Exhibit 99.1
 
MAXIMUS Reports Record Results for Fiscal 2011 Fourth Quarter and Full Year
 
- Introduces Outlook for Fiscal 2012; Board Increases Share Buyback Authorization to $125 Million -
 
RESTON, Va.--(BUSINESS WIRE)--November 10, 2011--MAXIMUS (NYSE: MMS), a leading provider of government services worldwide, today reported financial results for its fourth quarter and fiscal year ended September 30, 2011.
 
Key highlights include:
 
·  
Revenue grew 18% to $250.1 million for the fourth quarter and 12% to $929.6 million for the full fiscal year compared to the same periods last year, driven by growth on current contracts and new work.
 
·  
Adjusted diluted earnings per share from continuing operations increased 19% to $0.64 for the fourth quarter and 24% to $2.25 for the full fiscal year compared to the same periods last year.
 
·  
Cash and cash equivalents totaled $173.0 million at September 30, 2011.
 
·  
The Company purchased approximately 1.1 million shares of MAXIMUS common stock for $39.6 million during the fourth quarter and on November 8, 2011, the Board of Directors increased the Company’s share repurchase program to $125 million.
 
·  
The Company achieved record signed awards in fiscal 2011 that totaled $1.6 billion.
 
Revenue for the fiscal 2011 fourth quarter increased 18% (14% on a constant currency basis) to $250.1 million versus $212.5 million reported for the same period last year. Revenue for fiscal year 2011 increased 12% (8% on a constant currency basis) to $929.6 million compared to fiscal year 2010. Revenue increases were driven by organic growth on existing contracts and new work in both Segments and across all geographies.
 
During the fourth quarter, an increased share of international business and other factors reduced the tax rate to 28.9% for the quarter and 34.8% for the fiscal year. As a result, fourth quarter GAAP income from continuing operations, net of taxes, increased 24% to $25.6 million, or $0.73 per diluted share, and includes approximately $0.09 of the aforementioned benefits and a net legal recovery. Normalized for these benefits, fourth quarter adjusted diluted earnings per share from continuing operations increased 19% to $0.64 compared to the same period last year. For the full year, GAAP income from continuing operations, net of taxes, increased 18% to $82.1 million, or $2.31 per diluted share, which includes approximately $0.06 of benefits. Excluding these benefits, adjusted diluted earnings per share from continuing operations increased 24% to $2.25 compared to fiscal 2010. A normalization table is included in the accompanying financial schedules.
 
“MAXIMUS delivered another exceptional year with solid growth in both our Health and Human Services Segments. We won 98% of total contract value up for rebid, securing some of our most important projects for the next several years. Our recently launched operations in the United Kingdom are trending as expected and we recently received notification of award for new strategic work in Canada,” commented Richard A. Montoni, Chief Executive Officer of MAXIMUS.
 
 
 
 
 
Health Services Segment
 
Health Services Segment revenue for the fourth quarter of fiscal 2011 increased 21% to $156.3 million compared to $129.0 million for the same period last year, principally driven by the expansion of Medicaid managed care and efforts to modernize PharmaNet in British Columbia. For fiscal 2011, revenue increased 10% to $565.9 million compared to $514.3 million the prior year, driven by new work and expansion on existing contracts.
 
Health Services Segment operating income for the fourth quarter grew 3% to $20.6 million with an operating margin of 13.2% compared to $20.0 million in the same period last year. For the full fiscal year, Segment operating income increased 15% to $74.7 million with a 13.2% operating margin compared to $64.7 million in fiscal 2010.
 
Human Services Segment
 
Human Services Segment revenue for the fourth quarter increased 12% (4% on a constant currency basis) to $93.8 million compared to $83.5 million in the prior year period. For fiscal 2011, revenue increased 15% (or 7% on a constant currency basis) to $363.8 million compared to $317.5 million last year. Segment revenue growth was driven by the Company’s international welfare-to-work business in Australia and the United Kingdom.
 
Human Services Segment operating income for the fourth quarter totaled $13.3 million with an operating margin of 14.2% compared to $12.4 million in the same period last year. For the full fiscal year, operating income grew 19% to $46.8 million with a 12.9% operating margin compared to $39.5 million in fiscal 2010.
 
