job options inc. annual report 2007

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07annualreport

ContentSOur Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Our Accomplishments . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Our Report to the Community . . . . . . . . . . . . . . . . . . . . . 3

finanCiaL report Independent Auditor’s Report. . . . . . . . . . . . . . . . . . . . 4

Statements of Position . . . . . . . . . . . . . . . . . . . . . . . . . 5

Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Liabilities and Net Assets . . . . . . . . . . . . . . . . . . . . . 5

Statements of Activities and Changes in Net Assets. . . . 6

Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . 7

Statements of Functional Expenses 2007 . . . . . . . . . . . 8

Statements of Functional Expenses 2006 . . . . . . . . . . . 9

Notes to Financial Statements. . . . . . . . . . . . . . . . . . . 10

Management and Board of Directors. . . . . . . . . . . . . . . 12

Our Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Our Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

| Job Options 2007 Annual Report

We believe that meaningful employment provides the best mechanism for integrating people with disabilities into productive society. Work enhances self-worth, teaches marketable skills and provides a sense of accomplishment and belonging. It reinforces that the individual with a disability is a valuable member of society and that he or she has a productive place in it. Employment also reduces the dependence on public assistance programs and enables the employed individual to gain more economic security and choices than they would otherwise have.

Job Options, Inc. focuses exclusively on providing meaningful employment opportunities for people with disabilities in environments where they work and interact with non- disabled people. This can help reinforce the fact that they are not so different after all, and that we all have diverse talents and skills as well as challenges. JOI coordinates with other social agencies that provide assistance programs to people with disabilities. These programs include vocational training, counseling and assisted living housing. Once the individual is ready, JOI provides skill assessment, job placement assistance, on-the-job training, ongoing job support programs, and finally, job search assistance into competitive employment.

Our employees include individuals with diverse disabilities, ranging from physical disabilities to psychological, emotional and developmental disabilities, as well as individuals who are disabled because of substance-abuse histories. Over the course of its history, JOI has helped over 4,000 disabled individuals take their place in our community where they can contribute and gain a real sense of self-worth from the work they perform.

Our Mission

JOI has helped

over 4,000 disabled individuals take their place

in our community where they can contribute and gain a real

sense of self-worth from the work they perform.

Job Options 2007 Annual Report | Page 2

OngOing iSO CertifiCatiOnJOI has been ISO 9001:2000 registered in our Custodial, Food Service, Laundry and Commissary Divisions for over three years. Certification under this quality-management program signifies that we comply with principles of world-class providers. The quality standards and procedures we adhere to are an important part of the rehabilitative services we provide to our disabled employees. These procedures clearly define the work and expected output while contributing to the pride our employees develop as they meet the demanding requirements of our customers.

BuSineSS DevelOpMentJOI is pursuing new lines of business in secure electronic mail services, call-center operations and in our traditional businesses through partnerships such as businesses owned by disabled veterans.

DeBt reDuCtiOnImproved cash flow from decreasing outstanding receivables enabled us to repay over $1 million of debt in fiscal 2006/2007, thereby improving our balance sheet.

aChieveD prOfitaBility in launDry OperatiOnSOver the past four years we have doubled the size of our laundry business by opening up a new automated facility in San Bernardino. Job Options’ (JOI) laundry business now accounts for nearly 20% of our total revenue. Productivity at San Bernardino has also doubled, with the entire Laundry Division operating profitably. Due to our automated processes, JOI has built a significant commercial laundry business. We’ve secured contracts with high-end resorts such as La Costa Resort and Spa, Fantasy Springs and WorldMark Resorts. In recognition of these accomplishments, in 2006 we were awarded the NISH Business Innovation Award. To win this prestigious award, JOI competed against more than 500 other not-for-profit organizations in the AbilityOne Program (formerly JWOD).

expanSiOn Of BuSineSS at CaMp penDletOnIn 2007 we were selected to manage shelf-stocking and inventory-preparation services at the Camp Pendleton Commissary, and began a base-wide custodial contract. These projects provided an additional 57 jobs for individuals with disabilities. In total, the work we perform at Camp Pendleton amounts to over $9 million in revenue and provides employment for over 250 JOI employees.

fOOD ServiCe DiSpute SettleDWe settled a two-year dispute over our contractual pricing with Sodexo with minimal impact on our operations. In addition, we are poised to begin cooking and baking operations as well as continued mess attendant work at five locations.

navfaC iMpleMentatiOnWe were selected by NISH and the Navy to be the prime contractor for 16 different custodial contracts that fall under the AbilityOne umbrella. These were consolidated into a single contract, with locations in California, Arizona and Nevada. Currently nine of 16 contracts have been incorporated into the prime contract, with all others under this single contract by year-end. By acting as the prime contractor, we enhance our management capabilities and are positioned for additional work with the federal government.

