1
Financial Summary
Board RetreatSeptember 21, 2014
2
Agenda
• Independent Accountant’s Financial Statements– Fiscal Year 2014/Fiscal Year 2013
• SAE Financials “101”– Revenue & Expense Breakdown– Historical Financial Summary– Net Asset / Reserve Building
• FY2015 Budget Forecast • Appendix/Resources
– Annual Historical Trend Model– FY2015 Budget Scoreboard Model
3
Consolidated Financial Statements
4
Statement of Financial Position
5
Statement of Activities
6
Statement of Cash Flows
7
Understanding SAE’s Financials
8
Key Takeaways
• Tuition Covers ~ 75%-80% • Auction/Giving/Fundraising ~20-25%• Start Each Year with a “Get” of ~$700k• Teacher/Staff Expense is ~70% of Revenue • Small Size Has Many Benefits, But Not $cale • Fundraising is a Crucial Element to Profitability• Major Progress on Net Asset Position
(Reserve) Over Past 5 Years
9
Revenue Breakdown
10
Sources of Revenue
FY2014
Tuition & Fees80%
Annual Giving10%
Growth & Enhancement3%
Auction (Spring Fundraiser)4%
Other Fundraising2%
Other Income1%
11
Total Revenue Growth
FY2011 FY2012 FY2013 FY2014 3,000,000
3,100,000
3,200,000
3,300,000
3,400,000
3,500,000
3,600,000
3,700,000
3,800,000
3,900,000
4,000,000
3,350,089
3,726,764
3,977,751
3,871,663
12
Tuition & Fees
FY2011 FY2012 FY2013 FY2014 -
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
2,579,292
2,915,666
3,227,869 3,091,874
13
Total Fundraising
FY2011 FY2012 FY2013 FY2014 660,000
680,000
700,000
720,000
740,000
760,000
780,000
800,000
820,000
721,218
794,930
716,345
749,614
14
Historical Revenue Breakdown
FY2011 FY2012 FY2013 FY2014 -
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
2,579,292
2,915,666
3,227,869 3,091,874
721,218 794,930
716,345 749,614
49,579 16,169 33,537 30,175
Tuition & FeesLinear (Tuition & Fees)TOTAL FUNDRAISINGLinear (TOTAL FUNDRAISING)Other IncomeLinear (Other Income)
15
Expense Breakdown
16
Sources of Expense
FY2014
Wages/Benefits66%
General Operating14%
Rent12%
Technology3%
Insurance2%
Other Expense/Depreciation3%
17
Historical Operating Expense
FY2011 FY2012 FY2013 FY2014 -
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
3,086,023
3,418,936 3,554,048
3,798,507
18
Wages & Benefits
FY2011 FY2012 FY2013 FY2014 -
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2,122,524
2,365,893
2,551,291 2,590,108
19
General Operating
FY2011 FY2012 FY2013 FY2014 -
100,000
200,000
300,000
400,000
500,000
600,000
416,448
498,838
411,027
539,453
20
Rent
FY2011 FY2012 FY2013 FY2014 360,000
380,000
400,000
420,000
440,000
460,000
480,000
406,663
411,348
441,077
469,607
21
Technology
FY2011 FY2012 FY2013 FY2014 -
20,000
40,000
60,000
80,000
100,000
120,000
73,852
67,436
59,881
112,626
22
Insurance
FY2011 FY2012 FY2013 FY2014 -
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
66,536
75,421
90,772
86,712
23
Other/Depreciation
FY2011 FY2012 FY2013 FY2014 -
20,000
40,000
60,000
80,000
100,000
120,000
71,623
64,319
71,008
108,592
24
The Bottom Line
25
A Non-Profit’s Profits
• SAE is a Non-Profit Organization• Nomenclature for Non-Profits: Net Income = Net
Assets• Net Income or “Profit” for SAE Has Several Uses– Establishing an Operating Reserve to Cover Annual
Expenses (as recommended by CAIS)– Securing a Nest-Egg to Achieve Program Goals– Saving for Possible Expansion
