Virginia
(State or other jurisdiction of
incorporation or organization)
|
|
54-1000588
(I.R.S. Employer
Identification No.)
|
|
|
|
1891 Metro Center Drive, Reston, Virginia
(Address of principal executive offices)
|
|
20190
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock, no par value
|
|
New York Stock Exchange
|
Large accelerated filer
ý
|
|
Accelerated filer
o
|
|
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
o
|
|
Emerging growth company
o
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
a failure to meet performance requirements in our contracts, which might lead to contract termination and actual or liquidated damages;
|
•
|
the effects of future legislative or government budgetary and spending changes;
|
•
|
our failure to successfully bid for and accurately price contracts to generate our desired profit;
|
•
|
our ability to maintain technology systems and otherwise protect confidential or protected information;
|
•
|
our ability to attract and retain executive officers, senior managers and other qualified personnel to execute our business;
|
•
|
our ability to manage capital investments and startup costs incurred before receiving related contract payments;
|
•
|
the ability of government customers to terminate contracts on short notice, with or without cause;
|
•
|
our ability to maintain relationships with key government entities from whom a substantial portion of our revenue is derived;
|
•
|
the outcome of reviews or audits, which might result in financial penalties and impair our ability to respond to invitations for new work;
|
•
|
a failure to comply with laws governing our business, which might result in the Company being subject to fines, penalties, suspension, debarment and other sanctions;
|
•
|
the costs and outcome of litigation;
|
•
|
difficulties in integrating or achieving projected revenues and earnings for acquired businesses;
|
•
|
matters related to business we have disposed of or divested; and
|
•
|
other factors set forth in Exhibit 99.1 of this Annual Report on Form 10-K under the caption "Special Considerations and Risk Factors."
|
•
|
Demographic trends, including increased longevity and more complex health needs, place an increased burden on government social benefit programs. At the same time, programs that address societal needs must be a good use of taxpayer dollars and achieve their intended outcomes. We believe the macro-economic trends of demographics and government needs will continue to drive demand for our services.
|
•
|
Our contract portfolio offers us excellent revenue visibility. Much of our revenue is derived from long-term contractual arrangements with governments. A contract will often have a base period followed by additional option periods. As a result, single contracts may last several years and client relationships may be decades long. At any time, we are typically able to identify more than 90% of our subsequent twelve months' anticipated revenue from our existing contracts.
|
•
|
We maintain a strong reputation within the government health and human services industry. Our deep client relationships and reputation for delivering outcomes and creating efficiencies creates a strong barrier to entry in a risk-averse environment. Entering our markets typically requires expertise in complex procurement processes, operation of multi-faceted government programs and an ability to serve and engage with diverse populations.
|
•
|
We have a portfolio target operating profit margin that ranges between 10% and 15% with high cash conversion, a healthy balance sheet and access to a $400 million credit facility. Our financial flexibility allows us to fund investments in the business, complete strategic mergers and acquisitions to further supplement our core capabilities and seek new adjacent platforms.
|
•
|
We have an active program to identify potential strategic acquisitions. Our past acquisitions have successfully enabled us to expand our business processes, knowledge and client relationships into adjacent markets and new geographies. Over the past five years, these include:
|
▪
|
In 2017, we acquired Revitalised Limited (Revitalised), a U.K. provider of digital solutions for engaging people in the areas of health, fitness and well-being.
|
▪
|
In 2016, we acquired Ascend Management Innovations, LLC (Ascend), a provider of independent, specialized health assessments and data management tools to government agencies in the U.S.
|
▪
|
In 2016, we acquired Assessments Australia, a provider of assessments that identify the support services required to help individuals succeed in a community environment.
|
▪
|
In 2015, we acquired Acentia, LLC (Acentia), a provider of system modernization, software development, program management and other information technology services to the U.S. Federal Government.
|
▪
|
In 2015, we acquired Remploy, a leading provider of disability employment services in the U.K.
|
▪
|
In 2013, we acquired Health Management Limited (Health Management), a leading provider of occupational health services and independent medical assessments in the U.K.
|
•
|
Support for Medicaid, the Children's Health Insurance Program (CHIP) and the Affordable Care Act (ACA) in the U.S., Health Insurance BC (British Columbia) in Canada
|
•
|
Program eligibility and enrollment services to help beneficiaries make the best choice for their health insurance coverage and improve their access to health care
|
•
|
Application assistance and independent health plan enrollment counseling to beneficiaries
|
•
|
Beneficiary outreach, education, eligibility, enrollment and renewal services
|
•
|
Centralized multilingual customer contact centers and multichannel self-service options for easy enrollment
|
•
|
Document and record management
|
•
|
Premium payment processing and administration, such as invoicing and reconciliation
|
•
|
Digital eHealth and well-being solutions
|
•
|
The largest provider of Medicaid enrollment and CHIP services in the U.S.