Job optionS revenue over the paSt Six yearS haS

more than doubLed, growing from $13.6 million in

fiscal 2001/2002 to more than $31 million in fiscal 2006/2007.

We are on track to generate approximately $36 million in revenue

in fiscal 2007/2008. During this period of rapid expansion, the

number of disabled employees has grown from less than 200

seven years ago to over 460 today.

Our accomplishments

We believe JOI is poised to continue

substantial growth in the near term

as we pursue selected commercial

opportunities and expansion in the AbilityOne

Program. In addition, we should continue to

benefit from the ongoing military and federal

government outsource-support functions that

can be more cost-effectively supplied by the

private sector.

We believe JOI is poised to continue

substantial growth in the near term...


Job Options is a San Diego-based not-for-prof it 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, administrative/clerical, commissary-inventory manage-ment and shelf-stocking services to government and commercial customers. Most of our employment opportunities are with various agencies within the federal government and are offered under the provisions of AbilityOne, formerly known as the Javits-Wagner-O’Day program, which 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 currently have long-term contracts with the U.S. Department of Defense, General Services Admin-istration, Veterans Administration, Homeland Security (U.S. Customs Border 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 87% of our current employees work in federal government facilities, with the remaining 13% in the commercial sector.

JOI is now in its 20th year of operation. Over the past six years, our annual rate of growth has been more than 20%. This growth resulted in JOI generating revenue of over $31 million in f iscal 2006/2007. To meet the requirements of our contracts, JOI currently employs over 800 people, the majority of whom have a disability: physical, psychological, developmental or emotional.

JOI works in partnership with

government and commercial customers

to provide quality, reliable and cost-

effective support services.

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Job OptionsRevenue

Job OptionsDivisional Revenue

Number of Job Options Employees

Mill

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Hospital(20%)

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Commissary(27%)

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Job OptionsRevenue



Mill

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12.713.6

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28.930.1

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1741Custodial

(5%)NAVFAC

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Food Service(16%)

Hospital(20%)

Laundry(20%)

Commissary(27%)

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Job OptionsRevenue



Mill

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yees

12.713.6

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28.930.1

31.1

1146Admin(3%)

1741Custodial

(5%)NAVFAC

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Food Service(16%)

Hospital(20%)

Laundry(20%)

Commissary(27%)

96737255

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nuMBer Of JOB OptiOnS eMplOyeeS

Our report to the Community

Job Options is entirely self-funded through the contract revenue we receive from various governmental and commercial entities. We do not depend on any gifts or grants to fund our operations, and therefore have an ongoing responsibility to operate within budget.

In 2006/2007, 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 JOI having seven major Divisions – Food Service, Laundry, Commissary and Professional/Administrative Services in addition to the three mentioned above.

inDepenDent auDitOr’S repOrt

finan

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repo

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to the board of directorsJob 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, 2007 and 2006, 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, 2007 and 2006, 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.

Donald McLean and CompanySan Diego, CaliforniaFebruary 12, 2008

Statements of position . . . . . . . . . . . . . . . . . . . . . . . . . 5 assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Liabilities and net assets . . . . . . . . . . . . . . . . . . . . . 5 Statements of activities and Changes in net assets. . . . 6 Statements of Cash flows . . . . . . . . . . . . . . . . . . . . . . . 7 Statements of functional expenses 2007. . . . . . . . . . . . 8 Statements of functional expenses 2006. . . . . . . . . . . . 9 notes to financial Statements . . . . . . . . . . . . . . . . . . . 10



The accompanying notes are an integral part of these financial statements

Job Options, inc. A CALIFORNIA NOT-FOR-PROFIT CORPORATION

StateMentS Of pOSitiOnSEPTEMBER 30, 2007 AND 2006

aSSetS 2007 2006

CURRENT ASSETSCash and cash equivalents $ 888,042 $ 692,456 Inventory 250,947 253,025Contracts receivable 5,301,716 5,058,190Accounts receivable 113,304 311,830Prepaid expense 177,799 190,239

