MAXIMUS Reports Results for Fiscal 2012 Fourth Quarter and Full Year

  MAXIMUS Reports Results for Fiscal 2012 Fourth Quarter and Full Year

                    - Introduces Outlook for Fiscal 2013 -

Business Wire

RESTON, Va. -- November 15, 2012

MAXIMUS (NYSE: MMS), a leading provider of government services worldwide,
today reported financial results for its fourth quarter and fiscal year ended
September 30, 2012.

Key highlights include:

  *Revenue grew 20% to $300.7 million for the fourth quarter and 13% to $1.05
    billion for the full fiscal year compared to the same periods last year,
    driven by growth on existing contracts, new work, and the PSI acquisition.
  *Adjusted diluted earnings per share from continuing operations increased
    16% to $0.74 for the fourth quarter and increased 5% to $2.36 for the full
    fiscal year compared to the same periods last year.
  *Cash and cash equivalents totaled $189.3 million at September 30, 2012.
  *Year-to-date new signed contract awards totaled $1.44 billion at September
    30, 2012.

Revenue for the fiscal 2012 fourth quarter increased 20% (21% on a constant
currency basis) to $300.7 million versus $250.1 million reported for the same
period last year. Revenue for fiscal year 2012 increased 13% (13% on a
constant currency basis) to $1.05 billion compared to $929.6 million reported
for fiscal 2011. Revenue increases were driven by growth on existing
contracts, new work, and the acquisition of PSI. Fiscal 2012 organic revenue
increased 7% compared to last year.

Fourth quarter GAAP income from continuing operations, net of taxes, totaled
$23.8 million, or $0.68 per diluted share, and included approximately $0.06 of
net legal and acquisition-related expenses, and tax adjustments. Excluding
these costs, fourth quarter adjusted diluted earnings per share from
continuing operations increased 16% to $0.74 compared to $0.64 reported for
the same period last year. For the full year, GAAP income from continuing
operations, net of taxes, totaled $76.1 million, or $2.19 per diluted share,
and included approximately $0.17 per diluted share related to net legal and
acquisition-related expenses, and tax adjustments. Excluding these expenses,
adjusted diluted earnings per share from continuing operations increased 5% to
$2.36 compared to fiscal 2011. A normalization table is included in the
accompanying financial schedules.

“We are proud of our achievements in fiscal 2012 as we continue to grow the
business and maximize shareholder value. We won our first health insurance
exchange contract, expanded our domestic footprint through the acquisition of
PSI, and achieved breakeven on our UK Work Programme contract. Our
year-to-date signed awards of $1.44 billion were strong, contributing to our
healthy backlog of $2.9 billion at September 30, 2012,” commented Richard A.
Montoni, Chief Executive Officer of MAXIMUS.

Health Services Segment

Health Services Segment revenue for the fourth quarter of fiscal 2012
increased 16% to $181.6 million compared to $156.3 million for the same period
last year, principally due to new work and the acquisition of PSI. For fiscal
2012, revenue increased 19% to $671.2 million compared to $565.9 million for
the prior year, driven by new work, expansion on existing contracts, and the
acquisition of PSI. Excluding revenue from PSI, year-over-year Segment organic
revenue grew 15%.

Health Services Segment operating income for the fourth quarter totaled $20.0
million (11.0% operating margin) compared to $20.6 million (13.2% operating
margin) in the same period last year. For the full fiscal year, Segment
operating income was $80.6 million (12.0% operating margin) compared to $74.7
million (13.2% operating margin) in fiscal 2011. Operating margins for fiscal
2012 decreased due to: the managed care expansion in Texas; the timing of
work, including contract rebids and start-ups; and lower-margin pass through
revenue on a new health insurance exchange contract.

