Exhibit 99.1

MAXIMUS Reports Fiscal 2011 First Quarter Results

- Company Delivers Record Revenue and Reiterates Fiscal 2011 Guidance -

RESTON, Va.--(BUSINESS WIRE)--February 3, 2011--MAXIMUS (NYSE: MMS), a leading provider of government services worldwide, today reported financial results for its fiscal first quarter ended December 31, 2010.

Key highlights include:

Revenue for the fiscal 2011 first quarter increased 5.3% (3.6% on a constant currency basis) to $214.1 million versus $203.3 million reported for the same period last year. Revenue growth was driven by the international employment services businesses in Australia and the United Kingdom in the Human Services Segment.

Income from continuing operations increased to $17.6 million for the first quarter, compared to $14.6 million last year, driven by growth, profit expansion and a lower tax rate in geographies outside the United States. For the first quarter, diluted earnings per share from continuing operations increased 13.8% to $0.99 compared to adjusted diluted EPS of $0.87 (normalized to exclude $0.02 of legal expense and $0.04 related to 2010 year-end tax adjustments) for the same period last year.

“Our first quarter results represent a strong start to the year, and we are on track to realize our growth objectives for fiscal 2011,” commented Richard A. Montoni, Chief Executive Officer of MAXIMUS. “During the first quarter, we renewed two large contracts in California and Texas and were named as a preferred supplier for the bidding framework on a promising employment services opportunity as the United Kingdom reforms its welfare system. Additionally, we successfully launched operations on a ground-breaking eligibility and enrollment modernization effort in Colorado, which is expected to serve as a model for health insurance exchanges. This is a growing area for the Company as more states proactively evaluate modernization initiatives to simplify and streamline the enrollment process for their public health insurance programs.”


Mr. Montoni continued, “We are also seeing increased activity in Requests for Information (RFIs) and Request for Proposals (RFPs) for other programs as states work to reduce costs, improve the quality of service delivery, and increase accountability. For example, many states are exploring the transition from traditional Medicaid fee-for-service to new Medicaid managed care models. In addition, other states, such as Texas, are actively moving certain Medicaid populations into mandatory managed care. Initiatives like these present us with new growth opportunities today.”

Health Services Segment

Health Services Segment revenue for the first quarter of fiscal 2011 remained relatively constant at $130.0 million compared to the same period last year. Operating income for the first quarter increased 7.5% to $18.8 million compared to $17.5 million last year. As a result, Health Segment operating margin expanded 110 basis points to 14.5% compared to the prior year. Income and margin expansion were driven by the timing of transaction-based revenue during the quarter. The Company expects quarterly fluctuations in the Segment’s operating margin as a result of volumes, open enrollments, contract start up and program timing.

Human Services Segment

Human Services Segment revenue for the fiscal 2011 first quarter increased 15.7% (11.5% on a constant currency basis) to $84.1 million compared to the prior-year period. Revenue growth was driven by the Company’s international employment services business in Australia and the United Kingdom. Operating income for the first quarter increased 15.2% to $8.5 million compared to $7.4 million in the same period last year. Segment operating margin was 10.1% and consistent with the prior year. The Segment’s operating margin is seasonally lower in the fiscal first quarter as a result of normal business trends in the Company’s tax credit business.

Sales and Pipeline

At January 28th, fiscal year-to-date signed contract wins totaled $753 million compared to $183 million reported last year, and new contracts pending (awarded but unsigned) totaled $177 million compared to $347 million last year. Sales opportunities (pipeline) at January 28, 2011 totaled $1.6 billion (consisting of $96 million in proposals pending, $460 million in proposals in preparation and $1.1 billion in proposals tracking) compared to $1.6 billion the prior year.

Balance Sheet and Cash Flows

Cash and cash equivalents totaled $177.0 million at December 31, 2010. For the fiscal 2011 first quarter, cash provided by operating activities from continuing operations totaled $30.4 million with free cash flow of $25.7 million. The Company defines free cash flow as cash provided by operating activities from continuing operations less property, equipment and capitalized software. Cash flows in the quarter were driven by solid net income and strong collections.

Days Sales Outstanding (DSO) from continuing operations were 57 days. On November 30, 2010, MAXIMUS paid a quarterly cash dividend of $0.12 per share and in January 2011, the Company announced a 25% increase for its next quarterly cash dividend to $0.15 per share, payable on February 28, 2011 to shareholders of record on February 15, 2011.

During the first quarter of fiscal 2011, MAXIMUS used $8.4 million to purchase 136,153 shares of common stock and at December 31, 2010, the Company had $118.6 million available for repurchases under the current program.

