Exhibit 99.1

MAXIMUS Reports Third Quarter Results for Fiscal 2014

- Reiterates Fiscal 2014 Guidance -

RESTON, Va.--(BUSINESS WIRE)--August 7, 2014--MAXIMUS (NYSE: MMS), a leading provider of government services worldwide, today reported financial results for the three and nine months ended June 30, 2014.

Highlights for the third quarter of fiscal 2014 include:

Revenue for the third quarter of fiscal 2014 increased to $419.9 million compared to revenue of $334.3 million reported for the same period last year. The year-over-year increase in revenue was driven principally by growth in the Health Services Segment from new work and expansion on existing contracts. Revenue in the third quarter of fiscal 2014 grew 21% organically compared to the prior-year period.

For the third quarter of fiscal 2014, income from continuing operations, net of taxes, increased to $34.0 million, or $0.49 diluted earnings per share, compared to income from continuing operations of $28.0 million, or $0.40 diluted earnings per share, for the same period last year. As expected, adjusted diluted earnings per share increased 21% to $0.49 over $0.41 in the prior-year period, driven by growth in the Health Services Segment.

“We continue to see governments looking to partners, like MAXIMUS, to help them manage complex social benefit programs. These efforts are creating increased demand for our services over the long-term,” commented MAXIMUS Chief Executive Officer Richard A. Montoni. “MAXIMUS serves as a trusted supplier to governments, as they focus on achieving outcomes that matter, including validating and verifying the eligibility status of program beneficiaries, as well as helping citizens become more self-sufficient and economically independent.”

Health Services Segment

Health Services Segment revenue for the third quarter of fiscal 2014 increased 40% to $305.6 million compared to $217.9 million last year. The year-over-year revenue increase was driven by new work and the expansion of existing contracts, including work supporting the implementation and operation of the Affordable Care Act in the United States and revenue from the Health Management acquisition, which closed on July 1, 2013. Health Services Segment operating income for the third quarter increased 23% to $42.2 million (13.8% operating margin) driven by revenue growth. This compares to $34.4 million (15.8% operating margin) for the same period last year. The expected year-over-year decline in operating margin is largely due to an increase in lower-margin, cost-reimbursable work with the U.S. Federal Government.


Human Services Segment

Human Services Segment revenue for the third quarter of fiscal 2014 totaled $114.3 million and was adversely impacted by currency. This compares to $116.4 million for the same period last year. Human Services Segment operating income for the third quarter of fiscal 2014 totaled $13.0 million (11.4% operating margin) compared to $11.0 million (9.5% operating margin) last year. Operating margin in the third quarter of fiscal 2014 was bolstered by short-term engagements in the Segment’s U.S. consulting operations.

Sales and Pipeline

Year-to-date signed contract awards at June 30, 2014 totaled $1,060 million. This compares to $1,267 million reported for the same period last year, which included a large, five-year option exercise in Canada. In addition, new contracts pending (awarded but unsigned) totaled $428 million compared to $413 million reported for the same period in fiscal 2013.

Sales pipeline at June 30, 2014 was $3.0 billion (consisting of $631 million in proposals pending, $221 million in proposals in preparation and $2.2 billion in opportunities tracking). The total pipeline of opportunities was higher compared to the comparable period in fiscal 2013 and the second quarter of 2014. The increase in pipeline was driven by the addition to the sales pipeline of a large contract rebid in Australia that is expected to be bid in fiscal 2015, as well as new opportunities across multiple geographies and both segments. The sales pipeline only reflects opportunities, including new work, rebids and options, where the request for proposal is expected to be released within the next six months.

Balance Sheet and Cash Flows

Cash and cash equivalents at June 30, 2014 totaled $182.9 million, of which approximately 55% were held outside the United States. For the third quarter of fiscal 2014, cash provided by operating activities from continuing operations totaled $88.7 million, with free cash flow of $78.0 million. Strong collections in the third quarter led to an improvement of Days Sales Outstanding (DSO) to 63 days.

On May 30, 2014, MAXIMUS paid a quarterly cash dividend of $0.045 per share. On July 8, 2014, the Company announced a $0.045 per share cash dividend, payable on August 29, 2014 to shareholders of record on August 15, 2014.

During the third quarter of fiscal 2014, MAXIMUS repurchased 599,529 shares of the Company’s common stock for approximately $25.5 million. At June 30, 2014, the Company had approximately $187.3 million available for future repurchases under its Board-authorized share repurchase program, including the Board-approved $150 million increase announced on June 23, 2014. Subsequent to quarter close, the Company purchased an additional 403,433 shares for approximately $17.0 million.