Human Services Segment

Human Services Segment revenue for the fourth quarter increased 27% to $119.2
million compared to $93.8 million in the prior-year period. For fiscal 2012,
revenue increased 4% to $379.0 million compared to $363.8 million last year.
Segment revenue growth was driven by the acquisition of PSI, which offset
expected revenue decreases in the Company’s international operations related
to the completion of short-term programs and lower caseloads in Australia and
the transition to the Work Programme in the UK. As a result, excluding revenue
from PSI, year-over-year Segment organic revenue decreased 6%.

Human Services Segment operating income for the fourth quarter increased 64%
to $21.8 million (18.3% operating margin) and benefited from planned
improvements on the UK Work Programme, as well as expected short-term work
that was highly accretive. This compared to operating income of $13.3 million
(14.2% operating margin) in the same period last year. For the full fiscal
year, operating income grew 7% to $49.9 million (13.2% operating margin)
compared to $46.8 million (12.9% operating margin) in fiscal 2011.

Backlog, Sales and Pipeline

The Company reported backlog totaling $2.9 billion at September 30, 2012,
which is consistent with backlog of $2.9 billion at September 30, 2011.

Year-to-date signed contract wins at September 30, 2012 totaled $1.44 billion
compared to $1.61 billion for fiscal 2011. Last year’s year-to-date signed
awards included nearly $1 billion of awards from existing work. At September
30, 2012, new contracts pending (awarded but unsigned) totaled $128 million
compared to $691 million last year.

Sales opportunities (pipeline) at November 7, 2012 totaled $2.6 billion
(consisting of $1.2 billion in proposals pending, $145 million in proposals in
preparation, and $1.3 billion in proposals tracking) compared to $1.8 billion
in fiscal 2011.

Balance Sheet and Cash Flows

Cash and cash equivalents at September 30, 2012 totaled $189.3 million, of
which 66% is held overseas. For the full fiscal year, cash provided by
operating activities from continuing operations totaled $115.2 million with
free cash flow of $92.0 million. For the fourth quarter of fiscal 2012, cash
provided by operating activities from continuing operations totaled $30.1
million with free cash flow of $21.7 million.

Days Sales Outstanding (DSO) from continuing operations were favorable at 56
days and driven by the timing of collections.

On August 31, 2012, MAXIMUS paid a quarterly cash dividend of $0.09 per share,
and on October 10, 2012, the Company announced a $0.09 per share cash
dividend, payable on November 30, 2012 to shareholders of record on November
15, 2012.

During the fourth quarter of fiscal 2012, MAXIMUS used $3.9 million to
purchase 65,800 shares of MAXIMUS common stock under its Board-authorized
share repurchase program. For fiscal 2012, MAXIMUS repurchased a total of
306,000 shares and used cash of $13.0 million for buyback activity. At
September 30, 2012, the Company had $127.4 million available for future
repurchases. Subsequent to quarter close, MAXIMUS purchased another 168,500
shares of MAXIMUS common stock for $9.7 million through November 9, 2012.

Outlook

MAXIMUS is introducing fiscal 2013 guidance. MAXIMUS expects fiscal 2013
revenue to range between $1.225 billion and $1.275 billion, a 17% to 21%
increase compared to fiscal 2012. At September 30, 2012, approximately 90% of
forecasted 2013 revenue was in the form of backlog or outstanding option
period renewals.

The Company expects fiscal 2013 adjusted diluted earnings per share from
continuing operations to range between $2.85 and $3.05, a 21% to 29% increase
compared to fiscal 2012. These ranges assume a lower contribution from mature
contracts in Texas and California due to expected scope reductions in fiscal
2013, as previously disclosed. Revenue from these two contracts is expected to
be lower in fiscal 2013 compared to fiscal 2012 by approximately $40 million
to $45 million, with an estimated earnings impact of approximately $0.15 per
diluted share.

“As we launch fiscal 2013, we foresee an exceptional year of top- and
bottom-line growth. We remain focused on winning our fair share of health care
reform work, growing our global operations, expanding our federal book of
business, and strategically deploying cash. The management team remains
committed to delivering outcomes that matter to our government clients, while
at the same time adding new, profitable growth,” Montoni concluded.

