Maximus Inc
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Information Technology : IT Services | Small Cap Blend
Company profile

Maximus, Inc. is an operator of government health and human services programs and provider of technology solutions to governments. The Company operates through three segments: U.S. Services, U.S. Federal Services, and Outside the U.S. The U.S. Services segment provides a variety of business process services (BPS), such as program administration, appeals and assessments, and related consulting work for United States state and local government programs. The U.S. Federal Services segment delivers end-to-end solutions that help various United States federal government agencies, including program operations and management, clinical services, and technology solutions. The Outside the U.S. segment provides BPS for international governments and commercial clients. The services provided by the segment include health and disability assessments, program administration for employment services, wellbeing solutions, and other job seeker-related services.

Closing Price
$71.94
Day's Change
0.40 (0.56%)
Bid
--
Ask
--
B/A Size
--
Day's High
72.45
Day's Low
71.31
Volume
(Average)
Volume:
321,157

10-day average volume:
313,980
321,157

Maximus Reports Fourth Quarter and Full Year Results for Fiscal Year 2022

4:45 pm ET November 21, 2022 (BusinessWire) Print

Maximus (NYSE: MMS), a leading provider of government services worldwide, reported financial results for the three months and year ended September 30, 2022.

Highlights for fiscal year 2022 include:

Revenue increased 8.9% to $4.63 billion, compared to $4.25 billion for the prior year. A combination of organic and acquired growth more than offset the $800 million decline in COVID-19 response work. Diluted earnings per share were $3.29, and adjusted diluted earnings per share were $4.37. Results for the three months ended September 30, 2022, included combined benefits of $0.33 earnings per share from several contractual and legal items and a one-time gain on sale. Record signed contracts awards of $10.5 billion, which includes awarded Centers for Medicare & Medicaid Services contract for Contact Center Operations valued at $6.6 billion. A quarterly cash dividend of $0.28 per share payable on November 30, 2022, to shareholders of record on November 15, 2022.

"Our fiscal year 2022 results provide us confidence that the foundation we laid for the core business is yielding the desired outcome. There were record signed contract awards and the backlog of business is at an all-time high," said Bruce Caswell, President and Chief Executive Officer. "Expansion of core work and new business wins that take full advantage of our capabilities more than replaced the anticipated decline in short-term work."

Consolidated Fiscal Year 2022 Results

Revenue for fiscal year 2022 increased 8.9% to $4.63 billion, compared to $4.25 billion for the prior year. Organic growth from new or expanded programs and full-period contributions of the U.S. Federal Services acquisitions drove the $377 million revenue increase, which was net of $800 million less short-term COVID-19 response work. Adjusting for COVID-19 response work, normalized organic growth was approximately 18% over the prior year and driven by contributions from all three segments.

For fiscal year 2022, the operating margin was 7.0% and the adjusted margin operating margin was 9.0%. This compares to margins of 9.6% and 10.6%, respectively, for the prior year. Diluted earnings per share were $3.29 and adjusted diluted earnings per share were $4.37. This compares to $4.67 and $5.19, respectively, for the prior-year period.

Results for the three months ended September 30, 2022, included combined benefits of $28 million, or $0.33 earnings per share, from several contractual and legal items worth $17 million, or $0.20 earnings per share, resolved in the quarter and a one-time gain on the sale of the company's former headquarters worth $11.0 million, or $0.13 diluted earnings per share.

The Outside the U.S. Segment realized a loss in fiscal year 2022 primarily due to the unfortunate rebid outcome in Australia, which included severance costs and the write-down on a percentage of completion project disclosed in the third quarter.

U.S. Federal Services Segment

U.S. Federal Services Segment revenue for fiscal year 2022 increased 19.4% to $2.26 billion, compared to $1.89 billion reported for the prior year. The acquisitions of Attain Federal, Veterans Evaluation Services (VES), and Aidvantage had full-period contributions. Organic growth stemming from new work wins and expansion on recompete wins helped offset the decline in the COVID-19 response work. Adjusting for COVID-19 response work, normalized organic growth in the segment was approximately 4.8% over the prior year.