Outlook

The Company is reiterating its fiscal year 2014 revenue and earnings guidance with a bias towards the upper end of the ranges. The Company continues to expect its fiscal year 2014 revenue to range between $1.68 billion and $1.73 billion and diluted earnings per share from continuing operations to range between $2.00 and $2.10.


Website Presentation, Conference Call and Webcast Information

MAXIMUS will host a conference call this morning, August 7, 2014, 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 http://investor.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 21, 2014. Callers can access the replay by calling:

877.660.6853 (Domestic)/201.612.7415 (International)

Replay conference ID number: 13587088

About MAXIMUS

MAXIMUS is a leading operator of government health and human services programs in the United States, United Kingdom, Canada, Australia and Saudi Arabia. The Company delivers business process services 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 programs around 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 approximately 11,000 employees worldwide. For more information, visit www.maximus.com.

Non-GAAP Measures

This release refers to non-GAAP financial measures, including organic growth, free cash flow and adjusted diluted earnings per share from continuing operations.

In order to calculate organic growth, we exclude revenue from Health Management for all periods presented. We believe that organic growth provides a useful basis for assessing the performance of the business excluding the effects of acquisitions.

We have provided a reconciliation of free cash flow to cash provided by operating activities from continuing operations. We believe that free cash flow is a useful basis for investors to compare our performance across periods or against our competitors. Free cash flow shows the effects of the Company’s operations and routine capital expenditure and excludes the cash flow effects of acquisitions, share repurchases, dividend payments and other financing transactions.

We have provided a reconciliation to adjusted diluted earnings per share. We believe that this measure is a useful basis for assessing the Company’s performance excluding the effects of legal and settlement expenses, acquisition expenses, tax benefits and a contract termination in fiscal year 2013.

The presentation of these non-GAAP numbers is not meant to be considered in isolation, nor as alternatives to cash flows from operating activities, diluted earnings per share, revenue growth or net income as measures of performance. These non-GAAP financial measures, as determined and presented by us, may not be comparable to related or similarly titled measures presented by other companies.

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 Annual Report filed with the Securities and Exchange Commission, found on www.maximus.com.


   
MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
 
Three Months Nine Months
Ended June 30, Ended June 30,
2014   2013 2014   2013
Revenue $ 419,899 $ 334,323 $ 1,265,506 $ 946,940
Cost of revenue 307,296   239,763   926,315   678,406  
Gross profit 112,603 94,560 339,191 268,534
Selling, general and administrative expenses 57,345 49,181 165,077 138,096
Acquisition-related expenses 1,174 1,500
Legal and settlement expenses/(recoveries), net   (182 ) 600   (202 )
Operating income from continuing operations 55,258 44,387 173,514 129,140
Interest and other income, net 9   701   913   2,444  
Income from continuing operations before income taxes 55,267 45,088 174,427 131,584
Provision for income taxes 21,226   17,052   65,424   50,051  
Income from continuing operations 34,041 28,036 109,003 81,533
 
Discontinued operations, net of income taxes:
Loss from discontinued operations (21 ) (3 ) (9 ) (597 )
Gain on disposal 118   67   210   169  
Income (loss) from discontinued operations 97   64   201   (428 )
 
Net income $ 34,138   $ 28,100   $ 109,204   $ 81,105  
 
Basic earnings/(loss) per share:
Income from continuing operations $ 0.50 $ 0.41 $ 1.60 $ 1.20
Income/(loss) from discontinued operations     0.01   (0.01 )
Basic earnings per share $ 0.50   $ 0.41   $ 1.61   $ 1.19  
 
Diluted earnings/(loss) per share:
Income from continuing operations $ 0.49 $ 0.40 $ 1.57 $ 1.17
Income/(loss) from discontinued operations       (0.01 )
Diluted earnings per share $ 0.49   $ 0.40   $ 1.57   $ 1.16  
 
Dividends paid per share $ 0.045   $ 0.045   $ 0.135   $ 0.135  
 
Weighted average shares outstanding:
Basic 67,659   68,162   67,982   68,168  
Diluted 69,031   69,867   69,369   69,864  

