Maximus, Inc. · NYSE:MMS
Maximus — Q1 FY2019 Earnings Presentation
18 slides from Maximus's earnings presentation, Feb 11, 2019
Slide 1: Fiscal 2019 First Quarter Earnings Call
Fiscal 2019 First Quarter Earnings Call Rick Nadeau Chief Financial Officer February 7, 2019
Slide 2: Forward-looking Statements & Non-GAAP Information
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 our most recent quarterly earnings conference call.
Slide 3: Total Company Results – First Quarter of FY 2019
Total Company Results – First Quarter of FY 2019 ($ in millions, • Top-line growth was driven by the expected increases Q1 FY19 Q1 FY18 % Change except per share data) in the U.S. Federal Services Segment due to revenue Revenue from the acquisition of the citizen engagement centers U.S. Health & Hum
Slide 4: U.S. Health & Human Services Segment
U.S. Health & Human Services Segment ($ in millions) Q1 FY19 Q1 FY18 % Change Revenue U.S. Health & Human Services $ 294.2 $ 304.2 (3.3%) Operating Income U.S. Health & Human Services $ 55.9 $ 49.4 13.1% Operating Margin % 19.0% 16.2% Q1 FY19 Revenue • As expected, revenue decreased principally due
Slide 5: U.S. Federal Services Segment
U.S. Federal Services Segment ($ in millions) Q1 FY19 Q1 FY18 % Change Revenue U.S. Federal Services $ 217.0 $ 133.0 63.2% Operating Income U.S. Federal Services $ 21.4 $ 16.7 28.3% Operating Margin % 9.8% 12.6% Q1 FY19 Revenue • Citizen engagement centers acquisition closed in mid-November, and con
Slide 6: Outside the U.S. Segment
Outside the U.S. Segment ($ in millions) Q1 FY19 Q1 FY18 % Change Revenue Outside the U.S. $ 153.4 $ 185.9 (17.5%) Operating Income Outside the U.S. $ 4.4 $ 16.3 (72.7%) Operating Margin % 2.9% 8.7% Q1 FY19 Revenue • Unfavorably impacted by foreign currency translation of $7.2M (13.6% growth on cons
Slide 7: Cash Flows, DSOs, and Cash
Cash Flows, DSOs, and Cash $ in millions Q1 FY19 Cash flows from operations $59.3 Purchases of property and equipment and capitalized software costs (10.0) Capital expenditure as a result of acquisition (1) 4.5 Free cash flow $53.9 (1) Purchases of property and equipment and capitalized software cos
Slide 8: Capital Allocation
Capital Allocation MAXIMUS maintains a strong track record of operational performance and a history of generating strong, consistent cash flows. Capital Allocation • Ample capital flexibility to continue to return capital to shareholders and complete strategic acquisitions with the right fit and val
Slide 9: Reiterating Fiscal 2019 Guidance
Reiterating Fiscal 2019 Guidance Fiscal 2019 Guidance Revenue $2.925B – $3.0B GAAP $3.55 – $3.75 Diluted EPS Cash flow $275M – $325M from operations Free cash flow $235M – $285M Income Taxes • Expect an income tax rate between 25% and 26% • Expect a tax benefit in Q2FY19 that will lower the rate to
Slide 10: Fiscal 2019 First Quarter Earnings Call – CEO
Fiscal 2019 First Quarter Earnings Call Bruce Caswell President & Chief Executive Officer February 7, 2019
Slide 11: Solid First Quarter Fiscal 2019
Solid First Quarter Fiscal 2019 Solid first quarter results Good performance in our U.S. Health and Human Services Segment On track to achieve FY19 guidance Meaningful progress as we: 1. Transform the customer experience with digital tools 2. Expand our clinical-related services 3. Extend our reach
Slide 12: U.S. Federal Segment Update
U.S. Federal Segment Update • Less than 1% of the Segment revenue affected by the partial shutdown − Illustrates the critical nature of the business and service offerings in support of essential citizen services and safety-net programs • The acquired U.S. Federal contracts are the primary support ve
Slide 13: Pioneering Digital Transformation Strategy
Pioneering Digital Transformation Strategy • Developing new solution sets to achieve additional operational and cost efficiencies through techniques such as cloud migration services, Artificial Intelligence – or AI, robotic process automation (RPA) and machine learning • Implementing new digital inn
Slide 14: Digital Efforts Maturing Across Geographies
Digital Efforts Maturing Across Geographies • MAXIMUS Canada Enterprise Omni-channel Engagement Center offers a full range of engagement options to Canadians, including: ̶ video chat capabilities ̶ agent facilitated co-browsing to help citizens navigate online digital services ̶ text and web chat ̶
Slide 15: New Awards & Pipeline
New Awards & Pipeline New Awards (YTD) Dec. 31, 2018 Sales Pipeline Dec. 31, 2018 New Work % new $19.9B 78% signed contracts $224M methodology old unsigned contracts $743M $5.0B 76% methodology New Pipeline Methodology 1. Reporting total contract value Reflects the long-term nature of contracts and
Slide 16: Conclusion
Conclusion • Thank you to John Haley who stepped down from the MAXIMUS board last month; Directors Russ Beliveau and Paul Lederer will retire in the spring of 2020 • MAXIMUS has a proven track record of solid operational delivery, a dedicated team of seasoned professionals and a portfolio of busines
Slide 17: APPENDIX
APPENDIX 17 | MAXIMUS: Q1 FY19 EARNINGS PRESENTATION
Slide 18: New Methodology for Reporting Pipeline Metrics
New Methodology for Reporting Pipeline Metrics We examined our methodology for reporting pipeline metrics, which was established more than 15 years ago and built for a different type of business model. We will change our practices and adapt our pipeline to better reflect the market realities of our