A non-profit organization (NPO) is an organization that uses surplus revenues to achieve its goals rather than distributing them as profits or dividends.While not-for-profit organizations are permitted to generate surplus revenues, they must be retained by the organization for its self-preservation, expansion, or plans.*
* Source: Wikipedia
26
Net Income Growth
FY2011 FY2012 FY2013 FY2014
(100,000)
(50,000)
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
192,444
243,509
352,695
(35,435)
27
Net Assets/Reserve Building
28
Historical Net Assets(cumulative figures)
Ending Net AssetsFY2011 FY2012 FY2013 FY2014
(300,000)
(200,000)
(100,000)
-
100,000
200,000
300,000
400,000
500,000
(217,703)
25,805
378,550
343,113
29
Net Assets as % of 6 mo. Operating Expense
-
500,000
1,000,000
1,500,000
2,000,000
1,709,468 1,777,024
1,899,254 1,905,332
25,805
378,550 343,113
383,899
6 mos Operating ExpenseEnding Net Assets
2%
FY2012 FY2013 FY2014 FY2015
ReserveGoal: 100%
21% 18% 20%
30
FY2015 Revenue Forecast
31
FY 2015 Key Revenue Drivers & Assumptions
• Total Revenue Growth of 3%• Tuition Revenue – $3.33M or +8%– 108 Full paying students, up from 103 in FY14– Raised tuition by 4%
• Fundraising Revenue - $622K or -17%– Conservative Assumptions; Real Potential for Upside– Auction – down 19% – Annual Giving – flat– Growth & Enhancement – flat on a gross basis
32
FY2015 Total Revenue Growth
3,500,000
3,550,000
3,600,000
3,650,000
3,700,000
3,750,000
3,800,000
3,850,000
3,900,000
3,950,000
4,000,000
3,871,663
3,982,462
+ 3%
FY2014 FY2015
33
FY2015 Tuition & Fees
FY2014 FY2015 2,800,000
2,900,000
3,000,000
3,100,000
3,200,000
3,300,000
3,400,000
3,091,874
3,333,062
+ 8%
34
FY2015 Fundraising Revenue
FY2014 FY2015
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
749,614
621,500 -17%
35
FY2015 Other Income
FY2014 FY2015
14,000
16,000
18,000
20,000
22,000
24,000
26,000
28,000
30,000
32,000
30,175
27,900 -8%
36
FY2015 Operating Expense Forecast
37
Operating Expense Assumptions
• Total Operating Expense Flat with Prior Year• Wages/Benefits– $2.75M or +6%• General Operating - $431K or -20%– Prior Year includes Marketing spend (Website)
• Rent – Flat• Technology – Down 42% after significant
investment year• Insurance – Up 11%
38
FY2015 Operating Expense
FY2014 FY2015
3,500,000
3,550,000
3,600,000
3,650,000
3,700,000
3,750,000
3,800,000 3,798,507 3,810,663
+ 0.3%flat
39
FY2015 Wages & Benefits
FY2014 FY2015
2,300,000
2,350,000
2,400,000
2,450,000
2,500,000
2,550,000
2,600,000
2,650,000
2,700,000
2,750,000
2,590,108
2,748,639
+ 6%
40
FY2015 General Operating
FY2014 FY2015
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
550,000
600,000
539,453
430,836
-20%
41
FY2015 Rent
FY2014 FY2015
40,000
90,000
140,000
190,000
240,000
290,000
340,000
390,000
440,000
490,000
540,000
469,607 470,037
+ 0.1%(flat)
42
FY2015 Technology
FY2014 FY2015
-
20,000
40,000
60,000
80,000
100,000
120,000 112,626
65,000
-42%
43
FY2015 Insurance
FY2014 FY2015
70,000
74,000
78,000
82,000
86,000
90,000
94,000
86,712
96,151
+ 11%
44
FY2015 Other/Depreciation
FY2014 FY2015
90,000
110,000
130,000
108,592
131,012
+ 20%
45
FY2015 Net Asset Growth
FY2014 FY2015
(50,000)
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
343,113
383,899
(35,437)
40,786
Ending Net AssetsLinear (Ending Net Assets)Change in Net AssetsLinear (Change in Net Assets)
+ 12%
46
Appendix
• Annual Historical Trend Model• FY2015 Budget Scoreboard Model
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53
NOTES
Recommended