   
MAXIMUS, Inc.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
 
June 30,
2014
September 30,
2013
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 182,942 $ 125,617
Restricted cash 13,356 12,176
Accounts receivable — billed and billable, net of reserves of $3,831 and $3,828 274,544 272,636
Accounts receivable — unbilled 17,006 20,320
Prepaid income taxes 2,620 358
Deferred income taxes 27,773 26,443
Prepaid expenses and other current assets 36,159 32,049
Total current assets 554,400 489,599
 
Property and equipment, net 71,961 77,710
Capitalized software, net 41,482 40,456
Goodwill 175,471 171,867
Intangible assets, net 42,117 42,039
Deferred contract costs, net 13,750 14,318
Deferred income taxes 1,567 1,179
Deferred compensation plan assets 11,242 10,314
Other assets, net 10,090 10,496
Total assets $ 922,080 $ 857,978
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 101,313 $ 109,020
Accrued compensation and benefits 73,133 83,280
Deferred revenue 57,447 53,137
Current portion of long-term debt 164 170
Income taxes payable 17,743 8,327
Other liabilities 11,576 8,373
Total current liabilities 261,376 262,307
Deferred revenue, less current portion 30,056 32,953
Long-term debt 1,150 1,319
Deferred taxes 16,965 16,359
Deferred compensation plan liabilities, less current portion 17,422 13,953
Other liabilities 6,609 1,579
Total liabilities 333,578 328,470
 
Shareholders’ equity:
Common stock 430,642 415,271
Accumulated other comprehensive income 12,906 7,987
Retained earnings 144,954 106,250
Total shareholders’ equity 588,502 529,508
Total liabilities and shareholders’ equity $ 922,080 $ 857,978

   
MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
 
Three Months
Ended June 30,
Nine Months
Ended June 30,
2014   2013 2014   2013
Cash flows from operating activities:
Net income $ 34,138 $ 28,100 $ 109,204 $ 81,105
Adjustments to reconcile net income to net cash provided by operating activities:
(Income) loss from discontinued operations (97 ) (64 ) (201 ) 428
Depreciation and amortization 12,538 7,829 36,297 25,763
Deferred income taxes 810 (3,727 ) (577 ) 3,030
Non-cash equity based compensation 4,248 3,646 12,809 10,708
 
Change in assets and liabilities:
Accounts receivable — billed 36,154 (16,761 ) (1,362 ) (50,072 )
Accounts receivable — unbilled 3,330 2,231 3,280 (5,921 )
Prepaid expenses and other current assets (3,882 ) (1 ) (1,343 ) (2,522 )
Deferred contract costs (1,423 ) (1,038 ) 556 (2,451 )
Accounts payable and accrued liabilities (9,172 ) 7,752 (5,337 ) 16,480
Accrued compensation and benefits 9,960 8,818 2,510 6,941
Deferred revenue 6,299 (6 ) 88 (2,940 )
Income taxes (3,991 ) 12,550 6,162 5,989
Other assets and liabilities (178 ) 339   3,212   2,624  
Cash provided by operating activities – continuing ops 88,734 49,668 165,298 89,162
Cash used in operating activities – discontinued ops (44 ) (33 ) (148 ) (587 )
Cash provided by operating activities 88,690 49,635 165,150 88,575
 
Cash flows from investing activities:
Purchases of property and equipment (8,873 ) (11,518 ) (18,389 ) (24,869 )
Capitalized software costs (1,860 ) (5,412 ) (9,177 ) (13,652 )
Acquisition of Business (2,670 )
Proceeds from settlement of final PSI price 3,380
Proceeds from note receivable 196   113   350   285  
Cash used in investing activities (10,537 ) (16,817 ) (29,886 ) (34,856 )
 
Cash flows from financing activities:
Repurchases of common stock (24,658 ) (12,411 ) (59,354 ) (27,814 )
Employee tax withholding on restricted stock units vesting (1,776 ) (2,191 ) (14,681 ) (8,868 )
Tax benefit due to option exercises and RSU vesting 2,925 4,680
Cash dividends paid (3,043 ) (3,071 ) (9,181 ) (9,202 )
Stock option exercises 627 88 1,145 1,840
Issuance of long-term debt 15,000
Repayment of long-term debt (40 ) (43 ) (15,122 ) (130 )
Cash used in financing activities (28,890 ) (17,628 ) (79,268 ) (39,494 )
 
Effect of exchange rate changes on cash and cash equivalents 2,356 (14,622 ) 1,329 (15,626 )
 
Net increase/(decrease) in cash and cash equivalents 51,619 568 57,325 (1,401 )
 