Website Presentation, Conference Call and Webcast Information

MAXIMUS will host a conference call this morning, November 15, 2012, 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 www.maximus.com or by
calling:

             877.407.8289 (Domestic)/201.689.8341 (International)

For those unable to listen to the live call, a replay will be available
through November 30, 2012. Callers can access the replay by calling:

             877.660.6853 (Domestic)/201.612.7415 (International)
                     Replay conference ID number: 403280

About MAXIMUS

MAXIMUS is a leading operator of government health and human services programs
in the United States, United Kingdom, Canada, Australia and Saudi Arabia. The
Company delivers business process services to improve the cost effectiveness,
efficiency and quality of government-sponsored benefit programs, such as
Medicaid, Medicare, Children's Health Insurance Program (CHIP), Health
Insurance BC (British Columbia), as well as welfare-to-work and child support
programs around the globe. The Company's primary customer base includes
federal, provincial, state, county and municipal governments. Operating under
its founding mission of Helping Government Serve the People^®, MAXIMUS has
approximately 8,800 employees worldwide. For more information, visit
www.maximus.com.

Non-GAAP Measures

This release refers to non-GAAP financial measures, including free cash flows
from operating activities, adjusted diluted earnings per share from continuing
operations, constant currency revenue growth, organic growth, and operating
income excluding legal, settlement and acquisition-related expenses.

To provide constant currency information, revenue from foreign operations is
converted into United States dollars using average exchange rates from the
previous fiscal year. We believe constant currency revenue growth provides a
useful basis for assessing the performance of the Company excluding foreign
exchange fluctuations. To provide organic growth information, revenue in the
prior year is compared to the current year without PSI revenues. We believe
organic growth provides a useful basis for assessing the performance of the
business excluding PSI. We have provided a reconciliation of free cash flows
to operating cash flows from continuing operations. We believe that free cash
flows from operations is a useful basis for investors to compare our
performance across periods or across our competitors. Free cash flows show the
effects of the Company’s operations and routine capital expenditure and
exclude the cash flow effects of acquisitions, share repurchases, dividend
payments and other financing transactions. We have provided a reconciliation
to adjusted diluted earnings per share and operating income excluding legal,
settlement and acquisition-related expenses. We believe that these measures
are a useful basis for assessing the Company’s performance excluding the
effect of the costs of acquiring PSI and the recovery of insurance claims in
the periods shown.

The presentation of these non-GAAP numbers is not meant to be considered in
isolation, nor as alternatives to net income, cash flows from operating
activities, diluted earnings per share, revenue growth and operating income as
measures of performance.

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
uncertainties could cause the Company's actual results to differ materially
from those indicated by such forward-looking statements and include reliance
on government clients; risks associated with government contracting; risks
involved in managing government projects; legislative changes and political
developments; opposition from government unions; challenges resulting from
growth; adverse publicity; and legal, economic, and other risks detailed in
Exhibit 99.1 to the Company's most recent Annual Report filed with the
Securities and Exchange Commission, found on www.maximus.com.

                                                
MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
                                                                             
                       Three Months                Year
                       Ended September 30,         Ended September 30,
                       2012         2011          2012          2011
Revenue                $ 300,736     $ 250,107     $ 1,050,145     $ 929,633
Cost of revenue        216,107       181,880       762,202         675,982
Gross profit           84,629        68,227        287,943         253,651
Selling, general and
administrative         42,810        34,560        157,402         132,058
expenses
Acquisition-related    766           —             2,876           —
expenses
Legal and settlement
costs (recovery),      1,080         (1,169    )   90              (808      )
net
Operating income
from continuing        39,973        34,836        127,575         122,401
operations
Interest and other     1,084         1,124         4,176           3,495
income, net
Income from
continuing             41,057        35,960        131,751         125,896
operations before
income taxes
Provision for income   17,303        10,403        55,652          43,754
taxes
Income from
continuing             23,754        25,557        76,099          82,142
operations
                                                                             