|
•
|
A leading operator of customer contact centers for state-based health insurance exchanges in the U.S.
|
•
|
Support for the Health Assessment Advisory Service (HAAS) in the U.K.
|
•
|
Independent disability, long-term sick and other health assessments, including those related to long-term services and supports such as Preadmission Screening and Resident Reviews (PASRR)
|
•
|
Occupational health clinical assessments
|
•
|
A leading provider of government-sponsored health benefit assessments and appeals in the U.S. and the U.K.
|
•
|
One of the largest providers of disability and long-term sick support services and occupational health services in the U.K.
|
•
|
Centralized customer contact centers and support services
|
•
|
Document and record management
|
•
|
Case management, citizen engagement and consumer education
|
•
|
Independent medical reviews and worker's compensation benefit appeals
|
•
|
Health benefit appeals
|
•
|
Program eligibility appeals
|
•
|
Modernization of systems and information technology (IT) infrastructure
|
•
|
Infrastructure operations and support
|
•
|
Software development, operations and management
|
•
|
Data analytics
|
•
|
A focus on the citizen experience and citizen services, as well as digital services
|
•
|
Agencies moving from transformation initiatives to operations and maintenance
|
•
|
Agencies seeking consolidation and shared services to achieve cost efficiencies
|
•
|
Changes in the acquisition and contracting environment, including consolidation of General Services Administration schedules
|
•
|
Support a variety of programs including the Work Programme and Work Choice in the U.K.; jobactive, Disability Employment Services and Work for the Dole in Australia; Temporary Assistance to Needy Families (TANF) in the U.S.; the Employment Program of British Columbia, Canada; the Taqat and Taqat Plus programs in Saudi Arabia; and Workforce Singapore as a Career Matching Provider
|
•
|
Include eligibility determination, case management, job‑readiness preparation, job search and employer outreach, job retention and career advancement, and selected educational and training services
|
|
Backlog as of
September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Health Services
|
$
|
4,246
|
|
|
$
|
2,429
|
|
U.S. Federal Services
|
324
|
|
|
408
|
|
||
Human Services
|
1,130
|
|
|
1,163
|
|
||
Total
|
$
|
5,700
|
|
|
$
|
4,000
|
|
|
Price Range
|
|
|
||||||||
|
High
|
|
Low
|
|
Dividends
|
||||||
Year Ended September 30, 2017:
|
|
|
|
|
|
|
|
|
|||
First Quarter
|
$
|
57.66
|
|
|
$
|
43.69
|
|
|
$
|
0.045
|
|
Second Quarter
|
62.78
|
|
|
51.74
|
|
|
0.045
|
|
|||
Third Quarter
|
64.97
|
|
|
57.12
|
|
|
0.045
|
|
|||
Fourth Quarter
|
65.37
|
|
|
58.58
|
|
|
0.045
|
|
|||
Year Ended September 30, 2016:
|
|
|
|
|
|
|
|
|
|||
First Quarter
|
$
|
69.85
|
|
|
$
|
47.95
|
|
|
$
|
0.045
|
|
Second Quarter
|
55.67
|
|
|
45.15
|
|
|
0.045
|
|
|||
Third Quarter
|
58.14
|
|
|
46.90
|
|
|
0.045
|
|
|||
Fourth Quarter
|
61.68
|
|
|
54.38
|
|
|
0.045
|
|
Period
|
Total
Number of
Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans(1)
|
|
Approximate Dollar
Value of Shares that
May Yet Be
Purchased
Under the Plan
(in thousands)
|
||||||
July 1, 2017 - July 31, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
109,417
|
|
August 1, 2017 - August 31, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
109,694
|
|
||
September 1, 2017 - September 30, 2017 (2)
|
135,070
|
|
|
$64.50
|
|
—
|
|
|
109,878
|
|
|||
Total
|
135,070
|
|
|
|
|
—
|
|
|
|
|
(1)
|
Under a resolution adopted in August 2015, the Board of Directors authorized the repurchase, at management's discretion, of up to an aggregate of $200 million of our common stock. The resolution also authorized the use of option exercise proceeds for the repurchase of our common stock.
|
(2)
|
The total number of shares purchased in September 2017 comprises restricted stock units which vested in September 2017 but which were utilized by the recipients to net-settle personal income tax obligations.
|
A.
|
The lines represent index levels derived from compounded daily returns that include all dividends.
|
B.
|
The indexes are reweighted daily, using the market capitalization on the previous trading day.
|
C.
|
If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.
|
D.
|
The index level for all series was set to $100.00 on September 30, 2012.
