Maximus, Inc. · NYSE:MMS
Maximus — Q2 FY2019 Earnings Presentation
18 slides from Maximus's earnings presentation, May 13, 2019
Slide 1: Fiscal 2019 Second Quarter Earnings Call
Fiscal 2019 Second Quarter Earnings Call Rick Nadeau Chief Financial Officer May 9, 2019 1 | MAXIMUS: Q2 FY19 EARNINGS PRESENTATION
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 – Second Quarter of FY 2019
Total Company Results – Second Quarter of FY 2019 ($ in millions, Q2 FY19 Q2 FY18 % Change except per share data) • Top-line growth was driven by the expected Revenue increases in the U.S. Federal Services U.S. Health & Human Services $ 290.7 $ 306.2 (5.1)% Segment from the acquisition. Revenue U.S.
Slide 4: U.S. Health and Human Services Segment
U.S. Health and Human Services Segment Q2 FY19 Q2 FY18 % Change ($ in millions) Revenue U.S. Health & Human Services $ 290.7 $ 306.2 (5.1)% Operating Income U.S. Health & Human Services $ 56.9 $ 50.0 13.8% Operating Margin % 19.6% 16.3% Q2 FY19 Revenue It is not unusual during a rebid • Decreased re
Slide 5: U.S. Federal Services Segment
U.S. Federal Services Segment Q2 FY19 Q2 FY18 % Change ($ in millions) Revenue U.S. Federal Services $ 289.7 $ 116.3 149.1% Operating Income U.S. Federal Services $ 29.6 $ 9.8 200.9% Operating Margin % 10.2% 8.5% Q2 FY19 Revenue • Increase was driven by the acquisition, which contributed approximate
Slide 6: Outside the U.S. Segment
Outside the U.S. Segment Q2 FY19 Q2 FY18 % Change ($ in millions) Revenue Outside the U.S. $ 156.0 $ 190.2 (18.0)% Operating Income Outside the U.S. $ 4.5 $ 16.4 (72.6)% Operating Margin % 2.9% 8.6% Q2 FY19 Revenue • Lower compared to the prior year due to the unfavorable impact of foreign currency
Slide 7: Cash Flows, DSOs, and Cash
Cash Flows, DSOs, and Cash ($ in millions) Q2 FY19 Cash flows from operations $67.9 Purchases of property and equipment (8.6) and capitalized software costs Free cash flow $59.3 Days Sales Outstanding (DSO) • DSOs were 77 days at March 31, 2019, which was higher than Q1 FY19 due to timing on the pay
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 • Continue to target strategic acquisitions to create new growth platforms for MAXIMUS • Access to a $400M credit facility, which can be
Slide 9: Update to Fiscal 2019 Guidance
Update to Fiscal 2019 Guidance Fiscal 2019 Guidance Previous Current Revenue $2.925B – $3.0B $2.925B – $2.950B GAAP Diluted EPS $3.55 – $3.75 $3.65 – $3.75 Cash flow from operations $275M – $325M $275M – $325M Free cash flow $235M – $285M $235M – $285M Revenue Guidance • We estimate approximately $2
Slide 10: Fiscal 2019 Second Quarter Earnings Call – Bruce Caswell, CEO
Fiscal 2019 Second Quarter Earnings Call Bruce Caswell President & Chief Executive Officer May 9, 2019
Slide 11: Successful First Year Review
Successful First Year Review • Unparalleled commitment to operational excellence, solid execution and generating robust cash flow • Focused on delivering added value to our clients by driving digital solutions and innovation to improve the customer journey and overall program efficiency • Executing
Slide 12: New Board Member
New Board Member • Michael J. Warren was appointed to our Board of Directors, effective March 25, 2019 • Serves as Managing Director of Albright Stonebridge Group, a global business strategy and commercial diplomacy firm • Expertise in advising clients on international growth strategies, stakeholder
Slide 13: U.S. Federal Services Segment Update
U.S. Federal Services Segment Update • Received third certification for the Federal Risk and Authorization Management Program (FedRAMP) for our Intelligent Virtual Assistant ̶ FedRAMP certifications meet the most stringent security requirements for federal agencies • MAXIMUS Intelligent Virtual Assi
Slide 14: U.S. Health and Human Services Segment Update
U.S. Health and Human Services Segment Update Convergence of health and human services programs dovetail with our growth strategy for adjacent markets • Delivering a social determinant pilot in West Virginia that builds upon the work we already do in 12 Medicaid programs where we carry out health ri
Slide 15: Supporting Clients in Social Determinants Initiatives
Supporting Clients in Social Determinants Initiatives • Addressable population for this targeted pilot is small – aim to generate meaningful outcomes • A successful social determinants model will resemble a managed service that guides, encourages and enables consumers to supportive interventions tha
Slide 16: Outside the U.S. Segment Update
Outside the U.S. Segment Update • In the U.K., the Department for Work and Pensions (DWP) has announced their intention to extend our contract to continue the Health Assessment Advisory Service through June 2021 • Part of a larger project that the government is undertaking to transform the delivery
Slide 17: New Awards & Pipeline
New Awards & Pipeline New Awards (YTD) March 31, 2019 Sales Pipeline March 31, 2019 New Work % Signed Contracts $1.0B Total Pipeline $21.9B 74% Unsigned Contracts $725M • Modified our methodology at the beginning of FY19 to reflect the nature of our BPO business • The opportunities in our sales pipe
Slide 18: Conclusion
Conclusion • Favorable long term macro environment • Remain focused on our top priorities of digital transformation, expansion of our clinical offerings and strategic market expansion • Digital automation, such as next generation interactive voice recognition and process automation, allows us to con