Discontinued
operations, net of
income taxes:
Income (loss) from
discontinued           —             197           —               (133      )
operations
Gain (loss) on         (83       )   (179      )   34              (841      )
disposal
Income (loss) from
discontinued           (83       )   18            34              (974      )
operations
                                                                             
Net income             $ 23,671      $ 25,575      $ 76,133        $ 81,168
                                                                             
Basic earnings
(loss) per share:
Income from
continuing             $ 0.70        $ 0.75        $ 2.25          $ 2.39
operations
Income (loss) from
discontinued           —             —             —               (0.03     )
operations
Basic earnings per     $ 0.70        $ 0.75        $ 2.25          $ 2.36
share
                                                                             
Diluted earnings
(loss) per share:
Income from
continuing             $ 0.68        $ 0.73        $ 2.19          $ 2.31
operations
Income (loss) from
discontinued           —             —             —               (0.03     )
operations
Diluted earnings per   $ 0.68        $ 0.73        $ 2.19          $ 2.28
share
                                                                             
Dividends per share     0.09         0.09         0.36           0.30
                                                                             
Weighted average
shares outstanding:
Basic                  34,045        34,180        33,867          34,417
Diluted                35,033        35,258        34,806          35,531

                                                   
MAXIMUS, Inc.
CONSOLIDATED BALANCE SHEETS
(In thousands)
                                                                             
                                                     September 30,
                                                     2012         2011
ASSETS
Current assets:
Cash and cash equivalents                            $ 189,312     $ 172,950
Restricted cash                                      11,593        4,839
Accounts receivable—billed, net                      172,705       146,900
Accounts receivable—unbilled                         10,539        7,170
Prepaid income taxes                                 3,800         12,959
Deferred income taxes                                22,207        19,256
Prepaid expenses and other current assets            38,528        27,202
Total current assets                                 448,684       391,276
Property and equipment, net                          58,798        51,740
Capitalized software, net                            27,390        26,616
Goodwill                                             112,032       71,323
Intangible assets, net                               25,330        5,651
Deferred contract costs, net                         9,284         8,020
Deferred income taxes                                1,369         732
Deferred compensation plan assets                    9,220         8,004
Other assets                                         3,186         1,917
Total assets                                         $ 695,293     $ 565,279
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable                                     $ 71,314      $ 55,470
Accrued compensation and benefits                    56,105        47,748
Deferred revenue                                     61,840        47,902
Current portion of long-term debt                    178           42
Acquisition-related contingent consideration         —             1,840
Income taxes payable                                 3,100         5,104
Other liabilities                                    6,599         5,787
Total current liabilities                            199,136       163,893
Deferred revenue, less current portion               19,550        2,575
Long-term debt                                       1,558         1,654
Acquisition-related contingent consideration, less   406           388
current portion
Income taxes payable, less current portion           1,412         1,484
Deferred income taxes                                10,384        11,945
Deferred compensation plan liabilities, less         11,741        8,883
current portion
Total liabilities                                    244,187       190,822
                                                                             
Shareholders’ equity:
Common stock, no par value; 60,000 shares
authorized; 56,516 and 56,018 shares issued and
33,985 and 33,793 outstanding at September 30,       395,967       377,579
2012 and September 30, 2011, at stated amount,
respectively
Treasury stock, at cost; 22,531 and 22,225 shares
at September 30, 2012 and September 30, 2011,        (429,646  )   (416,850  )
respectively
Accumulated other comprehensive income               20,240        12,480
Retained earnings                                    464,545       401,248
Total shareholders’ equity                           451,106       374,457
Total liabilities and shareholders’ equity           $ 695,293     $ 565,279

