MAXIMUS Reports Record Third Quarter Revenue of $141.7 Million and EPS of $0.43.Business Editors RESTON, Va.--(BUSINESS WIRE)--Aug. 1, 2003 MAXIMUS (NYSE NYSE See: New York Stock Exchange : MMS (Multimedia Messaging Service) An enhanced transmission service that enables graphics, video clips and sound files to be transmitted via cellphones. Developed as part of the 3GPP project, MMS phones are generally backward compatible with SMS and EMS. ), a leading provider of consulting, health and human services Noun 1. Health and Human Services - the United States federal department that administers all federal programs dealing with health and welfare; created in 1979 Department of Health and Human Services, HHS program management, and information technology services to government, today reported results for its fiscal third quarter ended June 30, 2003. Key Financial Highlights: -- Quarterly record revenue of $141.7 million for the three-month period ended June 30, 2003, -- EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.43 for the third quarter, -- Third quarter cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $15.0 million with free cash flow of $12.6 million, and an ending cash balance of approximately $90 million, and -- Days Sales Outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (Accounts Receivables accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying ) of 96. Revenue for the third quarter increased 6.5% to $141.7 million compared to $133.1 million for the same period last year and improved 8.5% sequentially versus the second fiscal quarter. Year-over-year organic growth for the third quarter was 2.4%. Net income for the third quarter of fiscal 2003 was $9.0 million or $0.43 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net income of $11.1 million, or $0.48 per diluted share for the comparable quarter last year and $6.9 million, or $0.32 per diluted share recorded in the second quarter of fiscal 2003. The Company attributes the year-over-year decline in net income to general weakness in the State markets due to State fiscal conditions. Dr. David V. Mastran, Chief Executive Officer and President, commented, "We experienced substantial sequential improvements in revenue and profitability in the third quarter as work began on previously delayed contracts in our Systems and Consulting units. I am extremely proud of the efforts that the MAXIMUS team put forth during this period. Our strong sales success represents a solid foundation as we move towards 2004." Consulting Segment: Consulting revenue increased 12% sequentially and 9% year-over-year to $37.5 million, which represents 26% of Company revenue. Included in revenue is approximately $3.0 million related to pass-through revenue on a hardware and software delivery for a SchoolMAX(TM) contract. The Company realized growth in its Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. practice, including revenue maximization, child welfare, school-based claiming, and cost services, all of which have experienced increased demand. Work also began on a previously delayed SchoolMAX(TM) contract in addition to several new education contracts in Albuquerque, New Mexico “Albuquerque” redirects here. For other uses, see Albuquerque (disambiguation). Albuquerque (pronounced [ˈæl.bə.kɚ.kiː], Spanish: [al.βu. , Fremont, California For the unincorporated community in Yolo County, California, see . Fremont (IPA: /ˈfriːmɒnt/) is a city in California that was incorporated on January 23, 1956, from the merger of five smaller communities: and Birmingham, Alabama Birmingham (pronounced [ˈbɝmɪŋˌhæm]) is the largest city in the U.S. state of Alabama and is the county seat of Jefferson County. . Consulting is expected to perform at similar levels in the fourth quarter. Health Services health services Managed care The benefits covered under a health contract Segment: Third quarter Health Services revenue was $40.9 million, which was consistent with the previous quarter but declined 4% compared to the third quarter last year. Health services revenue accounted for 29% of total revenue in the quarter. Despite a difficult market environment, the segment has maintained revenue levels as a result of its solid base of recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. business and is expected to generate similar results in the fourth quarter. Human Services Segment: Third quarter Human Services revenue was $38.5 million, which increased 7% on a sequential basis and was consistent with the same quarter in the prior year, and represented 27% of total Company revenue. The sequential increase was due primarily to the acquisition of National Misdemeanant mis·de·mean·ant n. Law One who has been convicted of a misdemeanor. Private Probation probation, method by which the punishment of a convicted offender is conditionally