EX-99.1 2 mms-2018x12x14x8kxex991.htm EXHIBIT 99.1 Exhibit

Exhibit 99.1

MAXIMUS, Inc.
SEGMENT INFORMATION
(Amounts in thousands)
(Unaudited)
 
 
Quarter Ended
 
Year Ended Sept. 30, 2018
 
 
 
 
Dec. 31, 2017
 
% (1)
 
Mar. 31, 2018
 
% (1)
 
Jun. 30, 2018
 
% (1)
 
Sept. 30, 2018
 
% (1)
 
 
% (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Health & Human Services
 
$
304,241

 
100
%
 
$
306,249

 
100
%
 
$
314,477

 
100
%
 
$
288,944

 
100
 %
 
$
1,213,911

 
100
%
U.S. Federal Services
 
132,983

 
100
%
 
116,327

 
100
%
 
112,226

 
100
%
 
117,375

 
100
 %
 
478,911

 
100
%
Outside the U.S.
 
185,924

 
100
%
 
190,211

 
100
%
 
171,152

 
100
%
 
152,127

 
100
 %
 
699,414

 
100
%
Total
 
$
623,148

 
100
%
 
$
612,787

 
100
%
 
$
597,855

 
100
%
 
$
558,446

 
100
 %
 
$
2,392,236

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Profit:
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
U.S. Health & Human Services
 
$
84,231

 
27.7
%
 
$
86,586

 
28.3
%
 
$
101,425

 
32.3
%
 
$
87,382

 
30.2
 %
 
$
359,624

 
29.6
%
U.S. Federal Services
 
33,358

 
25.1
%
 
27,374

 
23.5
%
 
32,276

 
28.8
%
 
33,690

 
28.7
 %
 
126,698

 
26.5
%
Outside the U.S.
 
34,371

 
18.5
%
 
34,843

 
18.3
%
 
20,983

 
12.3
%
 
17,866

 
11.7
 %
 
108,063

 
15.5
%
Total
 
$
151,960

 
24.4
%
 
$
148,803

 
24.3
%
 
$
154,684

 
25.9
%
 
$
138,938

 
24.9
 %
 
$
594,385

 
24.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expense:
 
 
 
 

 
 
 
 

 
 
 
 

 
 
 
 
 
 
 
 
U.S. Health & Human Services
 
$
34,805

 
11.4
%
 
$
36,616

 
12.0
%
 
$
34,382

 
10.9
%
 
$
35,187

 
12.2
 %
 
$
140,990

 
11.6
%
U.S. Federal Services
 
16,648

 
12.5
%
 
17,540

 
15.1
%
 
17,399

 
15.5
%
 
17,725

 
15.1
 %
 
69,312

 
14.5
%
Outside the U.S.
 
18,106

 
9.7
%
 
18,403

 
9.7
%
 
16,775

 
9.8
%
 
18,811

 
12.4
 %
 
72,095

 
10.3
%
Other
 
—

 
NM

 
—

 
NM

 
1,032

 
NM

 
1,812

 
NM

 
2,844

 
NM

Total
 
$
69,559

 
11.2
%
 
$
72,559

 
11.8
%
 
$
69,588

 
11.6
%
 
$
73,535

 
13.2
 %
 
$
285,241

 
11.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income:
 
 
 
 

 
 
 
 

 
 
 
 

 
 
 
 
 
 
 
 
U.S. Health & Human Services
 
$
49,426

 
16.2
%
 
$
49,970

 
16.3
%
 
$
67,043

 
21.3
%
 
$
52,195

 
18.1
 %
 
$
218,634

 
18.0
%
U.S. Federal Services
 
16,710

 
12.6
%
 
9,834

 
8.5
%
 
14,877

 
13.3
%
 
15,965

 
13.6
 %
 
57,386

 
12.0
%
Outside the U.S.
 
