Enterprise Florida, Inc.

Transcription

1 Finance and Compensation Committee Meeting April 21, :00 pm 2:45 pm EST 800 North Magnolia Avenue, Suite 1100 Orlando, Florida eflorida.com

2 ENTERPRISE FLORIDA, INC. FINANCE & COMPENSATION COMMITTEE MEMBERS Alan Becker, Chair Founding Shareholder Becker & Poliakoff, P.A Stirling Road Fort Lauderdale, FL Phone: (954) Bob McAdam Senior Vice President, Government Relations Darden Restaurants 1000 Darden Center Drive Orlando, FL Phone: (407) Howard Halle Executive Vice President, Florida Wells Fargo Bank 1 Independent Drive 25 th Floor, Suite 2500 Jacksonville, FL Phone: (904) howard.halle@wellsfargo.com Gene Schaefer President-Miami Bank of America, N.A. 701 Brickell Avenue, 8 th Floor Miami, FL Phone: (305) gene.schaefer@baml.com Staff Contacts Louis Laubscher SVP Administration Phone: (407) llaubscher@eflorida.com Pamela Murphy Vice President, Finance and Accounting Phone: (407) pmurphy@eflorida.com

3 Enterprise Florida Board of Directors Finance and Compensation Committee Agenda April 21, :00 pm 2:45 pm EST A meeting at: 800 N. Magnolia Avenue, Suite 1100 Orlando, Florida Call in number Conference code # Presiding Officer, Alan Becker, Chair, Finance and Compensation Committee Committee members Howard Halle Bob McAdam Gene Schaefer Roll Call and Declaration of Quorum Pamela Murphy PUBLIC COMMENT Alan Becker Minutes for meetings held on January 6, 2014 Page 3 Alan Becker (I/D/A) Review and approval of unaudited financial statements for the quarter ending March 31, 2014 Page 4 Pamela Murphy (I/D/A) Report on the State Small Business Credit Initiative Program Page 11 Bill Spivey (I/D) Other Business Alan Becker (I/D) Adjourn Alan Becker Enterprise Florida Finance and Compensation Committee Meeting April 21,

4 NOTICE OF MEETING announces a public meeting to which all persons are invited: Date and Time: Monday, April 21, :00 PM Place: 800 N. Magnolia Avenue, Suite 1100 Orlando, FL Meeting: Finance & Compensation Committee Purpose: This meeting will discuss on-going issues, developing issues and other matters. If an accommodation is needed for a disability or physical impairment, please contact Pamela Murphy at (407) at least one (1) day prior to the activity. Persons who are hearing or speech impaired can contact the Florida Dual Party Relay System at (Voice) and (TDD). 2

5 DRAFT Minutes of a Regular Meeting of the Finance and Compensation Committee A regular meeting of the (EFI) Finance and Compensation Committee was held on January 6, 2014, at via teleconference. Committee Members Present Becker, Alan-Chair McAdam, Bob Staff Present Helton, Sean Salmon, Griff Halle, Howard Schaefer, Gene Laubscher, Louie Swoope, Gray Agenda I. Roll Call II. Minutes for meeting held on October 8, 2013 III. Review and approval of unaudited Financial Statements for the Quarter ending December 31, 2013 IV. Other Business V. Adjourn A quorum being present, Chairman Alan Becker called the meeting to order at 1:00 pm. Review and Approve the Minutes from the October 8, 2013 meeting Mr. Halle noted that the agenda listing in the minutes had a typographical error. The word contact was intended to be Contract. Upon motion by Gene Schaefer and Second by Howard Halle the corrected minutes were unanimously approved. Public Comment The chairman asked if there was any public comment. Hearing none, the committee addressed the remaining agenda items. Review and approve Unaudited Financial Statements for the Quarter Ending December 31, 2013 Mr. Laubscher explained that the interim financial statements were cut off before month end because of the tight timelines for the Finance and Compensation and Executive committee meetings. Some administrative fees were not recorded in the month, and because marketing revenues are not recognized until received from partners (but are under firm commitment,) this partially caused a shortfall in revenues. Expenses are well under budget. Upon motion by Howard Halle, second by Bob McAdam, and unanimously carried, the committee recommended the financial statements to the Executive Committee for placement on the Board of Directors Consent Agenda. There was no other business, and the meeting was adjourned without exception. 3