suspended. The offender must remain in the community and under the supervision of a probation officer, who is usually a court-appointed official. Operations (NMPPO NMPPO National Marine Pollution Program Office ), the largest U.S. provider of community corrections services. Human Services revenue continued to be impacted by softness in Workforce Services with similar demand anticipated for this segment in the fourth quarter. The segment's fourth quarter results are expected to include approximately $13.5 million in lower margin, pass-through revenue from a hardware sale as part of its contract with Orange County (California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). ) to provide a Direct Record Electronic voting Electronic voting (also known as e-voting) is a term encompassing several different types of voting, embracing both electronic means of casting a vote and electronic means of counting votes. system. Systems Segment: Systems revenue of $24.8 million for the third quarter, which represented 18% of total revenue, increased 24% on a sequential basis and 40% year-over-year as work commenced on a previously delayed Justice Solutions contract and a software license fee of approximately $1.1 million was recognized. The Company also realized revenue growth in its Intelligent Technologies Division from a recently signed five-month, $3.8 million contract with the U.S. Transportation Security Administration. The Company expects that fourth quarter results will be consistent with the third quarter but profitability may trend down due to the one-time benefit of license fee revenue recorded in the third quarter. Key Contract Wins: Since reporting second quarter results on May 6, 2003, the Company has announced the following new business wins: -- A four-year, $43.5 million contract with the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. Unified School District A unified school district is a school district which includes both primary school (kindergarten through middle school or junior high) and high school (grades 9-12). In Illinois, these districts are called unit school districts. , the nation's second largest school district, to implement its Web-based student information system, SchoolMAX(TM). -- Performance-based revenue maximization contracts with agencies in Florida, Connecticut Connecticut, state, United States Connecticut (kənĕt`ĭkət), southernmost of the New England states of the NE United States. It is bordered by Massachusetts (N), Rhode Island (E), Long Island Sound (S), and New York (W). , Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , and Iowa to identify andpursue additional federal funding. -- Performance-based contracts to provide school-based Medicaid Medicaid, national health insurance program in the United States for low-income persons; established in 1965 with passage of the Social Security Amendments and now run by the Centers for Medicare and Medicaid Services. claiming services for agencies in Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by , Miami-Dade County School District, and Gary, Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). . -- A two-year, $7.3 million contract with the Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). Department of Human Resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. to provide a new Child Care Administration Management Information System. The contract includes two, one-year renewal options. -- A 16-month, $11.2 million contract with the city of Kansas City, Missouri to lead and manage the implementation and system integration efforts of its ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. software applications. -- A five-year, $7.3 million contract with the Tennessee Department of Human Services to operate a full service child support program in the 25th Judicial District. -- A two-year, $1.0 million contract with the Indiana Department of Administration to implement a Web-based, eProcurement software solution. -- Additionally, the Company reported that it has signed its previously announced five-year contract with California's Managed Risk Medical Insurance Board (MRMIB MRMIB Managed Risk Medical Insurance Board (California) ) estimated at $418.4 million, which includes $70.6 million in pass-through costs. The scope of work covers California's Healthy Families Program and the Access for Infants and Mothers Program. The ramp-up of the program is well underway with several early stage projects already completed including the acquisition of project space to accommodate up to 600 employees, the recruitment and hiring of the systems development team, and the revision of health literacy health literacy Health care A measure of a person's ability to understand health-related information and make informed decisions about that information; HL includes interpreting