Backlog, Sales and Pipeline
 
The Company reported record backlog totaling $2.9 billion at September 30, 2011, which is a 38% increase over backlog of $2.1 billion at September 30, 2010. The increased backlog was attributable to new wins and the successful award of several large rebids in fiscal 2011.
 
Year-to-date signed contract wins at September 30, 2011 totaled $1.609 billion compared to $685 million for fiscal 2010. New contracts pending (awarded but unsigned) totaled $691 million compared to $709 million last year. Sales opportunities (pipeline) at November 4, 2011, totaled $1.8 billion (consisting of $417 million in proposals pending, $272 million in proposals in preparation and $1.1 billion in proposals tracking) compared to $1.8 billion in fiscal 2010.
 
Balance Sheet and Cash Flows
 
Cash and cash equivalents totaled $173.0 million at September 30, 2011. For the full fiscal year, cash provided by operating activities from continuing operations totaled $97.6 million with free cash flow of $71.5 million, and for the fourth quarter cash provided by operating activities from continuing operations totaled $27.1 million with free cash flow of $17.6 million. The Company defines free cash flow as cash provided by operating activities from continuing operations less cash paid for property, equipment and capitalized software.
 
Days Sales Outstanding (DSO) from continuing operations were favorable at 56 days and driven by the timing of collections.
 
On August 31, 2011, MAXIMUS paid a quarterly cash dividend of $0.09 per share, and on October 12, 2011, the Company announced a $0.09 per share cash dividend, payable on November 30, 2011 to shareholders of record on November 15, 2011.
 
During the fourth quarter of fiscal 2011, MAXIMUS used $39.6 million to purchase 1,083,700 shares of MAXIMUS common stock under its Board-authorized share repurchase program. For fiscal 2011, MAXIMUS repurchased a total of 1,597,458 shares and used cash of $56.5 million for buyback activity. At September 30, 2011, the Company had $77.8 million available for future repurchases. However, on November 8, 2011, the Board of Directors increased the share repurchase authorization to $125 million.
 
 
 
 
 
Outlook
 
MAXIMUS is introducing fiscal 2012 revenue guidance in the range of $980 million to $1.015 billion. At September 30, 2011, 95% of forecasted 2012 revenue was in the form of backlog or options periods. The Company expects fiscal 2012 adjusted diluted earnings from continuing operations in the range of $2.20 to $2.30, which reflects the expected start-up losses in fiscal 2012 on the new Work Programme in the United Kingdom. The Company is expecting an improved fiscal 2012 outlook for its UK operations and now expects revenue of approximately $30 million and losses of approximately $9.5 million. The improvement is a result of higher volumes on the Work Programme, as well as a potential termination payment associated with the legacy Flexible New Deal anticipated in the first quarter.
 
Mr. Montoni concluded, “We remain keenly focused on creating the foundation for growth over the next three years and beyond. The need for high quality, efficient social services is a universal one and we believe there will continue to be demand for world-class administration of government programs from vendors who can deliver results. With our fiscal 2012 guidance now in place, we look forward to driving results for our clients and delivering long-term value to our shareholders.”
 
Website Presentation, Conference Call and Webcast Information
 
MAXIMUS will host a conference call this morning, November 10, 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 November 18, 2011. Callers can access the replay by calling:
 
877.660.6853 (Domestic)/201.612.7415 (International)
Replay account number: 316
Replay conference ID number: 381745
 
About MAXIMUS
 
MAXIMUS is a leading health and human services administrator for governments in the United States, United Kingdom, Canada and Australia. The Company delivers administrative solutions to improve the cost effectiveness, efficiency and quality of government-sponsored benefit programs, such as Medicaid, Medicare, Children's Health Insurance Program (CHIP), Health Insurance BC (British Columbia), as well as welfare-to-work and child support enforcement programs across the globe. The Company's primary customer base includes federal, provincial, state, county and municipal governments. Operating under its founding mission of Helping Government Serve the People®, MAXIMUS has more than 7,000 employees located in more than 220 offices worldwide. For more information, visit www.maximus.com.
 