6 Enterprise Florida Financial Report Quarter Ending March 31, Unaudited The following financial information for the quarter ending March 31, 2014 and 2013, is unaudited, and is derived from internally generated financial statements. This report is provided to the Board of Directors to assist in its understanding and analysis of EFI s financial performance and accountability. These statements have been generated by management and the fairness of their presentation is the responsibility of management. Statement of Financial Position (Attachment A) The Statement of Financial Position provides a comparison of the assets, liabilities and net assets of EFI as of March 31, 2014 and 2013, and is presented in a combined format on Attachment A-1. Attachment A-2 provides the detail of EFI s Financial Position by category or activity. Operations are directly related to our agreement with the Florida Department of Economic Opportunity. Administered are funds awarded by the State to various grantees and administered by EFI. Corporate is investor activity and the use of those funds. Restricted is funding earmarked for a specific use only for programs such as Base Protection, Florida Defense Support Task Force, Small Business Technology Growth Fund, State Small Business Credit Initiative, Rural Strategic Marketing, and Technology related programs. Statement of Activities (Attachment B) The Statement of Activities provides a comparison of EFI's revenues and expenses compared to the budget approved by the Board. Information for the prior year is presented for comparative purposes. Information is presented for the quarter ending March 31, 2014 and 2013 on Attachment B-1. Attachment B-2 provides the detail for the nine months, formatted in the same manner as EFI s Financial Position. Revenues Revenues include state funding, investor contributions, program fees, and interest. The revenues are either collected or billed by year end. For the quarter ending March 31, 2014, the third quarter revenue from the state has been recorded and is expected to be received in May Corporate contributions were budgeted at $1,400,000 for FY 2013/14, the same as in FY 2012/13. Contributions are budgeted on a straightline basis throughout the fiscal year, with collections varying based on the anniversary dates of the investors and a higher volume of collections in the third and fourth quarters. The amount collected as of quarter-end was $1,012,500. Revenue in total for the nine months in the fiscal year was on track with the budget, with only minor variances due to the timing of certain events and activities. Expenses Through the end of the quarter, EFI had incurred expenses of $14.9 million compared to $12.1 million in 2013 and is under budget year-to-date. Open positions at the start of the year accounted for the significant savings in the Payroll and Related Costs line item. Most of the other expense categories are under budget year-to-date. Additional Schedules In addition, to assist in the analysis of EFI s financial performance, included on the last page is a schedule of the administered activity detailing the category of programs by award year. The first column, the Contract Award, is a memo column indicating the expected total to be awarded. The next three columns track the actual flow of funds from the State to EFI, then to the Recipients. The last column total supports the Administered category of activity included in the detail of EFI s Financial Position included on Attachment A-2 for March 31, For additional information, contact: Pamela Murphy, Vice President, Finance and Accounting T pmurphy@eflorida.com Enterprise Florida Board Meetings May 22,

7 Financial Report Financial Statements For the Quarter Ending March 31, 2014 Statement of Financial Position, Unaudited Attachment A-1 Attachment A-2 March 31, 2014 & 2013 Comparative March 31, 2014 & 2013 Detail Statement of Activities for Nine Months Ending, Unaudited Attachment B-1 Attachment B-2 March 31, 2014 & 2013 Comparative March 31, 2014 & 2013 Detail Administered Activity by Program as of March 31, 2014 Enterprise Florida Board Meetings May 22,