|
|
Year Ended September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
Consolidated statement of operations data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
2,450,961
|
|
|
$
|
2,403,360
|
|
|
$
|
2,099,821
|
|
|
$
|
1,700,912
|
|
|
$
|
1,331,279
|
|
Operating income
|
313,512
|
|
|
286,603
|
|
|
259,832
|
|
|
225,308
|
|
|
185,155
|
|
|||||
Net income attributable to MAXIMUS
|
209,426
|
|
|
178,362
|
|
|
157,772
|
|
|
145,440
|
|
|
116,731
|
|
|||||
Basic earnings per share attributable to MAXIMUS
|
$
|
3.19
|
|
|
$
|
2.71
|
|
|
$
|
2.37
|
|
|
$
|
2.15
|
|
|
$
|
1.71
|
|
Diluted earnings per share attributable to MAXIMUS
|
$
|
3.17
|
|
|
$
|
2.69
|
|
|
$
|
2.35
|
|
|
$
|
2.11
|
|
|
$
|
1.67
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
65,632
|
|
|
65,822
|
|
|
66,682
|
|
|
67,680
|
|
|
68,165
|
|
|||||
Diluted
|
66,065
|
|
|
66,229
|
|
|
67,275
|
|
|
69,087
|
|
|
69,893
|
|
|||||
Cash dividends per share of common stock
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
At September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Consolidated balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
166,252
|
|
|
$
|
66,199
|
|
|
$
|
74,672
|
|
|
$
|
158,112
|
|
|
$
|
125,617
|
|
Total assets
|
1,350,662
|
|
|
1,348,819
|
|
|
1,271,558
|
|
|
900,996
|
|
|
857,978
|
|
|||||
Debt
|
668
|
|
|
165,615
|
|
|
210,974
|
|
|
1,217
|
|
|
1,489
|
|
|||||
Total MAXIMUS shareholders' equity
|
940,085
|
|
|
749,081
|
|
|
612,378
|
|
|
555,962
|
|
|
529,508
|
|
•
|
In April 2015, we acquired Acentia, LLC (Acentia), a provider of services to the U.S. Federal Government. This business was integrated into our U.S. Federal Services Segment.
|
•
|
In April 2015, we acquired a majority ownership of Remploy, a business providing specialized disability employment services for the U.K. government. This business was integrated into our Human Services Segment.
|
•
|
In December 2015, we acquired Assessments Australia. This business was integrated into our Human Services Segment.
|
•
|
In February 2016, we acquired Ascend Management Innovations, LLC (Ascend). This business was integrated into our Health Services Segment.
|
•
|
In July 2017, we acquired Revitalised Limited (Revitalised), a provider of digital solutions for engaging communities in the United Kingdom in the areas of health, fitness and well-being. This business was integrated into our Health Services Segment.
|
•
|
Organic growth within our Health Services Segment, primarily through contract expansion in the United States and performance improvement in the Health Advisory and Assessment (HAAS) contract in the U.K.;
|
•
|
Declines in our U.S. Federal Services Segment due to the wind-down in 2017 of a large subcontract for work performed for the U.S. Department of Veterans Affairs where revenue declined by approximately
$63 million
compared to 2016; and in 2016 the expected closure of one customer contact center tied to the Federal Marketplace under the Affordable Care Act where revenue declined by approximately $49 million compared to 2015;
|
•
|
Organic growth in our Human Services Segment from expansion of our international welfare-to-work businesses due mostly to the ramp up of jobactive in Australia which offset expected declines in the U.K. due to the wind-down of the Work Programme;
|
•
|
The fluctuation in the value of international currencies, principally the British Pound which fell sharply on June 24, 2016 following the European Union referendum;
|
•
|
The effect of our acquisitions, especially that of Acentia and Remploy in 2015 and Ascend in 2016, which resulted in increases in revenue and operating income, but also cash borrowings, interest expense, amortization of intangible assets and acquisition-related expenses;
|
•
|
The repayment in full of our U.S. cash borrowings through 2016 and 2017, utilizing our operating cash flows, which reduced interest expense;
|
•
|
The sale of our K-12 Education business in May 2016, which resulted in a gain of
$6.9 million
on the date of sale and an additional
$0.7 million
in May 2017 following the resolution of outstanding contingencies;
|
•
|
Interest income and tax benefits from research and development credits in the United States and in foreign jurisdictions;
|
•
|
Tax benefits from the vesting of restricted stock units (RSUs) and the exercise of stock options in fiscal year 2017 which, under new accounting standards, are recorded as a component of tax expense. In prior years, the benefits from the vesting of RSUs were recorded through our Consolidated Statements of Changes in Shareholders' Equity;
|
•
|
Improved cash flows from operations due to improvements in customer cash collections in fiscal year 2017;
|
•
|
Increased investment in our capital infrastructure in fiscal year 2014 and 2015 which, along with acquisitions, utilized significant amounts of cash and increased our depreciation expense;
|
•
|
Approximately
$143.0 million
of repurchases of our own shares as part of our share repurchase program; and
|
•
|
Our quarterly cash dividends.
