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