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)
 
 
       
September 30,
       
2011
      
2010
ASSETS
      
(Unaudited)
            
Current assets:
                        
Cash and cash equivalents
      
$
172,950
        
$
155,321
  
Restricted cash
        
4,839
          
4,182
  
Accounts receivable—billed, net
        
146,900
          
136,260
  
Accounts receivable—unbilled
        
7,170
          
17,245
  
Prepaid income taxes
        
12,959
          
4,149
  
Deferred income taxes
        
19,256
          
13,290
  
Prepaid expenses and other current assets
        
27,202
          
25,702
  
Total current assets
        
391,276
          
356,149
  
Property and equipment, net
        
51,740
          
48,873
  
Capitalized software, net
        
26,616
          
24,715
  
Goodwill
        
71,323
          
71,251
  
Intangible assets, net
        
5,651
          
7,778
  
Deferred contract costs, net
        
8,020
          
6,708
  
Deferred income taxes
        
732
          
1,844
  
Deferred compensation plan assets
        
8,004
          
8,317
  
Other assets
        
1,917
          
2,106
  
Total assets
      
$
565,279
        
$
527,741
  
LIABILITIES AND SHAREHOLDERS’ EQUITY
                        
Current liabilities:
                        
Accounts payable
      
$
55,470
        
$
49,200
  
Accrued compensation and benefits
        
47,748
          
40,807
  
Deferred revenue
        
47,902
          
58,070
  
Current portion of long-term debt
        
42
          
—
  
Acquisition-related contingent consideration
        
1,840
          
923
  
Income taxes payable
        
5,104
          
7,120
  
Accrued liabilities
        
5,787
          
7,934
  
Liabilities of discontinued operations
        
—
          
634
  
Total current liabilities
        
163,893
          
164,688
  
Deferred revenue, less current portion
        
2,575
          
4,083
  
Long-term debt
        
1,654
          
1,411
  
Acquisition-related contingent consideration, less current portion
        
388
          
2,138
  
Income taxes payable, less current portion
        
1,484
          
1,793
  
Deferred income taxes
        
11,945
          
4,946
  
Deferred compensation plan liabilities, less current portion
        
8,883
          
9,893
  
Total liabilities
        
190,822
          
188,952
  
                         
Shareholders’ equity:
                        
Common stock, no par value; 60,000 shares authorized; 56,018 and 54,975 shares issued and 33,793 and 34,348 outstanding at September 30, 2011 and September 30, 2010, at stated amount, respectively
        
377,579
          
352,696
  
Treasury stock, at cost; 22,225 and 20,627 shares at September 30, 2011 and September 30, 2010, respectively
        
(416,850
)
        
(359,366
)
Accumulated other comprehensive income
        
12,480
          
14,530
  
Retained earnings
        
401,248
          
330,929
  
Total shareholders’ equity
        
374,457
          
338,789
  
Total liabilities and shareholders’ equity
      
$
565,279
        
$
527,741
  
 
 
 
 
 
MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Unaudited
 
 
     
Three Months
    
Year
     
Ended September 30,
    
Ended September 30,
     
2011
    
2010
    
2011
    
2010
Revenue
    
$
250,107
      
$
212,516
      
$
929,633
      
$
831,749
  
Cost of revenue
      
181,880
        
151,422
        
675,982
        
610,916
  
Gross profit
      
68,227
        
61,094
        
253,651
        
220,833
  
Selling, general and administrative expenses
      
34,560
        
30,904
        
132,058
        
118,778
  
Legal and settlement recovery, net
      
1,169
        
—
        
808
        
5,351
  
Operating income from continuing operations
      
34,836
        
30,190
        
122,401
        
107,406
  
Interest and other income, net
      
1,124
        
189
        
3,495
        
916
  
Income from continuing operations before income taxes
      
35,960
        
30,379
        
125,896
        
108,322
  
Provision for income taxes
      
10,403
        
9,698
        
43,754
        
38,925
  
Income from continuing operations
      
25,557
        
20,681
        
82,142
        
69,397
  
                                         
Discontinued operations, net of income taxes:
                                        
Income (loss) from discontinued operations
      
197
        
1,060
        
(133
)
      
1,040
  
Loss on disposal
      
(179
)
      
(28
)
      
(841
)
      
(28
)
Income (loss) from discontinued operations
      
18
        
1,032
        
(974
)
      
1,012
  
                                         
Net income
    
$
25,575
      
$
21,713
      
$
81,168
      
$
70,409
  
                                         
Basic earnings (loss) per share:
                                        
From continuing operations
    
$
0.75
      
$
0.60
      
$
2.39
      
$
1.99
  
From discontinued operations
      
—
        
0.03
        
(0.03
)
      
