FOR IMMEDIATE RELEASE CONTACT: Lisa Miles 703.251.8637 lisamiles@maximus.com Date: November 20, 2018

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FOR IMMEDIATE RELEASE
 
CONTACT:
Lisa Miles 703.251.8637
 
 
 
lisamiles@maximus.com
Date: November 20, 2018
 
 
 

MAXIMUS Reports Fourth Quarter and Full Year Results for Fiscal Year 2018
- Completes Acquisition and Establishes Guidance for Fiscal Year 2019 -

(RESTON, Va. - November 20, 2018) - MAXIMUS (NYSE: MMS), a leading provider of government services worldwide, today reported financial results for the three months and year ended September 30, 2018.

Highlights for fiscal year 2018 include:

Revenue of $2.39 billion

GAAP diluted earnings per share of $3.35

Total company operating margin of 12.4%

Cash, cash equivalents and short-term investments that totaled $370 million at September 30, 2018

Solid cash generation with cash flows from operations of $323.5 million and free cash flow of $297.0 million

Signed year-to-date contract awards of $2.7 billion, new contracts pending (awarded, but unsigned) of $553 million, and a sales pipeline of $2.7 billion at September 30, 2018, and

On November 16, 2018, MAXIMUS completed the $400 million, all-cash acquisition, subject to working capital adjustments, of U.S. Federal civilian citizen engagement centers.

Revenue for the fourth quarter of fiscal 2018 totaled $558.4 million, and, as expected, was lower compared to $620.9 million reported for the same period last year. While MAXIMUS operates a large portfolio of contracts, revenue in the fourth quarter was slightly below the Company's expectations due to lower-than-anticipated contributions across a handful of contracts. For the fourth quarter of fiscal 2018, net income attributable to MAXIMUS totaled $46.3 million, or $0.71 of diluted earnings per share. This compares to diluted earnings per share of $0.81 for the fourth quarter of fiscal 2017.

Revenue for fiscal 2018 totaled $2.39 billion, compared to $2.45 billion reported for fiscal 2017. The expected decrease is principally attributable to the anticipated declines in the U.S. Federal Services Segment and, to a lesser extent, the Human Services Segment, both of which offset organic growth in the Health Services Segment. As expected, the Company delivered operating margin for fiscal 2018 of 12.4% due to new contracts in the start-up phase that reduced margins in the Human Services Segment. For fiscal 2018, net income attributable to MAXIMUS totaled $220.8 million, or $3.35 of diluted earnings per share. This compares to fiscal 2017 reported net income attributable to MAXIMUS of $209.4 million and diluted earnings per share of $3.17.



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Health Services Segment
Health Services Segment revenue for the fourth quarter of fiscal 2018 decreased 8% (7% on a constant currency basis) to $328.2 million, compared to $355.3 million reported for the same period last year. As previously disclosed, revenue was lower due to forecasted changes on several sizable contracts that were rebid and won, extended or option periods that were exercised. Operating income for the fourth quarter totaled $51.9 million (15.8% operating margin), compared to $57.0 million (16.0% operating margin) for the same period last year.

For the full fiscal year, Health Services Segment revenue increased 2% to $1.40 billion, compared to $1.38 billion for the same period last year. Fiscal 2018 operating income totaled $236.4 million (16.8% operating margin), compared to operating income of $215.2 million (15.6% operating margin) for fiscal 2017.

U.S. Federal Services Segment
As expected, U.S. Federal Services Segment revenue for the fourth quarter of fiscal 2018 decreased 8% to $117.4 million, compared to $127.3 million reported for the same period last year. Operating income for the fourth quarter totaled $16.0 million (13.6% operating margin), compared to $13.6 million (10.7% operating margin) for the same period last year.

For the full fiscal year, U.S. Federal Services Segment revenue decreased 12% to $478.9 million, compared to $545.6 million for the same period last year due to contracts that ended, contracts that were re-procured under small business set-asides and some rebid losses. Despite lower revenue, operating margins in fiscal 2018 were slightly improved over the prior year due to operational efficiencies resulting from technology and innovation initiatives. Hence, fiscal 2018 operating income totaled $57.4 million (12.0% operating margin), compared to operating income of $65.0 million (11.9% operating margin) for fiscal 2017.