|
•
|
Tax regulations may penalize us if we transfer funds or debt across international borders. Accordingly, we may not be able to use our cash in the locations where it is needed. We mitigate this risk by maintaining sufficient capital, or having sufficient capital available to us under our credit facility, both within and outside the U.S., to support the short-term and long-term capital requirements of the businesses in each region. We establish our legal entities to make efficient use of tax laws and holding companies to minimize this exposure.
|
•
|
We are subject to exposure from foreign currency fluctuations. Our foreign subsidiaries typically incur costs in the same currency as they earn revenue, thus limiting our exposure to unexpected currency fluctuations. Further, the operations of the U.S. business do not depend upon cash flows from foreign subsidiaries. However, declines in the relevant strength of foreign currencies against the U.S. Dollar will affect our revenue mix, profit margin and tax rate.
|
|
|
Year ended September 30,
|
||||||||||
(dollars in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
$
|
2,450,961
|
|
|
$
|
2,403,360
|
|
|
$
|
2,099,821
|
|
Cost of revenue
|
|
1,839,056
|
|
|
1,841,169
|
|
|
1,587,104
|
|
|||
Gross profit
|
|
611,905
|
|
|
562,191
|
|
|
512,717
|
|
|||
Gross profit margin
|
|
25.0
|
%
|
|
23.4
|
%
|
|
24.4
|
%
|
|||
Selling, general and administrative expense
|
|
284,510
|
|
|
268,259
|
|
|
238,792
|
|
|||
Selling, general and administrative expense as a percentage of revenue
|
|
11.6
|
%
|
|
11.2
|
%
|
|
11.4
|
%
|
|||
Amortization of intangible assets
|
|
12,208
|
|
|
13,377
|
|
|
9,348
|
|
|||
Restructuring costs
|
|
2,242
|
|
|
—
|
|
|
—
|
|
|||
Acquisition-related expenses
|
|
83
|
|
|
832
|
|
|
4,745
|
|
|||
Gain on sale of a business
|
|
650
|
|
|
6,880
|
|
|
—
|
|
|||
Operating income
|
|
313,512
|
|
|
286,603
|
|
|
259,832
|
|
|||
Operating income margin
|
|
12.8
|
%
|
|
11.9
|
%
|
|
12.4
|
%
|
|||
Interest expense
|
|
2,162
|
|
|
4,134
|
|
|
1,398
|
|
|||
Other income, net
|
|
2,885
|
|
|
3,499
|
|
|
1,385
|
|
|||
Income before income taxes
|
|
314,235
|
|
|
285,968
|
|
|
259,819
|
|
|||
Provision for income taxes
|
|
102,053
|
|
|
105,808
|
|
|
99,770
|
|
|||
Effective tax rate
|
|
32.5
|
%
|
|
37.0
|
%
|
|
38.4
|
%
|
|||
Net income
|
|
212,182
|
|
|
180,160
|
|
|
160,049
|
|
|||
Income attributable to noncontrolling interests
|
|
2,756
|
|
|
1,798
|
|
|
2,277
|
|
|||
Net income attributable to MAXIMUS
|
|
$
|
209,426
|
|
|
$
|
178,362
|
|
|
$
|
157,772
|
|
Basic earnings per share attributable to MAXIMUS
|
|
$
|
3.19
|
|
|
$
|
2.71
|
|
|
$
|
2.37
|
|
Diluted earnings per share attributable to MAXIMUS
|
|
$
|
3.17
|
|
|
$
|
2.69
|
|
|
$
|
2.35
|
|
|
|
Revenue
|
|
Cost of Revenue
|
|
Gross Profit
|
|||||||||||||||
(dollars in thousands)
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|||||||||
Balance for fiscal year 2016
|
|
$
|
2,403,360
|
|
|
|
|
|
$
|
1,841,169
|
|
|
|
|
|
$
|
562,191
|
|
|
|
|
Organic growth
|
|
72,820
|
|
|
3.0
|
%
|
|
19,190
|
|
|
1.0
|
%
|
|
53,630
|
|
|
9.5
|
%
|
|||
Net acquired growth
|
|
8,928
|
|
|
0.4
|
%
|
|
7,500
|
|
|
0.4
|
%
|
|
1,428
|
|
|
0.3
|
%
|
|||
Currency effect compared to the prior period
|
|
(34,147
|
)
|
|
(1.4
|
)%
|
|
(28,803
|
)
|
|
(1.5
|
)%
|
|
(5,344
|
)
|
|
(1.0
|
)%
|
|||
Balance for fiscal year 2017
|
|
$
|
2,450,961
|
|
|
2.0
|
%
|
|
$
|
1,839,056
|
|
|
(0.1
|
)%
|
|
$
|
611,905
|
|
|
8.8
|
%
|
|
|
Revenue
|
|
Cost of Revenue
|
|
Gross Profit
|
|||||||||||||||
(dollars in thousands)
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|||||||||
Balance for fiscal year 2015
|
|
$
|
2,099,821
|
|
|
|
|
|
$
|
1,587,104
|
|
|
|
|
|
$
|
512,717
|
|
|
|
|
Organic growth
|
|
194,784
|
|
|