16,265

 
8.7
%
 
16,440

 
8.6
%
 
4,208

 
2.5
%
 
(945
)
 
(0.6
)%
 
35,968

 
5.1
%
Amortization of intangible assets
 
(2,718
)
 
NM

 
(2,603
)
 
NM

 
(2,525
)
 
NM

 
(2,462
)
 
NM

 
(10,308
)
 
NM

Restructuring costs
 
—

 
NM

 
(2,320
)
 
NM

 
—

 
NM

 
(1,033
)
 
NM

 
(3,353
)
 
NM

Acquisition-related expenses (2)
 
—

 
NM

 
—

 
NM

 
—

 
NM

 
(947
)
 
NM

 
(947
)
 
NM

Other (3)
 
—

 
NM

 
—

 
NM

 
(1,032
)
 
NM

 
(865
)
 
NM

 
(1,897
)
 
NM

Total
 
$
79,683

 
12.8
%
 
$
71,321

 
11.6
%
 
$
82,571

 
13.8
%
 
$
61,908

 
11.1
 %
 
$
295,483

 
12.4
%




MAXIMUS, Inc.
SEGMENT INFORMATION
(Amounts in thousands)
(Unaudited)
 
 
Quarter Ended
 
Year Ended Sept. 30, 2017
 
 
 
 
Dec. 31, 2016
 
% (1)
 
Mar. 31, 2017
 
% (1)
 
Jun. 30, 2017
 
% (1)
 
Sept. 30, 2017
 
% (1)
 
 
% (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Health & Human Services
 
$
305,480

 
100
%
 
$
307,357

 
100
%
 
$
295,002

 
100
%
 
$
312,247

 
100
%
 
$
1,220,086

 
100
%
U.S. Federal Services
 
141,298

 
100
%
 
145,370

 
100
%
 
131,589

 
100
%
 
127,316

 
100
%
 
545,573

 
100
%
Outside the U.S.
 
160,786

 
100
%
 
169,320

 
100
%
 
173,856

 
100
%
 
181,340

 
100
%
 
685,302

 
100
%
Total
 
$
607,564

 
100
%
 
$
622,047

 
100
%
 
$
600,447

 
100
%
 
$
620,903

 
100
%
 
$
2,450,961

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Profit:
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
U.S. Health & Human Services
 
$
81,276

 
26.6
%
 
$
84,851

 
27.6
%
 
$
84,020

 
28.5
%
 
$
98,759

 
31.6
%
 
$
348,906

 
28.6
%
U.S. Federal Services
 
37,576

 
26.6
%
 
36,571

 
25.2
%
 
33,627

 
25.6
%
 
31,547

 
24.8
%
 
139,321

 
25.5
%
Outside the U.S.
 
25,966

 
16.1
%
 
30,895

 
18.2
%
 
34,542

 
19.9
%
 
32,275

 
17.8
%
 
123,678

 
18.0
%
Total
 
$
144,818

 
23.8
%
 
$
152,317

 
24.5
%
 
$
152,189

 
25.3
%
 
$
162,581

 
26.2
%
 
$
611,905

 
25.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expense:
 
 
 
 

 
 
 
 

 
 
 
 

 
 
 
 
 
 
 
 
U.S. Health & Human Services
 
$
30,821

 
10.1
%
 
$
34,210

 
11.1
%
 
$
34,454

 
11.7
%
 
$
44,529

 
14.3
%
 
$
144,014

 
11.8
%
U.S. Federal Services
 
19,695

 
13.9
%
 
18,927

 
13.0
%
 
17,757

 
13.5
%
 
17,966

 
14.1
%
 
74,345

 
13.6
%
Outside the U.S.
 
