Maximus, Inc. · NYSE:MMS
Maximus — Q1 FY2018 Earnings Presentation
19 slides from Maximus's earnings presentation, Feb 12, 2018
Slide 1: Helping Government Serve the People
1 Rick Nadeau Chief Financial Officer February 8, 2018 Helping Government Serve the People®
Slide 2: Forward-looking Statements & Non-GAAP Information
2 Forward-looking Statements & Non-GAAP Information These slides should be read in conjunction with the Company’s most recent quarterly earnings press release, along with listening to or reading a transcript of the comments of Company management from the Company’s most recent quarterly earnings conf
Slide 3: Total Company Results – First Quarter of FY 2018
3 Total Company Results – First Quarter of FY 2018 • Passage of Tax Cuts and Jobs Act in the U.S. created significant benefits for MAXIMUS • As a profitable, high-cash conversion business with the majority of our earnings in the U.S., we have historically had a high income tax rate • Reduction of th
Slide 4: Long-Term Favorable Impacts from Tax Cuts and Jobs Act
4 Long-Term Favorable Impacts from Tax Cuts and Jobs Act Q1 FY18 Provision for income taxes ($M) Effective Income Tax Rate EPS Q1 FY18 results, as reported $ 19.9 24.9% $ 0.89 Impact from reduction from U.S. federal income tax rate1 6.4 Non-recurring deferred tax assets and liabilities2 10.6 Non-rec
Slide 5: Health Services Segment
5 Health Services Segment Q1 FY18 Revenue • Increase driven by organic growth and favorable currency exchange rates Q1 FY18 Operating Margin • Segment is comprised of a sizeable portfolio of contracts; contract maturity helped contribute to strong operating margins in Q1 FY18 Year-Over-Year U.K. Hea
Slide 6: U.S. Federal Services Segment
6 U.S. Federal Services Segment Revenue U.S. Federal Services 133.0$ 141.3$ (6%) Operating Income U.S. Federal Services 16.7$ 17.9$ (7%) Operating Margin % 12.6% 12.7% % Change($ in millions) Q1 FY18 Q1 FY17 Q1 FY18 Financial Results • As expected, revenue decrease was due to some contracts that end
Slide 7: Human Services Segment
7 Human Services Segment Revenue Human Services 138.1$ 125.5$ 10% Operating Income Human Services 8.1$ 11.8$ (32%) Operating Margin % 5.8% 9.4% ($ in millions) Q1 FY18 Q1 FY17 % Change Q1 FY18 Revenue • Increase driven by revenue from our Australian operations, and to a lesser extent, favorable fore
Slide 8: Cash Flows, DSOs, Cash and Capital Allocation
8 Cash Flows, DSOs, Cash and Capital Allocation $ in millions Q1 FY18 Cash flow from operations $37.9 Cash paid for property, equipment & capitalized software ($6.5) Free cash flow $31.4 Days Sales Outstanding (DSO) • 69 days at December 31, 2017, in-line with our expectations and consistent with th
Slide 9: Raising EPS, Cash Flow and Free Cash Flow Guidance
9 Raising EPS, Cash Flow and Free Cash Flow Guidance Fiscal 2018 Guidance New Old Notes Revenue $2.475B - $2.550B $2.475B - $2.550B Bias toward lower half of the revenue range due to lowered outlook from U.S. Federal Services Segment (now expect U.S. Federal Services Segment to run closer to $500 mi
Slide 10: Richard Montoni, Chief Executive Officer; Bruce Caswell, President
10 Richard Montoni Chief Executive Officer Bruce Caswell President February 8, 2018 Helping Government Serve the People®
Slide 11: Chief Executive Officer Transition
11 Chief Executive Officer Transition • Bruce will succeed as CEO effective April 1, 2018 • Working together to ensure a smooth transition • The time is right and Bruce is the right person to guide MAXIMUS in the future • Key accomplishments during Rich’s tenure as CEO: − helping governments impleme
Slide 12: Transforming to Meet the Needs of Clients
12 Transforming to Meet the Needs of Clients 1 2 Digital Transformation Clinical Evolution Operating in a changing and competitive world Clients expect continual evolution and innovation Constantly seeking ways to create more efficiencies and improve service delivery MAXIMUS is already transforming
Slide 13: Digital Transformation
13 Digital Transformation Cultural Shift • Digital disruption within the government services market and new models for engagement and efficiencies • We are implementing a roadmap across all of our markets looking at the pace of digital adoption and the impact of various digital enablers Digital Matu
Slide 14: Clinical Evolution
14 BPO Services with Clinical Dimensions Occupational Health and Digital Well-being Disability Assessment Services Long-Term Services and Supports Assessments Clinical Evolution • Macro trends driving demand for BPO with a clinical element (rising health care costs, longevity, chronic conditions, co
Slide 15: Long-Term Growth Strategy
15 Long-Term Growth Strategy Three Pronged Approach to Long-Term Growth Moving into adjacent markets Incorporating new growth platforms Growing in current core markets • Digital transformation and clinical evolution not mutually exclusive, some opportunities require expertise in both • Our digital e
Slide 16: Affordable Care Act Operations Update
16 Affordable Care Act Operations Update • Completed the most recent open enrollment season under the Affordable Care Act (ACA) • Launched with a bit of a bang with higher call volumes, likely due to consumer confusion over the status of the program • However, as open enrollment progressed, it was b
Slide 17: U.S. Federal Operations Update
17 U.S. Federal Operations Update • Gained credibility and respect as a trusted contractor, but recognize that there is more work to be done • Federal government procures a significant amount of work through pre-competed contract vehicles (as opposed to full and open competition); it is important to
Slide 18: New Awards & Sales Pipeline
18 New Awards December 31, 2017 YTD Signed Contracts $1.2B Additional Unsigned Contracts $236M Sales Opportunities December 31, 2017 Total Pipeline* $3.2B * Reported pipeline only reflects short-term opportunities where we believe request for proposals will be released within next six months New Awa
Slide 19: Conclusion
19 Conclusion • Appreciation to the MAXIMUS management team and our employees • Great pride at what we accomplished together and it has been a pleasure to work with such a talented group