Maximus, Inc. · NYSE:MMS
Maximus — Q1 FY2016 Earnings Presentation
19 slides from Maximus's earnings presentation, Feb 4, 2016
Slide 1: Fiscal 2016 First Quarter Earnings
Fiscal 2016 First Quarter Earnings Richard J. Nadeau Chief Financial Officer February 4, 2016 1
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 the Company’s most recent quarterly earnings confer
Slide 3: Pending Change Order at December 31, 2015
Pending Change Order at December 31, 2015 • MAXIMUS had a pending change order at December 31, 2015 related to a state health contract where we were already performing the additional scope of work • Costs were incurred and recorded in Q1; revenue will be recorded once the change order is signed • As
Slide 4: Total Company Results – First Quarter of FY 2016
Total Company Results – First Quarter of FY 2016 ($ in millions, Q1 FY16 Q1 FY15 % Change except per share data) Revenue Revenue • Q1 revenue grew 19%: Health Segment $ 291.9 $ 243.6 20% − 8% organic growth, driven by Health Segment U.S. Federal Segment 145.3 107.7 35% − 14% acquired growth Human Se
Slide 5: Health Services Segment
Health Services Segment ($ in millions) Q1 FY16 Q1 FY15 % Change Revenue Health Services $ 291.9 $ 243.6 20% Operating Income Health Services $ 26.8 $ 37.8 (29%) Operating Margin % 9.2% 15.5% Revenue • Increase driven principally by new work, and to a lesser extent, expansion of existing contracts •
Slide 6: U.S. Federal Services Segment
U.S. Federal Services Segment ($ in millions) Q1 FY16 Q1 FY15 % Change Revenue U.S. Federal Services $ 145.3 $ 107.7 35% Operating Income U.S. Federal Services $ 10.7 $ 13.3 (20%) Operating Margin % 7.4% 12.4% Revenue • Acquired growth from Acentia was offset by expected organic declines Operating I
Slide 7: Human Services Segment
Human Services Segment ($ in millions) Q1 FY16 Q1 FY15 % Change Revenue Human Services $ 119.5 $ 115.7 3% Operating Income Human Services $ 9.1 $ 16.2 (44%) Operating Margin % 7.6% 14.0% Revenue • Segment revenue growth benefitted from acquisition of Remploy, which was offset by approximately $9.4M
Slide 8: Cash Flows & Balance Sheet
Cash Flows & Balance Sheet • Days Sales Outstanding were 75 days at December 31; while in-line with our targeted range of 65 to 80 days, sequential increase due, in part, to timing of payments, as well as delayed payments in two states where budgets are not yet finalized • Increase in billed and unb
Slide 9: Share Repurchases & Other Uses of Cash
Share Repurchases & Other Uses of Cash Share Repurchases Approximate Purchase Period Weighted Average Price Number of Shares Amount Q1 FY16 543,000 $29.1M $53.65 • Approximately $139.4M remaining for repurchases under Board-authorized program Uses of Cash • Balance sheet remains healthy, and with ou
Slide 10: Reiterating FY16 Guidance
Reiterating FY16 Guidance • Still expect that earnings will be back-end loaded, primarily due to anticipated improvements in our various contracts that are in start-up phase and will mature throughout the year • Still anticipate that total Company operating margins will Fiscal 2016 Guidance be in 10
Slide 11: Fiscal 2016 First Quarter Earnings
Fiscal 2016 First Quarter Earnings Richard Montoni Chief Executive Officer February 4, 2016 11
Slide 12: Introduction
Introduction • Pending change order that we now expect to be recognized in Q2 • If change order had been finalized in Q1, would have been in-line with our expectations • As expected, several large start-ups are also tempering earnings at this time – as they mature, fully anticipate that they will be
Slide 13: U.K. Assessment Contract (HAAS) Project Update
U.K. Assessment Contract (HAAS) Project Update • Getting contract on right path to success remains a top priority for management team and we have made meaningful progress • U.K. National Audit Office (NAO) report and Public Accounts Committee meeting − On January 8, NAO published findings from an Au
Slide 14: Meaningful Progress Since NAO Report & November Call
Meaningful Progress Since NAO Report & November Call 1. Recruitment 2. Training & Graduation Rates 3. Productivity • Launched initiatives to drive • Performing functional assessments • Learning curve for HCPs – may take recruitment numbers is a new skill for many HCPs – 6-8 months to achieve full pr
Slide 15: NAO Report Findings On Quality & Cost
NAO Report Findings On Quality & Cost Quality • Delivering high quality assessment reports is essential; DWP uses them to determine benefit levels • NAO report indicated that we were not achieving one of the quality metrics at time of audit in August 2015 • Were meeting or exceeding 10 out of 11 ser
Slide 16: Affordable Care Act (ACA) & Open Enrollment Period
Affordable Care Act (ACA) & Open Enrollment Period • Closed out third Open Enrollment period (OE3) on January 31 • OE3 did not include a special enrollment extension and therefore had a shorter duration than prior periods • Despite compressed timeframe, call volumes across our contact centers were c
Slide 17: Successful Texas Contract Renewal
Successful Texas Contract Renewal • Signed Eligibility Support Services renewal contract with Texas Health and Human Services Commission on December 18, 2015 • Five-year base contract valued at $522M – Two years longer than our previous contract – Also has two additional option years • Will continue
Slide 18: New Awards, Pipeline & Rebids
New Awards, Pipeline & Rebids • Strong awards in Q1 • Sales pipeline lower sequentially due to work shifting into awarded category, most notably Texas Eligibility Support Services contract New Awards December 31, 2015 • Reported pipeline only reflects short-term YTD Signed Awards $665M opportunities
Slide 19: Conclusion
Conclusion • Making continual, steady progress with the U.K. assessment contract • Very positive working relationship with our client (DWP); remain confident that we will have the right pieces in place to achieve end-of-summer goals to meet our volume targets that underpin our FY16 guidance • Once f