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FOR IMMEDIATE RELEASECONTACT:Lisa Miles 703.251.8637
lisamiles@maximus.com
Date: November 19, 2019

MAXIMUS Reports Fourth Quarter and Full Year Results for Fiscal Year 2019
- Establishes Guidance for Fiscal Year 2020 -

(RESTON, Va. - November 19, 2019) - MAXIMUS (NYSE: MMS), a leading provider of government services worldwide, today reported financial results for the three months and year ended September 30, 2019.

Highlights for fiscal year 2019 include:

•Revenue increased to $2.89 billion driven by the November 2018 acquisition in the U.S. Federal Services Segment

•Diluted earnings per share of $3.72

•Total company operating margin of 11.0%

•Cash and cash equivalents of $105.6 million at September 30, 2019

•Solid cash generation with cash flows from operations of $356.7 million and free cash flow of $294.4 million

•Signed year-to-date contract awards of $2.6 billion, new contracts pending (awarded, but unsigned) of $242 million, and a sales pipeline of $30.2 billion at September 30, 2019
Revenue for the fourth quarter and fiscal 2019 increased to $755.0 million and $2.89 billion, respectively, compared to $558.4 million and $2.39 billion reported for the same periods last year.

For the fourth quarter of fiscal 2019, net income attributable to MAXIMUS totaled $60.1 million, or $0.93 of diluted earnings per share. This compares to $46.3 million and $0.71, respectively, for the fourth quarter of fiscal 2018. For fiscal 2019, net income attributable to MAXIMUS totaled $240.8 million, or $3.72 of diluted earnings per share. This compares to fiscal 2018 reported net income attributable to MAXIMUS of $220.8 million and diluted earnings per share of $3.35.

The year-over-year increase in revenue and earnings was driven by the acquisition of the federal citizen engagement centers business which was completed on November 16, 2018. If the acquisition had occurred on October 1, 2018, revenue and diluted earnings per share would have been approximately $2.985 billion and $3.77, respectively, on a pro-forma basis.

1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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U.S. Health and Human Services Segment
U.S. Health and Human Services Segment revenue for the fourth quarter of fiscal 2019 increased 4% to $300.4 million, compared to $288.9 million reported for the same period last year driven by new work. Operating income for the fourth quarter totaled $53.8 million (17.9% operating margin), compared to $52.2 million (18.1% operating margin) for the same period last year.

For the full fiscal year, U.S. Health and Human Services Segment revenue decreased 3% to $1.18 billion, compared to $1.21 billion for the same period last year. As previously disclosed, revenue was lower due to forecasted changes on several sizable contracts that were rebid and won, extended, or where option periods were exercised. Fiscal 2019 operating income totaled $220.8 million (18.8% operating margin), compared to operating income of $218.6 million (18.0% operating margin) for fiscal 2018.

U.S. Federal Services Segment
As expected, U.S. Federal Services Segment revenue for the fourth quarter of fiscal 2019 increased to $312.2 million, compared to $117.4 million reported for the same period last year. Operating income for the fourth quarter totaled $31.1 million (10.0% operating margin), compared to $16.0 million (13.6% operating margin) for the same period last year.

For the full fiscal year, U.S. Federal Services Segment revenue increased to $1.1 billion, compared to $478.9 million for the same period last year. Fiscal 2019 operating income totaled $115.9 million (10.4% operating margin), compared to operating income of $57.4 million (12.0% operating margin) for fiscal 2018.

Revenue and operating income increases for the fourth quarter and fiscal 2019 were driven by the acquisition of the federal citizen engagement centers business completed in November 2018. The most significant contracts acquired are cost-plus which tend to generate single-digit operating margins but carry lower risk. With more cost-plus contracts in the Segment's portfolio, the operating margin for the Segment was lower in the fourth quarter and fiscal 2019 compared to the prior year periods.

Outside the U.S. Segment
Outside the U.S. Segment revenue for the fourth quarter of fiscal 2019 decreased 6% (2% on a constant currency basis) to $142.4 million, compared to $152.1 million for the same period last year. The Segment had operating income for the fourth quarter of $2.2 million (1.5% operating margin), compared to an operating loss of $0.9 million for the same period last year, which was tempered by the jobactive program that was rebid and launched on July 1, 2018.

