Slide 1: Fiscal 2014 Fourth Quarter & Full Year Earnings
1 Richard J. Nadeau Chief Financial Officer and Treasurer November 13, 2014 Fiscal 2014 Fourth Quarter & Full Year Earnings
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: Highlights of Fiscal 2014
3 Highlights of Fiscal 2014 •Fiscal 2014 highlighted by strong growth and solid execution ‒ Delivered on unprecedented number of start-ups ‒ Increased support to clients during first open enrollment of Affordable Care Act (ACA) ‒ Unprecedented growth in our core markets and expansion into new adjace
Slide 4: Total Company Results – Fourth Quarter
4 RevenueHealth Services321.7$ 271.0$ 19%Human Services113.7113.3 <1%Total435.4$ 384.3$ 13%Operating Income Health Services42.8$ 45.9$ (7%)Human Services9.011.9 (25%)Other (includes legal)0.0(0.8) Total51.8$ 57.0$ (9%)Operating Margin %11.9%14.8%Net Income attributable to MAXIMUS36.2$ 35.6$ 2%EPS -
Slide 5: Total Company Results – Full Fiscal Year
5 RevenueHealth Services1,250.6$ 862.9$ 862.9$ 45%45%Human Services450.3468.4 452.4 (4%)(<1%)Total1,700.9$ 1,331.3$ 1,315.3$ 28%29%Operating Income Health Services175.4$ 129.8$ 129.8$ 35%35%Human Services50.558.1 47.2 (13%)7%Other (includes legal)(0.6)(2.8) (2.8) Total225.3$ 185.2$ 174.3$ 22%29%Oper
Slide 6: Health Services Segment
6 Health Services Segment Revenue •Q4 and FY14 growth driven by new work, including ACA work and existing contract expansion •Majority of growth was organic, FY14 received benefit of full-year’s contribution from Health Management acquisition, which closed on July 1, 2013 Operating Income & Margins
Slide 7: New U.K. Health & Disability Assessments Contract
7 New U.K. Health & Disability Assessments Contract •Program take over on March 1, 2015, followed by 36 months of operations through February 28, 2018 •Option to extend contract for two additional years •For FY15, contract expected to contribute approximately $140M to $165M over the seven months of
Slide 8: Human Services Segment Q4 Results
8 Revenue Human Services113.7$ 113.3$ <1%450.3$ 452.4$ (<1%)Operating Income Human Services9.0$ 11.9$ (24%)50.5$ 47.2$ 7%Operating Margin %7.9%10.5%11.2%10.4%FY14FY13% Change% Change($ in millions)Q4 FY14Q4 FY13Human Services Segment Q4 Results •Q4 FY14 revenue remained flat compared to Q4 FY13, whi
Slide 9: Balance Sheet and Cash Flows
9 Balance Sheet and Cash Flows Cash Flows in Q4 •DSOs were 61 days, better than target range of 65-80 days Cash and Cash Equivalents •Balance sheet remains healthy; at September 30, 2014, cash and cash equivalents totaled $158.1M (approximately $95M held outside U.S.) •Longer-term cash deployment ac
Slide 10: Share Repurchases and Other Uses of Cash
10 Share Repurchases and Other Uses of Cash Share Repurchases •Share repurchase program is opportunistic in nature •Aggressively repurchased shares of MMS common stock in Q4 FY14 and through most of October •At September 30, 2014, we had approximately $135.2M available for future repurchases Uses of
Slide 11: Confirming FY15 Revenue & Earnings Guidance
11 Confirming FY15 Revenue & Earnings Guidance •Entering FY15 with backlog of $3.8B at September 30, 2014 •Based on midpoint of revenue guidance, estimate that approximately 90% of forecasted FY15 revenue is in form of backlog or option periods •Backlog number does not include new Health and Disabil
Slide 12: Factors for Fiscal 2015 Estimates
12 Factors for Fiscal 2015 Estimates •Segment level detail: Revenue growth in FY15 driven by Health Services; Human Services may still grow in mid-single digits; expect Health Services will deliver a full-year operating margin around mid-point of target range of 10%-15% and Human Services will opera
Slide 13: Quarterly Trends for Fiscal 2015
13 Quarterly Trends for Fiscal 2015 Quarters may fluctuate in FY15: •On a sequential basis, strong Q1 FY15 driven by seasonality with ACA open enrollment •Anticipating a dip in Q2 FY15 as open enrollment winds down, but too soon to predict how consumer behavior might affect call volumes and talk tim
Slide 14: Cash Flow Guidance
14 Cash Flow Guidance Forecasting lower cash flows in FY15 driven by two main factors: •DSOs that are expected to run around 65 days •New large programs in start-up with working capital requirements that are expected to unfavorably impact cash flows in 2015 FY15 Guidance Cash from Continuing Operati
Slide 15: Fiscal 2014 Fourth Quarter & Full Year Earnings (CEO)
15 Richard A. Montoni Chief Executive Officer November 13, 2014 Fiscal 2014 Fourth Quarter & Full Year Earnings
Slide 16: Past Achievements & Future Expectations
16 Past Achievements & Future Expectations •Proud of our solid operational and financial results in FY14 •Significant progress towards our long-term strategic goals that are underpinnings for consistent growth and shareholder value: ‒ Growing our operations outside of the U.S. ‒ Expanding our U.S. f
Slide 17: "Land and Expand" Growth Model
17 “Land and Expand” Growth Model •Demonstrated key strategic successes from the past 18 months: ‒ New Fit for Work contract (U.K.) ‒ New Health and Disability Assessments contract (U.K.) ‒ Ongoing expansion in Australia where our top-rated performance has been critical to consistent expansion ‒ New
Slide 18: Growth Drivers Outside of the U.S.
