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Maximus Reports Fourth Quarter and Full Year Results for Fiscal Year 2020

11/19/2020

- Establishes Guidance for Fiscal Year 2021 -

RESTON, Va.--(BUSINESS WIRE)-- Maximus (NYSE: MMS), a leading provider of government services worldwide, reported financial results for the three months and year ended September 30, 2020.

Highlights for fiscal 2020 include:

  • Revenue increased to $3.46 billion compared to $2.89 billion reported for the same period last year, driven by the Census contract in the U.S. Federal Services Segment and new COVID-19 response work to assist governments in supporting individuals and families during the global pandemic
  • Organic growth of 15.7% in fiscal 2020, or 4.6% excluding the Census contract
  • Operating margin of 8.3% and diluted earnings per share of $3.39 for fiscal 2020 were lower compared to the prior year. Reduced volumes on core programs in the U.S. where pandemic-related program changes were instituted at the direction of our state and federal clients, a greater mix of cost-plus work in fiscal 2020, and unfavorable pandemic-related impacts in operations outside the U.S.
  • Renamed the U.S. Health & Human Services Segment to the U.S. Services Segment
  • A quarterly cash dividend of $0.28 for each share of our common stock outstanding payable on November 30, 2020, to shareholders of record on November 13, 2020

"Fiscal year 2020 demonstrated our ability to quickly respond and rapidly scale operations in order to support the significant increase in demand from governments to address the extraordinary needs of citizens in the wake of the pandemic. Our ongoing investments in technology and digital capabilities allowed us to enable thousands of employees into remote work environments in a span of weeks," shared Bruce Caswell, President and Chief Executive Officer.

Consolidated FY20 Results

Revenue for fiscal 2020 increased to $3.46 billion, compared to $2.89 billion reported for the prior year driven by the Census contract in the U.S. Federal Services Segment and COVID-19 response work. The Company is supporting governments with their public health responses in areas such as contact tracing, disease investigation, COVID-19 information lines, unemployment insurance claims processing, and other COVID-related assistance. Organic growth for fiscal 2020 was 15.7%, or 4.6% excluding the Census contract, and tempered by declines in the Outside the U.S. Segment.

Operating income for fiscal 2020 totaled $288.3 million, yielding an operating margin of 8.3%. This compares to $317.1 million and 11.0%, respectively, for the prior fiscal year. For fiscal 2020, net income attributable to Maximus totaled $214.5 million, or $3.39 of diluted earnings per share, compared to $240.8 million and $3.72, respectively, for the prior fiscal year.

Fiscal 2020 earnings were lower due to three primary areas of impact: 1) reduced volumes on large U.S. programs where state and federal government clients temporarily instituted changes in response to the COVID-19 pandemic to ensure that individuals and families retain access to vital programs, 2) a greater mix of cost-plus work in fiscal 2020 driven by the Census contract in the U.S. Federal Services Segment, and 3) COVID-related impacts outside the United States.

The effective tax rate for fiscal 2020 was 25.3%, compared to 24.2% in the prior fiscal year. The higher rate was attributable to normal course vesting of stock compensation which had a reduced benefit tied to a lower share price.

U.S. Services Segment

U.S. Services Segment revenue for fiscal 2020 increased 13% to $1.33 billion, compared to $1.18 billion reported in the prior fiscal year. All growth in this segment was organic and attributable to new work, including COVID-19 response efforts, and the expansion of existing contracts which offset temporary volume and revenue declines in certain core programs stemming from the pandemic. An estimated $129 million of revenue was attributable to COVID-19 response work in this segment for fiscal 2020.

The Families First Coronavirus Response Act provided states with a temporary increase to federal matching funds for Medicaid in exchange for meeting certain requirements, including ensuring continuous care for current Medicaid enrollees. As a result, Medicaid redeterminations have halted on some of our largest Medicaid programs and the reduced activity caused a significant revenue and earnings headwind for this segment in fiscal 2020. In addition, state budgetary pressures have created the need to work closely with clients to provide needed relief through adjustments to scope of work on certain contracts.

These impacts contributed to an operating margin of 17.1% for the U.S. Services Segment in fiscal 2020. Operating margin for this segment was 18.8% in the prior fiscal year.

U.S. Federal Services Segment

U.S. Federal Services Segment revenue for fiscal 2020 increased to $1.63 billion, compared to $1.11 billion reported in the prior fiscal year, driven most significantly by the $330 million increase of the Census contract. Organic growth excluding the Census contract was 8.0%. The Census contract delivered approximately $515 million of total revenue for fiscal 2020, compared to $185 million in the prior fiscal year.