For the full fiscal year, Outside the U.S. Segment revenue decreased 14% (9% on a constant currency basis) to $599.1 million, compared to $699.4 million for the same period last year. The year-over-year revenue decrease was driven by: 1) the ending of the Work Programme and Work Choice contracts which accounted for $36 million of the decline; 2) unfavorable currency translation of $35 million and; 3) lower pass-through revenue for support services tied to the jobactive program in Australia totaling $16 million. Fiscal 2019 operating income totaled $16.1 million (2.7% operating margin), compared to operating income of $36.0 million (5.1% operating margin) for fiscal 2018.

The Segment has experienced a slowdown in its employment services business as a result of low unemployment in the countries where we operate which has led to lower caseloads and volumes. The Segment has a handful of new contracts progressing towards profitability but they are unfavorable to earnings in the near-term.


1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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Sales Awards and Pipeline
Year-to-date signed contract awards totaled $2.6 billion at September 30, 2019. The value of new contracts pending at September 30, 2019, (awarded but unsigned) was $242 million.

The sales pipeline at September 30, 2019, was approximately $30.2 billion (comprised of approximately $2.9 billion in proposals pending, $1.2 billion in proposals in preparation and $26.1 billion in opportunities tracking).

Balance Sheet and Cash Flows
Cash, cash equivalents and short-term investments at September 30, 2019, totaled $105.6 million. For the fourth quarter of fiscal 2019, cash flows from operations were $93.0 million, with free cash flow of $65.2 million. For fiscal 2019, cash flows from operations were $356.7 million with free cash flow of $294.4 million.

At September 30, 2019, days sales outstanding (DSO) were 72 days.
On August 30, 2019, MAXIMUS paid a quarterly cash dividend of $0.25 per share. On October 10, 2019, the Company announced a $0.28 per share cash dividend, payable on November 29, 2019, to shareholders of record on November 15, 2019.

Outlook
MAXIMUS is establishing fiscal 2020 guidance. The Company expects revenue to range between $3.15 billion and $3.30 billion. The Company expects diluted earnings per share to range between $3.95 and $4.15. The Company expects cash flows from operations to range between $300 million and $350 million, and free cash flow to range between $275 million and $325 million.

For fiscal 2020, the Company has estimated its effective income tax rate to range between 24.5% and 25.5% and weighted average shares outstanding of approximately 64.9 million.

Bruce Caswell, President and Chief Executive Officer of MAXIMUS, commented, "We finished fiscal 2019 with solid top- and bottom-line growth driven principally by the acquisition of the federal citizen engagement centers business last November. The acquisition enabled us to build scale, expand our customer base, improve our competitive position and bring on new technology platforms in the federal market. As we look into fiscal 2020 and beyond, we are pleased with the substantial progress we have made on our strategic plan to lead a digital transformation, grow our clinically related services, and expand in key priority markets and adjacencies."

Website Presentation, Conference Call and Webcast Information
MAXIMUS will host a conference call this morning, November 19, 2019, at 9:00 a.m. (ET). The call is open to the public and can be accessed under the Investor Relations page of the Company’s website at
investor.maximus.com or by calling:

877.407.8289 (Domestic)/+1.201.689.8341 (International)

For those unable to listen to the live call, a replay will be available through December 3, 2019, by calling:

877.660.6853 (Domestic)/+1.201.612.7415 (International)
Replay conference ID number: 13695553

1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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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 approximately 30,000 employees worldwide, MAXIMUS is a proud partner to government agencies in the United States, Australia, Canada, Saudi Arabia, Singapore and the United Kingdom. For more information, visit maximus.com.

Non-GAAP and Other Measures
This release refers to non-GAAP financial measures, including free cash flow, constant currency, 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. 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 Exhibit 99.1 to the Company’s most recent Annual Report filed with the Securities and Exchange Commission, found on maximus.com.

