Exhibit 99.1
 
MAXIMUS Reports Fiscal 2011 Third Quarter Results
- Company Delivers Record Revenue and Adjusted EPS, Raises Fiscal 2011 Outlook -
 
RESTON, Va.--(BUSINESS WIRE)--August 4, 2011--MAXIMUS (NYSE: MMS), a leading provider of government services worldwide, today reported financial results for its fiscal third quarter ended June 30, 2011.
 
Key highlights include:
 
  
Third quarter revenue grew 13% to a record $238.3 million compared to the same period last year.
 
  
Adjusted diluted earnings per share from continuing operations for the third quarter increased 22% to a record level of $0.56 compared to adjusted diluted EPS of $0.46 in the prior-year period.
 
  
Cash and cash equivalents totaled $204.0 million at June 30, 2011, while share repurchases totaled $9.4 million during the quarter.
 
  
Year-to-date signed awards were $1.4 billion at August 2, 2011.
 
  
The Company completed a two-for-one stock split effective June 30, 2011 and in May announced a 20% increase to its quarterly cash dividend payable on August 31, 2011.
 
Revenue for the fiscal 2011 third quarter increased 13% (8% on a constant currency basis) to $238.3 million compared to $211.5 million reported for the same period last year. Income from continuing operations, net of taxes, increased 24% to $20.0 million for the third quarter compared to $16.1 million last year. For the third quarter, adjusted diluted earnings per share from continuing operations increased 22% to $0.56 compared to $0.46 for the same period last year. All numbers reflect the recent two-for-one stock split.
 
Revenue and profit growth were driven principally by strong operational performance in both segments from new work and expansion of existing contracts, which resulted in an operating margin of 13.1%, excluding legal and settlement expense. Results in the quarter exceeded expectations and benefitted from strong performance in Australia, the acceleration of revenue and profit in the United Kingdom, and favorable currency rates in the quarter.
 
“Record results for the third quarter demonstrate our solid execution and continued strong performance, which positions us well for fiscal 2012,” commented Richard A. Montoni, Chief Executive Officer of MAXIMUS. “In June, we successfully launched operations in the United Kingdom for the new Work Programme and operations are trending as expected. We are also actively marketing and responding to the increase in activities under the Affordable Care Act, as states are working to solidify their plans for Medicaid expansion and health insurance exchanges.”
 
Health Services Segment
 
Health Services Segment revenue for the third quarter of fiscal 2011 increased 11% to $141.8 million compared to $127.3 million in the same period last year, driven by new work and expansion of existing contracts. Operating income for the third quarter increased 10% to $15.9 million compared to $14.5 million for the same period last year. Segment operating margin for the third quarter was 11.2%.
 
Human Services Segment
 
Human Services Segment revenue for the fiscal 2011 third quarter increased 15% (4% on a constant currency basis) to $96.5 million compared to $84.2 million in the prior-year period. Revenue growth was driven by the Company’s international welfare-to-work business in Australia and the United Kingdom. Operating income for the third quarter increased 40% to $14.9 million compared to $10.7 million for the same period last year. Segment operating margin for the third quarter was 15.4%.
 
New Sales and Pipeline
 
At August 2, 2011 fiscal year-to-date signed contract wins totaled $1.4 billion compared to $379 million reported last year. New contracts pending (awarded but unsigned) totaled $338 million compared to $916 million last year. Sales opportunities (pipeline) at August 2, 2011 totaled $1.8 billion (consisting of $378 million in proposals pending, $39 million in proposals in preparation and $1.4 billion in proposals tracking) compared to $1.8 billion the prior year.
 
Balance Sheet and Cash Flows
 
Cash and cash equivalents totaled $204.0 million at June 30, 2011. For the fiscal 2011 third quarter, cash provided by operating activities from continuing operations totaled $34.1 million with free cash flow of $27.8 million. The Company defines free cash flow as cash provided by operating activities from continuing operations less property, equipment and capitalized software.
 