                                                  
MAXIMUS, Inc.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
                                                                             
                         Three Months                Year
                         Ended September 30,         Ended September 30,
                         2012         2011          2012         2011
Cash flows from
operating activities:
Net income               $ 23,671      $ 25,575      $ 76,133      $ 81,168
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Loss from discontinued   83            (18       )   (34       )   974
operations
Depreciation and         7,947         6,366         26,460        22,845
amortization
Deferred income taxes    1,355         1,386         (3,274    )   1,758
Non-cash equity based    3,236         2,549         12,077        9,485
compensation
Change in assets and
liabilities:
Accounts receivable —    (14,297   )   (22,471   )   (7,213    )   (11,584   )
billed
Accounts receivable —    1,996         9,209         2,214         10,068
unbilled
Prepaid expenses and     2,227         (4,462    )   (6,018    )   (2,573    )
other current assets
Deferred contract        (2,540    )   540           (1,221    )   (1,309    )
costs
Accounts payable         9,759         (148      )   6,485         7,312
Accrued compensation     1,372         4,996         (2,648    )   4,490
and benefits
Deferred revenue         (1,334    )   2,196         9,827         (11,779   )
Income taxes             (2,656    )   2,403         6,885         (10,814   )
Other assets and         (720      )   (1,021    )   (4,513    )   (2,456    )
liabilities
Cash provided by         30,099        27,100        115,160       97,585
continuing operations
Cash used in
discontinued             —             361           —             (725      )
operations
Cash provided by         30,099        27,461        115,160       96,860
operating activities
                                                                             
Cash flows from
investing activities:
Acquisition of
business, net of cash    —             —             (66,003   )   —
acquired
Proceeds from sale of
discontinued             —             —             2,240         —
operations
Purchases of property    (6,485    )   (7,543    )   (18,369   )   (18,506   )
and equipment
Capitalized software     (1,932    )   (1,915    )   (4,779    )   (7,608    )
costs
Proceeds from note       —             172           299           237
receivable
Cash used in investing
activities —             (8,417    )   (9,286    )   (86,612   )   (25,877   )
continuing ops
                                                                             
Cash flows from
financing activities:
Employee stock           11            (70       )   1,977         8,980
transactions
Repurchases of common    (3,088    )   (39,566   )   (12,977   )   (56,540   )
stock
Tax benefit due to
option exercises and     3,793         1,769         7,268         6,996
restricted stock units
vesting
Issuance (repayment)     (44       )   —             (44       )   304
of long-term debt
Acquisition-related
contingent               (1,809    )   (1,021    )   (1,809    )   (1,021    )
consideration
Cash dividends paid      (3,063    )   (3,086    )   (12,180   )   (10,327   )
Cash used in financing
activities —             (4,200    )   (41,974   )   (17,765   )   (51,608   )
continuing ops

Effect of exchange
rate changes on cash     2,930         (7,267    )   5,579         (1,746    )
and cash equivalents
                                                                             
Net increase in cash     20,412        (31,066   )   16,362        17,629
and cash equivalents
                                                                             
Cash and cash
equivalents, beginning   168,900       204,016       172,950       155,321
of period
                                                                             
Cash and cash
equivalents, end of      $ 189,312     $ 172,950     $ 189,312     $ 172,950
period

                                                                 
MAXIMUS, Inc.
SEGMENT INFORMATION
(Dollars in thousands)
(Unaudited)
                                                                    
                      Three Months Ended September 30,              Year Ended September 30,
                      2012         % (1)   2011         % (1)    2012        % (1)   2011         % (1)
                                                                                                         
Revenue:
Health Services       $ 181,564     100  %   $ 156,303     100  %   $ 671,181     100  %   $ 565,881     100  %
Human Services        119,172       100  %   93,804        100  %   378,964       100  %   363,752       100  %
Total                 300,736       100  %   250,107       100  %   1,050,145     100  %   929,633       100  %
                                                                                                              
Gross Profit:
Health services       44,533        24.5 %   39,183        25.1 %   172,456       25.7 %   147,239       26.0 %
Human Services        40,096        33.6 %   29,044        31.0 %   115,487       30.5 %   106,412       29.3 %
Total                 84,629        28.1 %   68,227        27.3 %   287,943       27.4 %   253,651       27.3 %
                                                                                                              
