Slide 1: Fiscal 2015 Third Quarter Earnings
Fiscal 2015 Third Quarter Earnings Richard J. Nadeau Chief Financial Officer August 6, 2015
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: Total Company Results – Third Quarter
($ in millions) Q3 FY15 Q3 FY14 % Change Revenue Health Services $ 439.6 $ 305.3 44% Human Services 132.7 114.6 16% Total $ 572.3 $ 419.9 36% Operating Income Health Services $ 60.0 $ 43.2 39% Human Services 16.8 13.6 24% Intangibles Amortization (3.3) (1.5) Other (2.5) – Total $ 71.1 $ 55.2 29% Ope
Slide 4: Health Services Segment
Health Services Segment Revenue Delivered another strong quarter of financial results Grew 44% compared to prior year period through combination of organic and acquired growth Majority growth was organic, with approx. 27% coming from new work and expansion of existing contracts Unfavorably impacted
Slide 5: U.K. Assessment Contract
U.K. Assessment Contract The additional revenue in the Health Services Segment will be offset by start-up challenges with Health Assessment Advisory Service (HAAS) contract in the U.K. In March 2015, took over the contract from the prior provider; at time of takeover it was a very troubled program M
Slide 6: Human Services Segment
Human Services Segment Revenue Revenue grew 16% compared to Q3 FY14 On a constant currency basis, revenue would have increased 26% Increase driven by Remploy acquisition and organic growth in our international welfare-to-work. This increase was offset by detrimental currency impact Operating Income
Slide 7: Days Sales Outstanding, Cash Flows and Balance Sheet
Days Sales Outstanding (DSOs) DSOs improved to 64 days As mentioned last quarter, new U.K. contracts were primary reason behind higher DSOs as of March 31, but as expected we have experienced normal collections on these contracts during Q3 FY15 Cash Flows and Balance Sheet Reconciliation to Free Cas
Slide 8: FY15 Guidance
FY15 Guidance Revenue $2.10B - $2.14B Diluted EPS $2.33 - $2.40 Updated FY15 revenue guidance driven by expansion on existing contracts and some new work in our U.S. federal business, offset by the weakness in our U.K. start-up As a result, we continue to expect FY15 diluted EPS in the range of $2.3
Slide 9: FY16 Preliminary Guidance
FY16 Preliminary Guidance Revenue $2.4B - $2.5B Diluted EPS $2.85 - $3.05 In middle of annual planning process for FY16 We have been making investments in IT infrastructure and modernization to ensure that we maintain our competitive position and have required scale and flexibility to continue to gr
Slide 10: Fiscal 2015 Third Quarter Earnings – Richard Montoni
Fiscal 2015 Third Quarter Earnings Richard Montoni Chief Executive Officer August 6, 2015
Slide 11: Start-Up Updates
Start-Up Updates Portfolio of contracts, many of which are tied to operating long-term programs with clearly defined program life cycles Often times, profitability may be lower in early days then improve as programs mature As part of our established risk management strategy, we place a tremendous am
Slide 12: U.K. Health Assessment Advisory Service
U.K. Health Assessment Advisory Service MAXIMUS is conducting assessments for individuals seeking certain disability benefits according to the rules set by Parliament Program faced significant obstacles prior to MAXIMUS taking over contract in March 2015 All along, we’ve recognized that it would tak
Slide 13: U.K. Fit for Work
U.K. Fit for Work Fit for Work is a support service to help working people who face long-term absence due to illness return to their jobs more quickly Launched phase one of the contract last December Recently launched phase two, which is the nationwide rollout of the service
Slide 14: Australia jobactive
Australia jobactive Successfully launched on July 1; key rebid for MAXIMUS As a reminder, gained a net pick-up in expected volumes, which increased overall market share of caseload allocations Under the same contract, also increased our footprint for the Work for the Dole program where we arrange ac
Slide 15: Acquisitions Update
Acquisitions Update Acentia We now hold positions on several additional federal contract vehicles and have access to more federal health and civilian agencies Already seeing many new prospects that combine BPO and IT that will develop over the next several years Business development team is finalizi
Slide 16: Affordable Care Act – Third Open Enrollment
Affordable Care Act – Third Open Enrollment We are also deep in the heart of planning for the Affordable Care Act’s third open enrollment period; starts on November 1 June’s U.S. Supreme Court’s decision essentially maintains the status quo; some states are still considering using waivers as a way t
Slide 17: Technology Investments
Technology Investments There are necessary technology investments to ensure that we are best positioned for continued growth over the long run We operate in a competitive environment and must keep technology capabilities sharp to maintain position as a trusted and preferred partner to governments wo
Slide 18: Three Areas for IT Investments
Three Areas for IT Investments Infrastructure Investing in the scalability and resiliency of our infrastructure to introduce additional efficiencies in our operations – and ultimately drive financial performance Examining technology areas such as: −Production systems −Data centers −Enterprise teleph
Slide 19: New Awards and Pipeline
New Awards and Pipeline At June 30, 2015: Year-to-date signed contract awards remained strong Sales pipeline includes opportunities from our new acquisitions Our new acquisitions bring along a much broader pipeline that lays out opportunities over next three to five years and isn’t captured in six-m
Slide 20: Conclusion
Conclusion Optimistic about macro trends that should continue to fuel our future growth and long-term demand for our services remains strong Will provide formal guidance for FY16 on November’s earnings call We continue to see growth opportunities that span multiple business areas and geographies Acq
Slide 21: Fiscal 2015 Third Quarter Earnings Appendix
Fiscal 2015 Third Quarter Earnings Appendix
Slide 22: Drivers to FY16 Preliminary Guidance
(+) Full-year contributions from Acentia and Remploy (+) New work and expansion of existing contracts (+) Growth from contracts in start-up phase during FY15: AUS jobactive, U.K. HAAS, U.K. Fit for Work and U.S. Dept. of Education (+/-) Normal-course portfolio headwinds and tailwinds (-) Incremental