The segment operating margin for fiscal year 2022 was 10.4% as compared to 10.0% reported for the prior year. Approximately one-third of the contractual and legal items benefited segment results for the three months ended September 30, 2022.

U.S. Services Segment

U.S. Services Segment revenue for fiscal year 2022 decreased by 3.3% to $1.61 billion, compared to $1.66 billion reported in the prior year. The expected decline in COVID-19 response work was tempered by growth from previously disclosed new contract wins in the segment. Adjusting for COVID-19 response work, normalized organic growth in the segment was more than 30% over the prior year.

The segment operating margin for fiscal year 2022 was 11.3% compared to 15.3% reported for the prior-year period. Approximately one-third of the contractual and legal items benefited segment results for the three months ended September 30, 2022. Margins were comparatively lower over the prior year, particularly in the second half of fiscal year 2022, as the highly-profitable short-term COVID-19 response work concluded. Meanwhile, redetermination activities remained paused as a result of the PHE, acting as a headwind to the earnings potential of the segment.

Outside the U.S. Segment

Outside the U.S. Segment revenue for fiscal year 2022 increased 9.2% to $763.7 million as compared to $699.1 million reported for the prior year, which was net of a 6% currency headwind. Organic growth in the segment was approximately 11% with U.K. Restart Programme being the largest contributor as caseload ramped across fiscal year 2022.

The segment realized an operating loss of $15.2 million for fiscal year 2022, compared to an operating profit of $20.1 million in the prior year. The fiscal 2022 loss was primarily due to an unfortunate rebid outcome in Australia and a write-down on a percentage of completion project disclosed in the prior quarter.

Sales and Pipeline

Year-to-date signed contract awards at September 30, 2022, totaled $10.5 billion and contracts pending (awarded but unsigned) totaled $800.1 million. These awards include the previously announced Centers for Medicare & Medicaid Services Contract for contact Center Operations valued at $6.6 billion, which contributed to the higher 2.3x book-to-bill ratio at September 30, 2022.

The sales pipeline at September 30, 2022, was $30.7 billion (comprised of approximately $3.4 billion in proposals pending, $3.10 billion in proposals in preparation, and $24.2 billion in opportunities tracking). New work opportunities represent 73.5% of the total sales pipeline.

Balance Sheet and Cash Flows

At September 30, 2022, cash and cash equivalents totaled $40.7 million and gross debt was $1.37 billion. The ratio of debt, net of allowed cash, to pro-forma EBITDA for the full year ended September 30, 2022, as calculated in accordance with our credit agreement, was 2.6x. This reflects debt pay downs of approximately $128 million in the most recent quarter and compares to 2.9x at June 30, 2022. In the near term, the company plans to continue prioritizing debt pay downs using its free cash flow.

For fiscal year 2022, cash flows from operating activities totaled $289.8 million and free cash flow was $233.7 million. This compares to $517.3 million and $480.8 million, respectively, in the prior year, which benefited from additional short-term COVID-19 response work earnings and working capital benefits totaling more than $100 million.

As of September 30, 2022, DSO were 62 days. The company is updating its target range to 60 to 70 days.

On October 7, 2022, our Board of Directors declared a quarterly cash dividend of $0.28 for each share of our common stock outstanding. The dividend is payable on November 30, 2022, to shareholders of record on November 15, 2022.

FY23 Outlook

Maximus is establishing fiscal year 2023 guidance. The company expects revenue to range between $4.75 billion and $4.90 billion. Adjusted operating income is expected to range between $390 million and $415 million which excludes an estimated $94 million of expense for amortization of intangible assets. Adjusted diluted earnings per share is expected to range between $3.70 and $4.00 per share.