8 Financial Report Statement of Financial Position, Unaudited Attachment A-1 ($ in Thousands) March 31 $ % Change Change Assets 1 Cash and Cash Equivalents - unrestricted $ 12,090 $ 10,283 $ 1, % (A) 2 Cash and Cash Equivalents - restricted 26,088 14,842 11, % (B) 3 Cash and Cash Equivalents - escrow 49,499 18,963 30, % (C) 4 Loans Receivable 16,130 8,869 7, % (D) 5 Accounts Receivable 17,715 4,501 13, % (E) 6 Other Assets % (F) 7 Total Assets $ 122,330 $ 58,119 $ 64, % Liabilities and Net Assets 8 Accounts Payable and Other Liabilities $ 1,939 $ 1,489 $ % (G) 9 Deferred Revenue 3,059 2, % (H) 10 Escrow Payable 49,468 18,952 30, % (C) 11 Total Liabilities 54,466 22,906 31, % Net Assets 12 Temporarily Restricted 54,994 23,711 31, % (B) 13 Unrestricted 12,870 11,502 1, % (I) 14 Total Net Assets 67,864 35,213 32, % 15 Total Liabilities and Net Assets $ 122,330 $ 58,119 $ 64, % (A) Unrestricted funds for operations and administered programs. (B) Restricted funds were received and recorded as revenue in prior years with funds expended in the current year. New funds were received related to the FL Defense Support Task Force and State Small Business Credit Support Initiative, accounting for the majority of the increase. (C) Escrow funds received from the state to be paid to several companies once DEO certifies the contract deliverables are met. The cash asset is offset by a related liability with the difference being the interest earned and payable to the State of Florida on a quarterly basis. (D) (E) (F) (G) (H) Loan receivables administed under the State Small Business Credit Support Initiative. Accounts receivable includes the third quarter appropriation and trade accounts receivable. Other assets increased for fixed assets purchased and capitalized at June 30, Accounts payable increased related to general operations. Deferred Revenue is largely composed of funds received from the State of Florida, to be paid for EFI administered grants. The balance fluctuates throughout the year based on when funds are received from the State, as well as, when payments are made to the grantees. (I) The increase in unrestricted net assets correlates to the increase in net assets from operations. (J) State operating funds for Enterprise Florida. (K) State operating funds for Florida Sports Foundation. (L) Corporate contributions are budgeted on a straight-line basis with actual collections recorded on a cash basis. The balance also includes private contributions collected by the Florida Sports Foundation. (M) Revenue related to events directly offset event expenses. (N) Other revenues from administrative fees, interest, and sponsorships. (O) Payroll and benefits is comparable to last year but under budget for the year. (P) Operating, general and administrative costs are slightly over budget but are expected to be on track by the end of the year. (Q) Program expenses and events are offset by event related revenue. (R) Program expenses related to the FL Sports Foundation and linked to state appropriations. (S) International offices were on track with prior year-to-date numbers and the budget for the year. (T) Professional Fees are in line with the budget. (U) Advertising & marketing is on track to spend based on their marketing plan. (V) The travel budget was increased for FY 2013/14 to support the needs of the organization. (W) Temporarily restricted revenue was received and recorded in prior years with payments made in the current year for the Base Protection, Florida International Business Expansion Initiative, Technology, and Rural Strategic Marketing Programs. Current year new programs related to SSBCI, Defense Task Force, and Minority Business account for the major increase. Enterprise Florida Board Meetings May 22,

9 Financial Report Statement of Financial Position, Unaudited Attachment A-2 ($ in Thousands) March 31, 2014 Operations Administered Corporate Restricted Total Assets 16 Cash and Cash Equivalents - unrestricted $ 7,846 $ 2,794 $ 1,450 $ - $ 12, Cash and Cash Equivalents - restricted ,088 26, Cash and Cash Equivalents - escrow 49, , Loans Receivable ,130 16, Accounts Receivable 4, ,054 17, Other Assets Total Assets $ 62,799 $ 2,794 $ 1,450 $ 55,287 $ 122,330 Liabilities and Net Assets 23 Accounts Payable and Other Liabilities $ 1,936 $ - $ - $ 3 $ 1, Deferred Revenue - 2, , Escrow Payable 49, , Total Liabilities 51,404 2, ,466 Net Assets 27 Temporarily Restricted ,994 54, Unrestricted 11,420-1,450-12, Total Net Assets 11,420-1,450 54,994 67, Total Liabilities and Net Assets $ 62,824 $ 2,794 $ 1,450 $ 55,262 $ 122,330 March 31, 2013 Operations Administered Corporate Restricted Total Assets 31 Cash and Cash Equivalents - unrestricted $ 6,749 $ 1,856 $ 1,678 $ - $ 10, Cash and Cash Equivalents - restricted ,842 14, Cash and Cash Equivalents - escrow 18, , Loans Receivable ,869 8, Accounts Receivable 4, , Other Assets Total Assets $ 30,874 $ 1,856 $ 1,678 $ 23,711 $ 58,119 Liabilities and Net Assets 38 Accounts Payable and Other Liabilities $ 1,489 $ - $ - $ - $ 1, Deferred Revenue 609 1, , Escrow Payable 18, , Total Liabilities 21,050 1, ,906 Net Assets 42 Temporarily Restricted 43 Unrestricted ,711 23, Total Net Assets 9,824-1,678-11,502 9,824-1,678 23,711 35, Total Liabilities and Net Assets $ 30,874 $ 1,856 $ 1,678 $ 23,711 $ 58,119 Enterprise Florida Board Meetings May 22,

