Maximus, Inc. · NYSE:MMS
Maximus — Q4 2016 Earnings Presentation
19 slides from Maximus's earnings presentation, Nov 10, 2016
Slide 1: Helping Government Serve the People
Helping Government Serve the People® Richard Montoni Chief Executive Officer November 10, 2016 1
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: Affordable Care Act & Impact to MAXIMUS
Affordable Care Act & Impact to MAXIMUS The Affordable Care Act (ACA) was initially a significant growth driver for MAXIMUS. Since launch, much has changed with the on-the-ground realities: • Some state-based exchanges have gone back to the federal exchange (like Hawaii and Oregon) • Some states hav
Slide 4: Two Categories of ACA-Related Work
Two Categories of ACA-Related Work Estimated Category Annual Work Revenue • CA, CT, HI, MN, WV Work exclusively tied to ACA that $100 Million • One of the customer contact centers in has already gone away support of the Federal Marketplace • Exchanges in MD, VT and D.C. • Small portions of our NY co
Slide 5: Fundamental Need for Wide Range of Citizen Services
Fundamental Need for Wide Range of Citizen Services Three key aspects to how MAXIMUS brings value to government programs remain relevant: 1. Macro drivers that simply aren’t going away. Populations living longer, have more complicated health care needs, and have a need for social safety net programs
Slide 6: Long-term Strategy
Long-term Strategy • We believe that we will likely experience a pause for major U.S. federal government programs as new administration enacts its agenda • Global macro trends that drive demand continue to be underpinnings of our three long-term growth strategies: 1. Continuing to broaden our U.S. h
Slide 7: Work, Health and Disability Green Paper
Work, Health and Disability Green Paper • United States is not the only government that is seeking solutions to social challenges • Last week U.K. Government issued a document titled “Work, Health and Disability Green Paper” Not intended to propose policies or legislation; but rather to solicit in
Slide 8: New Awards, Sales Pipeline & FY17 Rebids
New Awards, Sales Pipeline & FY17 Rebids Awards New Awards September 30, 2016 • FY16 awards lower compared to FY15, principally due to fewer rebids in FY16 YTD Signed Contracts $2.1B Pipeline Additional Unsigned Contracts $150M • Pipeline reached a new record at $4.3B • Strong pipeline represents qu
Slide 9: Rick Nadeau, Chief Financial Officer
Helping Government Serve the People® Rick Nadeau Chief Financial Officer November 10, 2016 9
Slide 10: Total Company Results – Full Fiscal Year 2016
Total Company Results – Full Fiscal Year 2016 ($ in millions, FY16 FY15 % Change Revenue Crosswalk Dollars % Change except per share data) Revenue Balance for full fiscal year 2015 $ 2,099.8 Health Segment $ 1,298.3 $ 1,109.2 17% Organic Growth 194.8 9% Federal Segment 591.7 502.5 18% Acquired Growt
Slide 11: Total Company Results – Fourth Quarter of FY 2016
Total Company Results – Fourth Quarter of FY 2016 ($ in millions, Q4 FY16 Q4 FY15 % Change Revenue Crosswalk Dollars % Change except per share data) Revenue Balance for fourth quarter fiscal year 2015 $ 578.7 Health Segment $ 342.1 $ 296.2 16% Organic Growth 49.4 9% Federal Segment 146.7 154.3 (5%)
Slide 12: Health Services Segment
Health Services Segment ($ in millions) FY16 FY15 % Change Q4 FY16 Q4 FY15 % Change Revenue Health Services $ 1,298.3 $ 1,109.2 17% $ 342.1 $ 296.2 16% Operating Income Health Services $ 185.0 $ 154.3 20% $ 50.9 $ 30.5 67% Operating Margin % 14.3% 13.9% 14.9% 10.3% Fiscal Year 2016 Revenue • Another
Slide 13: U.S. Federal Services Segment
U.S. Federal Services Segment ($ in millions) FY16 FY15 % Change Q4 FY16 Q4 FY15 % Change Revenue U.S. Federal Services $ 591.7 $ 502.5 18% $ 146.7 $ 154.3 (5%) Operating Income U.S. Federal Services $ 63.4 $ 59.4 7% $ 18.6 $ 20.9 (11%) Operating Margin % 10.7% 11.8% 12.7% 13.5% Fiscal Year 2016 Rev
Slide 14: Human Services Segment
Human Services Segment ($ in millions) FY16 FY15 % Change Q4 FY16 Q4 FY15 % Change Revenue Human Services $ 513.3 $ 488.1 5% $ 134.3 $ 128.2 5% Operating Income Human Services $ 47.7 $ 60.2 (21%) $ 14.5 $ 13.4 9% Operating Margin % 9.3% 12.3% 10.8% 10.4% Fiscal Year 2016 Revenue • Revenue grew 5% du
Slide 15: Balance Sheet & Cash Flows
Balance Sheet & Cash Flows Days Sales Outstanding (DSOs) • DSOs were 70 days at September 30th (target range is 65 to 80 days) • DSOs increased on a sequential basis due to a payment delay from one of our large clients; accounted for 5 DSOs; the balance was collected subsequent to quarter close • Du
Slide 16: Share Repurchases & Cash
Share Repurchases & Cash Share Repurchases Approximate Purchase Period Weighted Average Price Number of Shares Amount Fiscal 2016 587,000 $31.3M $53.39 9/30/16 through 243,000 $12.8M $52.84 11/8/16 • Approximately $124M remaining for repurchases under Board-authorized program Cash and Other Balance
Slide 17: Establishing Formal FY17 Guidance
Establishing Formal FY17 Guidance • Macro drivers are unchanged; believe that 10% top and bottom line growth over the long term is achievable • Will have years of accelerated growth driven by things like new legislation – but will also have years of lesser Fiscal 2017 Guidance growth as a result of
Slide 18: FY17 Guidance Data Points
FY17 Guidance Data Points Q1 FY17 Expectations: We anticipate that Q1 FY17 revenue and diluted EPS will be lower compared to Q4 FY16 driven by two factors: 1) U.S. Federal Services will deliver lower revenue and income due to the aforementioned $40M revenue reduction on a health care contract and th
Slide 19: Conclusion: Fiscal Year 2017
Conclusion: Fiscal Year 2017 • Now, more than ever, bringing together understanding of how cost, quality and access to services intersect could not be more important • MAXIMUS is really well positioned to address these challenges and be a change agent – we offer scalable, cost-effective and operatio