Guidance assumes that redetermination activities in the U.S. Services segment continue to be paused across fiscal year 2023 as there is currently no projected end date to the PHE. In addition, the short-term COVID response work has concluded and does not contribute to the company's forecast for fiscal year 2023.

Free cash flow is expected to range between $225 million and $275 million for fiscal year 2023. The company forecasts interest expense between $85 million and $95 million, an effective income tax rate between 24.5% and 25.5%, and weighted average shares outstanding between 61.2 million and 61.3 million shares for fiscal year 2023.

"As we enter fiscal year 2023, we conclude a formative but somewhat volatile period for the business, and now have the opportunity to capitalize on the organic growth we are seeing in the core business, and execution of our recently refreshed strategy," Caswell continued. "Our expectations for the upcoming year illustrate while there remain elements in our environment influenced by federal policy decisions, they represent upside opportunity for the business on top of a base that is supported by a stable business model with long-term contracts that provide essential and in-demand government services."

Conference Call and Webcast Information

Maximus will host a conference call tomorrow, November 22, 2022, at 9:00 a.m. ET. Shareholders are invited to submit questions for management's consideration by emailing IR@maximus.com up to one hour prior to the call.

The call is open to the public and available by webcast or by phone at:

877.407.8289 (Domestic) / +1.201.689.8341 (International)

For those unable to listen to the live call, a recording of the webcast will be available on investor.maximus.com.

About Maximus

As a leading strategic partner to governments across the globe, Maximus helps improve the delivery of public services amid complex technology, health, economic, environmental, and social challenges. With a deep understanding of program service delivery, acute insights that achieve operational excellence, and an extensive awareness of the needs of the people being served, our employees advance the critical missions of our partners. Maximus delivers innovative business process management, impactful consulting services, and technology solutions that provide improved outcomes for the public and higher levels of productivity and efficiency of government-sponsored programs. For more information, visit maximus.com.

Non-GAAP Measures and Risk Factors

This release refers to non-GAAP measures and other indicators, including organic growth normalized for the effects of COVID-19 response work, free cash flow, operating income and EPS adjusted for amortization of intangible assets, pro-forma EBITDA, and other non-GAAP measures.

A description of these non-GAAP measures, the reasons why we use and present them, and details as to how they are calculated are included in our earnings presentation and forthcoming Form 10-K.

The presentation of these non-GAAP numbers is not meant to be considered in isolation, nor as alternatives to cash flows from operations, 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 risks could cause the Company's actual results to differ materially from those indicated by such forward-looking statements. A summary of risk factors can be found in Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended September 30, 2022, which will be filed with the Securities and Exchange Commission (SEC) on November 22, 2022. The Company's SEC reports are accessible on maximus.com.

 
                                                                                                                      Maximus, Inc.
                                                                                                          Consolidated Statements of Operations
                                                                                                                       (Unaudited)
 
                                                                For the Three Months                                                                        For the Year Ended
                                                                                    Ended September 30,                                                                                              September 30,
                                                 ------------------------------------------------------------------------------------                          ------------------------------------------------------------------------------------
                                            2022                                2021                                2022                                2021
                                                 ------------------------------                       ----------------------------------                       ------------------------------                       ----------------------------------
                                                                                                             (in thousands, except per share amounts)
Revenue                                                             $  1,177,031                      $      1,106,131                      $  4,631,018                      $      4,254,485
                                                      904,048            887,725      3,691,208          3,307,510
   Cost of revenue
                                                 -------------------- ----------                      -------------------- --------------                      -------------------- ----------                      -------------------- --------------
Gross profit                                          272,983            218,406        939,810            946,975
                                                      146,991            129,590        534,493            494,088
   Selling, general, and administrative expenses
                                                       22,514             20,639         90,465             44,357
   Amortization of intangible assets
                                                       11,046     --         11,046     --
   Gain on sale of land and building
                                                 -------------------- ---------- -------------------- -------------------- -------------- -------------------- -------------------- ----------                      -------------------- --------------
Operating income                                      114,524             68,177        325,898            408,530
                                                       16,098             10,695         45,965             14,744
   Interest expense
                                                          742                521          2,835             10,105
   Other expense, net
                                                 -------------------- ----------                      -------------------- --------------                      -------------------- ----------                      -------------------- --------------
Income before income taxes                             97,684             56,961        277,098            383,681
                                                       28,617              4,947         73,270             92,481
   Provision for income taxes
                                                 -------------------- ----------                      -------------------- --------------                      -------------------- ----------                      -------------------- --------------
Net income                                                          $     69,067                      $         52,014                      $    203,828                      $        291,200
                                                 ==================== ==========                      ==================== ==============                      ==================== ==========                      ==================== ==============
                                                                                
