Maximus, Inc. · NYSE:MMS
Maximus — Q3 FY2017 Earnings Presentation
20 slides from Maximus's earnings presentation, Aug 7, 2017
Slide 1: Rick Nadeau, Chief Financial Officer
1 Rick Nadeau Chief Financial Officer August 3, 2017 Helping Government Serve the People®
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 – Third Quarter of FY 2017
3 Total Company Results – Third Quarter of FY 2017 • Solid cash flow and strong operating margins • Revenue decreased 3% principally due to foreign currency impacts and expected wind down of Veterans Affairs subcontract in U.S. Federal Services Segment; on a constant currency basis, revenue would ha
Slide 4: Health Services Segment
4 Health Services Segment Q3 FY17 Revenue • Unfavorably impacted by foreign currency translation; on a constant currency basis, revenue would have grown 3% • Segment benefitted from growth on existing contracts and improved service delivery in the U.K. • The prior-year period included $5M of work fr
Slide 5: U.S. Federal Services Segment
5 U.S. Federal Services Segment Q3 FY17 Revenue • As expected, revenue declined 12% compared to Q3 FY16, mostly due to Department of Veterans Affairs subcontract that ended in April 2017 Q3 FY17 Operating Margin • Strong at 12.1% and driven by ongoing efficiency benefits Continue to see a general sl
Slide 6: Human Services Segment
6 Human Services Segment Q3 FY17 Revenue • Comparable to Q3 FY16 • On a constant currency basis, growth would have been 2% • Organic growth was partially offset by expected ramp down of Work Programme in the U.K. Q3 FY17 Operating Margin • Strong at 12.2% Revenue Human Services 133.8$ 133.8$ (0%) Op
Slide 7: Cash Flows and DSOs
7 Cash Flows and DSOs $ in millions Q3 FY17 Cash flow from operations $115.2 Cash paid for property, equipment & capitalized software ($6.1) Free cash flow $109.1 Days Sales Outstanding (DSOs) • 64 days at June 30, 2017, better than our targeted range of 65 to 80 days Delivered strong cash flows in
Slide 8: Cash, Uses of Cash and Capital Allocation
8 Cash, Uses of Cash and Capital Allocation Long-Term Debt • Subsequent to Q3 close, paid off all draws on U.S. credit facility Q3 FY17 Share Repurchases • No repurchases in third quarter; approximately $109M remaining under Board-authorized program at June 30, 2017 Q3 FY17 Balance Sheet • Healthy b
Slide 9: Guidance
9 Guidance Fiscal 2017 Guidance New Old Notes Revenue $2.425B - $2.475B $2.425B - $2.475B No change, bias toward bottom of range GAAP Diluted EPS $3.05-$3.15 $3.00-$3.10 Raising FY17 estimates primarily due to R&D tax credits recorded in Q3 Cash provided by operations $230M - $280M $230M - $280M No
Slide 10: Richard Montoni, Chief Executive Officer
10 Richard Montoni Chief Executive Officer August 3, 2017 Helping Government Serve the People®
Slide 11: Good Third Quarter & Remain on Pace for Solid FY17
11 Good Third Quarter & Remain on Pace for Solid FY17 • Good Q3 with healthy operating margins and cash flows; remain on pace for a solid FY17 • Core business remains strong and long- term macro environment remains favorable • Today, will address the most common questions about short- and long-term
Slide 12: Short-Term Growth
12 Short-Term Growth Our short-term view has not changed • Still view pause in the industry as temporary, it is impractical to speculate when we might see a break in the pause. In the U.S., we are currently seeing: smaller deal sizes reflecting budget uncertainty increased delays and longer proc
Slide 13: Long-Term Growth
13 Long-Term Growth Management commitment to identify and invest in long-term growth opportunities • Over the next five years, the macro environment is as favorable as it’s been in a long time • Governments increasingly require solutions to manage aging populations, individuals with more complex hea
Slide 14: Growth in Core Markets – Digital Engagement
14 Growth in Core Markets – Digital Engagement Our digital, analytics and technology solutions have been key differentiators to winning recent bids Digital engagement • We offer forward-thinking services that can fundamentally change our clients’ approaches to achieving outcomes • Participants in go
Slide 15: Growth in Core Markets – Analytics & Technology
15 Growth in Core Markets – Analytics & Technology Innovation and technology enables us to operate more efficient and effective programs – a key priority for clients at all levels of government These differentiators will play an important role in helping us to continue to grow our core business Anal
Slide 16: Adjacent Markets – Long-Term Services & Supports
16 Adjacent Markets – Long-Term Services & Supports Emerging Long-Term Services and Supports Market • Given demographic trend of aging populations with more complex health needs, we anticipate increasing demand in the emerging Long-Term Services and Supports (LTSS) market • Our LTSS work is in its i
Slide 17: Adjacent Markets – Geographic Expansion
17 Adjacent Markets – Geographic Expansion Singapore Pilot Program • Another successful path into adjacent markets; plays a key role in our land and expand strategy • Often begins with an acquisition or pilot program where we deliver our core services to a new population • Small but strategic workfo
Slide 18: New Growth Opportunities
18 New Growth Opportunities • Entered the U.K. occupational health market through acquisition • Gained a workforce that included health care professionals delivering health and well-being services to a new set of public and private sector clients • Provided the qualifications to win the Health Asses
Slide 19: New Awards & Sales Pipeline
19 New Awards June 30, 2017 YTD Signed Contracts $1.8B Additional Unsigned Contracts $260M Sales Opportunities June 30, 2017 Total Pipeline* $3.3B * Reported pipeline only reflects short-term opportunities where we believe request for proposals will be released within next six months New Awards & Sa
Slide 20: Conclusion
20 Conclusion • Seizing the opportunity during this period of pause and actively engaged in working all three primary avenues for growth • Yesterday’s adjacencies and new growth platforms are today’s core business – our approach today is no different than how management has successfully grown the Co