Additionally, this segment realized growth from new contracts and new work related to the COVID-19 response efforts. An estimated $71.0 million of revenue was attributable to COVID-19 response work in the U.S. Federal Services Segment for fiscal 2020, which excludes the increases to the Census contract also tied to the pandemic-related extended response period.

The segment's operating income was tempered by: 1) a greater mix of cost-plus revenue related primarily to the Census contract and the Contact Center Operations (CCO) contract, also known as 1-800-MEDICARE, which carry lower margins, 2) a reduction in volumes, revenue, and profit on performance-based contracts as a result of the pandemic, and 3) ongoing investment in business development and marketing to support further expansion into the U.S. federal market.

As a result of these pressures, operating margin for the U.S. Federal Services Segment was 8.1% for fiscal 2020. Operating margin for this segment was 10.4% in the prior fiscal year.

"It is expected that business development and marketing activities take time to gain traction, and the pandemic has added to this timeline," commented Mr. Caswell. "But I am pleased that progress has been made in expanding scope in certain agencies such as the IRS. We are supporting the agency in responding to general inquiries regarding the CARES Act and the Economic Impact Plan. This is the first time the IRS has used a public sector partner for citizen engagement to this scale. We are extremely proud to be entrusted with this work."

Outside the U.S. Segment

Outside the U.S. Segment revenue for fiscal 2020 decreased to $498.9 million, compared to $599.1 million reported in the prior fiscal year. Operating loss for fiscal 2020 was $34.1 million, compared to an operating profit of $16.1 million and an operating margin of 2.7% reported in the prior fiscal year.

The segment experienced the most pronounced impact from the pandemic in fiscal 2020. The employment services contracts realized a significant decline in the number of employment opportunities available to those individuals looking for work. As a result, in the second quarter of fiscal 2020, the Company took a write-down of approximately $24 million or $0.28 of diluted earnings per share, which related to a decline in estimates for future period outcomes-based payments. Operating performance for the Outside the U.S. Segment improved in subsequent quarters and the fourth quarter of fiscal 2020 reported a loss of $0.6 million.

Approximately one-third of revenues for this segment are realized from the Health Assessment Advisory Service contract in the U.K. In March, the Department for Work and Pensions halted all face-to-face assessments, resulting in reduced activity levels and financial performance.

An improved outlook for this segment is expected in fiscal 2021 with forecasted revenue growth of $175 million, compared to fiscal 2020. The predominant driver of this growth is rising unemployment which is leading to increasing volumes on the Company's employment services contracts that support individuals back into long-term, sustained employment. The Company is already experiencing a rise in volumes in markets where economies have started to emerge from the global pandemic, such as Australia. This segment will also benefit from new work wins that will begin to monetize in fiscal 2021.

This segment is forecasted to be profitable in fiscal 2021, remaining in a loss position for the first half of the year and returning to profit in the second half of the year. The outlook may continue to be adversely impacted by the pandemic, but the Company remains poised to help governments navigate significant challenges as the world emerges from the global pandemic.

Sales and Pipeline

Signed contract awards for the year-ended September 30, 2020, totaled $2.7 billion and contracts pending (awarded but unsigned) totaled $744 million. These awards reflect total contract value.

The sales pipeline at September 30, 2020, was $33.0 billion (comprised of approximately $2.0 billion in proposals pending, $1.5 billion in proposals in preparation, and $29.6 billion in opportunities tracking).

Balance Sheet and Cash Flows

Cash and cash equivalents at September 30, 2020, totaled $71.7 million and excludes $16.8 million of restricted cash included in the Consolidated Statement of Cash Flows. At September 30, 2020, there were no outstanding draws on the Company's corporate credit facility, leaving $400 million of available capacity, and draws of $28.4 million in smaller facilities outside the U.S.

For fiscal 2020, cash from operations totaled $244.6 million and free cash flow was $203.9 million. Cash from operations was negatively impacted in the year due to the additional investment in working capital required by full year increases to revenue in fiscal 2020 and the timing of collections.

At September 30, 2020, DSO were 77 days and within the Company's typical range of 65 to 80 days.

On October 2, 2020, our Board of Directors declared a quarterly cash dividend of $0.28 for each share of our common stock outstanding. The dividend is payable on November 30, 2020, to shareholders of record on November 13, 2020.