9.3
|
%
|
|
177,732
|
|
|
11.2
|
%
|
|
17,052
|
|
|
3.3
|
%
|
|||
Acquired growth
|
|
157,985
|
|
|
7.5
|
%
|
|
117,425
|
|
|
7.4
|
%
|
|
40,560
|
|
|
7.9
|
%
|
|||
Currency effect compared to the prior period
|
|
(49,230
|
)
|
|
(2.3
|
)%
|
|
(41,092
|
)
|
|
(2.6
|
)%
|
|
(8,138
|
)
|
|
(1.6
|
)%
|
|||
Balance for fiscal year 2016
|
|
$
|
2,403,360
|
|
|
14.5
|
%
|
|
$
|
1,841,169
|
|
|
16.0
|
%
|
|
$
|
562,191
|
|
|
9.6
|
%
|
•
|
Our acquisitions, notably Acentia and Remploy, have contributed an additional cost base;
|
•
|
Additions to infrastructure have increased depreciation and maintenance charges by approximately
$10 million
;
|
•
|
Additional bonus costs for employees to reflect improved performance in fiscal year 2017;
|
•
|
Bad debt expense, approximately $2.5 million, related to a single customer; and
|
•
|
We incurred costs of $
2.2 million
in 2016 related to a legal matter from fiscal year 2014, which was settled in fiscal year 2017.
|
•
|
We incurred costs related to the acquisition of these entities; typically legal fees, third-party due diligence and costs related to the valuation of intangible assets. Expenses of
$0.1 million
in 2017 relate to Revitalised,
$0.8 million
in
2016
to Ascend and Assessments Australia and
$4.7 million
to Acentia and Remploy.
|
•
|
We utilized our credit facility to fund our acquisitions. We borrowed funds in April 2015 to acquire Acentia, along with a further balance in February 2016 to acquire Ascend. These borrowings resulted in an increase in our interest expense. Since the fourth quarter of 2016, we have steadily paid off our credit facility and, accordingly, interest expense has steadily declined. As of September 30, 2017, we had no borrowings under the credit facility. We would not anticipate any significant interest expense beyond the cost of maintaining the credit facility unless we have an acquisition that requires utilization of the credit facility.
|
•
|
Our intangible asset amortization increased in fiscal year 2016 due to the full year charges from the acquisitions of Acentia and Remploy, which were both acquired in April 2015, as well as charges from the 2016 acquisitions of Ascend and Assessments Australia. Notwithstanding the full year charges from the 2016 acquisitions, intangible amortization expense has declined in fiscal year 2017 as all assets acquired with Remploy as well as all technology and trademarks acquired with Policy Studies, Inc.(PSI), which was acquired in 2012, were fully amortized at the end of March 2017. Based upon our current portfolio, we anticipate amortization expense in fiscal year 2018 of
$10.3 million
, the further decline reflecting a full year without Remploy and PSI charges.
|
•
|
We received a benefit in fiscal year 2017 of $6.6 million related to the vesting of restricted stock units (RSUs) and the exercise of stock options. These tax benefits had previously been recorded through our Consolidated Statements of Changes in Shareholders' Equity but are now required to be recorded as a benefit to earnings. We will continue to receive benefits or charges related to RSU vesting in future years with the effect being dependent upon the number of awards vesting and the share price on that date. Although this is typically during the fourth quarter of our fiscal year, we have a significant population of RSUs whose issuance has been deferred. This may result in unpredictable movements within our tax provision. As of September 30, 2017, we no longer have any outstanding stock options.
|
•
|
We received a one-time benefit of $3.4 million related to research and development tax credits in the United States, Australia and Canada. These credits relate to past years and, accordingly, are not anticipated to recur in future quarters.