prescriptions and following self care insturctions. Cf Literacy. forms and correspondence templates. Sales: Signed contract wins through July 31, 2003 totaled $941.0 million, including the newly awarded $418.4 million MRMIB contract, compared to $305.0 million last year. New contracts pending (awarded but unsigned unsigned Adjective (of a letter etc.) anonymous Adj. 1. unsigned - lacking a signature; "the message was typewritten and unsigned" signed - having a handwritten signature; "a signed letter" ) totaled $59.3 million compared to $150.0 million last year. Sales opportunities were $899.5 million (consisting of $314.1 million in proposals pending, $46.1 million in proposals in preparation, and $539.3 million of RFPs tracking) compared to $712.0 million the same period a year ago. Liquidity: Cash flow from operations in the third quarter totaled $15.0 million with free cash flow (which represents cash provided by operating activities less capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. software development costs and purchases of property and equipment) of $12.6 million. Days Sales Outstanding (Accounts Receivables) improved to 96 days at the end of the quarter from 98 days in the second quarter. At June 30, 2003, cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has totaled $89.6 million, after the Company's repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of 245,600 common shares under its ongoing share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program and the $10.5 million acquisition of NMPPO, a leading misdemeanor misdemeanor, in law, a minor crime, in contrast to a felony. At common law a misdemeanor was a crime other than treason or a felony. Although it might be a grave offense, it did not affect the feudal bond or take away the offender's property. By the 19th cent. probation outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. firm. At the close of the third quarter, MAXIMUS had approximately $27.8 million available under the current Board-authorized share repurchase program. Conclusion: For the fiscal year ending September 30, 2003, MAXIMUS continues to expect diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of at least $1.60. With the acquisition of NMPPO and the expected revenue from the Company's contract to provide a Direct Record Electronic voting system to Orange Country, California, MAXIMUS has increased its revenue expectations in the range of $550-$560 million for fiscal 2003. Dr. Mastran concluded, "During the quarter we were successful in securing new business, despite the continued challenges of the market environment. We attribute our recent success rate and increasing backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. to our long-standing reputation as a premier provider of quality, cost-efficient services that government demands during difficult economic cycles." The Company will host a conference call on Friday, August, 1st at 10:30 EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT which is open to the public and can be accessed by calling:
Conference Call Number: 800.223.9488 (Domestic)
785.832.1508 (International)
Conference ID: MMS
For those unable to listen to the live call, a replay will be available for one week following the call and will expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. on August 8, 2003, at midnight. The replay will be available by calling: 402.220.4235 or 800.753.4652 MAXIMUS is one of America's leading government services companies devoted to providing health and human services program management, consulting and information technology services. The Company has more than 5,200 employees located in more than 300 offices in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada, and Australia. In 1999, 2001, and 2002, MAXIMUS was selected by Forbes Magazine as one of the Best 200 Small Companies in America for that year. MAXIMUS was selected by Business Week Magazine as one of the 100 Best Hot Growth Small Companies in 1999, 2000, 2001, and 2002. Additionally, MAXIMUS is included in the Russell 2000 Index Russell 2000 Index An index measuring the performance of the 2,000 smallest companies in the Russell 3000 Index, which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000 serves as a benchmark for small-cap stocks in the United States. and the S&P SmallCap 600 Index. Statements that are not historical facts, including statements about the Company's confidence and strategies and the Company's expectations about revenue, results of operations, profitability, future contracts, market opportunities, market demand or acceptance of the Company's products are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 (file number 001-12997)
MAXIMUS, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Sept. 30, June 30,
2002 2003