10 Financial Report Statement of Activities For the Nine Months Ending, Unaudited Attachment B-1 ($ in Thousands) March 31, 2014 March 31, 2013 Actual Budget Difference Actual Budget Difference Revenues: 46 State Appropriations - EFI $ 10,800 $ 10,800 $ - (J) $ 9,975 $ 9,975 $ - 47 State Appropriations - FSF 1,881 1, (K) 1,466 1,535 (69) 48 Private Cash Contributions 1,261 1,446 (185) (L) 900 1,050 (150) 49 Registration and Participation Fees 1,574 1,874 (300) (M) 1,216 1,294 (78) 50 Other Revenues 460 1,226 (766) (N) (45) 51 Total Revenues 15,976 16,996 (1,020) 13,945 14,287 (342) Expenses: 52 Payroll and Related Costs $ 6,197 $ 7,024 $ (827) (O) $ 5,876 $ 6,693 $ (817) 53 Operating, General and Administrative 2,679 2, (P) 1,900 2,171 (271) 54 Program Expenses and Events - EFI 1,449 2,406 (957) (Q) 1,243 1,706 (463) 55 Program Expenses and Events - FSF 1,296 1,408 (112) (R) 718 1,096 (378) 56 International Offices 1,323 1,548 (225) (S) 1,054 1,056 (2) 57 Professional Fees (196) (T) Advertising & Marketing 1,058 1,088 (30) (U) (412) 59 Travel (61) (V) (6) 60 Total Expenses 14,937 16,996 (2,057) 12,103 14,443 (2,340) 61 Change in net assets - operations 1,039-1,039 1,842 (156) 1, Change in net assets - temp restricted 15,280-15,280 (W) 5,834-5, Net assets, beginning of period 51,545-51,545 27,537-27, Net assets, end of period $ 67,864 $ - $ 67,863 $ 35,213 $ (156) $ 35, Revenue - Pass Throughs & Grants 1,301-1,301 3,608-3, Expenses - Grants to Other Organizations 1,301-1,301 3,608-3, Revenue - Temporarily Restricted 19,414-19,414 (T) 18,272-18, Expenses -Temporary Restricted 4,134-4,134 (T) 12,438-12,438 (A) Unrestricted funds for operations and administered programs. (B) Restricted funds were received and recorded as revenue in prior years with funds expended in the current year. New funds were received related to the FL Defense Support Task Force and State Small Business Credit Support Initiative, accounting for the majority of the increase. (C) Escrow funds received from the state to be paid to several companies once DEO certifies the contract deliverables are met. The cash asset is offset by a related liability with the difference being the interest earned and payable to the State of Florida on a quarterly basis. (D) Loan receivables administed under the State Small Business Credit Support Initiative. (E) Accounts receivable includes the third quarter appropriation and trade accounts receivable. (F) Other assets increased for fixed assets purchased and capitalized at June 30, (G) Accounts payable increased related to general operations. (H) Deferred Revenue is largely composed of funds received from the State of Florida, to be paid for EFI administered grants. The balance fluctuates throughout the year based on when funds are received from the State, as well as, when payments are made to the grantees. (I) The increase in unrestricted net assets correlates to the increase in net assets from operations. (J) State operating funds for Enterprise Florida. (K) State operating funds for Florida Sports Foundation. (L) Corporate contributions are budgeted on a straight-line basis with actual collections recorded on a cash basis. The balance also includes private contributions collected by the Florida Sports Foundation. (M) Revenue related to events directly offset event expenses. (N) Other revenues from administrative fees, interest, and sponsorships. (O) Payroll and benefits is comparable to last year but under budget for the year. (P) Operating, general and administrative costs are slightly over budget but are expected to be on track by the end of the year. (Q) Program expenses and events are offset by event related revenue. (R) Program expenses related to the FL Sports Foundation and linked to state appropriations. (S) International offices were on track with prior year-to-date numbers and the budget for the year. (T) Professional Fees are in line with the budget. (U) Advertising & marketing is on track to spend based on their marketing plan. (V) The travel budget was increased for FY 2013/14 to support the needs of the organization. (W) Temporarily restricted revenue was received and recorded in prior years with payments made in the current year for the Base Protection, Florida International Business Expansion Initiative, Technology, and Rural Strategic Marketing Programs. Current year new programs related to SSBCI, Defense Task Force, and Minority Business account for the major increase. Enterprise Florida Board Meetings May 22,