Total Current Assets 6,731,808 6,505,740

PROPERTY AND EQUIPMENTEquipment 3,253,268 3,028,678Furniture and fixtures 6,321 6,321Leasehold improvements 296,455 292,955Building 1,322,048 1,322,048Land 100,539 100,539Automobiles 261,995 182,076Less: Accumulated depreciation (1,886,855) (1,598,409)

Net Property and Equipment 3,353,771 3,334,208

NON-CURRENT ASSETSDeposits 43,290 28,856

Total Assets $ 10,128,869 $ 9,868,804

liaBilitieS anD net aSSetS

CURRENT LIABILITIESAccounts payable and other liabilities $ 1,719,674 $ 1,105,462Accrued payroll and payroll related expenses 1,472,099 1,345,385Notes payable, current 416,193 1,005,841

Total Current Liabilities 3,607,966 3,456,688

NOTES PAYABLE, NET OF CURRENT PORTION 2,095,534 2,319,343

Total Liabilities 5,703,500 5,776,031

NET ASSETS – UNRESTRICTED 4,425,369 4,092,773

Total Liabilities and Net Assets $ 10,128, 869 $ 9,868,804



A CALIFORNIA NOT-FOR-PROFIT CORPORATION

StateMentS Of aCtivitieS anD ChangeS in net aSSetSFOR THE YEARS ENDED SEPTEMBER 30, 2007 AND 2006

Job Options, inc.

2007 2006 REVENUE

Contract revenue $ 30,753,594 $ 29,441,623Claims and other revenue 297,132 597,465Interest and investment income 56,233 44,014

Total Revenue 31,106,959 30,083,102

DIRECT EXPENSEEmployee salaries $ 13,343,162 $ 12,660,255Employee benefits 5,880,188 5,555,780Subcontractor services 3,230,461 2,940,718General supplies 1,207,483 1,378,984NISH commission 934,280 874,265Utilities 703,013 879,766Depreciation 358,800 349,344Equipment leases and rents 292,575 315,879Other business services 275,849 299,993Travel 242,393 255,347Equipment repair and maintenance 198,214 177,965Bank services and interest 130,262 98,233Insurance 147,825 132,005Facility rents 128,666 130,160Bad Debt expense 110,166 109,506Professional fees 86,230 200Food and paper goods 63,374 82,503Telephone 61,492 69,378Printing and postage 36,379 19,600Office supplies 28,049 32,867Building maintenance 24,832 9,563Licenses and tax 7,956 13,309Minor equipment 6,631 10,218Staff development 4,924 3,131Marketing 4,855 50Dues and subscriptions 586 2,074

Total Direct Expense 27,508,645 26,401,093

ADMINISTRATIVE EXPENSE 3,265,718 3,431,526

Total Expense 30,774,363 29,832,619

Change in Unrestricted Net Assets 332,596 250,483

NET ASSETS AT BEGINNING OF YEAR 4,092,773 3,842,290

NET ASSETS AT END OF YEAR $ 4,425,369 $ 4,092,773




StateMentS Of CaSh flOwSFOR THE YEARS ENDED SEPTEMBER 30, 2007 AND 2006

Job Options, inc.

2007 2006

CASH FLOW FROM OPERATING ACTIVITIES:Excess of revenues over expenses $ 332,596 $ 250,483

Add charges to revenue not requiring use of cash: Depreciation 358,800 349,344

Adjustments to reconcile excess of revenue over expenses to net cash flow from operating activities

(Increase)/decrease in contracts and accounts receivable (45,000) (475,077) (Increase)/decrease in inventory 2,078 135,529 (Increase)/decrease in prepaid expense 12,440 64,624 (Increase)/decrease in deposits (14,434) 459 Increase/(decrease) in accounts payable and other liabilities 740,926 (440,933)

Net cash (used) by investing activities 1,387,406 (115,571)

CASH FLOW FROM INVESTING ACTIVITIES Acquisition of property and equipment (528,365) (335,001) Disposal of equipment 150,003 5,453

Net cash (used) by investing activities (378,362) (329,548)

CASH FLOW FROM FINANCING ACTIVITIES Proceeds from additional notes payable 190,835 1,630,626 Principal payments on notes payable (1,004,293) (1,345,169)

Net cash provided by financing activities (813,458) x 285,457

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 195,586 (159,662)

CASH AND CASH EQUIVALENTS BEGINNING OF YEAR 692,456 852,118

CASH AND CASH EQUIVALENTS AT END OF YEAR $ 888,042 $ 692,456

SUPPLEMENTAL INFORMATION Interest paid $ 179,119 $ 162,218




StateMentS Of funCtiOnal expenSeSFOR THE YEAR ENDED SEPTEMBER 30, 2007

Job Options, inc.