Outlook

Maximus is establishing fiscal 2021 guidance. The Company expects revenue to range between $3.20 billion and $3.40 billion. Diluted earnings per share is expected to range between $3.45 and $3.70. Cash from operations is expected to range between $340 million and $390 million, and free cash flow to range between $300 million and $350 million.

For fiscal 2021, the effective income tax rate is expected to range between 25.75% and 26.50% and weighted average shares outstanding to range between 62.1 million and 62.2 million, absent significant share purchase activity.

Revenue and earnings guidance is a wider range than in prior years due to the uncertainty related to the duration of COVID-19 response work and the length of disruption to core programs. Forecasted earnings for fiscal 2021 reflect the challenges faced when operating during the pandemic, including lower volumes in many core programs primarily in the United States. This is expected to be offset by increased revenue and profit from operations outside the United States where some economies have started to emerge from the global pandemic.

Mr. Caswell added, "We will continue to support our clients' evolving needs and we stand ready to provide additional support as governments strive to slow the global pandemic. As we look into fiscal 2021, we anticipate that we will begin to benefit from increasing caseloads in our employment services markets outside the United States. Our continued strong execution, healthy financial condition, robust cash flow and reliable delivery, positions Maximus for future pent-up demand as governments seek much needed assistance from private sector partners to support, operate, and scale critical safety-net programs."

Conference Call and Webcast Information

Maximus will host a conference call this morning, November 19, 2020, at 9:00 a.m. (ET).

The call is open to the public and available by webcast or by phone at:

877.407.8289 (Domestic) / +1.201.689.8341 (International)

For those unable to listen to the live call, a recording of the webcast will be available on investor.maximus.com.

About Maximus

Since 1975, Maximus has operated under its founding mission of Helping Government Serve the People®, enabling citizens around the globe to successfully engage with their governments at all levels and across a variety of health and human services programs. Maximus delivers innovative business process management and technology solutions that contribute to improved outcomes for citizens and higher levels of productivity, accuracy, accountability, and efficiency of government-sponsored programs. With more than 30,000 employees worldwide, Maximus is a proud partner to government agencies in the United States, Australia, Canada, Italy, Saudi Arabia, Singapore, South Korea, Sweden, and the United Kingdom. For more information, visit maximus.com.

Non-GAAP Measures

This release refers to non-GAAP measures and other indicators, including organic growth, free cash flow, and days sales outstanding.

We have provided a reconciliation of free cash flow to cash flows from operations.

A description of these non-GAAP measures, the reasons why we use and present them, and details as to how they are calculated are included in our Annual Report on Form 10-K.

The presentation of these non-GAAP numbers is not meant to be considered in isolation, nor as alternatives to cash flows from operations, revenue growth, or net income as measures of performance. These non-GAAP financial measures, as determined and presented by us, may not be comparable to related or similarly titled measures presented by other companies.

Statements that are not historical facts, including statements about the Company’s confidence and strategies, and the Company’s expectations about revenues, results of operations, profitability, future contracts, market opportunities, market demand, or acceptance of the Company’s products are forward-looking statements that involve risks and uncertainties such as those related to the impact of the COVID-19 pandemic including but not limited to:

  • The ultimate duration of the pandemic
  • The threat of further negative pandemic-related impacts
  • Delays in our core programs returning to normal volumes and operations
  • The potential impacts resulting from budget challenges with our government clients
  • The possibility of delayed or missed payments by customers
  • The potential for further supply chain disruptions impacting IT or safety equipment
  • The impact of further legislation and government policies on the programs we operate

These risks could cause the Company’s actual results to differ materially from those indicated by such forward-looking statements. A summary of risk factors can be found in Item 1A of our Annual Report on Form 10-K to be filed shortly with the Securities and Exchange Commission and found on maximus.com.

 

Maximus, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

 

Three Months Ended September 30,

 

Twelve Months Ended September 30,

 

2020

 

2019

 

2020

 

2019

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 

Revenue

$

923,836

 

 

$

754,966

 

 

$

3,461,537

 

 

$

2,886,815

 

Cost of revenue

726,985

 

 

586,716

 

 

2,750,535

 

 

2,215,631

 

Gross profit

196,851

 

 

168,250

 

 

711,002

 

 

671,184

 

Selling, general and administrative expenses

103,428

 

 

81,646

 

 

387,090

 

 

321,023

 

Amortization of intangible assets

8,900

 

 

9,028

 

 

35,634

 

 

33,054

 

Operating income

84,523

 

 

77,576

 

 

288,278

 

