Maximus, Inc. · NYSE:MMS
Maximus — Q1 FY2015 Earnings Presentation
19 slides from Maximus's earnings presentation, Feb 5, 2015
Slide 1: Fiscal 2015 First Quarter Earnings
Fiscal 2015 First Quarter Earnings Richard J. Nadeau Chief Financial Officer and Treasurer February 5, 2015 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: Total Company Results – First Quarter
Total Company Results – First Quarter • Q1 FY15 revenue increased 15% • Both segments delivered top-line increases driven by new work and expansion on existing contracts ($ in millions) Q1 FY15 Q1 FY14 % Change Revenue • Revenue unfavorably impacted by currency exchange Health Services $ 351.7 $ 299
Slide 4: Health Services Segment
Health Services Segment Delivered strong operational and financial results & performed largely in-line with our expectations ($ in millions) Q1 FY15 Q1 FY14 % Change Revenue Health Services $ 351.7 $ 299.2 18% Operating Income Health Services $ 50.4 $ 41.6 21% Operating Margin % 14.3% 13.9% Revenue
Slide 5: Human Services Segment
Human Services Segment ($ in millions) Q1 FY15 Q1 FY14 % Change Revenue Human Services $ 115.4 $ 107.4 7% Operating Income Human Services $ 15.5 $ 11.8 31% Operating Margin % 13.4% 10.9% Revenue • Adversely impacted by changes in currency, most notably weakening of Australian dollar • Q1 FY15 impact
Slide 6: Cash Flows
Cash Flows Cash Flows • Strong Q1 cash flow driven by increased earnings and good receivables collections • DSOs improved on a sequential basis to 58 days in the quarter. We expect DSOs may increase to more normalized levels during the year due to some new contracts; most notably two health contract
Slide 7: Share Repurchases & Uses of Cash
Share Repurchases & Uses of Cash Share Repurchases Period Purchase Amount Number of Shares Q1 FY15 $30.6M 753,010 • At December 31, 2014, $104.6M available for future purchases • Buyback program is opportunistic in nature Cash and Cash Equivalents • At December 31, 2014, had cash and cash equivalent
Slide 8: Reiterating FY15 Guidance
Reiterating FY15 Guidance FY15 Guidance • Canadian dollar and British pound continued to Revenue $1.9B - $2.0B significantly weaken throughout January 2015 Diluted EPS $2.25 - $2.40 • Looking at our guidance, the January 31 currency exchange rates would indicate a tempering of revenue of approximate
Slide 9: Fiscal 2015 First Quarter Earnings
Fiscal 2015 First Quarter Earnings Richard A. Montoni Chief Executive Officer February 5, 2015 9
Slide 10: Affordable Care Act – Second Open Enrollment
Affordable Care Act – Second Open Enrollment Our solid performance for Q1 FY15 sets a good path for remainder of year & beyond • Affordable Care Act teams are wrapping up the activities tied to the second open enrollment period, which runs through February 15, 2015 • As expected, overall open enroll
Slide 11: ACA Anecdotal Observations
ACA Anecdotal Observations • Overall increase in consumer awareness related to eligibility and enrollment • Just starting to receive calls related to new tax forms • Public health insurance exchanges and covered individuals are required to submit ACA-related tax information and forms • So far, about
Slide 12: ACA Customer Contact Centers
ACA Customer Contact Centers • MAXIMUS operates five state-based exchanges & the District of Columbia • Also operate two customer contact centers for Federal Marketplace as a subcontractor – As reported in the media, we’ve started the process of ramping down one of our federal customer contact cente
Slide 13: Transitions to State-Based Exchanges
Transitions to State-Based Exchanges • Continue to work closely with states that may be considering a potential move off the Federal Marketplace to their own state-based exchange • Realistically, won’t see a lot of movement until Supreme Court renders a decision on the King vs. Burwell case, expecte
Slide 14: 2017 State Innovation Waivers
2017 State Innovation Waivers • States continue to be interested in how to better manage the continuum of programs for the uninsured • We believe 2017 State Innovation Waivers provided under Section 1332 of the Act may prompt more states to consider new ways to manage their uninsured populations • I
Slide 15: Live Event: Opportunities for State Innovation
Live Event: Opportunities for State Innovation • MAXIMUS will be hosting a live event tomorrow at noon to discuss new approaches that states can take for the design and operation of their health insurance programs • Event features some of the country’s leading policy experts, all of whom have broad
Slide 16: U.K. Health Operations – Two New Contracts
U.K. Health Operations – Two New Contracts Fit for Work • Program is well underway; launched phase one in December 2014 and now working on phase two Health Assessment Advisory Service (formally known as the Health and Disability Assessment Service) • Under contract, MAXIMUS is conducting assessments
Slide 17: Positive News for Human Services
Positive News for Human Services U.S. Welfare-to-Work Operations • Successful on rebid for the Families First program where we’ve been a provider since 2007 in Tennessee; secured additional scope and are expanding into seven additional counties • Will now be providing employment and case management
Slide 18: New Awards and Sales Pipeline
New Awards and Sales Pipeline New Awards December 31, 2014 YTD signed awards $1.3B New contracts pending $169M Sales Opportunities December 31, 2014 Total pipeline $3.6B At December 31, 2014: • Year-to date signed contracts includes U.K. Health Assessment Advisory Service contract • Overall composit
Slide 19: Conclusion
Conclusion • With another solid quarter under our belt, we are positive about our progress in fiscal 2015 • Our collective efforts to secure new work, expand existing contracts and stand up new programs demonstrate our ability to deliver and meet commitments to our clients and the citizens they serv