Human Services Segment
As expected, the Human Services Segment revenue for the fourth quarter of fiscal 2018 decreased 18% (15% on a constant currency basis) to $112.9 million, compared to $138.2 million for the same period last year. The Segment had an operating loss for the fourth quarter of $0.7 million, compared to operating income of $10.8 million (7.8% operating margin) for the same period last year. As previously disclosed, results in the fourth quarter were tempered by the Disability Employment Services contract in Australia which was recently won in rebid and launched on July 1, 2018.

For the full fiscal year, Human Services Segment revenue decreased 3% (4% on a constant currency basis) to $508.4 million, compared to $525.2 million for the same period last year. Fiscal 2018 operating income totaled $18.2 million (3.6% operating margin), compared to operating income of $48.6 million (9.2% operating margin) for fiscal 2017.

During fiscal 2018, the Human Services Segment experienced dynamics that lowered both revenue and profit compared to the prior year, including several new performance-based contracts in the start-up phase with outcome-based pay points that take time to achieve, as well as contracts that are coming to an expected end such as the Work Programme and Work Choice contracts in the United Kingdom.

Backlog, Sales and Pipeline
Backlog was $5.1 billion at September 30, 2018. Year-to-date signed contract awards totaled $2.7 billion at September 30, 2018. The value of new contracts pending at September 30, 2018, (awarded but unsigned) was $553.3 million.



1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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The sales pipeline at September 30, 2018, was approximately $2.7 billion (comprised of approximately $930.6 million in proposals pending, $180.7 million in proposals in preparation and $1.6 billion in opportunities tracking). The pipeline is lower compared to the third quarter of fiscal 2018 due to contracts converting into new awards. During the fourth quarter, the Company backfilled its pipeline with more than $1 billion in opportunities. The Company’s sales pipeline only reflects those opportunities where MAXIMUS expects the request for proposal will be released within the next six months.

The Company will introduce a new pipeline reporting methodology in its first fiscal quarter of 2019. The anticipated changes include: 1) Reporting total contract values, including priced option periods. The Company previously reported base contract value, and options were reported in the year in which they were exercised. 2) Modifying the time horizon of reported RFPs to two years, but this remains under study. The Company previously only captured RFPs that were expected to be released within six months. 3) Eliminating the maximum value cap of $150 million on new work opportunities. The Company previously capped new work opportunities at a value of $150 million, but this did not apply to existing work.

MAXIMUS believes that these changes better reflect the business model and long-term nature of the Company's portfolio.

Balance Sheet and Cash Flows
Cash, cash equivalents and short-term investments at September 30, 2018, totaled $370 million. For the fourth quarter of fiscal 2018, cash flows from operations were $134.5 million, with free cash flow of $129.5 million. For fiscal 2018, cash flows from operations were $323.5 million with free cash flow of $297.0 million.

At September 30, 2018, days sales outstanding (DSO) were 63 days, and better than the Company’s stated range of 65 to 80 days. Low DSO resulted from strong cash collections in the quarter.
 
On August 31, 2018, MAXIMUS paid a quarterly cash dividend of $0.045 per share. On October 5, 2018, the Company announced a $0.25 per share cash dividend, payable on November 30, 2018, to shareholders of record on November 15, 2018.

For the full fiscal year, MAXIMUS repurchased approximately 1.1 million shares for $67.6 million (a weighted average price of $62.07). As of September 30, 2018, the Company had $192.8 million available for repurchases under its Board-authorized share repurchase program. Subsequent to year end, MAXIMUS purchased an additional 0.2 million shares for $15 million.

Acquisition Completion and Outlook
On November 16, 2018, MAXIMUS completed the $400 million, all-cash acquisition, subject to working capital adjustments, of selected U.S. Federal civilian citizen engagement centers from General Dynamics Information Technology. The assets will be reported in the Company's U.S. Federal Services Segment. MAXIMUS will file a Form 8-K in December with the financial statements of the acquired assets and pro forma financial information. The Company expects that fiscal 2019 revenue from the acquisition will range between $600 million and $625 million and estimates that it will contribute approximately $0.45 of diluted earnings per share.

MAXIMUS is establishing fiscal 2019 GAAP guidance which includes the acquisition. The Company expects fiscal 2019 revenue to range between $2.925 billion and $3.0 billion. Approximately 93% of the Company's fiscal 2019 forecasted revenue is in the form of backlog, option periods or extensions. This calculation includes $612.5 million of revenue and backlog from the acquisition. For fiscal 2019, the Company expects GAAP diluted earnings per share to range between $3.55 and $3.75. For fiscal 2019, the Company expects cash


1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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flows from operations to range between $275 million and $325 million, and free cash flow to range between $235 million and $285 million.

