Exhibit 99.1

MAXIMUS Reports Fiscal 2010 Third Quarter Results

-Record Revenue of $210.7 million and Record Diluted EPS of $0.91 from Continuing Operations-

RESTON, Va.--(BUSINESS WIRE)--August 5, 2010--MAXIMUS, Inc. (NYSE:MMS), a leading provider of government services worldwide, today reported results for the three months ended June 30, 2010.

Highlights for the third quarter include:

Revenue for the third quarter increased 19.4% over the same period last year (or 15.9% on a constant currency basis) to $210.7 million, driven primarily by the Company’s international employment services operations in Australia and the United Kingdom. Revenue was slightly lower than expected as a result of lower volumes on certain performance-based projects where the Company effectively managed costs to achieve margin and earnings. For the fiscal 2010 third quarter, organic revenue grew 16.0% (or 12.5% on a constant currency basis) compared to the same period last year.

Net income from continuing operations for the third quarter increased to $16.4 million. Earnings from continuing operations in the fiscal 2010 third quarter increased 25% to $0.91 per diluted share compared to adjusted earnings from continuing operations of $0.73 per diluted share last year, which excluded $0.16 of legal and settlement recovery.

“Our record results for the third quarter reflect the increasing positive contribution from our international operations,” commented Richard A. Montoni, President and Chief Executive Officer of MAXIMUS. “Our emphasis on results-driven performance resonates with government clients around the world who seek to maximize results in a budget-constrained environment. As our bottom-line results indicate, we have maintained strong fiscal discipline by managing resources on volume-sensitive contracts and ramped new business effectively while strategically growing our base of operations.”

Operations Segment

For the fiscal 2010 third quarter, Operations Segment revenue increased 18.7% (or 14.9% on a constant currency basis) to $196.5 million compared to $165.5 million for the third quarter of fiscal 2009. Operations Segment operating income for the third quarter grew 30.5% to $25.0 million compared to $19.1 million in the third quarter of last year. Operating margin for the quarter was 12.7%. Year-over-year revenue and profit expansion in the Segment were driven by strong growth in the Company’s international employment services operations in Australia and the United Kingdom.


Consulting Segment

For the fiscal 2010 third quarter, Consulting Segment revenue was $14.2 million compared to $10.9 million for the same period last year. Consulting Segment operating income for the fiscal 2010 third quarter was $604,000, with an operating margin of 4.3%.

New Sales and Sales Pipeline

At July 30, 2010, year-to-date signed contract awards totaled $379 million and new contracts pending (awarded, but unsigned) totaled $916 million, which includes approximately $750 million related to three large contracts where the Company has been notified of award and is in final contract negotiations.

Sales opportunities (pipeline) at July 30, 2010 totaled $1.8 billion (consisting of $241 million in proposals pending, $113 million in proposals in preparation, and $1,442 million in proposals tracking) compared to $928 million the prior year.

Balance Sheet and Cash Flows

At June 30, 2010, the Company reported cash and cash equivalents of $153.1 million. Days Sales Outstanding (DSO) from continuing operations improved to 62 days, on a sequential basis, driven by increased collections in the third quarter.

The Company continues to generate strong cash flows driven by solid net income. As a result, cash provided by operating activities totaled $49.6 million with free cash flow of $43.2 million for the third quarter of 2010. The Company defines free cash flow as cash provided by operating activities from continuing operations less property, equipment, and capitalized software expenditures.

MAXIMUS remains committed to returning excess cash to shareholders. During the fiscal 2010 third quarter, the Company purchased 135,936 shares of MAXIMUS common stock for $8.0 million under the Board-authorized share repurchase program. At June 30, 2010, the Company had $38.1 million available under the program. MAXIMUS also paid a cash dividend of $0.12 per share on May 28, 2010 to shareholders of record as of May 14, 2010. Subsequent to quarter end, the Company declared a quarterly cash dividend of $0.12 per share payable on August 31, 2010 to shareholders of record as of August 16, 2010.