Selling, general,
and administrative
expense:
Health Services       24,551        13.5 %   18,566        11.9 %   91,837        13.7 %   72,524        12.8 %
Human Services        18,274        15.3 %   15,756        16.8 %   65,565        17.3 %   59,590        16.4 %
Corporate/Other       (15       )   NM       238           NM       —             NM       (56       )   NM
Total                 42,810        14.2 %   34,560        13.8 %   157,402       15.0 %   132,058       14.2 %
                                                                                                              
Operating income
from continuing
operations:
Health services       19,982        11.0 %   20,617        13.2 %   80,619        12.0 %   74,715        13.2 %
Human Services        21,822        18.3 %   13,288        14.2 %   49,922        13.2 %   46,822        12.9 %
Corporate/Other       15            NM       (238      )   NM       —             NM       56            NM
Subtotal: Segment     41,819        13.9 %   33,667        13.5 %   130,541       12.4 %   121,593       13.1 %
Operating Income
Legal, settlement
and                   1,846         NM       (1,169    )   NM       2,966         NM       (808      )   NM
acquisition-related
expenses, net
Total                 $ 39,973      13.3 %   $ 34,836      13.9 %   $ 127,575     12.1 %   $ 122,401     13.2 %
                                                                                                              

(1) % of respective segment revenue. Changes not considered meaningful are
marked “NM.”

                                                                    
MAXIMUS, Inc.
Non-GAAP Measures

PRO FORMA DILUTED EPS FROM CONTINUING OPERATIONS
("Adjusted Diluted EPS")
FY 2011 and FY 2012
(Unaudited)
                                                                       
                                                                       Year
                                Quarter Ended                          Ended
                                Dec.    Mar. 31,  Jun.    Sept.     Sept.
                                31,                 30,      30,       30,
                                2011     2012       2012     2012      2012
Diluted EPS from continuing     $0.51    $0.41      $0.59    $0.68     $2.19
operations-GAAP basis
                                                                       
Pro forma adjustments:
Legal, settlement and
acquisition-related expenses,   –        (0.01)     0.03     0.03      0.05
net
Adjustment for tax accounts     –        0.09       –        0.03      0.12
Subtotal pro forma              –        0.08       0.03     0.06      0.17
adjustments
                                                                       
Adjusted Diluted EPS from       $0.51    $0.49      $0.62    $0.74     $2.36
continuing operations
                                                                       
                                                                       Year
                                Quarter Ended                          Ended
                                Dec.     Mar. 31,   Jun.     Sept.     Sept.
                                31,                 30,      30,       30,
                                2010     2011       2011     2011      2011
Diluted EPS from continuing     $0.50    $0.54      $0.56    $0.73     $2.31
operations-GAAP basis
                                                                       
Pro forma adjustments:
Legal and settlement expense    –        –          –        (0.02)    (0.02)
(recovery), net
Adjustment for tax accounts     0.01     0.01       0.01     (0.07)    (0.04)
Subtotal pro forma              0.01     0.01       0.01     (0.09)    (0.06)
adjustments
                                                                       
Adjusted Diluted EPS from       $0.51    $0.55      $0.57    $0.64     $2.25
continuing operations

                                                   
MAXIMUS, Inc.
FREE CASH FLOW
(Dollars in thousands)
(Unaudited)
                                                                             
                            Three Months              Year
                            Ended September 30,       Ended September 30,
                            2012        2011         2012         2011
                                                                             
Cash provided by
operating activities –      $ 30,099     $ 27,100     $ 115,160     $ 97,585
continuing ops
Purchases of property and   (6,485   )   (7,543   )   (18,369   )   (18,506  )
equipment
Capitalized software        (1,932   )   (1,915   )   (4,779    )   (7,608   )
costs
Free cash flow              $ 21,682     $ 17,642     $ 92,012      $ 71,471

Contact:

MAXIMUS
Lisa Miles, 703-251-8637
lisamiles@maximus.com
 
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