For fiscal 2019, the Company has estimated its effective income tax rate will range between 25% and 26% and weighted average shares outstanding of approximately 65.3 million.

Bruce Caswell, President and Chief Executive Officer of MAXIMUS, commented, "During fiscal 2018, we made demonstrated progress in executing our strategic initiatives, including assessing and prioritizing new and adjacent markets, stepping-up our M&A activities with our recent acquisition, deepening our executive bench, and bringing in new sales and capture leadership. Our vision is to be the premier provider of large-scale complex program management solutions, offering unparalleled support to citizens who access and utilize critical government programs. We continue to see evidence that long-term macro trends remain in our favor."

New Segment Reporting
On October 1, 2018, MAXIMUS reorganized its reporting segments based on the way that our Chief Executive Officer intends to manage performance, allocate resources and evaluate results. The reorganization is largely in response to market changes with the increasing integration of health and human services programs worldwide, and the evolving needs of our government clients as they aim to deliver services in a more holistic manner to their citizens. Accordingly, the three operating segments will be on a geographic basis: U.S. Health & Human Services, U.S. Federal, and Outside the U.S. The Company will file a Form 8-K in early December with historical financial information by quarter in the reclassified segments.

Changes in revenue recognition
Beginning October 1, 2018, MAXIMUS adopted a new methodology for reporting revenue. Although this new method will not affect the timing of revenue on most contracts, we anticipate that revenue on the welfare-to-work contracts will be accelerated. This reflects the obligation to recognize long-term outcome fees across the period of performance, which may be several months, rather than deferring recognition until outcomes are certain, as was the requirement in fiscal 2018 and prior. This should result in a closer matching of revenue and costs within these contracts and should mitigate some losses recorded in these contracts in their early months, although it is typical that any new contract will generally be less profitable than a mature contract.

We project that fiscal 2019 revenue will benefit by approximately $7 million as a result of the new methodology. We project that the cumulative effect of the new methodology on all prior years will increase our retained earnings, increase our deferred tax assets and decrease our deferred revenue by approximately $33 million, $14 million and $47 million as of October 1, 2018, respectively.

Website Presentation, Conference Call and Webcast Information
MAXIMUS will host a conference call this morning, November 20, 2018, at 9:00 a.m. (ET). The call is open to the public and can be accessed under the Investor Relations page of the Company’s website at
http://investor.maximus.com or by calling:

877.407.8289 (Domestic)/+1.201.689.8341 (International)

For those unable to listen to the live call, a replay will be available through December 4, 2018, by calling:

877.660.6853 (Domestic)/+1.201.612.7415 (International)
Replay conference ID number: 13684707
About MAXIMUS


1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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Since 1975, MAXIMUS has operated under its founding mission of Helping Government Serve the People®, enabling citizens around the globe to successfully engage with their governments at all levels and across a variety of health and human services programs. MAXIMUS delivers innovative business process management and technology solutions that contribute to improved outcomes for citizens and higher levels of productivity, accuracy, accountability and efficiency of government-sponsored programs. With more than 30,000 employees worldwide, MAXIMUS is a proud partner to government agencies in the United States, Australia, Canada, Saudi Arabia, Singapore and the United Kingdom. For more information, visit maximus.com.

Non-GAAP and Other Measures
This release refers to non-GAAP financial measures, including free cash flow, constant currency, and days sales outstanding.

We have provided a reconciliation of free cash flow to cash flows from operations.

A description of these non-GAAP measures, the reasons why we use and present them and details as to how they are calculated are included in our Annual Report on Form 10-K.

The presentation of these non-GAAP numbers is not meant to be considered in isolation, nor as alternatives to cash flows from operations, revenue growth or net income as measures of performance. These non-GAAP financial measures, as determined and presented by us, may not be comparable to related or similarly titled measures presented by other companies.


Statements that are not historical facts, including statements about the Company’s confidence and strategies and the Company’s expectations about revenues, results of operations, profitability, future contracts, market opportunities, market demand or acceptance of the Company’s products are forward-looking statements that involve risks and uncertainties. These risks could cause the Company’s actual results to differ materially from those indicated by such forward-looking statements. A summary of risk factors can be found in Exhibit 99.1 to the Company’s most recent Annual Report filed with the Securities and Exchange Commission, found on maximus.com.