Earnings per share:                                                                                
                                                                    $       1.13                      $           0.84                      $       3.30                      $           4.69
   Basic
                                                                    $       1.13                      $           0.83                      $       3.29                      $           4.67
   Diluted
Weighted average shares outstanding:                                                                              
                                                       61,010             62,082         61,774             62,072
   Basic
                                                       61,292             62,506         61,969             62,365
   Diluted
                                                                                
Dividends declared per share                                        $       0.28                      $           0.28                      $       1.12                      $           1.12
                                                                                                                                                  Maximus, Inc.
                                                                                                                                           Consolidated Balance Sheets
                                                                                                                                                   (Unaudited)
 
                                                                                                                                                                                                                     As of September 30,
                                                                                                                                                                                   ----------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                     2022            2021    
                                                                                                                                                                                   -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                                                                       (in thousands)
Assets:                                                                                                                                                                                                                
                                                                                                                                                                                                      $    40,658                        $   135,061  
   Cash and cash equivalents
                                                                                                                                                                                       807,110         834,819  
   Accounts receivable, net
                                                                                                                                                                                         2,158           5,413  
   Income taxes receivable
                                                                                                                                                                                       182,387         104,201  
   Prepaid expenses and other current assets
                                                                                                                                                                                   -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                                     1,032,313       1,079,494  
      Total current assets
                                                                                                                                                                                        52,258          62,627  
   Property and equipment, net
                                                                                                                                                                                        58,740          42,868  
   Capitalized software, net
                                                                                                                                                                                       132,885         179,349  
   Operating lease right-of-use assets
                                                                                                                                                                                     1,779,415       1,774,406  
   Goodwill
                                                                                                                                                                                       804,904         879,168  
   Intangible assets, net
                                                                                                                                                                                        47,732          36,486  
   Deferred contract costs, net
                                                                                                                                                                                        37,050          46,738  
   Deferred compensation plan assets
                                                                                                                                                                                         4,970             990  
   Deferred income taxes
                                                                                                                                                                                        42,447          16,839  
   Other assets
                                                                                                                                                                                   -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                                                      $ 3,992,714                        $ 4,118,965
      Total assets
                                                                                                                                                                                   ==================== ========= ====================                      ==================== =========
Liabilities and Shareholders' Equity:                                                                                                                                                                                  
                                                                                                                                                                                                                       
   Liabilities:
                                                                                                                                                                                                      $   264,553                        $   305,565  
      Accounts payable and accrued liabilities
                                                                                                                                                                                       178,199         186,809  
      Accrued compensation and benefits
                                                                                                                                                                                        87,146          98,588  
      Deferred revenue, current portion
                                                                                                                                                                                           718           6,782  
      Income taxes payable
                                                                                                                                                                                        63,458          80,555  
      Long-term debt, current portion
                                                                                                                                                                                        63,999          76,077  
      Operating lease liabilities, current portion
                                                                                                                                                                                       116,374          35,057  
      Other current liabilities
                                                                                                                                                                                   -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                                       774,447         789,433  
         Total current liabilities
                                                                                                                                                                                        21,414          35,932  
      Deferred revenue, non-current portion
                                                                                                                                                                                       206,099         194,638  
      Deferred income taxes
                                                                                                                                                                                     1,292,483       1,429,137  
      Long-term debt, non-current portion
                                                                                                                                                                                        40,210          47,405  
      Deferred compensation plan liabilities, non-current portion
                                                                                                                                                                                        86,175         121,771  
      Operating lease liabilities, non-current portion
                                                                                                                                                                                        22,515          20,320  
      Other liabilities
                                                                                                                                                                                   -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                                     2,443,343       2,638,636  
         Total liabilities
                                                                                                                                                                                                                       
