Treasurer's Report

May/June 2004
Elements of the Budget, Part III
Part I ... Part II ... Part IV
By Tong Lee

Fiscal Year 2003 Financial Report

In fiscal year 2003, the USATT continued to make progress in strengthening its financial position and increase reserves.  Revenues totaled $1,038,256 and expenses were $914,635, resulting in a surplus of $123,621.  Net total assets, defined as total assets less total liabilities increased from $171,222 to $294,843 during the year.  The total cash and cash equivalents more than doubled, increasing by $187,901 from $144,182 to $332,083. 

Highlights of FY 2003 are as follows:

• The 2003 Budget projected a $20,000 surplus.  The surplus of $123,621 was a pleasant surprise, even though we could see over $100,000 coming during the last quarter.  It represented 11.9% of total revenue, and this is a relatively high achievement even for most for-profit businesses.   We overcame a decrease of $5,500 in funding from the USTTA Foundation – down from $51,500 the previous year (and from $56,000 from several years ago) to $46,000.  That USATT could achieve a surplus in six figures in consecutive years is unprecedented, and demonstrates the synergistic financial and managerial capabilities of the Board of Directors and the Executive Director together with his staff. 

• The U.S. Nationals and the U.S. Open were both profitable.  The U.S. Nationals generated a profit of $35,000 while the U.S. Open brought in $18,000.   The combined profit of $53,000 compared to a loss of $14,000 the previous year represents a turnaround of over $67,000.   The results of the Nationals were particularly encouraging as they were achieved even with the additional expense of outsourcing certain tournament functions to North American Table Tennis (Note: USATT did not pay NATT for outsourced work for the U.S. Open).   A major reason for the profitability of the Open was because we skipped the ITTF Pro Tour.  Other reasons for profitability were that we maintained a watchful eye on expenses and increased sponsorship revenue and entry fees.

• There was a net increase of over $18,000 in deferred membership revenue – $14,000 from three-year and $4,000 from life memberships.  Deferred membership revenue is revenue already received, but is recognized over three years for three-year memberships and 20 years for life memberships.   A continual increase in deferred membership revenue means more membership stability and an increasing revenue stream in the future as well as more members. 

• Rating fees increased by over 50% even though the regular rating fee was increased by 33% (from $3 to $4), but only after May 5, 2003.  This shows that, an increase in rating fee notwithstanding, there was a substantial increase in tournament participation from more players and/or players were more active in tournaments.  In any case, this is significant for our equipment sponsors – if there are more players and more tournament participation, more equipment must be used.   Our sponsors must be selling more and should be willing and able to re-invest some of their profits in sponsorship money to the USATT in the future.

• We put $200,000 in an interesting-bearing savings account.  This could be done because of the improved cash flow position of the Association, and this amount was not needed for day-to-day operations.  We also opened a brokerage account to park over $1,000 worth of Microsoft shares that were donated by a USATT member.

• The early termination of the Oakbrook contract in early April reduced the expenses for the Oakbrook Training Center and its mandated coach by over $25,000.  All these savings were redirected to the Elite Athlete Committee budget and resulted in more money for our athletes.  

For more financial details, please view USATT 2003 tax return, IRS Form 990, that will be posted in May at www.usatt.org.  

Looking Ahead

Despite two successive outstanding fiscal years, the Board of Directors will continue with its policy to run the Association on a surplus budget and to build up reserves.  The 2004 Budget projects a surplus of $50,000.   (See budget summary below.)  The Board of Directors, together with the Executive Director and his staff, is working on and looking at new programs to generate new sources of revenue and doing old things more professionally.  We have brought back the ITTF Pro Tour because it is a popular membership benefit, but we are budgeting a surplus for the U.S. Open/ITTF Pro Tour.