14,525

 
9.0
%
 
15,367

 
9.1
%
 
16,187

 
9.3
%
 
18,663

 
10.3
%
 
64,742

 
9.4
%
Other
 
357

 
NM

 
92

 
NM

 
(90
)
 
NM

 
1,133

 
NM

 
1,492

 
NM

Total
 
$
65,398

 
10.8
%
 
$
68,596

 
11.0
%
 
$
68,308

 
11.4
%
 
$
82,291

 
13.3
%
 
$
284,593

 
11.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income:
 
 
 
 

 
 
 
 

 
 
 
 

 
 
 
 
 
 
 
 
U.S. Health & Human Services
 
$
50,455

 
16.5
%
 
$
50,641

 
16.5
%
 
$
49,566

 
16.8
%
 
$
54,230

 
17.4
%
 
$
204,892

 
16.8
%
U.S. Federal Services
 
17,881

 
12.7
%
 
17,644

 
12.1
%
 
15,870

 
12.1
%
 
13,581

 
10.7
%
 
64,976

 
11.9
%
Outside the U.S.
 
11,441

 
7.1
%
 
15,528

 
9.2
%
 
18,355

 
10.6
%
 
13,612

 
7.5
%
 
58,936

 
8.6
%
Amortization of intangible assets
 
(3,402
)
 
NM

 
(3,386
)
 
NM

 
(2,720
)
 
NM

 
(2,700
)
 
NM

 
(12,208
)
 
NM

Restructuring costs
 
(2,242
)
 
NM

 
—

 
NM

 
—

 
NM

 
—

 
NM

 
(2,242
)
 
NM

Acquisition-related expenses (2)
 
—

 
NM

 
—

 
NM

 
—

 
NM

 
(83
)
 
NM

 
(83
)
 
NM

Gain on sale of a business
 
—

 
NM

 
—

 
NM

 
650

 
NM

 
—

 
NM

 
650

 
NM

Other (3)
 
(357
)
 
NM

 
(92
)
 
NM

 
90

 
NM

 
(1,050
)
 
NM

 
(1,409
)
 
NM

Total
 
$
73,776

 
12.1
%
 
$
80,335

 
12.9
%
 
$
81,811

 
13.6
%
 
$
77,590

 
12.5
%
 
$
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.



MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

 
 
Year Ended
September 30,
 
 
2018
 
2017
 
 
 
 
 
Cash flows from operations:
 
 
 
 
Net income
 
$
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
 
51,884

 
55,769

Amortization of intangible assets
 
10,308

 
12,208

Deferred income taxes
 
6,721

 
4,762

Stock compensation expense
 
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
 
34,033

 
53,025

Accounts receivable — unbilled
 
4,920

 
26

Prepaid expenses and other current assets
 
4,954

 
2,584

Deferred contract costs
 
1,838

 
2,037

Accounts payable and accrued liabilities
 
(7,725
)
 
(28,309
)
Accrued compensation and benefits
 
(8,795
)
 
8,849

Deferred revenue
 
(27,039
)
 
(15,401
)
Income taxes
 
7,262

 
8,901

Other assets and liabilities
 
(2,641
)
 
(924
)
Cash provided by operating activities
 
316,774

 
336,424

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

 
(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
 
1,436

 
575

Cash used in investing activities
 
(45,237
)
 
(25,221
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Cash dividends paid
 
(11,692
)
 
(11,674
)
Repurchases of common stock
 
(66,919
)
 
(28,863
)
Tax withholding related to RSU vesting
 
(8,529
)
 
(9,175
)
Borrowings under credit facility
 
136,632

 
185,000

Repayment under credit facility
 
(136,769
)
 
(349,981
)
Stock option exercises
 
—

 
924

Other
 
(4,603
)
 
(1,660
)
Cash used in financing activities
 
(91,880
)
 
(215,429
)
 
 
 
 
 
Effect of exchange rate changes on cash, cash equivalents and restricted cash
 
(2,825
)
 
3,660

 
 
 
 
 
Net increase in cash, cash equivalents and restricted cash
 
176,832

 
99,434

 
 
 
 
 
Cash, cash equivalents and restricted cash, beginning of period
 
179,727

 
80,293

 
 
 
 