   Shareholders' equity:
                                                                                                                                                                                       557,978         532,411  
      Common stock, no par value; 100,000 shares authorized; 60,774 and 61,954 shares issued and outstanding as of September 30, 2022 and 2021, respectively (shares in thousands)
                                                                                                                                                                                       (33,961 )                          (39,908 )
      Accumulated other comprehensive loss
                                                                                                                                                                                     1,025,354         987,826  
      Retained earnings
                                                                                                                                                                                   -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                                     1,549,371       1,480,329  
         Total shareholders' equity
                                                                                                                                                                                   -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                                                      $ 3,992,714                        $ 4,118,965  
         Total liabilities and shareholders' equity
                                                                                                                                                                                   ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                       Maximus, Inc.
                                                                                                                                                                           Consolidated Statements of Cash Flows
                                                                                                                                                                                        (Unaudited)
 
                                                                                                                              For the Three Months                                                                                                                         For the Year
                                                                                                                                                  Ended September 30,                                                                                                                                         Ended September 30,
                                                                                        --------------------------------------------------------------------------------------------------------------------------------                            --------------------------------------------------------------------------------------------------------------------------------
                                                                            2022                 2021                 2022                 2021       
                                                                                        -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
                                                                                                                                                                                                               (in thousands)
Cash flows from operating activities:                                                                                                                                                                            
                                                                                                           $         69,067                        $         52,014                        $        203,828                        $        291,200  
   Net income
                                                                                                                                                                                                                 
   Adjustments to reconcile net income to cash flows from operations:
                                                                                                  12,455               12,697               42,330               46,361  
      Depreciation and amortization of property, equipment and capitalized software
                                                                                                  22,514               20,639               90,465               44,357  
      Amortization of intangible assets
                                                                                                   1,066                  865                3,012                  865  
      Amortization of debt issuance costs and debt discount
                                                                                          --       --       --                8,509  
      Costs related to debt financing
                                                                                                 (11,046 )                        --              (11,046 )                        --  
      Gain on sale of land and building
                                                                                                  17,383              (10,209 )                                10,204               (6,577 )
      Deferred income taxes
                                                                                                   8,396                7,731               30,476               28,554  
      Stock compensation expense
                                                                                                                                                                                                                 