Days Sales Outstanding (DSO) from continuing operations were favorable at 54 days and driven by the timing of collections.
 
On May 31, 2011, MAXIMUS paid a quarterly cash dividend of $2.6 million, which reflected the 25% dividend increase declared in January. During the third quarter, the Company completed a two-for-one stock split effective June 30, 2011 and announced another 20% increase to its quarterly cash dividend. The cash dividend of $0.09 is payable on August 31, 2011 to shareholders of record on August 15, 2011.
 
During the fiscal 2011 third quarter, the Company purchased 238,600 shares of MAXIMUS common stock for $9.4 million under the Board-authorized share repurchase program. At June 30, 2011, the Company had $115.4 million available under the program for future repurchases. MAXIMUS remains committed to this program and since 2008, has repurchased 12.4 million shares of common stock for $246.8 million through August 2, 2011.
 
 
 

 
 
Outlook
 
The Company is raising its fiscal 2011 revenue and earnings guidance as a result of strong performance in the third quarter. MAXIMUS now expects revenue from continuing operations in the range of $925 million to $935 million and adjusted diluted earnings per share from continuing operations in the range of $2.15 to $2.20.
 
Mr. Montoni concluded, “Our favorable performance in the quarter, in addition to our fourth quarter outlook, has led us to increase our full-year guidance and demonstrates our commitment to profitable growth and delivering long-term shareholder value. Additionally, we completed a two-for-one stock split and announced an additional 20% increase to our quarterly cash dividend, which underscores the confidence we have in our future. With a healthy balance sheet and strong cash flows, we are well positioned to fund our future growth while providing cash returns to shareholders."
 
Website Presentation, Conference Call and Webcast Information
 
MAXIMUS will host a conference call this morning, August 4, 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 August 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: 376023
 
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)
             
   
June 30,
   
September 30,
 
   
2011
   
2010
 
   
(Unaudited)
       
ASSETS
           
Current assets:
           
Cash and cash equivalents
 
$
204,016
   
$
155,321
 
Restricted cash
 
5,097
   
4,182
 
Accounts receivable — billed, net of reserves of $3,792 and $1,845
 
125,747
   
136,260
 
Accounts receivable — unbilled
 
16,394
   
17,245
 
Income taxes receivable
 
19,127
   
4,149
 
Deferred income taxes
 
17,301
   
13,290
 
Prepaid expenses and other current assets
 
24,223
   
25,702
 
Total current assets
 
411,905
   
356,149
 
             
Property and equipment, net
 
50,426
   
48,873
 
Capitalized software, net
 
27,589
   
24,715
 
Goodwill
 
73,252
   
71,251
 
Intangible assets, net
 
6,409
   
7,778
 
Deferred contract costs, net
 
8,617
   
6,708
 
Deferred income taxes
 
676
   
1,844
 
Deferred compensation plan assets
 
9,171
   
8,317
 
Other assets, net
 
2,022
   
2,106
 
Total assets
 
$
590,067
   
$
527,741
 
             
LIABILITIES AND SHAREHOLDERS’ EQUITY
           
Current liabilities:
           
Accounts payable
 
$
61,552
   
$
49,200
 
Accrued compensation and benefits
 
41,134
   
40,807
 
Deferred revenue
 
45,109
   
58,070
 
Acquisition-related contingent consideration
 
2,969
   
923
 
Income taxes payable
 
9,420
   
7,120
 
Other accrued liabilities
 
6,100
   
7,934
 
Liabilities of discontinued operations
 
   
634
 
Total current liabilities
 
166,284
   
164,688
 
Deferred revenue, less current portion
 
4,494
   
4,083
 
Long-term debt
 
1,794
   
1,411
 
Acquisition-related contingent consideration, less current portion
 
406
   
2,138
 
Income taxes payable, less current portion
 
1,784
   
1,793
 
Deferred income tax liability
 
7,824
   
4,946
 
Deferred compensation plan liabilities
 
11,507
   
9,893
 
Total liabilities
 
194,093
   
188,952
 
             
Shareholders’ equity:
           
