Slide 1: Fiscal 2012 Third Quarter Earnings
Fiscal 2012 Third Quarter EarningsDavid N. WalkerChief Financial Officer and TreasurerAugust 7, 2012A number of statements being made today will be forward-looking in nature.Such statements are only predictions and actual events or results maydiffer materially as a result of risks we face, including
Slide 2: Selected Financial Results from Continuing Operations
Selected Financial Results from Continuing Operations• Q3 revenue grew 12% compared tolast year, driven by Health Servicesand contributions from the PSIacquisition• Quarterly results included a changeorder that contributed $10.2 M inrevenue and $0.10 of diluted EPS• Q3 operating income, excludingleg
Slide 3: Health Services Segment
Health Services Segment• Segment results were better-than-expected and bolstered by the acceleration of $10.2 million inrevenue related to a change order on a large health project; the change order relates to a newprogram where the scope of services increased once the program launched and it also re
Slide 4: Human Services Segment
Human Services Segment• Q3 revenue was $96.0 million, comparable to the same period last year and grew 2% on a constant currency basis; Q3operating income totaled $9.2 million, delivering operating margin of 9.6%• As expected, the ongoing ramp up on the UK Work Programme damped revenue and income co
Slide 5: Balance Sheet and Cash Flows
Balance Sheet and Cash Flows• Net income of $20.5 million contributed to strong cash flows• DSOs were 58 days• Cash provided by operating activities from continuing operations of $16.0 millionin the quarter, with free cash flow* of $9.7 million– In Q3, used cash of $66 million to complete the acquis
Slide 6: Updating FY 2012 Guidance
Updating FY 2012 Guidance• Reiterating fiscal 2012 revenue guidance and increasing earnings estimates to a range of $2.25 and $2.35,excluding non-recurring acquisition related charges• Continue to expect approximately $4 million in acquisition related expense, which we’ve excluded from ouradjusted d
Slide 7: Fiscal 2012 Third Quarter Earnings
Fiscal 2012 Third Quarter EarningsRichard A. MontoniPresident and Chief Executive OfficerAugust 7, 2012
Slide 8: New Award Under First Wave of HIX Technology Bids
New Award Under First Wave of HIX Technology Bids• Health care reform remains a great opportunity for MAXIMUS; the recent decision by theU.S. Supreme Court clarified that states must proceed with some form of healthinsurance exchange (HIX), but Medicaid expansion is now optional• Most of the health
Slide 9: Well-Positioned for Downstream Exchange Operations
Well-Positioned for Downstream Exchange Operations• We believe there are only a handful logical BPO players in the HIX operations market; asthe fall 2013 deadline approaches for exchange operations to begin, states areevaluating procurement approaches and some states may leverage existing servicecen
Slide 10: States Study Impact of Medicaid Expansion
States Study Impact of Medicaid Expansion• SCOTUS ruling gives states additional flexibility on Medicaid expansion, so states arecarefully studying the economic impacts of this expansion– With 100% federal funding initially decreasing to 90% in later years, states may have a hard timeturning down fe
Slide 11: Revised Total Addressable Medicaid Expansion Market
Revised Total Addressable Medicaid Expansion Market• The Congressional Budget Office revised their coverage expectations noting that thedirection of states remains uncertain; CBO now estimates that 11 million new enrolleeswill come in by 2022, down 35% from their original estimate of 17 million• MAX
Slide 12: State Efforts to Increase Efficiencies & Manage Costs
State Efforts to Increase Efficiencies & Manage Costs• California is expanding Medicaid managed care by shifting additional counties intomanaged care beginning in mid-2013 and also planning to move Medicare benefits for itsdual eligibles into Medi-Cal– We are in the early planning stages to support
Slide 13: Other Initiatives
Other Initiatives• We remain very much on track with our federal expansion strategy, enhancing ourcurrent offerings and looking at new agencies and adjacent markets where we can applyour core competencies– See promising new emerging opportunities in the health and human services space– Sales pipelin
Slide 14: Global Operations Continue to Grow
Global Operations Continue to Grow• In the United Kingdom, Work Programme operations remain on track and we still expect thecontract to break even during the fourth quarter– The economy continues to be a challenge for the UK and the Work Programme has received bothpositive and negative media attenti
Slide 15: New Awards and Sales Pipeline
New Awards and Sales PipelineSales pipeline is at a record level of $3.4 billion; most notably, of this $3.4billion, we are awaiting decisions on submitted proposals that have a totalcontract value of $1.7 billion
Slide 16: Conclusion
Conclusion• Pleased with our progress on our short-termgoals to grow the business:Integration of PSI going wellSigned our first HIX contractGaining more traction in our federal operationsContinue to expand the global footprint with anew pilot program in Saudi Arabia and a newpopulation in AustraliaU