James A. Fox, PE, CEO and Chairman

Message from the CEO

PEOPLE + CLIENTS

We called for growth through engagement in our Annual Plan, and our people delivered. Our Company achieved significant growth in 2016—growth in client relationships, people, community engagement, and our top and bottom lines. Importantly, this growth was achieved through tremendous engagement with our clients and people—the type of high-quality engagement that strengthens relationships and positions the Company for sustainable growth.

In addition to modest organic growth, we completed the strategic acquisition of PENTA Engineering and set the stage for the strategic acquisition of Natural Resource Technology (NRT) (completed January 2017). These acquisitions were the result of significant relationship development that built upon strong cultural and strategic alignment. Both companies have an exceptional focus on their clients and people that will strengthen our client relationships, accelerate our geographic growth, and create opportunities for our combined talent.

We are in the thick of integration activities, welcoming new colleagues and clients. The more we engage with one another, the more we feel confident about our sustainable future together. With the positive impact of our growth initiatives, and the ever-important lessons that we learn, we will continue to explore additional strategic acquisitions and partnerships that align with our culture and growth strategy.

Within this report, you will see snapshots of meaningful experiences shared by our people and our clients, focusing on both client appreciation and recognition of the innovative and integrated solutions delivered by our talented people.

CLIENTS

Relationship development and focused branding, targeting, and sales initiatives yielded positive performance in both the qualitative measures of client relationships, as well as the quantitative impact of a record year in authorizations. We continued to strengthen our brand experience with our clients as demonstrated by high client satisfaction survey results and feedback that shows our approach to client relationships is making a difference. Our clients are more aware of our integrated solutions, and our client retention is at the highest level we have measured. The investment and implementation of a new client relationship management (CRM) system will further differentiate the Company through our unique focus on client relationships.

Several notable projects that exemplify our innovative solutions and make a difference for our clients provide worthy highlights from 2016.

In advanced manufacturing, we led a major facility expansion project that is enabling a global aircraft engine manufacturer to meet their growing production demands.

The expansion project will enable increased production of parts and reduced costs for engine programs.

In energy, we designed and installed a 4.5-megawatt condensing steam turbine and 15,000-gallons-per-minute cooling tower for a global pharmaceutical manufacturer, integrating services across our environmental and energy businesses.

The project is increasing the pharmaceutical manufacturer’s ability to generate electricity and reduce operating expenses.

In environment, we continued restoration planning and design in the Gulf of Mexico, including beach, dune, and back-barrier marsh habitats on North Breton Island.

North Breton Island restoration will help enhance ecosystem resilience to environmental change along the coast, while preserving needed nesting areas for birds.

And in water, we designed a $70 million advanced wastewater treatment plant, integrating net-zero energy goals, to serve the West Point U.S. Military Academy.

Rendering of new U.S. Military Academy at West Point Target Hill wastewater treatment plant

PEOPLE

Engagement with our people, from communications and safety to shaping the future of talent management, resulted in the successful implementation of action plans in our key growth areas. We saw improvement in our organizational goal alignment that contributed to our collective operational performance. We continued to focus on our people as a true differentiator, and we made great progress in strengthening our unique people-oriented culture—from how our people perceive safety, to the significant energy level in our innovation activities and the recognition of our annual Exceptional Employee Awards. We welcomed PENTA and NRT who are already strengthening our culture through diversity of thought, relationships, and experiences.

COMMUNITIES

We continued to enhance the connectivity of our strategic philanthropy program with our branding, thought leadership, and innovation initiatives, and focused on supporting science, technology, engineering, and math (STEM) education, wellness, and philanthropic endeavors that are important to our employees, clients, and communities. Our biennial safety perception survey was marked by a significant increase in our safety perception score and valuable ideas through which we can further enhance our safety culture.

FINANCIAL

Our strong financial results exceeded our financial objectives in revenues, profitability, and balance sheet objectives. Gross revenues and internal revenues were up 10% and 5%, respectively. The positive revenue variance and strong operational performance resulted in gross operating income 10% above budget and 25% above 2015 results. The impact of strong client relationships resulted in record authorizations that exceeded sales objectives by 10%. These results, coupled with projected sustainable financial performance, had a positive impact on the enterprise value of the Company with a 12% increase in our share price.

It was especially gratifying to see all of our brands and resource groups meet or exceed financial performance objectives to make 2016 a true team achievement. The commitment and engagement of our people to manage the logistics of acquisitions, while delivering a positive variance to operating performance and business outlook, speaks of our talented people and unique culture. We are extremely proud of our collective success, our culture, and our people.

The successful implementation of our new CRM system and enhancements to our enterprise resource planning (ERP) systems will increasingly provide an efficient technology and business analytics platform to support our growth, as well as the collaboration of our people. After managing challenges of a multi-year ERP upgrade, and the adaptive changes associated with it, we have a unique opportunity to better leverage our collective intelligence and agility to create sustainable competitive advantages.

With significant potential change ahead in regulatory, macroeconomic, technology, and competitive landscapes, we will continue to hone our business planning to further strengthen OBG’s foundation and position for the future. With even more focus on our people and clients, we can be assured that the best years for OBG are still ahead.

- James A. Fox, PE, CEO and Chairman

Client Satisfaction

CELEBRATING CLIENTS

In 2016, OBG had multiple Client Appreciation Events to celebrate its clients and partners across the regions. In addition, many employees were recognized through OBG’s Client Service Award Program, which provides clients an opportunity to recognize employees for excellent service.