----------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 94,965 $ 89,501
Restricted cash - 1,829
Marketable securities 160 140
Accounts receivable - billed 108,074 120,826
Accounts receivable - unbilled 25,102 28,803
Prepaid expenses and other current assets 7,123 7,385
----------- -----------
Total current assets 235,424 248,484
Deferred contract costs
Property and equipment, at cost - 1,148
Less accumulated depreciation and 39,612 44,421
amortization (14,206) (18,077)
----------- -----------
Property and equipment, net 25,406 26,344
Software development costs 19,024 21,978
Less accumulated amortization (4,908) (7,769)
Software development, net 14,116 14,209
Goodwill, net 68,812 80,574
Intangible assets, net 6,540 7,536
Other assets 1,792 1,954
----------- -----------
Total assets $ 352,090 $ 380,249
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 10,867 $ 20,397
Accrued compensation and benefits 19,726 20,689
Deferred revenue 12,939 22,147
Income taxes payable 2,325 2,495
Deferred income taxes 1,811 1,210
Other current liabilities 1,794 239
----------- -----------
Total current liabilities 49,462 67,177
Other liabilities 499 534
----------- -----------
Total liabilities 49,961 67,711
Shareholders' equity:
Common stock, no par value;
60,000,000 shares authorized;
21,509,444 and 20,742,566 shares
issued and outstanding at
September 30, 2002 and June 30, 2003,
at stated amount, respectively 144,156 128,170
Accumulated other comprehensive
income (loss) 24 (34)
Retained earnings 157,949 184,402
----------- -----------
Total shareholders' equity 302,129 312,538
----------- -----------
Total liabilities and
shareholders' equity $ 352,090 $ 380,249
=========== ===========
MAXIMUS, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Nine Months
Ended June 30, Ended June 30,
------------------- ------------------
2002 2003 2002 2003
-------- -------- -------- --------
Revenue $133,090 $141,741 $384,613 $405,095
Cost of revenue 90,159 99,321 266,902 281,828
-------- -------- -------- --------
Gross profit 42,931 42,420 117,711 123,267
Selling, general and
administrative expenses 24,861 27,408 69,770 80,084
Non-cash equity based
compensation 85 214 85 726
Amortization of acquisition-
related intangibles 180 311 693 864
-------- -------- -------- --------
Income from operations 17,805 14,487 47,163 41,593
Interest and other income 858 331 2,261 1,268
-------- -------- -------- --------
Income before income
taxes 18,663 14,818 49,424 42,861
Provision for income taxes 7,559 5,853 20,017 16,930
-------- -------- -------- --------
Net income $ 11,104 $ 8,965 $ 29,407 $ 25,931
======== ======== ======== ========
Earnings per share:
Basic $ 0.49 $ 0.43 $ 1.28 $ 1.23
======== ======== ======== ========
Diluted $ 0.48 $ 0.43 $ 1.24 $ 1.22
======== ======== ======== ========
Weighted average shares
outstanding:
Basic 22,695 20,731 22,979 21,016
======== ======== ======== ========
Diluted 23,226 21,015 23,711 21,285
======== ======== ======== ========
MAXIMUS, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Nine Months
Ended June 30,
---------------------
2002 2003
---------- ----------
Cash flows from operating activities:
Net income $ 29,407 $ 25,931
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 2,064 3,872
Amortization 2,508 3,725
Deferred income taxes 6,628 (435)
Tax benefit due to option exercises 1,225 523
Non-cash equity based compensation 85 726
Change in assets and liabilities, net of effects
from acquisitions:
Accounts receivable - billed 6,932 (11,323)
Accounts receivable - unbilled (6,170) (3,702)
Prepaid expenses and other current assets (1,750) (707)
Deferred contract costs - (1,148)
Other assets 418 262
Accounts payable (2,685) 8,785
Accrued compensation and benefits (1,804) 100
Deferred revenue (4,299) 8,795
Income taxes payable 1,343 169
Other liabilities 1,141 (1,545)
---------- ----------
Net cash provided by operating activities 35,043 34,028
Cash flows from investing activities:
Acquisition of businesses,
net of cash acquired (12,673) (13,532)
Purchases of property and equipment (5,408) (4,574)
(Increase) decrease in notes receivable (241) 188
Capitalization of software development
costs (4,242) (2,954)
Increase in restricted cash - (1,829)
Decrease in marketable securities 1,106 30
---------- ----------
Net cash used in investing activities (21,458) (22,671)
Cash flows from financing activities:
Employee stock transactions 8,223 3,682
Repurchases of common stock (24,669) (20,394)
Net payments on capital leases (200) (109)
---------- ----------
Net cash used in financing activities (16,646) (16,821)
---------- ----------
Net decrease in cash and cash equivalents (3,061) (5,464)
Cash and cash equivalents, beginning of period 114,108 94,965
---------- ----------
Cash and cash equivalents, end of period $ 111,047 $ 89,501
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