Maximus, Inc. · NYSE:MMS
Maximus — Q2 FY2006 Earnings Presentation
22 slides from Maximus's earnings presentation, May 5, 2006
Slide 1: MAXIMUS Quarterly Earnings Call
MAXIMUS MAXIMUS QUARTERLY EARNINGS CALL David N. Walker Chief Financial Officer and Treasurer 2° Quarter Fiscal 2006 May 4, 2006
Slide 2: Revenue was $179.8 million
Revenue was $179.8 million + An increase of 17% year-over-year + Driven principally by Operations Segment Net income totaled $8.9 million or $0.41 per diluted share + Compares to $8.5 million or $0.39 a share in the same quarter last year, after adjusting for FAS 123R + Q2 EPS impacted by $0.02 for
Slide 3: Consulting Segment Results
Consulting Segment Results Consulting Segment: 15% of total revenue = Consulting Segment revenue increased 12% over last year to $26.4 million = Operating income totaled $3.0 million with an operating margin of 11.3% + Revenue and margin growth over Q2 05 driven principally from the financial servic
Slide 4: Systems Segment Results
Systems Segment Results Systems Segment: 18% of total revenue = Systems Segment revenue $32.2 million which is comparable to last year = Operating income just under $300,000 Decline of $1.7 million compared to Q2 05 Operating income decline largely the result of additional resources needed to fulfil
Slide 5: Operations Segment Results
Operations Segment Results Operations Segment: 67% of total revenue = Operations Segment grew 24% over Q2 05, revenue of $121.2 million + Growth driven principally by: — British Columbia health operations contract; launched in Q3 05 — $4.1 million hardware delivery on voter contract — New work acros
Slide 6: Total Company - Expenses and Operating Margin
‘ee Total Company - Expenses and Operating Margin = Operating margin for Q2 was 7.6% + Excluding legal and settlement; operating margin was 8% = Year-over-year SG&A and operating margins were impacted in FY06 by FAS 123 (R), as FY 05 does not include option expense + Total stock option expense in th
Slide 7: Balance Sheet
‘ee Balance Sheet YE& 405 Q205 §=Q305 Q106 §=6a206 Billed A/R = AYR for Q2 totaled $185.8 million = DSOs totaled 97 days NOTE: The 97 days includes $5.4 million in long term A/R; classified within other assets on balance sheet 7
Slide 8: Cash Balance, Stock Repurchase, and Cash Flow from Operations
a Cash Balance, Stock Repurchase, and Cash Flow from Operations Q205 Q305 Q405 FY06 Q106 206 Cash from Ges $11.9 | $25.0 | $74.1 FCF $22.5 | $ 6.0 | $15.9 | $49.8 | $(0.5) = Cash from operations totaled $11.4 million with free cash flow of $6.5 million = Cash, cash equivalents, and marketable securi
Slide 9: MAXIMUS Quarterly Earnings Call
MAXIMUS MAXIMUS QUARTERLY EARNINGS CALL Richard A. Montoni President and Chief Executive Officer 2° Quarter Fiscal 2006 May 4, 2006
Slide 10: Management Transition
‘ine Management Tran: n = MAXIMUS remains strong and stable Above all a team-oriented company Overwhelming support received from large customers Change will not adversely impact project and field operations Morale is high and employee base is energized 10
Slide 11: Strategic Plan Remains on Course
Strategic Plan Remains on Course = Several initiatives already underway Refocus some current efforts = Long-term, six-point plan laid out 18 months ago Deeply involved in developing the strategic direction Made real, tangible progress toward those objectives = Strengthened management team Implemente
Slide 12: New Approach to Business
New Approach to Business Committed to being the premier government services provider * Quality can and will be improved + Execute on current contracts and manage the risk in start-up implementations such as BC and TX Redirect the organization on winning more profitable business and increasing overal
Slide 13: Recruit industry-leading talent that hit the ground running
Recruit industry-leading talent that hit the ground running Taken ownership of long-term objectives . More can be accomplished by further empowering the team . Decision-making process and accountability must be driven downward Segment leaders will have necessary resources and decision- making latitu
Slide 14: Culture Shift Towards Greater Teamwork
‘ine Culture Shift Towards Greater Teamwork = Fostering a culture that requires management to maintain accountability and deliver on goals = Scalable to the growth level aspired; not dependent on any single person = Improving performance in British Columbia requires expertise across the Company . He
Slide 15: British Columbia
British Columbia = Significant progress made in turning around performance . Service levels among the best on record for the Ministry = Ministry quarterly report noted: . Maintaining a record low document inventory level . Processed public documents within required levels ° Answered phones from the
Slide 16: Texas Integrated Eligibility Project
‘ine Texas Integrated Eli ity Project = Texas Health and Human Services Commission delayed integrated eligibility roll out = Delay is a result of needed technical and operational improvements . Systems development and interfacing . Start-up readiness = Financial implications not known today but depe
Slide 17: Uses of Cash
Uses of Cash M8A activity: smaller, tuck-in acquisitions Divest certain businesses . Facilitate margin improvement * Business lines that no longer aligned with strategic objectives Reinvest in the business to upgrade technological capabilities . More effectively scale service offerings . Improve abi
Slide 18: Re-bids
Re-bids = 17 jobs up for re-bid in FY 06 + Have won or received extensions on 13 + Total value of $172 million . To date, won $114 million = FY 06 re-bid contract value totaled close to $32 million = Secured $29 million, to date . Largest re-bid decision expected end of FY 06 18
Slide 19: Options
Options = 14 option exercises outstanding + Total contract value of $81 million + Won six with a contract value of $48 million . FY 06 impact totals $20 million and we've secured $17 million = Eight remaining options ° Three totaling $21 million; awarded late 2006 with no impact to FY06 19
Slide 20: Summary Awards & Pipeline
Summary Awards & Pi Q2 FY0S Q2 FY06 Signed $ 628 $ 292 “Awarded but Not | Signed 452 135 Pipeline Proposals Submitted 190 494 Proposals in Preparation 310 144 Major Opportuniti Iwagropennnes | asa] 682 | Total Pipeline $1,058 $1,321 | Alcotervetesinmans | ine 20
Slide 21: Guidance
Guidance Expect revenue in the range of $710-$725 Revising full year EPS estimates . $1.87 still achievable; reducing to more conservative levels . Estimate diluted earning per share in the range of $1.80 - $1.87 Revised forecast with several items in mind + Texas . Continued improvement in British
Slide 22: Searchable text section of graphics shown above
Searchable text section of graphics shown above [LOGO] [GRAPHIC] MAXIMUS QUARTERLY EARNINGS CALL David N. Walker Chief Financial Officer and Treasurer 2 nd Quarter Fiscal 2006 May 4, 2006 Q2 FY06 Financial Highlights • Revenue was $179.8 million • An increase of 17% year-over-year • Driven principal