 
Cash, cash equivalents and restricted cash, end of period
 
$
356,559

 
$
179,727




MAXIMUS, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
 
 
Quarter Ended
 
 
Dec. 31, 2017
 
Mar. 31, 2018
 
Jun. 30, 2018
 
Sept. 30, 2018
 
 
 
 
 
 
 
 
 
Cash flows from operations:
 
 
 
 
 
 
 
 
Net income
 
$
59,952

 
$
55,106

 
$
60,242

 
$
45,516

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
 
Depreciation and amortization of property, plant, equipment and capitalized software
 
13,719

 
13,355

 
12,828

 
11,982

Amortization of intangible assets
 
2,718

 
2,603

 
2,525

 
2,462

Deferred income taxes
 
5,707

 
(14,886
)
 
18,053

 
(2,153
)
Stock compensation expense
 
5,402

 
5,922

 
4,389

 
4,525

Changes in assets and liabilities, net of effects of business combinations:
 
 
 
 
 
 
 
 
Accounts receivable — billed and billable
 
(44,381
)
 
25,859

 
11,733

 
40,822

Accounts receivable — unbilled
 
5,535

 
(10,265
)
 
5,042

 
4,608

Prepaid expenses and other current assets
 
6,019

 
2,507

 
(3,020
)
 
(552
)
Deferred contract costs
 
1,413

 
381

 
446

 
(402
)
Accounts payable and accrued liabilities
 
11,387

 
(14,558
)
 
(20,525
)
 
15,971

Accrued compensation and benefits
 
(29,588
)
 
14,197

 
(444
)
 
7,040

Deferred revenue
 
(12,405
)
 
(11,384
)
 
(1,939
)
 
(1,311
)
Income taxes
 
9,642

 
8,992

 
(12,721
)
 
1,349

Other assets and liabilities
 
2,877

 
934

 
(5,053
)
 
(1,399
)
Cash provided by operating activities
 
37,997

 
78,763

 
71,556

 
128,458

 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
Purchases of property and equipment and capitalized software costs
 
(6,514
)
 
(6,661
)
 
(8,377
)
 
(4,968
)
Acquisition of part of noncontrolling interest
 
—

 
(157
)
 
—

 
—

Purchases of short-term investments
 
—

 
—

 
(19,996
)
 
—

Other
 
59

 
482

 
657

 
238

Cash used in investing activities
 
(6,455
)
 
(6,336
)
 
(27,716
)
 
(4,730
)
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
Cash dividends paid
 
(2,930
)
 
(2,935
)
 
(2,936
)
 
(2,891
)
Repurchases of common stock
 
(1,038
)
 
—

 
(60,949
)
 
(4,932
)
Tax withholding related to RSU vesting
 
(8,529
)
 
—

 
—

 
—

Borrowings under credit facility
 
59,683

 
65,000

 
10,000

 
1,949

Repayment under credit facility
 
(48,156
)
 
(76,596
)
 
(10,034
)
 
(1,983
)
Other
 
—

 
(2,130
)
 
(1,928
)
 
(545
)
Cash used in financing activities
 
(970
)
 
(16,661
)
 
(65,847
)
 
(8,402
)
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash, cash equivalents and restricted cash
 
203

 
867

 
(2,784
)
 
(1,111
)
 
 
 
 
 
 
 
 
 
Net increase/(decrease) in cash, cash equivalents and restricted cash
 
30,775

 
56,633

 
(24,791
)
 
114,215

 
 
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash, beginning of period
 
179,727

 
210,502

 
267,135

 
242,344

 
 
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash, end of period
 
$
210,502

 
$
267,135

 
$
242,344

 
$
356,559



MAXIMUS, Inc.
BACKLOG
(Amounts in millions)
(Unaudited)


 
September 30,
 
2018
 
2017
U.S. Health & Human Services
$
3,221

 
$
3,750

U.S. Federal Services
744

 
324

Outside the U.S.
1,335

 
1,626

Total
$
5,300

 
$
5,700