1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)

Three Months Ended September 30,Twelve Months Ended September 30,
2019201820192018
(Unaudited) (Unaudited) (Unaudited) 
Revenue$754,966  $558,446  $2,886,815  $2,392,236  
Cost of revenue586,716  419,508  2,215,631  1,797,851  
Gross profit168,250  138,938  671,184  594,385  
Selling, general and administrative expenses81,646  73,535  321,023  285,241  
Amortization of intangible assets9,028  2,462  33,054  10,308  
Restructuring costs—  1,033  —  3,353  
Operating income77,576  61,908  317,107  295,483  
Interest expense343  590  2,957  1,000  
Other income, net122  798  3,170  4,726  
Income before income taxes77,355  62,116  317,320  299,209  
Provision for income taxes17,314  16,600  76,825  78,393  
Net income60,041  45,516  240,495  220,816  
(Loss)/income attributable to noncontrolling interests(48) (791) (329) 65  
Net income attributable to MAXIMUS$60,089  $46,307  $240,824  $220,751  
Basic earnings per share attributable to MAXIMUS$0.93  $0.71  $3.73  $3.37  
Diluted earnings per share attributable to MAXIMUS$0.93  $0.71  $3.72  $3.35  
Dividends per share$0.25  $0.045  $1.00  $0.18  
Weighted average shares outstanding:  
Basic64,397  65,034  64,498  65,501  
Diluted64,848  65,402  64,820  65,932  












1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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MAXIMUS, Inc.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
September 30,
20192018
(Unaudited) 
ASSETS      
Current assets:      
Cash and cash equivalents$105,565  $349,245  
Short-term investments—  20,264  
Accounts receivable — billed and billable,net476,690  357,613  
Accounts receivable — unbilled123,884  31,536  
Income taxes receivable20,805  5,979  
Prepaid expenses and other current assets62,481  43,995  
Total current assets789,425  808,632  
Property and equipment, net99,589  77,544  
Capitalized software, net32,369  22,429  
Goodwill584,469  399,882  
Intangible assets, net179,250  88,035  
Deferred contract costs, net18,921  14,380  
Deferred compensation plan assets32,908  34,305  
Deferred income taxes186  6,834  
Other assets8,615  9,959  
Total assets$1,745,732  $1,462,000  
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable and accrued liabilities$177,786  $114,378  
Accrued compensation and benefits106,789  95,555  
Deferred revenue43,344  51,182  
Income taxes payable13,952  4,438  
Long-term debt, current portion9,658  136  
Other liabilities12,709  11,760  
Total current liabilities364,238  277,449  
Deferred revenue, less current portion32,341  20,394  
Deferred income taxes46,560  26,377  
Deferred compensation plan liabilities, less current portion34,079  33,497  
Other liabilities20,313  17,864  
Total liabilities497,531  375,581  
Commitments and contingencies      
Shareholders' equity:      
Common stock498,433  487,539  
Accumulated other comprehensive loss(45,380) (36,953) 
Retained earnings794,739  633,281  
Total MAXIMUS shareholders' equity1,247,792  1,083,867  
Noncontrolling interests409  2,552  
Total equity1,248,201  1,086,419  
Total liabilities and equity$1,745,732  $1,462,000  


1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Three Months Ended September 30,Twelve Months Ended September 30,
2019201820192018
Cash flows from operations:      
Net income$60,041  $45,516  $240,495  $220,816  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization of property, plant, equipment and capitalized software17,816  11,982  52,404  51,884  
Amortization of intangible assets9,028  2,462  33,054  10,308  
Deferred income taxes1,465  (2,153) 12,661  6,721  
Stock compensation expense5,451  4,525  20,774  20,238  
Changes in assets and liabilities, net of effects of business combinations:      
Accounts receivable — billed and billable47,818  40,822  (60,313) 34,033  
Accounts receivable — unbilled(31,354) 4,608  14,818  4,920  
Prepaid expenses and other current assets(12,650) (552) (15,583) 4,954  
Deferred contract costs3,472  (402) (4,670) 1,838  
Accounts payable and accrued liabilities(5,882) 15,971  47,580  (7,725) 
Accrued compensation and benefits(6,994) 7,040  2,288  (8,795) 
Deferred revenue8,631  (1,311) 16,488  (27,039) 
Income taxes(7,859) 1,349  (4,720) 7,262  
Other assets and liabilities4,033  (1,399) 1,451  (2,641) 
Cash flows from operations93,016  128,458  356,727  316,774  
Cash flows from investing activities:      
Purchases of property and equipment and capitalized software costs(27,813) (4,968) (66,846) (26,520) 
Acquisition of businesses, net of cash acquired(14,790) —  (436,839) —  
Acquisition of noncontrolling interests(647) —  (647) (157) 
Maturities/(purchases) of short-term investments—  —  19,996  (19,996) 
Other73  238  453  1,436  
Cash used in investing activities(43,177) (4,730) (483,883) (45,237) 
Cash flows from financing activities:      
Cash dividends paid to MAXIMUS shareholders(15,951) (2,891) (63,887) (11,692) 
Purchases of MAXIMUS common stock(1,378) (4,932) (47,446) (66,919) 
Tax withholding related to RSU vesting—  —  (8,915) (8,529) 
Borrowings under credit facility and other loan agreements94,616  1,949  414,664  136,632  
Repayment of credit facility and other long-term debt(88,545) (1,983) (405,142) (136,769) 
Other—  (545) (133) (4,603) 
Cash used in financing activities(11,258) (8,402) (110,859) (91,880) 
Effect of exchange rate changes on cash(1,058) (1,111) (2,052) (2,825) 
Net increase/(decrease) in cash and cash equivalents37,523  114,215  (240,067) 176,832  
Cash, cash equivalents and restricted cash, beginning of period78,969  242,344  356,559  179,727  
Cash, cash equivalents and restricted cash, end of period$116,492  $356,559  $116,492  $356,559  