      Change in assets and liabilities, net of effects of business combinations:
                                                                                                  54,129              292,882               14,132               38,578  
      Accounts receivable
                                                                                                 (16,199 )                               (24,268 )                                (6,745 )                               (16,726 )
      Prepaid expenses and other current assets
                                                                                                  (4,354 )                                   347              (12,056 )                               (15,426 )
      Deferred contract costs
                                                                                                   9,855              (89,969 )                               (32,722 )                                26,904  
         Accounts payable and accrued liabilities
                                                                                                 (10,558 )                               (16,275 )                                 3,288               18,112  
         Accrued compensation and benefits
                                                                                                 (19,684 )                                30,028              (19,342 )                                53,652  
         Deferred revenue
                                                                                                    (688 )                               (17,898 )                               (13,510 )                                (2,733 )
         Income taxes
                                                                                                     218                4,237               (1,112 )                                 5,314  
         Operating lease right-of-use assets and liabilities
                                                                                                 (12,491 )                                 7,842              (11,363 )                                (3,622 )
         Other assets and liabilities
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                 120,063              270,663              289,839              517,322  
         Net cash provided by operating activities
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Cash flows from investing activities:                                                                                                                                                                            
                                                                                                 (20,209 )                                (4,432 )                               (56,145 )                               (36,565 )
   Purchases of property and equipment and capitalized software
                                                                                                    (151 )                               (19,442 )                               (14,295 )                            (1,798,915 )
   Acquisitions of businesses, net of cash acquired
                                                                                                  14,431       --               16,431       --  
   Proceeds from the sale of land and building
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                  (5,929 )                               (23,874 )                               (54,009 )                            (1,835,480 )
         Net cash used in investing activities
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Cash flows from financing activities:                                                                                                                                                                            
                                                                                                 (16,954 )                               (17,213 )                               (68,716 )                               (68,838 )
   Cash dividends paid to Maximus shareholders
                                                                                                 (22,255 )                        --              (96,119 )                                (3,363 )
   Purchases of Maximus common stock
                                                                                          --       --               (9,673 )                                (9,818 )
   Tax withholding related to RSU vesting
                                                                                                  (1,369 )                        --               (1,369 )                        --  
   Payments for contingent consideration
                                                                                          --                 (454 )                        --              (23,213 )
   Payments for debt financing costs
                                                                                                 200,000               33,129              615,000            2,318,129  
   Proceeds from borrowings
                                                                                                (327,685 )                              (216,603 )                              (770,658 )                              (824,483 )
   Principal payments for debt
                                                                                                  83,264                   42               83,264               (2,721 )
   Other
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                 (84,999 )                              (201,099 )                              (248,271 )                             1,385,693  
         Net cash (used in)/provided by financing activities
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                  (2,965 )                                (2,356 )                                (7,334 )                                   474  
         Effect of exchange rate changes on cash, cash equivalents, and restricted cash
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                  26,170               43,334              (19,775 )                                68,009  
   Net change in cash, cash equivalents, and restricted cash
Cash, cash equivalents and restricted cash, beginning of period                                  110,625              113,236              156,570               88,561  
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Cash, cash equivalents and restricted cash, end of period                                                  $        136,795                        $        156,570                        $        136,795                        $        156,570  
                                                                                        ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                                                                                                     Maximus, Inc.
                                                                                                                                                                                                                                     Consolidated Results of Operations by Segment
                                                                                                                                                                                                                                     (Unaudited)
 