|
|
|
Year ended September 30,
|
||||||||||
(dollars in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
$
|
1,380,151
|
|
|
$
|
1,298,304
|
|
|
$
|
1,109,238
|
|
Cost of revenue
|
|
1,032,826
|
|
|
1,006,123
|
|
|
855,130
|
|
|||
Gross profit
|
|
347,325
|
|
|
292,181
|
|
|
254,108
|
|
|||
Selling, general and administrative expense
|
|
132,081
|
|
|
107,155
|
|
|
99,815
|
|
|||
Operating income
|
|
215,244
|
|
|
185,026
|
|
|
154,293
|
|
|||
Gross profit percentage
|
|
25.2
|
%
|
|
22.5
|
%
|
|
22.9
|
%
|
|||
Operating margin percentage
|
|
15.6
|
%
|
|
14.3
|
%
|
|
13.9
|
%
|
|
|
Revenue
|
|
Cost of Revenue
|
|
Gross Profit
|
|||||||||||||||
(dollars in thousands)
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|||||||||
Balance for fiscal year 2016
|
|
$
|
1,298,304
|
|
|
|
|
|
$
|
1,006,123
|
|
|
|
|
|
$
|
292,181
|
|
|
|
|
Organic growth
|
|
104,224
|
|
|
8.0
|
%
|
|
47,033
|
|
|
4.7
|
%
|
|
57,191
|
|
|
19.6
|
%
|
|||
Acquired growth
|
|
9,790
|
|
|
0.8
|
%
|
|
7,626
|
|
|
0.8
|
%
|
|
2,164
|
|
|
0.7
|
%
|
|||
Currency effect compared to the prior period
|
|
(32,167
|
)
|
|
(2.5
|
)%
|
|
(27,956
|
)
|
|
(2.8
|
)%
|
|
(4,211
|
)
|
|
(1.4
|
)%
|
|||
Balance for fiscal year 2017
|
|
$
|
1,380,151
|
|
|
6.3
|
%
|
|
$
|
1,032,826
|
|
|
2.7
|
%
|
|
$
|
347,325
|
|
|
18.9
|
%
|
•
|
Our scope of work expanded on our existing U.S.-based contracts, notably with the expansion of an existing contract in New York State.
|
•
|
We have improved our performance on our United Kingdom-based HAAS contract and are meeting service levels, resulting in reduced penalties against our revenue.
|
•
|
As previously noted, we chose not to rebid a contract with the state of Connecticut which had previously provided approximately $23 million of annual revenue. The existing contract ended in the fourth quarter of 2016.
|
•
|
Our results include a full year for Ascend, which was acquired in February 2016, as well as two months from Revitalised.
|
•
|
The significant year-over-year decline in the value of the British Pound has reduced the benefits of the improved performance on the United Kingdom-based contracts. On a constant currency basis, revenue and cost of revenue growth would have been
8.8%
and
5.5%
, respectively.
|
|
|
Revenue
|
|
Cost of Revenue
|
|
Gross Profit
|
|||||||||||||||
(dollars in thousands)
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|||||||||
Balance for fiscal year 2015
|
|
$
|
1,109,238
|
|
|
|
|
|
$
|
855,130
|
|
|
|
|
|
$
|
254,108
|
|
|
|
|
Organic growth
|
|
202,928
|
|
|
18.3
|
%
|
|
165,467
|
|
|
19.3
|
%
|
|
37,461
|
|
|
14.7
|
%
|
|||
Acquired growth
|
|
14,881
|
|
|
1.3
|
%
|
|
10,336
|
|
|
1.2
|
%
|
|
4,545
|
|
|
1.8
|
%
|
|||
Currency effect compared to the prior period
|
|
(28,743
|
)
|
|
(2.6
|
)%
|
|
(24,810
|
)
|
|
(2.9
|
)%
|
|
(3,933
|
)
|
|
(1.5
|
)%
|
|||
Balance for fiscal year 2016
|
|
$
|
1,298,304
|
|
|
17.0
|
%
|
|
$
|
1,006,123
|
|
|
17.7
|
%
|
|
$
|
292,181
|
|
|
15.0
|
%
|
•
|
Our scope of work expanded on our existing U.S.-based contracts, notably with the expansion of an existing contract in New York State.
|
•
|
We received a full year benefit from our U.K.-based HAAS contract. This contract commenced March 1, 2015. The HAAS contract experienced operating losses in fiscal year 2015 due to challenges in the recruitment and retention of health care professionals. This resulted in reduced fees from performance incentives in the contract. During fiscal year 2016, our performance on the HAAS contract improved and we experienced operating margins in the high-single digits.
|
•
|
Our results include seven months of operations following our acquisition of Ascend.