Outlook

The Company is reiterating its fiscal 2011 revenue and earnings guidance. MAXIMUS continues to expect revenue from continuing operations in the range of $890 million to $920 million and diluted earnings per share from continuing operations in the range of $3.95 to $4.15.


Mr. Montoni concluded, “With governments actively evaluating new models to transform their public health and human services programs, MAXIMUS is engaging with new and existing government partners to offer relevant and timely solutions. We expect our 2011 results to be driven by increased activity in our Health Services Segment with continued solid performance from our Human Services Segment. We see significant opportunity in the days ahead to build upon our brand and presence in our current markets, both domestically and internationally, while exploring entry into new markets where favorable dynamics exist.”

Website Presentation, Conference Call and Webcast Information

MAXIMUS will host a conference call this morning, February 3, 2011, 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 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 February 11, 2011. Callers can access the replay by calling:

877.660.6853 (Domestic)/201.612.7415 (International)
Replay account number: 316
Replay conference ID number: 366059

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, and the United Kingdom. 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.


   
MAXIMUS, Inc.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 

December 31,

2010

September 30,

2010

(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 177,004 $ 155,321
Restricted cash 4,966 4,182
Accounts receivable — billed, net of reserves of $2,088 and $1,845 114,586 136,260
Accounts receivable — unbilled 18,797 17,245
Income taxes receivable 8,559 4,149
Deferred income taxes 14,848 13,290
Prepaid expenses and other current assets   24,682     25,702  
Total current assets 363,442 356,149
 
Property and equipment, net 48,505 48,873
Capitalized software, net 26,346 24,715
Deferred contract costs, net 7,320 6,708
Goodwill 72,189 71,251
Intangible assets, net 7,389 7,778
Deferred income taxes 425 1,844
Deferred compensation plan assets 8,878 8,317
Other assets, net   2,250     2,106  
Total assets $ 536,744   $ 527,741  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 53,638 $ 49,200
Accrued compensation and benefits 29,626 40,807
Deferred revenue 53,286 58,070
Acquisition-related contingent consideration 1,000 923
Income taxes payable 8,260 7,120
Other accrued liabilities 7,038 7,934
Liabilities of discontinued operations       634  
Total current liabilities 152,848 164,688
Deferred revenue, less current portion 3,761 4,083
Long-term debt 1,452 1,411
Acquisition-related contingent consideration, less current portion 2,300 2,138
Income taxes payable, less current portion 1,823 1,793
Deferred income tax liability 5,924 4,946
Deferred compensation plan liabilities   11,459     9,893  
Total liabilities 179,567 188,952
 
Shareholders’ equity:
Common stock, no par value; 60,000,000 shares authorized; 27,612,647 and 27,487,725 shares issued and 17,164,447 and 17,174,141 shares outstanding at December 31, 2010 and September 30, 2010, at stated amount, respectively 360,198 352,696
Treasury stock, at cost;10,448,200 and 10,313,584 shares at December 31, 2010 and September 30, 2010, respectively (367,733 ) (359,366 )
Accumulated other comprehensive income 18,459 14,530
Retained earnings   346,253     330,929  
Total shareholders’ equity   357,177     338,789  
Total liabilities and shareholders’ equity $ 536,744   $ 527,741  
 

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

Three Months

Ended December 31,

2010   2009
Revenue $ 214,114 $ 203,320
Cost of revenue   158,155     151,145  
Gross profit 55,959 52,175
Selling, general and administrative expenses 28,667 27,429
Legal and settlement expense       686  
Operating income from continuing operations 27,292 24,060
Interest and other income, net   491     99  
Income from continuing operations before income taxes 27,783 24,159
Provision for income taxes   10,196     9,559  
Income from continuing operations 17,587 14,600
 
Discontinued operations, net of income taxes:
Loss from discontinued operations (1,972 )
Loss on disposal   (105 )    
Loss from discontinued operations   (105 )   (1,972 )
   
Net income $ 17,482   $ 12,628  
 
Basic earnings (loss) per share:
Income from continuing operations $ 1.02 $ 0.83
Loss from discontinued operations       (0.11 )
Basic earnings per share $ 1.02   $ 0.72  
 
Diluted earnings (loss) per share:
Income from continuing operations $ 0.99 $ 0.81
Loss from discontinued operations       (0.11 )
Diluted earnings per share $ 0.99   $ 0.70  
 
Dividends paid per share $ 0.12   $ 0.12  
 
Weighted average shares outstanding:
Basic   17,180     17,595  
Diluted   17,710     18,039  
 