Outlook

The Company is slightly revising its revenue guidance and now expects revenue from continuing operations in the range of $828 million to $838 million due to lower volumes on certain performance-based projects where the Company has continued to manage costs effectively and achieve its earnings objectives. In addition, MAXIMUS is narrowing the range on its previous earnings guidance. The Company now expects adjusted earnings per diluted share from continuing operations to be in the range of $3.55 to $3.60, which is at the top end of its prior guidance range of $3.50 to $3.60.

Website Presentation, Conference Call, and Web Cast Information

MAXIMUS will host a conference call this morning, August 5, 2010, at 9:00 a.m. (ET). The Company has also posted a presentation on its website, under the Investor Relations page, for analysts to follow during the conference call. The call can be accessed through the Investor Relations page of the Company’s website at www.maximus.com or by calling:

877.407.8289 (Domestic)/201.689.8341 (International)

For those unable to listen to the live call, a replay will be available through August 19, 2010. Callers can access the replay by calling:

877.660.6853 (Domestic)/201.612.7415 (International)
Replay account number: 316
Replay conference ID number: 354155

About MAXIMUS

MAXIMUS is a leading provider of government services worldwide and is devoted to providing health and human services program management and consulting services to its clients. The Company has more than 6,500 employees located in more than 220 offices in the United States, Canada, Australia, the United Kingdom, and Israel. Additionally, MAXIMUS is included in the Russell 2000 Index and the S&P SmallCap 600 Index.

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 uncertainties could cause the Company's actual results to differ materially from those indicated by such forward-looking statements and include reliance on government clients; risks associated with government contracting; risks involved in managing government projects; legislative changes and political developments; opposition from government unions; challenges resulting from growth; adverse publicity; and legal, economic, and other risks detailed in Exhibit 99.1 to the Company's most recent Quarterly Report filed with the Securities and Exchange Commission, found on www.maximus.com.

Non-GAAP Financial Information

This press release includes certain non-GAAP financial information as defined by Securities and Exchange Commission Regulation G. Pursuant to the requirements of this regulation, reconciliations of this non-GAAP financial information to MAXIMUS financial statements as prepared under generally accepted accounting principles (GAAP) are included in this press release. MAXIMUS management believes providing investors with this information gives additional insights into MAXIMUS results of operations. While MAXIMUS management believes that these non-GAAP financial measures are useful in evaluating MAXIMUS operations, this information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.


   
MAXIMUS, Inc.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
 

September 30,

2009

June 30,

2010

(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 87,815 $ 153,059
Restricted cash 3,919 3,753
Accounts receivable — billed, net of reserves of $5,812 and $1,484 132,058 122,611
Accounts receivable — unbilled 16,706 19,598
Note receivable 736
Income taxes receivable 7,501
Deferred income taxes 5,389 8,017
Prepaid expenses and other current assets 19,749 21,757
Current assets of discontinued operations   18,238     9,368  
Total current assets 292,111 338,163
 
Property and equipment, at cost 98,781 109,708
Less accumulated depreciation and amortization   (53,495 )   (62,887 )
Property and equipment, net 45,286 46,821
Capitalized software 26,475 32,830
Less accumulated amortization   (7,506 )   (10,049 )
Capitalized software, net 18,969 22,781
Deferred contract costs, net 8,206 6,863
Goodwill 61,029 67,806
Intangible assets, net 2,455 8,128
Deferred income taxes 1,239
Other assets, net   3,939     3,816  
Total assets $ 433,234   $ 494,378  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 44,368 $ 55,834
Accrued compensation and benefits 31,713 37,941
Deferred revenue 22,177 35,385
Acquisition-related contingent consideration 906
Income taxes payable 823
Other accrued liabilities 15,083 9,577
Liabilities of discontinued operations   14,124     4,565  
Total current liabilities 127,465 145,031
Deferred revenue, less current portion 6,527 16,081
Long-term debt 1,187
Acquisition-related contingent consideration 2,100
Income taxes payable, less current portion 1,871 1,755
Deferred income tax liability   243     2,724  
Total liabilities 136,106 168,878
 