|
|
|
Year ended September 30,
|
||||||||||
(dollars in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
$
|
545,573
|
|
|
$
|
591,728
|
|
|
$
|
502,484
|
|
Cost of revenue
|
|
406,252
|
|
|
453,560
|
|
|
383,838
|
|
|||
Gross profit
|
|
139,321
|
|
|
138,168
|
|
|
118,646
|
|
|||
Selling, general and administrative expense
|
|
74,345
|
|
|
74,792
|
|
|
59,252
|
|
|||
Operating income
|
|
64,976
|
|
|
63,376
|
|
|
59,394
|
|
|||
Gross profit percentage
|
|
25.5
|
%
|
|
23.3
|
%
|
|
23.6
|
%
|
|||
Operating margin percentage
|
|
11.9
|
%
|
|
10.7
|
%
|
|
11.8
|
%
|
|
|
Revenue
|
|
Cost of Revenue
|
|
Gross Profit
|
|||||||||||||||
(dollars in thousands)
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|||||||||
Balance for fiscal year 2015
|
|
$
|
502,484
|
|
|
|
|
|
$
|
383,838
|
|
|
|
|
|
$
|
118,646
|
|
|
|
|
Organic growth
|
|
(15,043
|
)
|
|
(3.0
|
)%
|
|
(11,133
|
)
|
|
(2.9
|
)%
|
|
(3,910
|
)
|
|
(3.3
|
)%
|
|||
Acquired growth
|
|
104,287
|
|
|
20.8
|
%
|
|
80,855
|
|
|
21.1
|
%
|
|
23,432
|
|
|
19.7
|
%
|
|||
Balance for fiscal year 2016
|
|
$
|
591,728
|
|
|
17.8
|
%
|
|
$
|
453,560
|
|
|
18.2
|
%
|
|
$
|
138,168
|
|
|
16.5
|
%
|
|
|
Year ended September 30,
|
||||||||||
(dollars in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
$
|
525,237
|
|
|
$
|
513,328
|
|
|
$
|
488,099
|
|
Cost of revenue
|
|
399,978
|
|
|
381,486
|
|
|
348,136
|
|
|||
Gross profit
|
|
125,259
|
|
|
131,842
|
|
|
139,963
|
|
|||
Selling, general and administrative expense
|
|
76,675
|
|
|
84,157
|
|
|
79,719
|
|
|||
Operating income
|
|
48,584
|
|
|
47,685
|
|
|
60,244
|
|
|||
Gross profit percentage
|
|
23.8
|
%
|
|
25.7
|
%
|
|
28.7
|
%
|
|||
Operating margin percentage
|
|
9.2
|
%
|
|
9.3
|
%
|
|
12.3
|
%
|
|
|
Revenue
|
|
Cost of Revenue
|
|
Gross Profit
|
|||||||||||||||
(dollars in thousands)
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|||||||||
Balance for fiscal year 2016
|
|
$
|
513,328
|
|
|
|
|
|
$
|
381,486
|
|
|
|
|
|
$
|
131,842
|
|
|
|
|
Organic growth
|
|
14,751
|
|
|
2.9
|
%
|
|
19,465
|
|
|
5.1
|
%
|
|
(4,714
|
)
|
|
(3.6
|
)%
|
|||
Net acquisition and disposal
|
|
(862
|
)
|
|
(0.2
|
)%
|
|
(126
|
)
|
|
—
|
%
|
|
(736
|
)
|
|
(0.6
|
)%
|
|||
Currency effect compared to the prior period
|
|
(1,980
|
)
|
|
(0.4
|
)%
|
|
(847
|
)
|
|
(0.2
|
)%
|
|
(1,133
|
)
|
|
(0.9
|
)%
|
|||
Balance for fiscal year 2017
|
|
$
|
525,237
|
|
|
2.3
|
%
|
|
$
|
399,978
|
|
|
4.8
|
%
|
|
$
|
125,259
|
|
|
(5.0
|
)%
|
•
|
We continued to ramp-up the jobactive contract. A portion of the revenue growth from the jobactive contract is pass-through (where we incur the direct costs and the client reimburses us) which carries no margin. Our most accretive payments relate to outcome fees, which are received after individuals have been placed into employment for a significant period of time. Accordingly, it takes time for contracts of this type to mature.
|
•
|
As expected, the Work Programme contracts in the United Kingdom are winding down and as a result revenue has declined from this program. No additional cases are being provided but we will continue to service the existing caseload for up to two years from referral.
|
•
|
The decline in revenue and costs from the sale of the K-12 Education business has been partially offset by the benefit from a full year of Assessments Australia business.
|
•
|
The year-over-year decline in the value of the British Pound has had a significant effect on the segment. On a constant currency basis, revenue and cost of revenue would have increased
2.7%
and
5.1%
, respectively.
