Maximus, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Business segments

Business segments

12 Months Ended

Sep. 30, 2015

Business segments

Business segments

2. Business segments

The Company is organized and managed based upon the services it provides.

As our business changes, we revise our internal reporting and the manner in which our Chief Executive Officer operates and reviews the results of our business. This reporting forms the basis for our external reporting of our business segments. During the fourth quarter of fiscal year 2015, we revised our reporting structure to accommodate three business segments, adding a U.S. Federal Services Segment that comprises the work we perform for the U.S. Federal Government, as well as some U.S.-based appeals work. The businesses within this new segment were previously included within our Health Services Segment and include the results of the businesses acquired with Acentia, LLC (Acentia) in April 2015. We made these changes to our operations and internal reporting due to our acknowledgement that the U.S. Federal Government is a distinct customer with different procurement methods and regulations, the scale of our business with the U.S. Federal Government and the growth of our federal business from a primarily health-focused business to a broader business covering several federal agencies.

Expenses which are not specifically included in the segments are included in the corporate category, which primarily consist of amortization of intangible assets and the direct costs of acquisitions. These corporate costs are excluded from measuring each segment's operating performance. We also transferred a small division from our Health Services Segment to our Human Services Segment.

The results of these segments for the three years ended September 30, 2015 are shown below (in thousands). These results are presented for all years on a basis consistent with our existing business segments.

	Year ended September 30,
	2015			2014			2013
Revenue:
Health Services	$	1,109,238		$	906,650		$	691,565
U.S. Federal Services		502,484			341,840			167,258
Human Services		488,099			452,422			472,456

Total	$	2,099,821		$	1,700,912		$	1,331,279


Gross Profit:
Health Services	$	254,108		$	213,728		$	172,336
U.S. Federal Services		118,646			110,793			73,694
Human Services		139,963			127,602			140,003

Total	$	512,717		$	452,123		$	386,033


Selling, general and administrative expense:
Health Services	$	99,815		$	98,172		$	83,131
U.S. Federal Services		59,252			47,695			31,128
Human Services		79,719			74,444			78,970
Other		6			614			598

Total	$	238,792		$	220,925		$	193,827


Operating income
Health Services	$	154,293		$	115,556		$	89,205
U.S. Federal Services		59,394			63,098			42,566
Human Services		60,244			53,158			61,033
Amortization of intangible assets		(9,348	)		(5,890	)		(4,883	)
Acquisition-related expenses		(4,745	)		—			(2,168	)
Other		(6	)		(614	)		(598	)

Total	$	259,832		$	225,308		$	185,155


Depreciation and amortization:
Health Services	$	27,694		$	23,994		$	14,768
U.S. Federal Services		10,363			9,557			3,355
Human Services		8,792			9,227			12,810

Total	$	46,849		$	42,778		$	30,933

Acquisition-related expenses are costs directly incurred from the purchases of Acentia and Remploy in 2015 and HML in 2013, as well as any unsuccessful transactions.

We principally operate in the United States, the United Kingdom, Australia, Canada, Saudi Arabia and New Zealand.

Our revenue was distributed as follows (in thousands):

	Year ended September 30,
	2015		2014		2013
United States	$	1,559,769	$	1,306,026	$	999,419
United Kingdom		267,702		128,363		65,718
Australia		178,167		170,727		157,383
Rest of World		94,183		95,796		108,759

Total	$	2,099,821	$	1,700,912	$	1,331,279

Identifiable assets for the segments are shown below (in thousands):

	Year Ended September 30,
	2015		2014
Health Services	$	483,215	$	415,821
U.S. Federal Services		441,521		95,367
Human Services		189,855		152,243
Corporate/Other		165,580		237,565

Total	$	1,280,171	$	900,996

Our long-lived assets, consisting of property and equipment, capitalized software costs and deferred compensation plan assets, were distributed as follows (in thousands):

	Year Ended September 30,
	2015		2014
United States	$	120,130	$	93,500
Australia		33,591		8,769
Canada		19,720		27,043
United Kingdom		16,141		7,731
Rest of World		41		63

Total	$	189,623	$	137,106

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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