                                                                                                                                          For the Three Months                                                                                                                                                                                                                              For the Year
                                                                                                                                                              Ended September 30,                                                                                                                                                                                                                                              Ended September 30,
                                                 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                  -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                2022                                                                                                          2021                                                                                                         2022                                                                                                          2021
                                                 ---------------------------------------------------------------------------------------------------                           --------------------------------------------------------------------------------------------------------                           ---------------------------------------------------------------------------------------------------                           --------------------------------------------------------------------------------------------------------
                                                   Amount (1)                                     % (2)                                      Amount (1)                                        % (2)                                    Amount (1)                                     % (2)                                      Amount (1)                                        % (2)
                                                 -------------------------------------------------   -------------------- ------------------------------  -------------------- ------------------------------------------------------   -------------------- ------------------------------  -------------------- -------------------------------------------------   -------------------- ------------------------------  -------------------- ------------------------------------------------------   -------------------- ------------------------------
                                                                                                                                                                                                                                                                   (dollars in thousands)
Revenue:                                                                                                                                                                                                                                             
------------------------------------------------
U.S. Federal Services                                               $   579,066                                       $        540,302                                       $ 2,259,744                                       $      1,893,284      
U.S. Services                                        423,798                             392,623                      1,607,612                           1,662,110      
Outside the U.S.                                     174,167                             173,206                        763,662                             699,091      
                                                 -------------------- --------- --------------------                                                                           -------------------- -------------- --------------------                                                                           -------------------- --------- --------------------                                                                           -------------------- -------------- --------------------
                                                                    $ 1,177,031                                       $      1,106,131                                       $ 4,631,018                                       $      4,254,485      
   Revenue
                                                 ==================== ========= ====================                                                                           ==================== ============== ====================                                                                           ==================== ========= ====================                                                                           ==================== ============== ====================
Gross profit:                                                                                                                                                                                                                                        
------------------------------------------------
U.S. Federal Services                                               $   153,508           26.5 %                                         $        120,146           22.2 %                                         $   519,440           23.0 %                                         $        432,551           22.8 %
U.S. Services                                         94,199           22.2 %                                84,794           21.6 %                          343,004           21.3 %                               408,050           24.6 %
Outside the U.S.                                      25,276           14.5 %                                13,466            7.8 %                           77,366           10.1 %                               106,374           15.2 %
                                                 -------------------- --------- --------------------                                                                           -------------------- -------------- --------------------                                                                           -------------------- --------- --------------------                                                                           -------------------- -------------- --------------------
                                                                    $   272,983           23.2 %                                         $        218,406           19.7 %                                         $   939,810           20.3 %                                         $        946,975           22.3 %
   Gross profit
                                                 ==================== ========= ====================                                                                           ==================== ============== ====================                                                                           ==================== ========= ====================                                                                           ==================== ============== ====================
Selling, general, and administrative expenses:                                                                                                                                                                                                             
------------------------------------------------
U.S. Federal Services                                               $    81,169           14.0 %                                         $         70,608           13.1 %                                         $   284,509           12.6 %                                         $        243,485           12.9 %
U.S. Services                                         45,176           10.7 %                                36,954            9.4 %                          160,902           10.0 %                               153,609            9.2 %
Outside the U.S.                                      24,084           13.8 %                                21,230           12.3 %                           92,536           12.1 %                                86,248           12.3 %
Other (4)                                             (3,438 )                              NM                  798             NM          (3,454 )                              NM               10,746             NM  
                                                 -------------------- --------- --------------------                                                                           -------------------- -------------- --------------------                                                                           -------------------- --------- --------------------                                                                           -------------------- -------------- --------------------
                                                                    $   146,991           12.5 %                                         $        129,590           11.7 %                                         $   534,493           11.5 %                                         $        494,088           11.6 %
   Selling, general, and administrative expenses
                                                 ==================== ========= ====================                                                                           ==================== ============== ====================                                                                           ==================== ========= ====================                                                                           ==================== ============== ====================
Operating income:                                                                                                                                                                                                                                          
------------------------------------------------
U.S. Federal Services                                               $    72,339           12.5 %                                         $         49,538            9.2 %                                         $   234,931           10.4 %                                         $        189,066           10.0 %
U.S. Services                                         49,023           11.6 %                                47,840           12.2 %                          182,102           11.3 %                               254,441           15.3 %
Outside the U.S.                                       1,192            0.7 %                                (7,764 )                            (4.5 )%                         (15,170 )                            (2.0 )%                               20,126            2.9 %
Amortization of intangible assets                    (22,514 )                              NM              (20,639 )                              NM         (90,465 )                              NM              (44,357 )                              NM  
Gain on sale of land and building (3)                 11,046             NM       --             NM          11,046             NM       --             NM  
Other (4)                                              3,438             NM                 (798 )                              NM           3,454             NM              (10,746 )                              NM  
                                                 -------------------- --------- --------------------                                                                           -------------------- -------------- --------------------                                                                           -------------------- --------- --------------------                                                                           -------------------- -------------- --------------------
(1)                  Expenses that are not specifically included in the segments are included in other categories, including amortization of intangible assets and the direct costs of acquisitions. These costs are excluded from measuring each segment's operating performance. Expenses that are not specifically included in the segments are included in other categories, including amortization of intangible assets and the direct costs of acquisitions. These costs are excluded from measuring each segment's operating performance.
                                                                                                                                                                                                                                         
(2)                  Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM."                                                                                                                                                              Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM."
                                                                                                                                                                                                                                         