Shareholders’ equity:
Common stock, no par value; 60,000,000 shares authorized; 27,161,849 and 27,358,672 shares issued and 17,599,029 and 17,353,075 shares outstanding at September 30, 2009 and June 30, 2010, at stated amount, respectively 338,739 349,098
Treasury stock, at cost; 9,562,820 and 10,005,597 shares at September 30, 2009 and June 30, 2010, respectively (319,149 ) (341,664 )
Accumulated other comprehensive income 8,268 6,673
Retained earnings   269,270     311,393  
Total shareholders’ equity   297,128     325,500  
Total liabilities and shareholders’ equity $ 433,234   $ 494,378  
 

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

Three Months

Ended June 30,

Nine Months

Ended June 30,

2009   2010 2009   2010
Revenue $ 176,393 $ 210,659 $ 523,261 $ 616,859
Cost of revenue   128,041     153,359   381,471     456,612  
Gross profit 48,352 57,300 141,790 160,247
Selling, general and administrative expenses 27,017 31,574 80,145 87,529
Legal and settlement expense (recovery), net   (4,829 )     (4,461 )   (5,351 )
Operating income from continuing operations 26,164 25,726 66,106 78,069
Interest and other income, net   129     442   258     729  
Income from continuing operations before income taxes 26,293 26,168 66,364 78,798
Provision for income taxes   10,386     9,813   26,214     29,549  
Income from continuing operations 15,907 16,355 40,150 49,249
 
Discontinued operations, net of income taxes:
Income (loss) from discontinued operations (924 ) 970 (2,172 ) (552 )
Loss on disposal         (5 )    
Income (loss) from discontinued operations   (924 )   970   (2,177 )   (552 )
 
Net income $ 14,983   $ 17,325 $ 37,973   $ 48,697  
 
Basic earnings (loss) per share:
Income from continuing operations $ 0.91 $ 0.94 $ 2.28 $ 2.82
Income (loss) from discontinued operations   (0.05 )   0.05   (0.12 )   (0.03 )
Basic earnings per share $ 0.86   $ 0.99 $ 2.16   $ 2.79  
 
Diluted earnings (loss) per share:
Income from continuing operations $ 0.89 $ 0.91 $ 2.25 $ 2.73
Income (loss) from discontinued operations   (0.05 )   0.05   (0.12 )   (0.03 )
Diluted earnings per share $ 0.84   $ 0.96 $ 2.13   $ 2.70  
 
Dividends paid per share $ 0.12   $ 0.12 $ 0.34   $ 0.36  
 
Weighted average shares outstanding:
Basic   17,503     17,423   17,582     17,476  
Diluted   17,839     18,004   17,855     18,015  
 

   
MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
 

Nine Months

Ended June 30,

2009 2010
Cash flows from operating activities:
Net income $ 37,973 $ 48,697
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations 2,177 552
Depreciation 6,307 9,556
Amortization 2,080 4,093
Deferred income taxes 22,351 (1,281 )
Gain on sale of fixed assets (51 )
Deferred interest income on note receivable 312 263
Non-cash equity based compensation 5,628 5,983
 
Change in assets and liabilities, net of effect of business combinations:
Accounts receivable — billed 7,493 11,065
Accounts receivable — unbilled (8,111 ) (2,762 )
Prepaid expenses and other current assets (10,949 ) (2,004 )
Deferred contract costs (3,206 ) 1,358
Due from insurance carrier 12,500
Other assets 308 (136 )
Accounts payable 3,418 7,543
Accrued compensation and benefits (122 ) 6,727
Deferred revenue 3,389 22,549
Income taxes (20,042 ) 9,519
Other liabilities   (35,664 )   (1,952 )
Cash provided by operating activities — continuing operations 25,791 119,770
Cash provided by (used in) operating activities — discontinued operations   (2,306 )   (1,573 )
Cash provided by operating activities 23,485 118,197
 
Cash flows from investing activities:
Proceeds from sale of fixed assets 54
Decrease in note receivable 631 473
Purchases of property and equipment (10,604 ) (10,383 )
Capitalized software costs (5,037 ) (6,307 )
Acquisition of businesses, net of cash acquired       (10,673 )
Cash used in investing activities — continuing operations (14,956 ) (26,890 )
Cash used in investing activities — discontinued operations   (36 )    
Cash used in investing activities (14,992 ) (26,890 )
 
