Slide 1: Fiscal 2014 Third Quarter Earnings
1 Fiscal 2014 Third Quarter Earnings Richard J. Nadeau Chief Financial Officer and Treasurer August 7, 2014
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: Total Company Results
3 Total Company Results Q3 FY14 revenue increased 26% to $419.9M compared to the same quarter last year, driven by the Health Services Segment Consolidated operating income totaled $55.3M, delivering an operating margin of 13.2% Income from continuing operations, net of taxes, increased 21% to $34.0
Slide 4: Health Services Segment
4 Health Services Segment Revenue Another solid quarter. Q3 FY14 revenue increased 40% Top-line increases driven by: 1. New work and expansion on existing contracts, including those related to the Affordable Care Act (ACA) 2. Health Management acquisition, which closed on July 1, 2013 Operating Inco
Slide 5: Human Services Segment
5 Human Services Segment Revenue Q3 FY14 revenue is slightly lower than last year, principally due to adverse currency impacts Operating Income & Margins Q3 FY14 operating income compared favorably to last year Operating margin improved to 11.4%, for Q3 14, up from 9.5% last year. Third quarter oper
Slide 6: Balance Sheet and Cash Flows
6 Balance Sheet and Cash Flows Cash Flows in Q3 Benefitted from strong earnings and solid collections that led to lower DSOs of 63 days DSOs will likely rise in Q4 to within the previously stated range of 65-80 days Cash Deployment Share repurchases − Q3 FY14, purchased 599,529 shares of MMS common
Slide 7: Reiterating FY Guidance
7 Reiterating FY 14 Guidance Full year guidance for fiscal year ending September 30, 2014 remains unchanged We expect a bias towards the top end of both our revenue and earnings guidance Cash flow guidance remains unchanged
Slide 8: Fiscal 2014 Third Quarter Earnings
8 Fiscal 2014 Third Quarter Earnings Richard A. Montoni President and Chief Executive Officer August 7, 2014
Slide 9: Changes to the Leadership for Future Growth
9 Changes to the Leadership for Future Growth New Chief Financial Officer, Rick Nadeau Comes to MAXIMUS from SRA International Brings more than 10 years of public company experience and more than 30 years experience in public accounting Bruce Caswell appointed to President Responsible for operationa
Slide 10: New U.S. Contract – Debt Management Services
10 New U.S. Contract – Debt Management Services Successfully launched operations – on schedule – for the new debt management contract with U.S. Department of Education Helping administer a portfolio of approximately five million borrowers whose student loans are in default status Operations include:
Slide 11: New U.K. Contract – Health and Work Service
11 New U.K. Contract – Health and Work Service Department for Work and Pensions selected Health Management for new program Terms 63-month contract with expected total contract value of up to approximately $226 million Anticipate initial start-up loss due to contract nature; overall program economics
Slide 12: Additional Work for Job Services Australia
12 Additional Work for Job Services Australia Reallocated work under Job Services Australia (JSA) program Strong performance under Star Rating program resulted in the award of 18 new sites Increases caseload by approximately 15% to more than 100,000 job seekers Provides approximately $15 million in
Slide 13: International Opportunities
13 International Opportunities Future international growth may come from: New countries that are increasing their propensity to outsource Current geographies with expanded needs For example, in Australia: Substantive opportunities for growth Exact timing of opportunities is not precisely known We re
Slide 14: US Operations and ACA Efforts
14 US Operations and ACA Efforts See Future opportunities related to the support of the Affordable Care Act (ACA) Current status for customer contact centers for state and federal exchanges Gearing up for next open enrollment period and we will adapt to dynamic environment as governments apply “less
Slide 15: Rebids
15 Rebids 15 contracts worth a total of $225 million up for rebid in FY 14 Won or received extensions on 11 with a total contract value of $150 million Year-to-date, lost 2 small rebids with a combined total contract value of about $20 million, leaving only 2 rebids left with a total contract value
Slide 16: New Awards and Sales Pipeline
16 New Awards and Sales Pipeline At June 30, 2014: Signed $1.1 billion in year-to-date contract awards Additional $428 million in contracts pending (notified of award and in contract negotiations) Sales pipeline reached $3.0 billion and driven, in part, by: Contract rebid in Australia New opportunit
Slide 17: Fiscal 2015 Commentary
17 Fiscal 2015 Commentary We are pleased with our: Progress in FY 14 Expectations for the remainder of the year Prospects for FY 15 and beyond Fiscal Year 2015 Headwinds 1. Reduced revenue from ACA and appeals work for the Medicare program Lion’s share of ACA work is recurring, but as expected some
Slide 18: Conclusion
18 Conclusion FY 15 shaping up to be a growth year, both top- and bottom-line Conducting annual planning process and will provide formal guidance in November Management team remains focused on dynamics that best position MAXIMUS for future, multi-year growth Over the long-term, believe revenue and e