SOURCE: Tofias PC

October 10, 2006 12:11 ET

Tofias' 21st Annual Boston Architectural Survey Reveals Industry Turnaround; Increase in Available Work and Proper Project Management Delivers Improved Profitability

CAMBRIDGE, MA -- (MARKET WIRE) -- October 10, 2006 -- Tofias PC (http://www.tofias.com), a leading New England certified public accounting and consulting firm, has released its 21st Annual Architectural Survey. Major findings reveal that even as the local area's residential housing boom threatens to cool, the architecture industry serving commercial building owners shows an upward tendency. After stabilizing in 2004, the 2005 data establishes a positive, upward trend.

"This is very good news for the architectural design market throughout eastern New England," said David Swan, author of the report and Tofias shareholder. "With an abundance of top-quality architectural firms in the region, competition for new projects is fierce, and only the best managed firms have been able to successfully compete. A combination of more projects, effective project management and improved firm staffing levels appear to be the leading reasons for increased profitability," he said.

Mr. Swan added, "Most of the headlines recently point to the bursting of the residential housing bubble. However the commercial real estate sector appears to be very strong for the greater Boston area firms. The Tofias Architectural Survey is a valuable tool for management of architectural firms and various allied service providers, especially if used as a benchmark to better understand how an individual firm's operational performance compares to the local industry."

During 2005, on average, firms increased their direct hours and revenues (net fee income) for the first time since 2000. These healthy increases are a good indicator of increased work that has become available to local firms. Additionally, firms substantially increased their direct labor utilization rate by approximately 3-1/2 percentage points. The average profit per direct hour increased 63.5% to $8.78, up from $5.37 in 2004, and is the largest annual increase observed in more than a decade.

TOFIAS 21ST ANNUAL ARCHITECTURAL SURVEY AT-A-GLANCE

The 2006 Architectural Survey findings are based on financial data from architectural design firms in the metropolitan Boston area. Key results include:

--  After a two-year, all-time low, the average direct labor utilization
    rate recovered to 63% in 2005, up from approximately 59% during the
    preceding two years.  Firms are continuing to recover from a decline in
    utilization rate than began in 2000, continuing through 2004.  Tofias
    recommends that at least a 65% utilization rate be maintained to achieve
    reasonable profitability.  This past year's average performance is finally
    returning to a healthier profitability level.
    
--  For almost a decade, the overhead rate per direct hour has steadily
    climbed.  In 2005, the rate decreased by $2.33 to $51.37.  This year's
    positive decrease indicates firms' successful efforts in increasing labor
    utilization and controlling overhead.
    
--  The average direct labor billing multiple remains unchanged at 3.02,
    after a two-year slide in 2002 and 2003.  The multiple continues strong, as
    this is only the fourth year the average multiple has exceeded 3.0 in the
    21-year history of the survey.
    
--  The average billing rate per direct hour has reached an all-time high,
    increasing to $89.49 in 2005 from $88.49 in 2004.
    
For a copy of the "2006 Architectural Survey, An Analysis of Key Industry Statistics," please contact Tofias toll-free at 888-761-8835 or visit the web site: www.tofias.com/contact

About Tofias PC Accountants and Consultants

Tofias PC has conducted the industry survey, the only one of its kind to serve the greater Boston area, for more than 20 years. With offices in Cambridge, Providence, New Bedford and Newport, Tofias is the market share leader in serving New England-based architectural and engineering firms. Employing more than 180 full-time personnel, Tofias is one of the largest accounting firms in New England and among the top 50 public accounting firms in the United States.

Tofias is an independent member of BKR International (www.bkr.com), an association of firms specializing in accounting, taxation and business consulting. BKR International firms are located in more than 300 major cities throughout the world.

Contact Information