Cash flows from financing activities:
Employee stock transactions 636 2,679
Repurchases of common stock (30,046 ) (22,518 )
Payments on capital lease obligations (417 )
Tax benefit due to option exercises and restricted stock units vesting 6 1,424
Issuance of long-term debt 326
Cash dividends paid   (5,955 )   (6,295 )
Cash used in financing activities — continuing operations (35,776 ) (24,384 )
Cash used in financing activities — discontinued operations        
Cash used in financing activities (35,776 ) (24,384 )
   
Effect of exchange rate changes on cash and cash equivalents (656 ) (1,679 )
 
Net increase (decrease) in cash and cash equivalents (27,939 ) 65,244
 
Cash and cash equivalents, beginning of period 119,605 87,815
 
Cash and cash equivalents, end of period $ 91,666 $ 153,059
 

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

The following table provides certain financial information for each of the Company’s business segments:

 
Three Months Ended June 30, Nine Months Ended June 30,
2009 % (1) 2010 % (1) 2009 % (1) 2010 % (1)
 
Revenue:
Operations $ 165,522 100 % $ 196,458 100 % $ 477,486 100 % $ 576,580 100 %
Consulting   10,871   100 %   14,201   100 %   45,775   100 %   40,279   100 %
Total 176,393 100 % 210,659 100 % 523,261 100 % 616,859 100 %
 
Gross profit:
Operations 41,981 25.4 % 52,271 26.6 % 123,683 25.9 % 145,773 25.3 %
Consulting   6,371   58.6 %   5,029   35.4 %   18,107   39.6 %   14,474   35.9 %
Total 48,352 27.4 % 57,300 27.2 % 141,790 27.1 % 160,247 26.0 %
 
Selling, general, and administrative expense:
Operations 22,854 13.8 % 27,311 13.9 % 63,866 13.4 % 75,114 13.0 %
Consulting 4,119 37.9 % 4,425 31.2 % 15,645 34.2 % 12,440 30.9 %
Corporate/other   44   NM   (162 )   NM   634   NM   (25 ) NM
Total 27,017 15.3 % 31,574 15.0 % 80,145 15.3 % 87,529 14.2 %
 
Operating income from continuing operations:
Operations 19,127 11.6 % 24,960 12.7 % 59,817 12.5 % 70,659 12.3 %
Consulting   2,252   20.7 %   604   4.3 %   2,462   5.4 %   2,034   5.0 %
Consolidating adjustments (44 ) NM 162 NM (634 ) NM 25 NM
Subtotal: Segment operating income 21,335 12.1 % 25,726 12.2 % 61,645 11.8 % 72,718 11.8 %

Legal and settlement recovery (expense), net

  4,829   NM     NM   4,461   NM   5,351   NM
Total $ 26,164 14.8 % $ 25,726 12.2 % $ 66,106 12.6 % $ 78,069 12.7 %
 
(1)   Percentage of respective segment revenue. Changes considered not meaningful are marked “NM.”
 

               
MAXIMUS, Inc.
Supplemental Pro Forma Diluted EPS from Continuing Operations ("Adjusted EPS")
FY 2009 and Q1, Q2, and Q3 FY 2010
(Unaudited)
 
Q1 09   Q2 09   Q3 09   Q4 09  

Total

FY 09

  Q1 10   Q2 10   Q3 10
Diluted EPS from continuing operations-
GAAP basis $ 0.69   $ 0.66   $ 0.89     $ 0.80   $ 3.05     $ 0.81   $ 1.02     $ 0.91
 
Pro forma adjustments:
Legal and settlement expense (recovery), net - 0.01 (0.16 ) 0.01 (0.14 ) 0.02 (0.21 ) -
Severance   -     0.01     -       -     -       -     -       -
Subtotal pro forma adjustments $ 0.00   $ 0.02     ($0.16 )   $ 0.01     ($0.14 )   $ 0.02     ($0.21 )     -
                             
Adjusted EPS from continuing operations $ 0.69   $ 0.68   $ 0.73     $ 0.81   $ 2.91     $ 0.83   $ 0.81     $ 0.91
 

CONTACT:
MAXIMUS, Inc.
Lisa Miles, 800-MAXIMUS x11637