TOTAL PROGRAMSERVICE

MANAGEMENTAND GENERAL

2007

Payroll $ 13,343,162 $ 13,343,162 $ –Payroll benefits 5,914,039 5,880,188 33,851Management fee 3,048,810 – 3,048,810 Sub-contractor services 3,230,461 3,230,461 –General supplies 1,208,751 1,207,483 1,268NISH and other commissions 934,280 934,280 –Utilities 703,013 703,013 –Depreciation 358,800 358,800 –Equipment leases and rents 298,261 292,575 5,686Other business services 281,297 272,722 8,575Travel 252,523 242,394 10,129Insurance 208,650 147,825 60,825Equipment repair and maintenance 198,321 198,214 107Bank services and interest 179,119 130,262 48,857Facility rents 128,666 128,666 –Professional fees 125,651 86,230 39,421Bad debt expense 110,166 110,166 –Telephone 63,948 61,492 2,456Food and paper goods 63,374 63,374 –Printing and postage 36,379 27,691 8,688Office supplies 29,015 28,224 791Building maintenance 24,872 24,832 40License and taxes 9,173 7,956 1,217Staff development 7,211 4,924 2,287Minor equipment 6,631 6,631 –Marketing 6,050 4,855 1,195Dues and subscriptions 2,740 586 2,154Donations 1,000 – 1,000

Totals $ 30,774,363 $ 27,497,006 $ 3,277,357




StateMentS Of funCtiOnal expenSeSFOR THE YEAR ENDED SEPTEMBER 30, 2006

Job Options, inc.

2006

TOTAL PROGRAMSERVICE

MANAGEMENTAND GENERAL

Payroll $ 12,847,304 $ 12,660,255 $ 187,049Payroll benefits 5,619,331 5,555,780 63,551Management fee 2,974,507 – 2,974,507 Sub-contractor services 2,940,718 2,940,718 –General supplies 1,379,211 1,378,984 227Utilities 881,765 879,766 1,999NISH and other commissions 874,265 874,265 –Depreciation 349,344 349,344 –Other business services 317,895 299,993 17,902Equipment leases and rents 315,879 315,879 –Travel 255,347 255,347 –Insurance 203,986 132,005 71,981Equipment repair and maintenance 183,550 177,965 5,585Bank services and interest 162,218 98,233 63,985Facility rents 130,160 130,160 –Bad debt expense 109,506 109,506 –Food and paper goods 82,503 82,503 –Telephone 71,560 69,378 2,182Office supplies 33,092 32,867 225Printing and postage 21,403 19,600 1,803Staff development 20,066 3,131 16,935License and taxes 17,162 13,309 3,853Professional fees 12,610 200 12,410Minor equipment 10,218 10,218 –Building maintenance 9,563 9,563 –Dues and subscriptions 8,956 2,074 6,882Marketing 500 50 450

Totals $ 29,832,619 $ 26,401,093 $ 3,431,526


nOte 1 – nature Of BuSineSSJob Options, Inc. (the “Organization”) contracts with federal agencies and private companies to provide a variety of services, including janito-rial, grounds maintenance, shelf stocking and laundry throughout South-ern California. 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 700 individuals.

nOte 2 – SuMMary Of SignifiCant aCCOunting pOliCieSBasis of accountingThe Organization utilizes the accrual method of accounting for financial statement reporting. Under this method, revenue is recognized when earned and expenses are recognized when incurred.

use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash equivalentsCash equivalents consist of short-term highly liquid investments that are readily converted to cash with an original maturity of three months or less.

fair valueThe 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 assetsThe 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.

Short-term investmentsIn 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 3.

retirement plansThe Organization offers a non-contributory 403-B savings plan. The plan allows eligible employees to defer up to the maximum allowed under appropriate laws governing the plan selected.

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). Unrelated business activities do not result in significant taxable income.

functional expensesThe 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 receivableContracts 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.

Basis of presentationAccounting 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 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.

administrative expenseAdministrative 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 be-tween programs and supporting services as they relate to those functions as reflected in the statements of functional expense.

nOte 3 – ShOrt-terM inveStMentSShort-term investment income comprised of interest and dividends in the amount of $56,233 and $44,014 for the years ended September 30, 2007 and 2006, respectively.

nOte 4 – COnCentratiOn Of CreDit riSKThe Organization maintains cash/cash equivalent balances in excess of the $100,000 FDIC limit in one high-quality financial institution. As of Sep-tember 30, 2007, $879,483 classified as cash was in excess of the FDIC limit.