Cash and cash equivalents, beginning of period 131,323   187,343   125,617   189,312  
 
Cash and cash equivalents, end of period $ 182,942   $ 187,911   $ 182,942   $ 187,911  

   
MAXIMUS, Inc.
SEGMENT INFORMATION – GAAP BASIS
(Amounts in thousands)
(Unaudited)
 
Three Months Ended June 30, Nine Months Ended June 30,
2014   % (1)   2013   % (1) 2014   % (1)   2013   % (1)
 
Revenue:
Health Services $ 305,647 100 % $ 217,901 100 % $ 928,865 100 % $ 591,847 100 %
Human Services 114,252 100 % 116,422 100 % 336,641 100 % 355,093 100 %
Total 419,899 100 % 334,323 100 % 1,265,506 100 % 946,940 100 %
 
Gross Profit:
Health services 79,679 26.1 % 62,868 28.9 % 241,558 26.0 % 162,778 27.5 %
Human Services 32,924 28.8 % 31,692 27.2 % 97,633 29.0 % 105,756 29.8 %
Total 112,603 26.8 % 94,560 28.3 % 339,191 26.8 % 268,534 28.4 %
 
Selling, general, and administrative expense:
Health Services 37,430 12.2 % 28,507 13.1 % 108,980 11.7 % 78,882 13.3 %
Human Services 19,915 17.4 % 20,674 17.8 % 56,097 16.7 % 59,597 16.8 %
Corporate/Other NM NM NM (383 ) NM
Total 57,345 13.7 % 49,181 14.7 % 165,077 13.0 % 138,096 14.6 %
 
Operating income from continuing operations:
Health services 42,249 13.8 % 34,361 15.8 % 132,578 14.3 % 83,896 14.2 %
Human Services 13,009 11.4 % 11,018 9.5 % 41,536 12.3 % 46,159 13.0 %
Corporate/Other NM NM NM 383 NM
Subtotal:
Segment Operating Income 55,258 13.2 % 45,379 13.6 % 174,114 13.8 % 130,438 13.8 %
Acquisition-related expenses NM 1,174 NM NM 1,500 NM
Legal and settlement expenses/ (recoveries) NM (182 ) NM 600 NM (202 ) NM
Total $ 55,258 13.2 % $ 44,387 13.3 % $ 173,514 13.7 % $ 129,140 13.6 %
 
(1) Percentage of respective segment revenue. Percentages not considered meaningful are marked “NM.”

 
MAXIMUS, Inc.
ADJUSTED DILUTED EPS FROM CONTINUING OPERATIONS
FY 2014 and FY 2013
 
Quarter Ended
Dec. 31,

2013

  Mar. 31,

2014

  Jun. 30,

2014

   
Diluted EPS from continuing operations-GAAP basis $0.48 $0.59 $0.49
 
Adjustments:
Legal and settlement expenses 0.01
Tax Adjustment (0.01

)

Subtotal pro forma adjustments
 
Adjusted diluted EPS from continuing operations $0.48 $0.59 $0.49
 
 
Quarter Ended Year Ended
Dec. 31,

2012

Mar. 31,

2013

Jun. 30,

2013

Sept. 30,

2013

Sept. 30,

2013

Diluted EPS from continuing operations-GAAP basis $0.31 $0.45 $0.40 $0.51 $1.68  
 
Adjustments:
Legal, settlement and acquisition-related expenses, net 0.01 0.01
Terminated Contract (0.09 ) (0.09 )
Subtotal pro forma adjustments (0.09 ) 0.01 (0.08 )
 
Adjusted Diluted EPS from continuing operations $0.31 $0.36 $0.41 $0.51 $1.60  

   
MAXIMUS, Inc.
FREE CASH FLOW
(Amounts in thousands)
(Unaudited)
 
Three Months
Ended June 30,
Nine Months
Ended June 30,
2014   2013 2014   2013
Cash provided by operating activities – continuing operations $ 88,734 $ 49,668 $ 165,298 $ 89,162
Purchases of property and equipment (8,873 ) (11,518 ) (18,389 ) (24,869 )
Capitalized software costs (1,860 ) (5,412 ) (9,177 ) (13,652 )
Free cash flow from continuing operations $ 78,001   $ 32,738   $ 137,732   $ 50,641  
 

CONTACT:
MAXIMUS
Lisa Miles, 703-251-8637
lisamiles@maximus.com