 

317,107

 

Interest expense

494

 

 

343

 

 

2,059

 

 

2,957

 

Other income, net

222

 

 

122

 

 

843

 

 

3,170

 

Income before income taxes

84,251

 

 

77,355

 

 

287,062

 

 

317,320

 

Provision for income taxes

20,590

 

 

17,314

 

 

72,553

 

 

76,825

 

Net income

63,661

 

 

60,041

 

 

214,509

 

 

240,495

 

Loss attributable to noncontrolling interests

 

 

(48)

 

 

 

 

(329)

 

Net income attributable to Maximus

$

63,661

 

 

$

60,089

 

 

$

214,509

 

 

$

240,824

 

Basic earnings per share

$

1.03

 

 

$

0.93

 

 

$

3.40

 

 

$

3.73

 

Diluted earnings per share

$

1.02

 

 

$

0.93

 

 

$

3.39

 

 

$

3.72

 

Dividends per share

$

0.28

 

 

$

0.25

 

 

$

1.12

 

 

$

1.00

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

61,874

 

 

64,397

 

 

63,062

 

 

64,498

 

Diluted

62,256

 

 

64,848

 

 

63,322

 

 

64,820

 

 

Maximus, Inc.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

 

September 30, 2020

 

September 30, 2019

 

(unaudited)

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

71,737

 

 

$

105,565

 

Accounts receivable — billed and billable, net

622,871

 

 

476,690

 

Accounts receivable — unbilled

163,332

 

 

123,884

 

Income taxes receivable

2,075

 

 

20,805

 

Prepaid expenses and other current assets

72,543

 

 

62,481

 

Total current assets

932,558

 

 

789,425

 

Property and equipment, net

66,721

 

 

99,589

 

Capitalized software, net

38,033

 

 

32,369

 

Operating lease right-of-use assets

177,159

 

 

 

Goodwill

593,129

 

 

584,469

 

Intangible assets, net

145,893

 

 

179,250

 

Deferred contract costs, net

20,891

 

 

18,921

 

Deferred compensation plan assets

36,819

 

 

32,908

 

Deferred income taxes

1,915

 

 

186

 

Other assets

11,584

 

 

8,615

 

Total assets

$

2,024,702

 

 

$

1,745,732

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

253,338

 

 

$

177,786

 

Accrued compensation and benefits

137,101

 

 

106,789

 

Deferred revenue

51,655

 

 

43,344

 

Income taxes payable

5,377

 

 

13,952

 

Current portion of long-term debt and other borrowings

10,878

 

 

9,658

 

Operating lease liabilities

80,748

 

 

 

Other current liabilities

22,071

 

 

12,709

 

Total current liabilities

561,168

 

 

364,238

 

Deferred revenue, less current portion

27,311

 

 

32,341

 

Deferred income taxes

24,737

 

 

46,560

 

Long-term debt, less current portion

18,017

 

 

231

 

Deferred compensation plan liabilities, less current portion

38,654

 

 

34,079

 

Operating lease liabilities, less current portion

104,011

 

 

 

Other liabilities

8,985

 

 

20,082

 

Total liabilities

782,883

 

 

497,531

 

Commitments and contingencies

 

 

 

Shareholders' equity:

 

 

 

Common stock, no par value; 100,000 shares authorized; 61,504 and 63,979 shares issued and outstanding at September 30, 2020 and 2019, at stated amount, respectively

513,959

 

 

498,433

 

Accumulated other comprehensive loss

(42,638)

 

 

(45,380)

 

Retained earnings

770,498

 

 

794,739

 

Total Maximus shareholders' equity

1,241,819

 

 

1,247,792

 

Noncontrolling interests

 

 

409

 

Total equity

$

1,241,819

 

 

$

1,248,201

 

Total liabilities and equity

$

2,024,702

 

 

$

1,745,732

 

 

Maximus, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

 

Three Months Ended
September 30, 2020

 

Twelve Months Ended
September 30, 2020

 

2020

 

2019

 

2020

 

2019

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 

Cash flows from operations:

 

 

 

 

 

 

 

Net income

$

63,661

 

 

$

60,041

 

 

$

214,509

 

 

$

240,495

 

Adjustments to reconcile net income to cash flows from operations:

 

 

 

 

 

 

 

Depreciation and amortization of property and equipment and capitalized software

17,031

 

 

17,816

 

 

64,527

 

 

52,404

 

Amortization of intangible assets

8,900

 

 

9,028

 

 

35,634

 