1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)

 
Three Months Ended September 30,
 
Twelve Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
 
Revenue
$
558,446

 
$
620,903

 
$
2,392,236

 
$
2,450,961

Cost of revenue
419,508

 
458,322

 
1,797,851

 
1,839,056

Gross profit
138,938

 
162,581

 
594,385

 
611,905

Less:
 
 
 
 
 
 
 
Selling, general and administrative expenses
73,535

 
82,291

 
285,241

 
284,593

Amortization of intangible assets
2,462

 
2,700

 
10,308

 
12,208

Restructuring costs
1,033

 

 
3,353

 
2,242

Add:
 
 


 
 
 
 
Gain on sale of a business

 

 

 
650

Operating income
61,908

 
77,590

 
295,483

 
313,512

Less:
 
 
 
 
 
 
 
Interest expense
590

 
111

 
1,000

 
2,162

Add:
 
 


 
 
 
 
Other income, net
798

 
899

 
4,726

 
2,885

Income before income taxes
62,116

 
78,378

 
299,209

 
314,235

Provision for income taxes
16,600

 
23,410

 
78,393

 
102,053

Net income
45,516

 
54,968

 
220,816

 
212,182

Income attributable to noncontrolling interests
(791
)
 
1,639

 
65

 
2,756

Net income attributable to MAXIMUS
$
46,307

 
$
53,329

 
$
220,751

 
$
209,426

Basic earnings per share attributable to MAXIMUS
$
0.71

 
$
0.81

 
$
3.37

 
$
3.19

Diluted earnings per share attributable to MAXIMUS
$
0.71

 
$
0.81

 
$
3.35

 
$
3.17

Dividends paid per share
$
0.045

 
$
0.045

 
$
0.18

 
$
0.18

Weighted average shares outstanding:
 
 
 
 
 
 
 
Basic
65,034

 
65,618

 
65,501

 
65,632

Diluted
65,402

 
66,171

 
65,932

 
66,065














1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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MAXIMUS, Inc.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
 
September 30,
 
2018
 
2017
 
(Unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
349,245

 
$
166,252

Short-term investments
20,264

 

Accounts receivable — billed and billable
357,613

 
394,338

Accounts receivable — unbilled
31,536

 
36,475

Income taxes receivable
5,979

 
4,528

Prepaid expenses and other current assets
43,995

 
55,649

Total current assets
808,632

 
657,242

Property and equipment, net
77,544

 
101,651

Capitalized software, net
22,429

 
26,748

Goodwill
399,882

 
402,976

Intangible assets, net
88,035

 
98,769

Deferred contract costs, net
14,380

 
16,298

Deferred compensation plan assets
34,305

 
28,548

Deferred income taxes
6,834

 
7,691

Other assets
9,959

 
10,739

Total assets
$
1,462,000

 
$
1,350,662

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued liabilities
$
114,378

 
$
122,083

Accrued compensation and benefits
95,555

 
105,667

Deferred revenue
51,182

 
71,722

Income taxes payable
4,438

 
4,703

Other liabilities
11,896

 
12,091

Total current liabilities
277,449

 
316,266

Deferred revenue, less current portion
20,394

 
28,182

Deferred income taxes
26,377

 
20,106

Deferred compensation plan liabilities, less current portion
33,497

 
30,707

Other liabilities
17,864

 
9,633

Total liabilities
375,581

 
404,894

Commitments and contingencies
 
 
 
Shareholders’ equity:
 
 
 
Common stock
487,539

 
475,592

Accumulated other comprehensive income
(36,953
)
 
(27,619
)
Retained earnings
633,281

 
492,112

Total MAXIMUS shareholders’ equity
1,083,867

 
940,085

Noncontrolling interests
2,552

 
5,683

Total equity
1,086,419

 
945,768

Total liabilities and equity
$
1,462,000

 
$
1,350,662



1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
 
 
Three Months Ended September 30,
 
Twelve Months Ended September 30,
 
 
2018
 
2017
 
2018
 
2017
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
 
Cash flows from operations:
 
 
 
 
 
 
 
 
Net income
 
$
45,516

 
$
54,968

 
$
220,816

 
$
212,182

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
 
Depreciation and amortization of property, plant, equipment and capitalized software
 