0.03
  
Basic earnings per share
    
$
0.75
      
$
0.63
      
$
2.36
      
$
2.02
  
                                         
Diluted earnings (loss) per share:
                                        
From continuing operations
    
$
0.73
      
$
0.58
      
$
2.31
      
$
1.93
  
From discontinued operations
      
—
        
0.03
        
(0.03
)
      
0.03
  
Diluted earnings per share
    
$
0.73
      
$
0.61
      
$
2.28
      
$
1.96
  
                                         
Dividends paid per share
    
$
0.09
      
$
0.06
      
$
0.30
      
$
0.24
  
Weighted average shares outstanding:
                                        
Basic
      
34,180
        
34,455
        
34,417
        
34,827
  
Diluted
      
35,258
        
35,614
        
35,531
        
35,930
  
 
 
 
 
 
MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 
     
Quarter Ended September 30,
    
Year ended September 30,
     
2011
    
2010
    
2011
    
2010
Cash flows from operating activities:
                                        
Net income
    
$
25,575
      
$
21,713
      
$
81,168
      
$
70,409
  
Adjustments to reconcile net income to net cash provided by operating activities:
                                        
Loss from discontinued operations
      
(18
)
      
(1,032
)
      
974
        
(1,012
)
Depreciation and amortization
      
6,366
        
4,692
        
22,845
        
18,340
  
Deferred income taxes
      
1,386
        
(1,891
)
      
1,758
        
(3,172
)
Deferred interest income on note receivable
      
—
        
—
        
—
        
263
  
Non-cash equity based compensation
      
2,549
        
1,935
        
9,485
        
7,918
  
Change in assets and liabilities:
                                        
Accounts receivable — billed
      
(22,471
)
      
(10,857
)
      
(11,584
)
      
38
  
Accounts receivable — unbilled
      
9,209
        
4,954
        
10,068
        
2,415
  
Prepaid expenses and other current assets
      
(4,462
)
      
264
        
(2,573
)
      
(1,740
)
Deferred contract costs
      
540
        
183
        
(1,309
)
      
1,541
  
Accounts payable
      
(148
)
      
(8,975
)
      
7,312
        
(407
)
Accrued compensation and benefits
      
4,996
        
1,122
        
4,490
        
7,883
  
Deferred revenue
      
2,196
        
8,745
        
(11,779
)
      
31,294
  
Income taxes
      
2,403
        
(3,145
)
      
(10,814
)
      
6,374
  
Other assets and liabilities
      
(1,021
)
      
2,914
        
(2,456
)
      
827
  
Cash provided by continuing operations
      
27,100
        
20,622
        
97,585
        
140,971
  
Cash used in discontinued operations
      
361
        
(378
)
      
(725
)
      
(2,530
)
Cash provided by operating activities
      
27,461
        
20,244
        
96,860
        
138,441
  
                                         
Cash flows from investing activities:
                                        
Proceeds from sale of discontinued operations, net of transaction costs
      
—
        
1,700
        
—
        
1,700
  
Acquisition of businesses, net of cash acquired
      
(1,021
)
      
(1,287
)
      
(1,021
)
      
(11,960
)
Purchases of property and equipment
      
(7,543
)
      
(3,553
)
      
(18,506
)
      
(13,936
)
Capitalized software costs
      
(1,915
)
      
(2,365
)
      
(7,608
)
      
(8,672
)
Proceeds from note receivable
      
172
        
—
        
237
        
473
  
Cash used in investing activities — continuing ops
      
(10,307
)
      
(5,505
)
      
(26,898
)
      
(32,395
)
                                         
Cash flows from financing activities:
                                        
Employee stock transactions
      
(70
)
      
84
        
8,980
        
2,763
  
Repurchases of common stock
      
(39,566
)
      
(17,699
)
      
(56,540
)
      
(40,217
)
Tax benefit due to option exercises and restricted stock units vesting
      
1,769
        
1,477
        
6,996
        
2,901
  
Repayment of long-term debt
      
—
        
—
        
—
        
(7
)
Issuance of long-term debt
      
—
        
199
        
304
        
533
  
Cash dividends paid
      
(3,086
)
      
(2,079
)
      
(10,327
)
      
(8,375
)
Cash used in financing activities — continuing ops
      
(40,953
)
      
(18,018
)
      
(50,587
)
      
(42,402
)
                                         