11 Financial Report Statement of Activities For the Nine Months Ending, Unaudited Attachment B-2 ($ in Thousands) March 31, 2014 Operations Administered Corporate Restricted Total Revenues: 69 State Appropriations-EFI $ 10,800 $ - $ - $ - $ 10, State Appropriations-FSF 1, , Private Cash Contributions 248-1,013-1, Registration and Participation Fees 1, , Other Revenues Total Revenues 14,963-1,013-15,976 Expenses: 75 Payroll and Related Costs $ 6,197 $ - $ - $ - $ 6, Operating, General and Administrative 2, , Program Expenses and Events-EFI 1, , Program Expenses and Events-FSF 1, , International Offices 1, , Professional Fees Advertising & Marketing 1, , Travel Total Expenses 14, , Change in net assets - operations , Change in net assets - temp restricted ,280 15, Net assets, beginning of period 11, ,714 51, Net assets, end of period $ 11,420 $ - $ 1,450 $ 54,994 $ 67, Revenue - Pass Throughs & Grants - 1, , Expenses - Grants to Other Organizations - 1, , Revenue - Temporarily Restricted ,414 19, Expenses -Temporary Restricted ,134 4,134 March 31, 2013 Operations Administered Corporate Restricted Total Revenues: 92 State Appropriations-EFI $ 9,975 $ - $ - $ - $ 9, State Appropriations-FSF 1, , Private Cash Contributions Registration and Participation Fees 1, , Other Revenues Total Revenues 13, ,945 Expenses: 98 Payroll and Related Costs $ 5,876 $ - $ - $ - $ 5, Operating, General and Administrative 1, , Program Expenses and Events-EFI 1, ,243 Program Expenses and Events-FSF International Offices 1, , Professional Fees Advertising & Marketing Travel Total Expenses 11, , Change in net assets - operations 1, , Change in net assets - temp restricted ,834 5, Net assets, beginning of period 8,220-1,440 17,877 27, Net assets, end of period $ 9,824 $ - $ 1,678 $ 23,711 $ 35, Revenue - Pass Throughs & Grants - 3, , Expenses - Grants to Other Organizations - 3, , Revenue - Temporarily Restricted ,272 18, Expenses -Temporary Restricted ,438 12,438 Enterprise Florida Board Meetings May 22,

12 Financial Report Detail of Administered Activities by Program Funds Funds Received Funds In Contract From Paid To House Awarded State Recipients 3/31/2014 Base Protection: 114 Awarded in 12/13 8,580 8,580 4, , Awarded in 11/12 18,950 18,950 18, Defense Infrastructure: 116 Awarded in 13/14 1,600, Awarded in 12/13 1,581, ,245 83, , Awarded in 11/12 1,581,245 1,025, , , Awarded in 10/11 5,000,000 4,702,583 3,915, , Awarded in 09/10 1,367,325 1,385,457 1,215, , Awarded in 08/09 10,600,000 10,600,000 10,599, Awarded in 07/08 2,782,000 2,113,344 2,112, Awarded in 06/07 5,314,500 3,635,718 3,579,706 56, Awarded in 05/06 3,498,165 3,203,404 3,199,713 3, Awarded in 04/05 3,550,000 3,020,000 2,568, ,303 Defense Reinvestment: 126 Awarded in 13/14 850, Awarded in 12/13 850, , , , Awarded in 11/12 850, , ,232 39, Awarded in 10/11 850, , ,809 75,191 Rural Development: 130 Awarded in 10/11 587, , ,022 - Rural Infrastructure: 131 Awarded in 10/11 1,100, , ,924 - Interest (payable to the State of Florida) 132 Received 12/ , Ending Balance 41,961,980 34,287,018 31,496,361 2,793,813 Enterprise Florida Board Meetings May 22,