11,982

 
12,353

 
51,884

 
55,769

Amortization of intangible assets
 
2,462

 
2,700

 
10,308

 
12,208

Deferred income taxes
 
(2,153
)
 
(3,852
)
 
6,721

 
4,762

Stock compensation expense
 
4,525

 
5,543

 
20,238

 
21,365

Gain on sale of a business
 

 

 

 
(650
)
Changes in assets and liabilities, net of effects of business combinations:
 
 
 
 
 
 
 
 
Accounts receivable — billed and billable
 
40,822

 
(14,998
)
 
34,033

 
53,025

Accounts receivable — unbilled
 
4,608

 
7,293

 
4,920

 
26

Prepaid expenses and other current assets
 
(552
)
 
(3,360
)
 
4,954

 
2,584

Deferred contract costs
 
(402
)
 
923

 
1,838

 
2,037

Accounts payable and accrued liabilities
 
15,971

 
9,104

 
(7,725
)
 
(28,309
)
Accrued compensation and benefits
 
7,040

 
10,552

 
(8,795
)
 
8,849

Deferred revenue
 
(1,311
)
 
869

 
(27,039
)
 
(15,401
)
Income taxes
 
1,349

 
3,531

 
7,262

 
8,901

Other assets and liabilities
 
4,608

 
(523
)
 
4,110

 
(148
)
Cash provided by operating activities
 
134,465

 
85,103

 
323,525

 
337,200

 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
Purchases of property and equipment and capitalized software costs
 
(4,968
)
 
(5,066
)
 
(26,520
)
 
(24,154
)
Acquisition of businesses, net of cash acquired
 

 
(2,677
)
 

 
(2,677
)
Acquisition of part of noncontrolling interest
 

 

 
(157
)
 

Proceeds from the sale of a business
 

 

 

 
1,035

Purchases of short-term investments
 

 

 
(19,996
)
 

Other
 
94

 
90

 
369

 
575

Cash used in investing activities
 
(4,874
)
 
(7,653
)
 
(46,304
)
 
(25,221
)
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
Cash dividends paid
 
(2,891
)
 
(2,920
)
 
(11,692
)
 
(11,674
)
Repurchases of common stock
 
(4,932
)
 

 
(66,919
)
 
(28,863
)
Tax withholding related to RSU vesting
 

 
92

 
(8,529
)
 
(9,175
)
Stock option exercises
 

 
554

 

 
924

Borrowings under credit facility
 
1,949

 
30,000

 
136,632

 
185,000

Repayment under credit facility
 
(1,983
)
 
(45,079
)
 
(136,769
)
 
(349,981
)
Other
 
(545
)
 
(440
)
 
(4,603
)
 
(1,660
)
Cash used in financing activities
 
(8,402
)
 
(17,793
)
 
(91,880
)
 
(215,429
)
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash
 
(965
)
 
2,217

 
(2,348
)
 
3,503

 
 
 
 
 
 
 
 
 
Net increase/(decrease) in cash and cash equivalents
 
120,224

 
61,874

 
182,993

 
100,053

 
 
 
 
 
 
 
 
 
Cash and cash equivalents, beginning of period
 
229,021

 
104,378

 
166,252

 
66,199

 
 
 
 
 
 
 
 
 
Cash and cash equivalents, end of period
 
$
349,245

 
$
166,252

 
$
349,245

 
$
166,252



1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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MAXIMUS, Inc.
SEGMENT INFORMATION
(Amounts in thousands)
 
 
Three Months Ended September 30,
 
Twelve Months Ended September 30,
 
 
2018
 
% (1)
 
2017
 
% (1)
 
2018
 
% (1)
 
2017
 
% (1)
 
 
(Unaudited)
 
 
 
(Unaudited)
 
 
 
(Unaudited)
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Health Services
 
$
328,186

 
100
 %
 
$
355,338

 
100
%
 
$
1,404,959

 
100
%
 
$
1,380,151

 
100
%
U.S. Federal Services
 
117,375

 
100
 %
 
127,316

 
100
%
 
478,911

 
100
%
 
545,573

 
100
%
Human Services
 
112,885

 
100
 %
 
138,249

 
100
%
 
508,366

 
100
%
 
525,237

 
100
%
Total
 
$
558,446

 
100
 %
 
$
620,903

 
100
%
 
$
2,392,236

 
100
%
 
$
2,450,961

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Profit:
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
Health Services
 