18 Growth Drivers Outside of the U.S. Reform efforts to address rising caseloads and improve the effectiveness of social benefits programs A trend towards more outcomes-based government programs Growing demand for our services
Slide 19: New U.K. Health & Disability Assessments Contract
19 New U.K. Health & Disability Assessments Contract •U.K. Government developed criteria and an assessment process for determining eligibility for various benefits programs as part of a broader welfare reform effort over the last several years •MAXIMUS will conduct assessments for individuals seekin
Slide 20: Addressing Current Program Challenges
20 Addressing Current Program Challenges •Our experience and expertise makes us ideally suited to tackle some of the challenges that exist today •Our number one goal under the program is to improve the overall customer experience •We want to reduce the long wait times, improve the quality of the ass
Slide 21: Fit for Work Contract
21 Fit for Work Contract •U.K. Fit for Work program was a result of a government review to consider how the current employee sickness absence systems could be improved to help people stay in work, reduce costs, and contribute to economic growth ‒ Analysis found 140 million days lost to sickness abse
Slide 22: Confirming Data Points for U.K. Land & Expand
22 Confirming Data Points for U.K. Land & Expand •Both the Health and Disability Assessment and Fit for Work contracts are great examples of how our services meet the needs of governments by: ‒ Addressing rising caseloads to manage benefits programs more effectively ‒ Implementing performance-based
Slide 23: Expanded AUS Disability Employment Services
23 Expanded AUS Disability Employment Services •Positive news out of Australia •Government recently decided to move Disability Employment Services (DES) caseloads that were historically managed in-house to outside providers •MAXIMUS has been a strong DES performer and was notified last week that we
Slide 24: Upcoming Job Services Australia (JSA) Rebid
24 Upcoming Job Services Australia (JSA) Rebid •Australian team is hard at work on JSA rebid •Response to tender is due later this month and expect to hear results in Spring 2015 •Reminder that rebid not expected to be “winner-take-all” award −Based on past procurements, awards are done location-by-
Slide 25: Second ACA Open Enrollment
25 Second ACA Open Enrollment •Starts this Saturday and runs through February 15, 2015 •Expect this year will be smoother – fewer technology challenges as governments apply “lessons learned” from last year •Volumes may likely be lower due to improved technology and more self-service tools; but this
Slide 26: Rebids
26 Rebids Fiscal 2014 •Won or extended approximately 91% of the total base contract value of our rebids Fiscal 2015 •Have 10 contracts up for rebid, combined total value of base contracts is approximately $1.2B −Job Services Australia rebid Estimated to be approximately $690M over five years Updated
Slide 27: New Awards & Sales Pipeline
27 New Awards & Sales Pipeline •Sales pipeline reached a record $3.5B: −Contained opportunities across multiple geographies and both segments −Confirmation of continued demand for our core services •Awards and pipeline numbers reflective of where opportunities stood at Sept. 30 •New U.K. Health and
Slide 28: Contract Contributions to Long-Term Value
28 Contract Contributions to Long-Term Value •Governments around the world face same challenges: −Increasing populations −Rising caseloads −Need to effectively manage their social programs •Demand trends for our business can span decades: −Enter into contracts that are sometimes up to 10 years −Expe
Slide 29: Earnings Slingshot From Three New Contracts
29 Earnings Slingshot From Three New Contracts FY14 Actual FY15 Estimate FY16 Estimate Aggregate Revenue $10.2M $235.0M $460.0M Aggregate EPS ($0.04) $0.08 $0.34 Year-over-Year EPS Change (Earnings Slingshot) - $0.12 $0.26 •These large programs require resources and investment from across the organi
Slide 30: Conclusion
30 Conclusion •Coming off a great 2014; table is set for solid growth in 2015 and well beyond •We are excited about significant progress made in establishing ourselves in new: ‒ Markets ‒ Adjacencies ‒ Agencies •A growing business and solid demand both inside and outside U.S.; we believe that MAXIMU
Slide 31: Reconciliation to Non-GAAP Measures
31 Reconciliation to Non-GAAP Measures