Celebrating with clients and partners in Rochester, NY; Syracuse, NY; Virginia Beach, VA; Ocean City, MD; and Palm Springs, CA (clockwise)
Client Service Award for energy master planning for the University at Albany, SUNY

Corporate Social Responsibility

PEOPLE CREATING A BETTER FUTURE

To support OBG’s mission of People creating a better future by making a difference each day, the Company continually strengthens its efforts of improving natural and built environments. In 2016, OBG continued to enhance the connectivity of its corporate social responsibility (CSR) program with its branding, thought leadership, and innovation initiatives, and focused on supporting STEM education, safety, wellness, community development, environmental stewardship, and philanthropic endeavors that are important to its employees, clients, and communities.

OBG, together with its employees, contributed more than $250,000 and significant time and talent to support and strengthen the communities in which we live and work.
American Cancer Society's Real Men Wear Pink campaign, Syracuse, NY; American Heart Association’s Heart Walk, Syracuse, NY; Utica Children’s Museum “It’s a Nano World” exhibit, Utica, NY; Reforest Northern Kentucky woodland restoration project, Cincinnati, OH; American Red Cross community resilience programs, Western and Central New York; North Fulton Community Charities Back to School program, Atlanta, GA (clockwise)

CELEBRATING SAFETY

As part of OBG’s CSR objective and commitment to developing and sustaining a best-in-class safety culture, the Company implemented the following safety initiatives in 2016:

Safety Perception Survey measured progress of OBG's safety culture and how its people feel about safety and was marked by a 7% increase in safety perception score.

Near Miss Program reported 50 near misses and shared 25 lessons learned to improve safe work procedures and reduce accidental injuries.

Safety Ambassadors continued to promote and enhance OBG’s safety culture through safety leadership, awareness, and engagement, and re-energized the Company's Project Safety program to improve engagement at project sites.

OBG holds various safety education breaks across the Company to sustain a best-in-class safety culture

Employee Satisfaction

EXCEPTIONAL EMPLOYEE AWARDS

The 15th Exceptional Employee Awards program recognized six employees who live OBG’s values, support its mission, and go above and beyond in helping the Company achieve its vision.

From left to right: Colin Lautz, Maggie Hopkins, Paul Hare, Robert Richards, Melanie Marshall, Tom Heenan, Sr.
  • Cornelius B. Murphy, Jr. Corporate Social Responsibility Award - Paul Hare, CPG, PG, Albany, NY
  • Earl F. O’Brien Leadership Award - Maggie Hopkins, PE, Richmond, VA
  • Edwin C. Tifft, Jr. Unwavering Employee Satisfaction & Spirit Award - Colin Lautz, PE, LEED AP, Syracuse, NY
  • John R. Loveland Employee of the Year Award - Melanie Marshall, PE, Savannah, GA
  • Russell L. Sutphen Client Satisfaction Award - Robert Richards, PE, Bowie, MD
  • Samuel W. Williams Engineering & Sustainable Financial Performance Award - Tom Heenan, Sr., PE, Syracuse, NY

CELEBRATING EMPLOYEES

OBG celebrated employee contributions throughout the year and during employee events at each office.

The Onondaga Cup and Lakefest, Syracuse NY; National Wear Red Day, Syracuse, NY; Fashion Show at Exceptional Employee Awards, Syracuse, NY; Clambake, Syracuse, NY (clockwise)
Milestone awards received by Hubie Schlientz, Jr., Syracuse, NY (left) and Thomas Komar, PE, Danville, PA (middle); Kendrick Jaglal, PE awarded for his contributions to OBG’s environmental business

A CULTURE OF INNOVATION

From internally capturing ideas, advancing custom innovations, and holding an annual company-wide innovation competition, to externally sourcing open innovation and hosting SPARK Innovation Competitions with partner universities, OBG continually adapts to the future needs of stakeholders through creative thinking and successful execution. In 2016, OBG enhanced the connectivity of its innovation plan to its growth strategy, thought leadership, and CSR program and implemented the following initiatives, working with employees and partnering clients and universities.

OBG held two SPARK Innovation Competitions, connecting the innovative ideas of students with the Company's academic partners and subject matter experts, and the real-world challenges of its industry partners.

SPARK Innovation Competition, Syracuse, NY

More than 60 students participated in two SPARK Innovation Competitions from Drexel University, Syracuse University, and Villanova University.

SPARK Innovation Competition, Philadelphia, PA

The fourth I-Factor competition focused on leveraging innovation to enhance OBG’s growth and challenged employees to develop solutions that build resilience within the communities in which OBG lives and works.

Funding was provided to the top four I-Factor competition teams to advance their innovation solutions.
I-Factor Competition, Syracuse, NY

Board of Directors

From left to right: Darek Letkiewicz, PE; Kevin B. Bryant, PE; Nicholas M. Donofrio; Timothy J. Barry, PE; James A. Fox, PE; Joseph M. McNulty, CPA; Andy Seidel; Thomas A. Nowlan, PE; Richard J. Keck

About OBG

Advanced Manufacturing. Energy. Environment. Water. For more than 70 years, OBG has specialized in engineering and problem solving, but the Company’s greatest strength is creating comprehensive, integrated solutions for its clients.

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