$
86,111

 
26.2
 %
 
$
99,368

 
28.0
%
 
$
372,628

 
26.5
%
 
$
347,325

 
25.2
%
U.S. Federal Services
 
33,690

 
28.7
 %
 
31,547

 
24.8
%
 
126,698

 
26.5
%
 
139,321

 
25.5
%
Human Services
 
19,137

 
17.0
 %
 
31,666

 
22.9
%
 
95,059

 
18.7
%
 
125,259

 
23.8
%
Total
 
$
138,938

 
24.9
 %
 
$
162,581

 
26.2
%
 
$
594,385

 
24.8
%
 
$
611,905

 
25.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expense:
 
 
 
 

 
 
 
 

 
 
 
 

 
 
 
 
Health Services
 
$
34,172

 
10.4
 %
 
$
42,344

 
11.9
%
 
$
136,250

 
9.7
%
 
$
132,081

 
9.6
%
U.S. Federal Services
 
17,725

 
15.1
 %
 
17,966

 
14.1
%
 
69,312

 
14.5
%
 
74,345

 
13.6
%
Human Services
 
19,826

 
17.6
 %
 
20,848

 
15.1
%
 
76,835

 
15.1
%
 
76,675

 
14.6
%
Other
 
1,812

 
NM

 
1,133

 
NM

 
2,844

 
NM

 
1,492

 
NM

Total
 
$
73,535

 
13.2
 %
 
$
82,291

 
13.3
%
 
$
285,241

 
11.9
%
 
$
284,593

 
11.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income:
 
 
 
 

 
 
 
 

 
 
 
 

 
 
 
 
Health Services
 
$
51,939

 
15.8
 %
 
$
57,024

 
16.0
%
 
$
236,378

 
16.8
%
 
$
215,244

 
15.6
%
U.S. Federal Services
 
15,965

 
13.6
 %
 
13,581

 
10.7
%
 
57,386

 
12.0
%
 
64,976

 
11.9
%
Human Services
 
(689
)
 
(0.6
)%
 
10,818

 
7.8
%
 
18,224

 
3.6
%
 
48,584

 
9.2
%
Amortization of intangible assets
 
(2,462
)
 
NM

 
(2,700
)
 
NM

 
(10,308
)
 
NM

 
(12,208
)
 
NM

Restructuring costs
 
(1,033
)
 
NM

 

 
NM

 
(3,353
)
 
NM

 
(2,242
)
 
NM

Acquisition-related expenses (2)
 
(947
)
 
NM

 
(83
)
 
NM

 
(947
)
 
NM

 
(83
)
 
NM

Gain on sale of a business
 

 
NM

 

 
NM

 

 
NM

 
650

 
NM

Other (3)
 
(865
)
 
NM

 
(1,050
)
 
NM

 
(1,897
)
 
NM

 
(1,409
)
 
NM

Total
 
$
61,908

 
11.1
 %
 
$
77,590

 
12.5
%
 
$
295,483

 
12.4
%
 
$
313,512

 
12.8
%


(1)    Percentage of respective segment revenue. Percentages considered not meaningful are marked “NM.”
(2)
Acquisition-related expenses include costs for the acquisition of the U.S. Federal citizen engagement centers, which were incurred in fiscal year 2018 prior to the transaction closing in fiscal year 2019, and costs for the acquisition of Revitalised Limited in fiscal year 2017
(3)
"Other" relates to various expenses which are not directly attributable to our segments, including litigation costs.


1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

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mmsheaderpage2.jpg


MAXIMUS, Inc.
FREE CASH FLOW
(Non-GAAP measure)
(Amounts in thousands)
(Unaudited)


 
 
Three Months Ended September 30,
 
Twelve Months Ended September 30,
 
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
 
Cash flows from operations
 
$
134,465

 
$
85,103

 
$
323,525

 
$
337,200

Purchases of property and equipment and capitalized software costs
 
(4,968
)
 
(5,066
)
 
(26,520
)
 
(24,154
)
Free cash flow
 
$
129,497

 
$
80,037

 
$
297,005

 
$
313,046

 
 
 
 
 
 
 
 
 




1891 METRO CENTER DRIVE | RESTON, VIRGINIA 20190 | 703.251.8500 | 703.251.8240 FAX | MAXIMUS.COM

Page 10