1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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MAXIMUS, Inc.
SEGMENT INFORMATION
(Amounts in thousands)
(Unaudited)

 Three Months Ended September 30,Twelve Months Ended September 30,
2019% (1)2018% (1)2019% (1)2018% (1)
Revenue:        
U.S. Health & Human Services$300,406  100 %$288,944  100 %$1,176,488  100 %$1,213,911  100 %
U.S. Federal Services312,179  100 %117,375  100 %1,111,197  100 %478,911  100 %
Outside the U.S.142,381  100 %152,127  100 %599,130  100 %699,414  100 %
Total$754,966  100 %$558,446  100 %$2,886,815  100 %$2,392,236  100 %
Gross profit:      
U.S. Health & Human Services$83,154  27.7 %$87,382  30.2 %$344,109  29.2 %$359,624  29.6 %
U.S. Federal Services66,586  21.3 %33,690  28.7 %242,070  21.8 %126,698  26.5 %
Outside the U.S.18,510  13.0 %17,866  11.7 %85,005  14.2 %108,063  15.5 %
Total$168,250  22.3 %$138,938  24.9 %$671,184  23.2 %$594,385  24.8 %
Selling, general and administrative expense:              
U.S. Health & Human Services$29,322  9.8 %$35,187  12.2 %$123,275  10.5 %$140,990  11.6 %
U.S. Federal Services35,496  11.4 %17,725  15.1 %126,128  11.4 %69,312  14.5 %
Outside the U.S.16,353  11.5 %18,811  12.4 %68,944  11.5 %72,095  10.3 %
Other475  NM  1,812  NM  2,676  NM  2,844  NM  
Total$81,646  10.8 %$73,535  13.2 %$321,023  11.1 %$285,241  11.9 %
Operating income:              
U.S. Health & Human Services$53,832  17.9 %$52,195  18.1 %$220,834  18.8 %$218,634  18.0 %
U.S. Federal Services31,090  10.0 %15,965  13.6 %115,942  10.4 %57,386  12.0 %
Outside the U.S.2,157  1.5 %(945) (0.6)%16,061  2.7 %35,968  5.1 %
Amortization of intangible assets(9,028) NM  (2,462) NM  (33,054) NM  (10,308) NM  
Restructuring costs—  NM  (1,033) NM  —  NM  (3,353) NM  
Acquisition-related expenses (2) —  NM  (947) NM  (2,691) NM  (947) NM  
Other (3)(475) NM  (865) NM  15  NM  (1,897) NM  
Total$77,576  10.3 %$61,908  11.1 %$317,107  11.0 %$295,483  12.4 %


(1) Percentage of respective segment revenue. Percentages considered not meaningful are marked “NM.”
(2) Acquisition-related expenses include costs for the acquisition of the citizen engagement centers business.
(3)  "Other" relates to various expenses which are not directly attributable to our segments, including litigation costs.

1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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MAXIMUS, Inc.
FREE CASH FLOW
(Non-GAAP measure)
(Amounts in thousands)
(Unaudited)


Three Months Ended September 30,Twelve Months Ended September 30,
2019201820192018
Cash provided by operations$93,016  $128,458  $356,727  $316,774  
Purchases of property and equipment and capitalized software costs(27,813) (4,968) (66,846) (26,520) 
Capital expenditure as a result of the acquisition—  —  4,542  —  
Free cash flow$65,203  $123,490  $294,423  $290,254  



1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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