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, 2007 and 2006, 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, 2007 and September 30, 2006 were $1,800. Total lease payments during the years ended September 30, 2007 and 2006, were $21,600 and $22,422,


respectively. Aggregate future lease payment liabilities are $16,197 for the year ending September 30, 2008. 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, 2007 and 2006 were $10,620. Aggregate future lease payment liabilities are $7,968 for the year ending September 30, 2008. The 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 SySteMS, inC.The Organization has entered into an agreement with Behavioral Manage-ment Systems, Inc. (BMS) as of April 1, 2004. BMS is a for-profit entity which has been organized to provide administrative services to the Orga-nization. Officers of Job Options, Inc. are also officers of BMS. Manage-ment fees not allocated to programs was $3,048,810 for the year ended September 30, 2007.

nOte 7 – Operating leaSe COMMitMentSThe 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, 2012.

Future minimum payments, by year and in the aggregate, under non-cancelable operating leases with initial or remaining terms of one year or more, consisted of the following as of September 30:

Years ending September 30;

2008 $ 467,401

2009 283,277

2010 93,884

2011 131,684

2012 and thereafter 8,326

$ 984,572

nOte 8 – nOteS payaBleNotes payable consist of the following:

Capital lease payable to Tenant Financial Services in the amount of $31,956 for the purchase of a street sweeper, effective interest at 11.5%, 60 monthly payments of $533, with a $1 buy-out at lease maturity date of March 1, 2007. The balance as of September 30, 2007 and 2006 was $0 and $2,592, respectively.

The Organization has entered in a non-cancelable lease with Associated Bank in the amount of $500,000 for the purchase of laundry equipment, effective interest at 7.85%, 60 monthly payments of $10,102, with a $1 buy-out at lease maturity date of January 23, 2009. The balance as of September 30, 2007 and 2006 was $152,991 and $257,704, respectively.

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, 2007 and September 30, 2006 was $567,223 and $577,707, respectively.

The Organization entered into a capital lease with Celtic Leasing during this fiscal year. The agreement allows for the purchase of equipment up to $367,822. As of September 30, 2007, the principal balance was $190,835. The effective interest rate as of September 30, 2007 was 6.94%

The Organization entered into a promissory note agreement with Mental Health Systems, Inc. (a related party) in the amount of $1,000,000, accruing interest at 8.50%. The loan is payable in full with accrued interest on the maturity date of June 30, 2007. The balance as of September 30, 2006 was $700,000. The balance as of September 30, 2007 was $0.

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, 2006 additional proceeds of $433,906 were added to the loan. The balance as of September 30, 2007 and 2006 was $1,065,968 and $1,087,536, 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, 2007 and 2006 was $520,629 and $687,898, respectively.

The Organization has various car loans outstanding with maturities through 2009. The balance in these loans was $14,440 and $31,746 as of September 30, 2007 and 2006, respectively.

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

Years ending September 30;

2008 $ 416,193

2009 344,066

2010 206,776

2011 78,752

2012 50,034

Thereafter 1,415,906

Total 2,511,727

Less current portion 416,193

Long-term debt $ 2,095,534

nOte 9 – aSSetS aCQuireD via Capital leaSeIncluded in fixed assets are $771,687 of assets that have been acquired via a capital lease agreement on September 30, 2005. There are four separate lease agreements; each requires a $1 buyout at the completion of the lease term. As of September 30, 2007 and 2006, amortization expense, which has been included in depreciation expense, was $54,624 and $57,482, respectively.

nOte 10 – health anD welfare MOney purChaSe penSiOn planIncluded in accounts payable and other liabilities as of September 30, 2007 and 2006 were $215,352 and $234,206, respectively, due to various trusts for health and welfare pensions. Included in employee benefits expense were $2,907,805 and $2,639,298, of health and welfare benefits for the years ended September 30, 2007 and 2006, respectively.

nOte 11 – COntraCtS anD aCCOuntS reCeivaBle – allOwanCe fOr DOuBtful aCCOuntSConsistent with generally accepted accounting principles in the United States of America, contracts receivable as of September 30, 2007 and 2006, are shown net of an allowance for doubtful accounts in the amount of $156,942 and $110,000, respectively. The Organization recorded bad debt of $110,166 and $109,506 for the years ended September 30, 2007 and 2006, respectively.