 

33,054

 

Deferred income taxes

(13,935)

 

 

1,465

 

 

(19,145)

 

 

12,661

 

Stock compensation expense

6,150

 

 

5,451

 

 

23,708

 

 

20,774

 

Gain on sale of a business

(12)

 

 

 

 

(1,718)

 

 

 

Changes in assets and liabilities, net of effects of business combinations

 

 

 

 

 

 

 

Accounts receivable — billed and billable

5,784

 

 

47,818

 

 

(141,842)

 

 

(60,313)

 

Accounts receivable — unbilled

41,362

 

 

(31,354)

 

 

(38,905)

 

 

14,818

 

Prepaid expenses and other current assets

(10,368)

 

 

(12,650)

 

 

(9,839)

 

 

(15,583)

 

Deferred contract costs

(515)

 

 

3,472

 

 

(1,911)

 

 

(4,670)

 

Accounts payable and accrued liabilities

31,308

 

 

(5,882)

 

 

79,930

 

 

47,580

 

Accrued compensation and benefits

(4,163)

 

 

(6,994)

 

 

29,484

 

 

2,288

 

Deferred revenue

(415)

 

 

8,631

 

 

2,391

 

 

16,488

 

Income taxes

2,927

 

 

(7,859)

 

 

3,490

 

 

(4,720)

 

Operating lease right-of-use assets and liabilities

515

 

 

 

 

(556)

 

 

 

Other assets and liabilities

279

 

 

4,033

 

 

4,835

 

 

1,451

 

Cash flows from operations

148,509

 

 

93,016

 

 

244,592

 

 

356,727

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property and equipment and capitalized software costs

(12,271)

 

 

(27,813)

 

 

(40,707)

 

 

(66,846)

 

Acquisition of businesses, net of cash acquired

(4,455)

 

 

(14,790)

 

 

(7,066)

 

 

(436,839)

 

Acquisition of noncontrolling interests

 

 

(647)

 

 

 

 

(647)

 

Proceeds from the sale of a business

 

 

 

 

3,250

 

 

 

Maturities of short-term investments

 

 

 

 

 

 

19,996

 

Other

 

 

73

 

 

385

 

 

453

 

Cash used in investing activities

(16,726)

 

 

(43,177)

 

 

(44,138)

 

 

(483,883)

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Cash dividends paid to Maximus shareholders

(17,167)

 

 

(15,951)

 

 

(70,155)

 

 

(63,887)

 

Purchases of Maximus common stock

 

 

(1,378)

 

 

(166,959)

 

 

(47,446)

 

Tax withholding related to RSU vesting

 

 

 

 

(10,614)

 

 

(8,915)

 

Borrowings of debt

216,560

 

 

94,616

 

 

638,048

 

 

414,664

 

Repayment of debt

(340,474)

 

 

(88,545)

 

 

(619,445)

 

 

(405,142)

 

Other

(8)

 

 

 

 

(965)

 

 

(133)

 

Cash used in financing activities

(141,089)

 

 

(11,258)

 

 

(230,090)

 

 

(110,859)

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

1,879

 

 

(1,058)

 

 

1,705

 

 

(2,052)

 

Net (decrease)/increase in cash, cash equivalents and restricted cash

(7,427)

 

 

37,523

 

 

(27,931)

 

 

(240,067)

 

Cash, cash equivalents and restricted cash, beginning of period

95,988

 

 

78,969

 

 

116,492

 

 

356,559

 

Cash, cash equivalents and restricted cash, end of period

$

88,561

 

 

$

116,492

 

 

$

88,561

 

 

$

116,492

 

 

Maximus, Inc.

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)

 

 

Three Months Ended September 30, 2020

 

Twelve Months Ended September 30,2020

 

 

2020

 

% (1)

 

2019

 

% (1)

 

2020

 

% (1)

 

2019

 

% (1)

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Services

 

$

371,345

 

 

 

 

$

300,406

 

 

 

 

$

1,329,274

 

 

 

 

$

1,176,488

 

 

 

U.S. Federal Services

 

423,232

 

 

 

 

312,179

 

 

 

 

1,633,337

 

 

 

 

1,111,197

 

 

 

Outside the U.S.