Common stock, no par value
 
374,267
   
352,696
 
Treasury stock, at cost; 21,140,926 and 20,627,168 shares at June 30, 2011 and September 30, 2010, respectively
 
(377,247
)
 
(359,366
)
Accumulated other comprehensive income
 
23,154
   
14,530
 
Retained earnings
 
375,800
   
330,929
 
Total shareholders’ equity
 
395,974
   
338,789
 
Total liabilities and shareholders’ equity
 
$
590,067
   
$
527,741
 
 
 
 

 
 
           
MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
           
   
Three Months
 
Nine Months
 
   
Ended June 30,
 
Ended June 30,
 
   
2011
   
2010
 
2011
   
2010
 
Revenue
 
$
238,296
   
$
211,527
 
$
679,526
   
$
619,233
 
Cost of revenue
 
171,897
   
154,514
 
494,102
   
459,494
 
Gross profit
 
66,399
   
57,013
 
185,424
   
159,739
 
Selling, general and administrative expenses
 
35,259
   
31,658
 
97,498
   
87,874
 
Legal and settlement expense (recovery), net
 
361
   
 
361
   
(5,351
)
Operating income from continuing operations
 
30,779
   
25,355
 
87,565
   
77,216
 
Interest and other income, net
 
961
   
442
 
2,371
   
727
 
Income from continuing operations before income taxes
 
31,740
   
25,797
 
89,936
   
77,943
 
Provision for income taxes
 
11,780
   
9,672
 
33,351
   
29,227
 
Income from continuing operations
 
19,960
   
16,125
 
56,585
   
48,716
 
                       
Discontinued operations, net of income taxes:
                     
Income (loss) from discontinued operations
 
(65
)
 
1,200
 
(330
)
 
(20
)
Loss on disposal
 
(3
)
 
 
(662
)
 
 
Income (loss) from discontinued operations
 
(68
)
 
1,200
 
(992
)
 
(20
)
                       
Net income
 
$
19,892
   
$
17,325
 
$
55,593
   
$
48,696
 
                       
Basic earnings (loss) per share:
                     
Income from continuing operations
 
$
0.58
   
$
0.46
 
$
1.64
   
$
1.39
 
Income (loss) from discontinued operations
 
(0.01
)
 
0.04
 
(0.03
)
 
 
Basic earnings per share
 
$
0.57
   
$
0.50
 
$
1.61
   
$
1.39
 
                       
Diluted earnings (loss) per share:
                     
Income from continuing operations
 
$
0.56
   
$
0.45
 
$
1.59
   
$
1.35
 
Income (loss) from discontinued operations
 
   
0.03
 
(0.03
)
 
 
Diluted earnings per share
 
$
0.56
   
$
0.48
 
$
1.56
   
$
1.35
 
                       
Dividends paid per share
 
$
0.075
   
$
0.06
 
$
0.21
   
$
0.18
 
Dividends declared per share
 
$
0.165
   
$
0.06
 
$
0.30
   
$
0.18
 
                       
Weighted average shares outstanding:
                     
Basic
 
34,708
   
34,847
 
34,496
   
34,952
 
Diluted
 
35,803
   
36,008
 
35,612
   
36,030
 
 
 
 

 
 
             
MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
             
   
Three Months
   
Nine Months
 
   
Ended June 30,
   
Ended June 30,
 
   
2011
   
2010
   
2011
   
2010
 
Cash flows from operating activities:
                               
Net income
 
$
19,892
   
$
17,325
   
$
55,593
   
$
48,696
 
Adjustments to reconcile net income to net cash provided by operating activities:
                       
Loss from discontinued operations
 
68
   
(1,200
)
 
992
   
20
 
Depreciation and amortization
 
5,696
   
4,630
   
16,479
   
13,648
 
Deferred income taxes
 
(774
)
 