13 State Small Business Credit Initiative ( SSCBI ) Overview ( EFI ) Finance and Compensation Committee Meeting April 21, 2014 Created as part of the Small Business Jobs Act of 2010, SSBCI was designed by the federal government to help states strengthen existing loan and equity programs and/or create new programs that support financing small businesses. Florida received a total SSBCI allocation of $97,662,349 from the U.S Department of the Treasury ( UST ). The Minority and Small Business, Entrepreneurship and Capital ( MaSBEC ) unit within EFI contracted with the Department of Economic Opportunity to administer most of the program. The primary objective of this five year program is to leverage private capital for Florida s small businesses. After five years, the goal is to show that, taken together, $10 in new private, small business lending or investment was generated by every $1 in SSBCI funding. Current, MaSBEC has been able to achieve a leverage ratio of almost 7:1. Below is a breakdown of sub-program allocation for the program: Gross Net Expenses Net Sub-program Admin Allocation 3.660% Funding Loan Participation EFI $ 32,062,349 $ 1,173,482 $ 30,888,867 Loan Guarantee EFI $ 15,000,000 $ 549,000 $ 14,451,000 Venture Capital EFI $ 43,500,000 $ 1,592,100 $ 41,907,900 Direct Loan EFI $ 100,000 $ 3,660 $ 96,340 CAP DEO $ 2,000,000 $ 73,200 $ 1,926,800 Export Guarantee FEFC $ 3,000,000 $ 109,800 $ 2,890,200 Export Direct Loan FEFC $ 2,000,000 $ 73,200 $ 1,926,800 Subtotal $ 97,662,349 $ 3,574,442 $ 94,087,907 The following table reflects transaction activity as of March 31, 2014: Closed Transactions Number of Transactions Loan Participation $ 22,667, Loan Guarantee $ 14,451, Venture Capital $ 16,792, Direct Loan $ - 0 $ 53,911, Including administrative expenses, Florida is a little over $1.3MM away from qualifying for the third and final tranche of funding from UST. It is anticipated that Florida will have approval by the end of June

14 Sub-programs administered by MaSBEC: 1. Loan Participation: There are two (2) types of loan participation transactions. a. 504 Bridge Loan: This program is a key sub-component to Florida s SSBCI Program due to their relative short duration, which allows funds to be recycled faster. These loans are processed and administered by Florida First Capital Finance Corporation, working in conjunction with Enterprise Florida. With SBA 504 Loans, lenders are permitted to finance equipment and owner-occupied real estate purchases for up to ninety-percent (90%) of the total project cost. The lender makes such a loan with the expectation that the portion above 50% will be taken-out by a SBA-guaranteed note. However, there is often a timing difference up to 180 days between initial closing and that take-out. The 504 Bridge Loan Program addressed this timing difference. Therefore, by removing this interim 90% financing risk for lenders, the 504 Bridge Loan Program ultimately makes more capital available for Florida s small businesses. This particular program is targeted for transactions ranging from $250,000 $5,000,000. b. MBD Loan Participation: This program mainly serves to support MaSBEC s minority business development function by providing access to capital. Typically, a Community Development Financial Institution ( CDFI ) will offer a line of credit ( LOC ) to a firm. This program will participate by purchasing 50% of the LOC. Applicants face significant challenges in obtaining credit through banks, but often show positive financial results and a plan to address any deficiencies by partnering with the CDFI that originates the LOC. This particular program has assisted transactions ranging from $37,500 $250, Loan Guarantee: This program provides limited credit enhancement for loan transactions, typically for 50% of the loan amount. The program requires the Partnering Lender to have at least 20% of its capital at risk (based on the total required financing). This particular program will provide a maximum SSBCI support of $1,000,000 and a typical term of thirty-six (36) months. 3. Venture Capital: Direct investments in seed and early-stage companies within the State of Florida s targeted industries, typically in the form of a preferred equity or convertible debt instrument. Size of obligation is between $1.0MM - $5.0MM. Return on investment is realized upon Initial Public Offering or acquisition by another company. 4. Direct Loans: This program has been inactive since inception and will not be used. 12