 

129,259

 

 

 

 

142,381

 

 

 

 

498,926

 

 

 

 

599,130

 

 

 

Total

 

$

923,836

 

 

 

 

$

754,966

 

 

 

 

$

3,461,537

 

 

 

 

$

2,886,815

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Services

 

$

92,199

 

 

24.8

%

 

$

83,154

 

 

27.7

%

 

$

360,272

 

 

27.1

%

 

$

344,109

 

 

29.2

%

U.S. Federal Services

 

86,423

 

 

20.4

%

 

66,586

 

 

21.3

%

 

318,925

 

 

19.5

%

 

242,070

 

 

21.8

%

Outside the U.S.

 

18,229

 

 

14.1

%

 

18,510

 

 

13.0

%

 

31,805

 

 

6.4

%

 

85,005

 

 

14.2

%

Total

 

$

196,851

 

 

21.3

%

 

$

168,250

 

 

22.3

%

 

$

711,002

 

 

20.5

%

 

$

671,184

 

 

23.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Services

 

$

29,856

 

 

8.0

%

 

$

29,322

 

 

9.8

%

 

$

132,489

 

 

10.0

%

 

$

123,275

 

 

10.5

%

U.S. Federal Services

 

54,568

 

 

12.9

%

 

35,496

 

 

11.4

%

 

186,023

 

 

11.4

%

 

126,128

 

 

11.4

%

Outside the U.S.

 

18,813

 

 

14.6

%

 

16,353

 

 

11.5

%

 

65,938

 

 

13.2

%

 

68,944

 

 

11.5

%

Gain on sale of a business (2)

 

(12)

 

 

NM

 

 

 

NM

 

(1,718)

 

 

NM

 

 

 

NM

Other (3)

 

203

 

 

NM

 

475

 

 

NM

 

4,358

 

 

NM

 

2,676

 

 

NM

Total

 

$

103,428

 

 

11.2

%

 

$

81,646

 

81646000

10.8

%

 

$

387,090

 

 

11.2

%

 

$

321,023

 

 

11.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Services

 

$

62,343

 

 

16.8

%

 

$

53,832

 

 

17.9

%

 

$

227,783

 

 

17.1

%

 

$

220,834

 

 

18.8

%

U.S. Federal Services

 

31,855

 

 

7.5

%

 

31,090

 

 

10.0

%

 

132,902

 

 

8.1

%

 

115,942

 

 

10.4

%

Outside the U.S.

 

(584)

 

 

(0.5)

%

 

2,157

 

 

1.5

%

 

(34,133)

 

 

(6.8)

%

 

16,061

 

 

2.7

%

Amortization of intangible assets

 

(8,900)

 

 

NM

 

(9,028)

 

 

NM

 

(35,634)

 

 

NM

 

(33,054)

 

 

NM

Acquisition-related expenses (4)

 

(459)

 

 

NM

 

 

 

NM

 

(4,621)

 

 

NM

 

(2,691)

 

 

NM

Gain on sale of a business (2)

 

12

 

 

NM

 

 

 

NM

 

$

1,718

 

 

NM

 

 

 

NM

Other

 

256

 

 

NM

 

(475)

 

 

NM

 

263

 

 

NM

 

15

 

 

NM

Total

 

$

84,523

 

 

9.1

%

 

$

77,576

 

 

10.3

%

 

$

288,278

 

 

8.3

%

 

$

317,107

 

 

11.0

%

(1) Percentage of respective segment revenue. Percentages not considered meaningful are marked “NM.”

(2) During fiscal year 2020, we sold Q2 Administrators LLC, a subsidiary within our U.S. Federal Services Segment, resulting in a gain.

(3) Other selling, general and administrative expenses includes credits and costs that are not allocated to a particular segment.

(4) Acquisition-related expenses are costs of completed business combinations as well as the costs of any unsuccessful transactions.

 

Maximus, Inc.

FREE CASH FLOW

(Non-GAAP measure)

(Amounts in thousands)

(Unaudited)

 

Three Months Ended
September 30,

 

Twelve Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

Cash from operations

$

148,509

 

 

$

93,016

 

 

$

244,592

 

 

$

356,727

 

Purchases of property and equipment and capitalized software costs

(12,271)

 

 

(27,813)

 

 

(40,707)

 

 

(66,846)

 

Capital expenditure as a result of acquisition (1)

 

 

 

 

4,542

 

Free cash flow

$

136,238

 

 

$

65,203

 

 

$

203,885

 

 

$

294,423

 

 

 

 

 

 

 

 

 

(1) Purchases of property and equipment and capitalized software costs included $4.5 million in one-time payments to cover software licenses required for employees joining us through the citizen engagement centers acquisition in November 2018.

Lisa Miles
703.251.8637

Source: Maximus

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