Effect of exchange rate changes on cash and cash equivalents
      
(7,267
)
      
5,541
        
(1,746
)
      
3,862
  
                                         
Net increase (decrease) in cash and cash equivalents
      
(31,066
)
      
2,262
        
17,629
        
67,506
  
                                         
Cash and cash equivalents, beginning of period
      
204,016
        
153,059
        
155,321
        
87,815
  
                                         
Cash and cash equivalents, end of period
    
$
172,950
      
$
155,321
      
$
172,950
      
$
155,321
  
 
 
 
 
 
MAXIMUS, Inc.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
 
 
     
Three Months Ended September 30,
    
Year Ended September 30,
     
2011
    
% (1)
    
2010
    
% (1)
    
2011
    
% (1)
    
2010
    
% (1)
                                                                         
Revenue:
                                                                        
Health Services
    
$
156,303
      
100
%
    
$
129,032
      
100
%
    
$
565,881
      
100
%
    
$
514,258
      
100
%
Human Services
      
93,804
      
100
%
      
83,484
      
100
%
      
363,752
      
100
%
      
317,491
      
100
%
Total
      
250,107
      
100
%
      
212,516
      
100
%
      
929,633
      
100
%
      
831,749
      
100
%
                                                                         
Gross Profit:
                                                                        
Health Services
      
39,183
      
25.1
%
      
36,009
      
27.9
%
      
147,239
      
26.0
%
      
130,276
      
25.3
%
Human Services
      
29,044
      
31.0
%
      
25,085
      
30.0
%
      
106,412
      
29.3
%
      
90,557
      
28.5
%
Total
      
68,227
      
27.3
%
      
61,094
      
28.7
%
      
253,651
      
27.3
%
      
220,833
      
26.6
%
                                                                         
Selling, general, and administrative expense:
                                                                        
Health Services
      
18,566
      
11.9
%
      
16,024
      
12.4
%
      
72,524
      
12.8
%
      
65,551
      
12.7
%
Human Services
      
15,756
      
16.8
%
      
12,695
      
15.2
%
      
59,590
      
16.4
%
      
51,067
      
16.1
%
Corporate/Other
      
238
      
NM
        
2,185
      
NM
        
(56
)
    
NM
        
2,160
      
NM
  
Total
      
34,560
      
13.8
%
      
30,904
      
14.5
%
      
132,058
      
14.2
%
      
118,778
      
14.3
%
                                                                         
Operating income from continuing operations:
                                                                        
Health Services
      
20,617
      
13.2
%
      
19,985
      
15.5
%
      
74,715
      
13.2
%
      
64,725
      
12.6
%
Human Services
      
13,288
      
14.2
%
      
12,390
      
14.8
%
      
46,822
      
12.9
%
      
39,490
      
12.4
%
Consolidating adjustments
      
(238
)
    
NM
        
(2,185
)
    
NM
        
56
      
NM
        
(2,160
)
    
NM
  
Subtotal: Segment Operating Income
      
33,667
      
13.5
%
      
30,190
      
14.2
%
      
121,593
      
13.1
%
      
102,055
      
12.3
%
Legal and settlement recovery (expense), net
      
1,169
      
NM
        
—
      
NM
        
808
      
NM
        
5,351
      
NM
  
Total
    
$
34,836
      
13.9
%
    
$
30,190
      
14.2
%
    
$
122,401
      
13.2
%
    
$
107,406
      
12.9
%
                                                                         

_________________________
(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 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
  
                                               
                                               
                             
Total
     
Q1 10
    
Q2 11
    
Q3 11
    
Q4 11
    
FY 11
Diluted EPS from continuing operations
    
$
0.50
    
$
0.54
      
$
0.56
    
$
0.73
      
$
2.31
  
                                               
Pro forma Adjustments:
                                              
Legal and settlement expense (recovery), net
      
-
      
-
        
-
      
(0.02
)
      
(0.02
)
Adjustment for taxation rate
      
0.01
      
0.01
        
0.01
      
(0.07
)
      
(0.04
)
Subtotal pro forma adjustments
      
-
      
-
        
-
      
-
        
-
  
                                               
Adjusted EPS from continuing operations
    
$
0.51
    
$
0.55
      
$
0.57
    
$
0.64
      
$
2.25
  
                                               
 
CONTACT:
MAXIMUS, Inc.
Lisa Miles, 800-MAXIMUS x11637