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

Three Months

Ended December 31,

2010   2009
Cash flows from operating activities:
Net income $ 17,482 $ 12,628
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations 105 1,972
Depreciation and amortization 5,232 4,540
Deferred income taxes 990 (8,492 )
Deferred interest income on note receivable 61
Non-cash equity based compensation 2,057 1,865
 
Change in assets and liabilities:

Accounts receivable — billed

22,145 9,349
Accounts receivable — unbilled (1,554 ) (2,327 )
Prepaid expenses and other current assets 1,041 1,042
Deferred contract costs (580 ) 479
Other assets (1,284 ) (34 )
Accounts payable 3,948 587
Accrued compensation and benefits (11,553 ) (2,035 )
Deferred revenue (5,270 ) 13,134
Income taxes (3,470 ) 14,867
Other liabilities   1,092     1,251  
Cash provided by operating activities — continuing operations 30,381 48,887
Cash provided by (used in) operating activities — discontinued operations   (739 )   6,134  
Cash provided by operating activities 29,642 55,021
 
Cash flows from investing activities:
Proceeds from note receivable 217
Purchases of property and equipment (2,407 ) (3,938 )
Capitalized software costs   (2,298 )   (2,641 )
Cash used in investing activities — continuing operations (4,705 ) (6,362 )
Cash used in investing activities — discontinued operations        
Cash used in investing activities (4,705 ) (6,362 )
 
Cash flows from financing activities:
Employee stock transactions 4,329 1,004
Repurchases of common stock (8,370 ) (8,661 )
Tax benefit due to option exercises and restricted stock units vesting 1,031 135
Cash dividends paid   (2,067 )   (2,118 )
Cash used in financing activities — continuing operations (5,077 ) (9,640 )
Cash used in financing activities — discontinued operations        
Cash used in financing activities (5,077 ) (9,640 )
 
Effect of exchange rate changes on cash and cash equivalents 1,823 106
 
Net increase/(decrease) in cash and cash equivalents 21,683 39,125
 
Cash and cash equivalents, beginning of period   155,321     87,815  
 
Cash and cash equivalents, end of period $ 177,004   $ 126,940  
 

   
MAXIMUS, Inc.
BUSINESS SEGMENTS
(Dollars in thousands)
(Unaudited)
 

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

 
Three Months Ended December 31,
2010 % (1)   2009   % (1)
 
Revenue:
Health Services $ 130,011 100 % $ 130,640 100 %
Human Services   84,103   100 % 72,680   100 %
Total   214,114   100 % 203,320   100 %
 
Gross profit:
Health Services 34,277 26.4 % 32,910 25.2 %
Human Services   21,682   25.8 % 19,265   26.5 %
Total   55,959   26.1 % 52,175   25.7 %
 
Selling, general, and administrative expense:
Health Services 15,454 11.9 % 15,402 11.8 %
Human Services 13,179 15.7 % 11,886 16.4 %
Corporate/other   34   NM 141   NM
Total   28,667   13.4 % 27,429   13.5 %
 

Operating income from continuing operations:

Health Services 18,823 14.5 % 17,508 13.4 %
Human Services 8,503 10.1 % 7,379 10.2 %
Consolidating adjustments   (34 ) NM (141 ) NM
Subtotal: Segment operating income 27,292 12.7 % 24,746 12.2 %
Legal and settlement expense     NM (686 ) NM
Total $ 27,292   12.7 % $ 24,060   11.8 %
 
(1)   % of respective segment revenue. Changes not considered meaningful are marked NM.
 

     
MAXIMUS, Inc.
Supplemental Pro Forma Diluted EPS from Continuing Operations ("Adjusted Diluted EPS")
FY 2010 and FY 2011
(Unaudited)
 
Quarter Ended

Year

Ended

Quarter

Ended

Dec. 31,

2009

 

Mar. 31,

2010

 

Jun. 30,

2010

 

Sept. 30,

2010

Sept. 30,

2010

Dec. 31,

2010

Diluted EPS from continuing operations-GAAP basis $ 0.81 $ 1.00   $ 0.90 $ 1.16   $ 3.86   $ 0.99
 
Pro forma adjustments:
Legal and settlement expense (recovery), net 0.02 (0.21 ) (0.19 )
Severance
Adjustment for tax accounts   0.04   (0.02 )   0.01   (0.08 )   (0.05 )  
Subtotal pro forma adjustments $ 0.06   ($0.23 )   0.01   ($0.08 )   ($0.24 )  
 
Adjusted Diluted EPS from continuing operations $ 0.87 $ 0.77   $ 0.91 $ 1.08   $ 3.62   $ 0.99
 

CONTACT:
MAXIMUS
Lisa Miles, 800-MAXIMUS x11637