 51,378 5,980 35,846 – 13,410 8,007 14,389 12,476 220 770 34,122,571

$ 4,657,465

JOB OPORTUNITIES, INC. INCOME STATEMENT AND CHANGES IN RETAINED EARNINGS FOR THE YEAR ENDED SEPTEMBER 30, 2011 REVENUE Contract revenue

$

Total Revenue DIRECT EXPENSE Employee salaries $ Employee benefits General supplies Management fees Equipment cost Office expense Bank services Facility rents Travel Telephone Insurance Legal and professional State income tax Utilities Licenses and tax

224,091 224,091 122,022 53,287 38,748 32,754 16,555 13,536 3,267 2,846 2,689 1,934 1,905 800 800 68 59

Total Expense

291,270

Change in Unrestricted Net Assets

(67,179)

RETAINED EARNINGS AT BEGINNING OF YEAR

(1,813)

RETAINED EARNINGS AT END OF YEAR

$ (68,992)

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

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Job Options, Inc. 2011 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 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

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 three months or less.

Use of Estimates

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, 2011.

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 $948 and $6,942 for the years ended September 30, 2011 and 2010, respectively.

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.

NOTE 4 – CONCENTRATION OF CREDIT RISK

Fair Value

NOTE 5 – RELATED PARTIES – MENTAL HEALTH SYSTEMS, INC.

Generally accepted accounting principles (GAAP) provide guidance on how fair value should be determined when financial statement element 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 $1,000 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 two departments, NMC and Food Service, which are covered under union contracts for health and welfare and pension

Job Options, Inc. 2011 Annual Report

| Page 14

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, 2011, the Organization’s non-interest bearing operating account was $680,614.

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, 2011 and 2010, 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, 2011 and September 30, 2010 were $1,800. Total lease payments during the years ended September 30, 2011 and 2010, were $21,600 and $21,600, respectively. Aggregate future lease payment liabilities are $14,397 for the year ending September 30, 2012. 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 $7,083 for the year ending September 30, 2012. Organization has 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 has 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. are also officers of BMS. Management fees were $4,606,689 and $4,152,376 for the years ended September 30, 2011 and 2010 respectively.

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 noncurrent investment. Job Opportunities, Inc. had a loss of $(67,179) with gross revenues of $224,091 for the year ended September 30, 2011.

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, 2016.. 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,

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, 2011 and 2010 was $948,094 and $988,899, 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. This loan matured October I, 2010. The balance as of September 30, 2011 and 2010 was $0 and $17,269, 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, 2011 and 2010 was $67,650 and $112,844, 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, 2011 and 2010 was $557,687 and $707,564, respectively. Additional equipment loans will commence January 2012 for assets purchased in the amount of $900,563. Effective interest rate will be at 4.6%. The future matures are included in the following schedule.

2012

2013

367,135

The Organization has various car loans outstanding with maturities through 2016. The balance in these loans was $120,460 and $77,435 as of September 30, 2011 and 2010, respectively.

2014

302,181

Aggregate future maturities of long-term debt are as follows:

2015

62,313

2016 and thereafter

1,807

$

581,057

Years ending September 30:

2012

$

593,933

2013

558,892

NOTE 9 – FAIR VALUE MEASUREMENTS

2014

542,115

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

2015

407,484

2016

178,848

Thereafter

949,449

Total

3,230,721

The fair value of the Job Opportunities, Inc. stock is based on cost as there is no current market for the stock.

Less: Future maturities on future capital lease

900,563 2,330,158

$

1,314,493

There were no Level 3 investments.

(Level 2)

(Level 2)

Less current portion

Long-term debt 9/30/11

December 31

2011

2010

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 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, 2011 and September 30, 2010 was $510,662 and $529,978, 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, 2011, the principal balance was $104,131. The effective interest rate as of September 30, 2011 was 6.94%. There is an additional $9,612 of sales tax included in notes payable as of September 30, 2011 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, 2011, the principal balance was $11,861. The effective interest rate as of September 30, 2011 was 7.68%.

$

437,422 1,892,736

NOTE 11 – HEALTH AND WELFARE MONEY PURCHASE PENSION PLAN

Included in accounts payable and other liabilities as of September 30, 2011 and 2010 were $357,025 and $240,140, respectively, due to various trusts for health and welfare pensions. Included in employee benefits expense were $4,103,124 and $3,420,521, of health and welfare benefits for the years ended September 30, 2011 and 2010, 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, 2011 and 2010, are shown net of an allowance for doubtful accounts in the amount of $70,134 and $77,398, respectively. The Organization recorded bad debt of $150,000 and $138,000 for the years ended September 30, 2011 and 2010, 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.

Page 15 |

Job Options, Inc. 2011 Annual Report


our awards 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. 2011

Chula Vista Laundry Plant Accreditation Healthcare Laundry Accreditation Council

2006

NISH National Business Innovation Award

2010

NISH Pacific West Region William M. Usdane Award Rosamaria Santana

2006

NAVFAC SW FEAD San Diego Safety Award Facilities Maintenance Category, Janitorial Services for Naval Medical Center San Diego

2009

NISH National Business Innovation Award

2005

NISH National William M. Usdane Award James Bandy

2008

NISH Board Award for Performance Excellence Randy Williams NISH Award for Outstanding Performance

2004

Fastest Growing Company Award San Diego Business Journal

2007 2006

Grassroots Excellence Award Governmental Relations

2002

NISH National Evilyne Villines Award Jim Smith

management William R. Mead, Ph.D. Chief Executive Officer bmead@joboptionsinc.org 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 Brian Priest Healthcare Laundry Division Director of Business Development and Account Management bpriest@joboptionsinc.org

Al Salcedo Director of Business Development, Quality and Continuous Improvement asalcedo@joboptionsinc.org

Nasar Masry Hospital Environmental Services Division Manager nmasry@joboptionsinc.org

Margaret Ann Penã NAVFAC Division Manager Facilities Division Manager mpena@joboptionsinc.org

Carol Whiteley Commissary Division Manager cwhiteley@joboptionsinc.org

Gladis Jarquin Administrative Services Division Manager/Safety Officer gjarquin@joboptionsinc.org Peg Daly NAVFAC Contract Manager pdaly@joboptionsinc.org Joe Ryan Director of Laundry Operations jryan@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 Richard Carrillo Director of Contracts Governmental Relations rcarrillo@joboptionsinc.org

board of directors Celia Ballesteros

Dr. Richard Skay

Bruce Whitcomb, Chairman

Patrick O’Sullivan

Verlyn Soderstrom

Richard Woodaman

Job Options, Inc. 2011 Annual Report

| Page 16


our services Job Options plays a key role in providing award-winning services in a wide range of areas to 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

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 Page 17 |

Job Options, Inc. 2011 Annual Report


ISO9001:2008 certification

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 E dstrzok@joboptionsinc.org 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 909.386.0342 F 909.890.4673

560 Greenbrier Drive Suite 103 Oceanside, CA 92054 T 760.547.2480 F 760.547.2485

Š2012 Job Options, Inc. 04/12

providing real jobs for capable people

Independent and Capable Always Dependable JOI 2011 Annual Report  

Studio 2055 Design 2011JOI Annual Report

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