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 through the years, including:

2007 NISH Award for Outstanding Performance

2006 NAVFAC SW FEAD San Diego Safety Award – Facilities Maintenance Category–for Janitorial Services for Naval Medical Center

2006 NISH National Business Innovation Award

2006 Grassroots Excellence Award for Governmental Relations

2002 Jim Smith–NISH National Evilyne Villines Award

2005 James Bandy–NISH National William Usdane Award

Management and Board of Directors

manaGementWilliam r. mead, ph.d.Chief Executive Officer

Jeffrey JohnsonChief Operating Officer

doug bakerFood Service Division Manager

margaret ann penaNAVFAC Division Manager

Gladis Jarquin Administrative Services Division Manager/Safety Officer

Char healyController

Joe marinoDirector of Quality Assurance

darren taplinNAVFAC Contract Manager

bill eastwood, ma Chief Administrative Officer

Joe ryanLaundry Division Manager

Jeffrey abateHospital Environmental Services Division Manager

Carol WhiteleyCommissary Division Manager

valorie SeidlHuman Resources Director

Juan agundisInformation Technology Director

Steve CredlePTS Administrator and Purchasing

richard CarilloDirector of Contacts Governmental Relations

board of direCtorSCelia ballesteros

patrick o’Sullivan

bruce Whitcomb, Chairman

richard Woodaman

Our awards Job optionS: reCoGnized for exCeLLenCe

adminiStrative ServiCeS

Customer service • Data entry • Office support • Word processing • Bilingual services • Project Management

Linen and Laundry ServiCeS

Uniforms • Table linens and napkins • Bed linens and terry • Pick-up and delivery • Flat work, finishing, dry cleaning • Folding • Item rental and COG • Amenities • Dust control (mats, wet mops, dust mops)

buiLdinG and CuStodiaL ServiCeS

Floor maintenance • Floor auto scrubbing • Floor power polishing • Carpet cleaning • Vacuuming • Window cleaning • Furniture and office cleaning • Food preparation area cleaning • Hospital aseptic cleaning • Biological agent decontamination and prevention • Restroom cleaning and sanitizing • Common area cleaning • Low dusting and cleaning – walls, doors, furniture, etc. • High dust and cleaning – blinds, ceiling fans and drapes • Waste containers – empty, wash and sanitize • Strip and make beds • Change towels • Restock supplies

GroundS/LandSCape maintenanCe

Lawn care • Planting • Trimming • Weeding • Watering • Beds maintenance • Street sweeping • Irrigations system construction and maintenance

CommiSSary and WarehouSinG

Inventory tracking, management and order writing • Material management and logistics-truck loading/unloading, forklift handling • Shelf-stocking

food and hoSpitaLity ServiCeS

Cashiers • Salad/Pastry/Deli/Other – Self-serve bar replenishment • Table busing and cleaning • Silverware and table setting replenishment • Scullery • Pot washing • Kitchen cleaning • Plate silverware bar/replenishment • Restaurant area cleaning • Cooking and baking • Menu planning • Food service budget development • Food ordering • Procurement inventory in storage

our empLoyeeS featured in thiS reportThe employees photographed in this annual report were

taken on location at their respective places of employment.

On the cover clockwise:

James Bandy: Machine Finisher, Chula Vista Laundry

Adolfo Vizcarra: Custodian, San Ysidro Port of Entry

Mayra Vella: Restaurant Cleaning, Camp Pendleton

Steve Credle: PTS Administrator

Inside front cover:

Patricia Cruz: Machine Finisher, Chula Vista Laundry

Page 12:

Hugo Martinez: Production Supervisor, Chula Vista Laundry

Back cover:

Micah Niel: Scullery Worker, Camp Pendleton

Photography by Richard Dowdy: Studio 2055

Concept and Design by Studio 2055, studio2055.com

Our Services

As a valued partner, Job Options plays a key role in providing

solutions in a wide range of areas to business and government.

Corporate offiCe

3465 Camino Del Rio SouthSuite 300San Diego, CA 92108Phone: 619-688-1784Fax: 619-688-9884

Laundry pLant

Chula Vista Plant2248 Main Street, Suite 10Chula Vista, CA 91911Phone: 619-575-7627Fax: 619-424-8768

Laundry pLant

San Bernardino Plant1110 S. Washington AvenueSan Bernardino, CA 92408Phone: 909-386-0342Fax: 909-890-4673

food ServiCeS

560 Greenbrier Drive Suite 103Oceanside, CA 92054Phone: 760-547-2480Fax: 760-547-2485

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job options inc. annual report 2007

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