(1,126
)
 
372
   
(1,281
)
Deferred interest income on note receivable
 
   
84
   
   
263
 
Non-cash equity based compensation
 
2,441
   
2,030
   
6,936
   
5,983
 
Change in assets and liabilities:
                       
Accounts receivable — billed
 
12,483
   
6,118
   
10,887
   
10,895
 
Accounts receivable — unbilled
 
(1,162
)
 
1,891
   
859
   
(2,539
)
Prepaid expenses and other current assets
 
220
   
(1,590
)
 
1,889
   
(2,004
)
Deferred contract costs
 
(620
)
 
392
   
(1,849
)
 
1,358
 
Accounts payable
 
(4,827
)
 
6,762
   
7,460
   
8,568
 
Accrued compensation and benefits
 
6,061
   
3,844
   
(506
)
 
6,761
 
Deferred revenue
 
(2,679
)
 
8,423
   
(13,975
)
 
22,549
 
Income taxes
 
(2,883
)
 
5,751
   
(13,217
)
 
9,519
 
Other assets and liabilities
 
183
   
(3,745
)
 
(1,435
)
 
(2,087
)
Cash provided by continuing operations
 
34,099
   
49,589
   
70,485
   
120,349
 
Cash used in discontinued operations
 
(135
)
 
(1,147
)
 
(1,086
)
 
(2,152
)
Cash provided by operating activities
 
33,964
   
48,442
   
69,399
   
118,197
 
                         
Cash flows from investing activities:
                       
Acquisition of businesses, net of cash acquired
 
   
   
   
(10,673
)
Purchases of property and equipment
 
(4,499
)
 
(4,352
)
 
(10,963
)
 
(10,383
)
Capitalized software costs
 
(1,821
)
 
(1,982
)
 
(5,693
)
 
(6,307
)
Proceeds from note receivable
 
65
   
83
   
65
   
473
 
Cash used in investing activities — continuing ops
 
(6,255
)
 
(6,251
)
 
(16,591
)
 
(26,890
)
                         
Cash flows from financing activities:
                       
Employee stock transactions
 
1,037
   
1,064
   
9,050
   
2,679
 
Repurchases of common stock
 
(8,515
)
 
(8,007
)
 
(16,974
)
 
(22,518
)
Tax benefit due to option exercises and restricted stock units vesting
 
1,409
   
314
   
5,227
   
1,424
 
Issuance of long-term debt
 
4
   
333
   
304
   
326
 
Cash dividends paid
 
(2,598
)
 
(2,094
)
 
(7,241
)
 
(6,295
)
Cash used in financing activities — continuing ops
 
(8,663
)
 
(8,390
)
 
(9,634
)
 
(24,384
)
   
Effect of exchange rate changes on cash and cash equivalents
 
1,815
   
(2,104
)
 
5,521
   
(1,679
)
                         
Net increase in cash and cash equivalents
 
20,861
   
31,697
   
48,695
   
65,244
 
                         
Cash and cash equivalents, beginning of period
 
183,155
   
121,362
   
155,321
   
87,815
 
                         
Cash and cash equivalents, end of period
 
$
204,016
   
$
153,059
   
$
204,016
   
$
153,059
 
 
 
 

 
 
             
MAXIMUS, Inc.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
             
   
Three Months Ended June 30,
   
Nine Months Ended June 30,
 
   
2011
   
% (1)
   
2010
   
% (1)
   
2011
   
% (1)
   
2010
   
% (1)
 
                                                 
Revenue:
                                               
Health Services
 
$
141,788
   
100
%
 
$
127,307
   
100
%
 
$
409,578
   
100
%
 
$
385,226
   
100
%
Human Services
 
96,508
   
100
%
 
84,220
   
100
%
 
269,948
   
100
%
 
234,007
   
100
%
Total
 
238,296
   
100
%
 
211,527
   
100
%
 
679,526
   
100
%
 
619,233
   
100
%
                                                 
Gross Profit:
                                               