(3)                  During fiscal year 2022, we sold the land and building which held our corporate headquarters, resulting in a gain on sale of $11.0 million.                                                                                                                   During fiscal year 2022, we sold the land and building which held our corporate headquarters, resulting in a gain on sale of $11.0 million.
                                                                                                                                                                                                                                         
(4)                  Other expenses includes credits and costs that are not allocated to a particular segment. This includes expenses incurred as part of our acquisitions, as well as potential acquisitions which have not been or may not be completed.                         Other expenses includes credits and costs that are not allocated to a particular segment. This includes expenses incurred as part of our acquisitions, as well as potential acquisitions which have not been or may not be completed.
                                                                                                                                                            Maximus, Inc.
                                                                                                                                               Consolidated Free Cash Flows - Non-GAAP
                                                                                                                                                             (Unaudited)
 
                                                                                            For the Three Months                                                                                                           For the Year
                                                                                                                Ended September 30,                                                                                                                           Ended September 30,
                                                             ------------------------------------------------------------------------------------------------------------------                            ------------------------------------------------------------------------------------------------------------------
                                              2022          2021          2022          2021   
                                                             -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                      (in thousands)
Net cash provided by operating activities                      120,063                        $ 270,663       289,839       517,322  
Purchases of property and equipment and capitalized software   (20,209 )                         (4,432 )                        (56,145 )                        (36,565 )
                                                             -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                $  99,854                        $ 266,231                        $ 233,694                        $ 480,757  
   Free cash flow
                                                             ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                          Maximus, Inc.
                                                                                                                                              Non-GAAP Adjusted Results Excluding Amortization of Intangible Assets
                                                                                                                                                                           (Unaudited)
                                                                                                                                                                                
------------------------------------------------------------------------------------------ -------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------
                                                                                                                For the Three Months Ended September 30,                                                                                      For the Year Ended September 30,
                                                                                           -----------------------------------------------------------------------------------------------------------------                            ------------------------------------------------------------------------------------------------------------------
                                                                            2022         2021          2022          2021   
                                                                                           -------------------- ------- --------------------                      -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                     (dollars in thousands, except per share data)
Operating income                                                                                              $ 114,524                        $ 68,177                        $ 325,898                        $ 408,530  
Add back: Amortization of intangible assets                                                   22,514       20,639        90,465        44,357  
                                                                                           -------------------- ------- --------------------                      -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                              $ 137,038                        $ 88,816                        $ 416,363                        $ 452,887  
   Adjusted operating income excluding amortization of intangible assets (Non-GAAP)
                                                                                           ==================== ======= ==================== ==================== ==================== ====== ====================                      ==================== ======= ====================                      ==================== ======= ====================
                                                                                                11.6 %                           8.0 %                            9.0 %                           10.6 %
   Adjusted operating income margin excluding amortization of intangible assets (Non-GAAP)
                                                                                                                                                                                                        
Net income                                                                                                    $  69,067                        $ 52,014                        $ 203,828                        $ 291,200  
Add back: Amortization of intangible assets, net of tax                                       16,622       15,388        66,786        32,752  
                                                                                           -------------------- ------- --------------------                      -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                              $  85,689                        $ 67,402                        $ 270,614                        $ 323,952  
   Adjusted net income excluding amortization of intangible assets (Non-GAAP)
                                                                                           ==================== ======= ====================                      ==================== ====== ====================                      ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                        
Diluted earnings per share                                                                                    $    1.12                        $   0.83                        $    3.29                        $    4.67  
Add back: Effect of amortization of intangible assets on diluted earnings per share             0.28         0.25          1.08          0.52  
                                                                                           -------------------- ------- --------------------                      -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------

View source version on businesswire.com: https://www.businesswire.com/news/home/20221121005910/en/

SOURCE: Maximus

James Francis 703.251.8526
Jessica Batt 703.251.8634
IR@maximus.com
comtex tracking

COMTEX_419428493/1006/2022-11-21T16:45:00

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