Health Services
 
35,459
   
25.0
%
 
32,425
   
25.5
%
 
108,056
   
26.4
%
 
94,267
   
24.5
%
Human Services
 
30,940
   
32.1
%
 
24,588
   
29.2
%
 
77,368
   
28.7
%
 
65,472
   
28.0
%
Total
 
66,399
   
27.9
%
 
57,013
   
27.0
%
 
185,424
   
27.3
%
 
159,739
   
25.8
%
                                                 
Selling, general, and administrative expense:
                                               
Health Services
 
19,536
   
13.8
%
 
17,916
   
14.1
%
 
53,958
   
13.2
%
 
49,527
   
12.9
%
Human Services
 
16,032
   
16.6
%
 
13,904
   
16.5
%
 
43,834
   
16.2
%
 
38,372
   
16.4
%
Corporate/Other
 
(309
)
 
NM
   
(162
)
 
NM
   
(294
)
 
NM
   
(25
)
 
NM
 
Total
 
35,259
   
14.8
%
 
31,658
   
15.0
%
 
97,498
   
14.3
%
 
87,874
   
14.2
%
                                                 
Operating income from continuing operations:
                                               
Health Services
 
15,923
   
11.2
%
 
14,509
   
11.4
%
 
54,098
   
13.2
%
 
44,740
   
11.6
%
Human Services
 
14,908
   
15.4
%
 
10,684
   
12.7
%
 
33,534
   
12.4
%
 
27,100
   
11.6
%
Consolidating adjustments
 
309
   
NM
   
162
   
NM
   
294
   
NM
   
25
   
NM
 
Subtotal: Segment Operating Income
 
31,140
   
13.1
%
 
25,355
   
12.0
%
 
87,926
   
12.9
%
 
71,865
   
11.6
%
Legal and settlement recovery (expense), net
 
(361
)
 
NM
   
   
NM
   
(361
)
 
NM
   
5,351
   
NM
 
Total
 
$
30,779
   
12.9
%
 
$
25,355
   
12.0
%
 
$
87,565
   
12.9
%
 
$
77,216
   
12.5
%

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

 
 
                     
MAXIMUS, Inc.
Supplemental Pro Forma Diluted EPS from Continuing Operations
("Adjusted EPS")
FY 2010 and YTD FY 2011
(Unaudited)
                     
                     
                   
Total
   
Q1 10
 
Q2 10
 
Q3 10
 
Q4 10
 
FY 10
Diluted EPS from continuing operations - GAAP basis
 
$
0.40
 
$
0.50
   
$
0.45
 
$
0.58
   
$
1.93
 
                     
Pro forma Adjustments:
                   
Legal and settlement expense (recovery), net
   
0.01
   
(0.11
)
   
-
   
-
     
(0.10
)
Adjustment for taxation rate
   
0.02
   
(0.01
)
   
0.01
   
(0.04
)
   
(0.02
)
Subtotal pro forma adjustments
   
0.03
   
(0.12
)
   
0.01
   
(0.04
)
   
(0.12
)
                     
Adjusted EPS from continuing operations
 
$
0.43
 
$
0.38
   
$
0.46
 
$
0.54
   
$
1.81
 
                     
                     
   
Q1 11
 
Q2 11
 
Q3 11
       
Diluted EPS from continuing operations
 
$
0.50
 
$
0.54
   
$
0.56
       
                     
Pro forma Adjustments:
                   
Legal and settlement expense (recovery), net
   
-
   
-
     
-
       
Adjustment for taxation rate
   
-
   
-
     
-
       
Subtotal pro forma adjustments
   
-
   
-
     
-
       
                     
Adjusted EPS from continuing operations
 
$
0.50
 
$
0.54
   
$
0.56
       
 
CONTACT:
MAXIMUS
Lisa Miles, 800-MAXIMUS x11637