|
|
|
Revenue
|
|
Cost of Revenue
|
|
Gross Profit
|
|||||||||||||||
(dollars in thousands)
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|
Dollars
|
|
Percentage change
|
|||||||||
Balance for fiscal year 2015
|
|
$
|
488,099
|
|
|
|
|
|
$
|
348,136
|
|
|
|
|
|
$
|
139,963
|
|
|
|
|
Organic growth
|
|
6,899
|
|
|
1.4
|
%
|
|
23,398
|
|
|
6.7
|
%
|
|
(16,499
|
)
|
|
(11.8
|
)%
|
|||
Acquired growth
|
|
38,817
|
|
|
8.0
|
%
|
|
26,234
|
|
|
7.5
|
%
|
|
12,583
|
|
|
9.0
|
%
|
|||
Currency effect compared to the prior period
|
|
(20,487
|
)
|
|
(4.2
|
)%
|
|
(16,282
|
)
|
|
(4.7
|
)%
|
|
(4,205
|
)
|
|
(3.0
|
)%
|
|||
Balance for fiscal year 2016
|
|
$
|
513,328
|
|
|
5.2
|
%
|
|
$
|
381,486
|
|
|
9.6
|
%
|
|
$
|
131,842
|
|
|
(5.8
|
)%
|
•
|
The ramp-up of the new Australian jobactive contract, which commenced in late fiscal year 2015. This contract resulted in higher revenue and costs, but in fiscal 2016 it operated at a lower margin than its predecessor contract;
|
•
|
Revenue from Assessments Australia and a full year of revenue from Remploy;
|
•
|
Anticipated declines in the U.K. Work Programme, owing to lower volumes and referrals with the expected wind down of the contract in 2017; and
|
•
|
The detrimental effect of foreign currency declines.
|
|
As of September 30, 2017
|
||
U.S. Dollar denominated funds held in the United States
|
$
|
42,012
|
|
U.S. Dollar denominated funds held in foreign locations
|
60,572
|
|
|
Funds held in foreign locations in local currencies
|
63,668
|
|
•
|
Actively pursue new growth opportunities;
|
•
|
Maintain our quarterly dividend program; and
|
•
|
Make repurchases of our own shares where opportunities arise to do so.
|
|
|
Year ended September 30,
|
||||||||||
(dollars in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by/(used in):
|
|
|
|
|
|
|
|
|
|
|||
Operations
|
|
$
|
337,200
|
|
|
$
|
180,026
|
|
|
$
|
206,217
|
|
Investing activities
|
|
(25,221
|
)
|
|
(87,103
|
)
|
|
(393,872
|
)
|
|||
Financing activities
|
|
(215,429
|
)
|
|
(96,842
|
)
|
|
111,115
|
|
|||
Effect of exchange rates on cash and cash equivalents
|
|
3,503
|
|
|
(4,554
|
)
|
|
(6,900
|
)
|
|||
Net increase/(decrease) in cash and cash equivalents
|
|
$
|
100,053
|
|
|
$
|
(8,473
|
)
|
|
$
|
(83,440
|
)
|
•
|
Year-over-year increases in operating profits,
|
•
|
Improvements in cash collections, most notably within the United States,
|
•
|
Advanced payments for contracts in fiscal year 2015 which did not recur to the same extent in later years, and
|
•
|
The timing of tax payments.
|
•
|
The acquisitions of Acentia and Remploy in fiscal year 2015,
|
•
|
The acquisitions of Assessments Australia and Ascend in fiscal year 2016,
|
•
|
A significant infrastructure build-out in the United States, principally focused on the our information technology, and
|
•
|
Contract startups for HAAS and jobactive, which required initial up-front investment.
|
|
|
Year ended September 30,
|
||||||||||
(dollars in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash provided by operations
|
|
$
|
337,200
|
|
|
$
|
180,026
|
|
|
$
|
206,217
|
|
Purchases of property and equipment and capitalized software costs
|
|
(24,154
|
)
|
|
(46,391
|
)
|
|
(105,149
|
)
|
|||
Free cash flow
|
|
$
|
313,046
|
|
|
$
|
133,635
|
|
|
$
|
101,068
|
|
|
|
Payments due by period
|
||||||||||||||||||
(dollars in thousands)
|
|
Total
|
|
Less than
1 year |
|
1 - 3
years |
|
3 - 5
years |
|
More than
5 years |
||||||||||
Operating leases
|
|
$
|
175,077
|
|
|
$
|
69,482
|
|
|
$
|
90,682
|
|
|
$
|
14,672
|
|
|
$
|
241
|
|
Debt(1)
|
|
668
|
|
|
141
|
|
|
282
|
|
|
245
|
|
|
—
|
|
|||||
Deferred compensation plan liabilities(2)
|
|
32,444
|
|
|
1,737
|
|
|
2,158
|
|
|
1,255
|
|
|
27,294
|
|
|||||
Total(3)
|
|
$
|
208,189
|
|
|
$
|
71,360
|
|
|
$
|
93,122
|
|
|
$
|
16,172
|
|
|
$
|
27,535
|
|
(1)
|
The debt balance of
$0.7 million
at September 30, 2017 is interest free. Accordingly, no estimated interest payments have been included within the balances above.
|
(2)
|
Deferred compensation plan liabilities are typically payable at times elected by the employee at the time of deferral. The timing of these payments are based upon elections in place at September 30, 2017, but these may be subject to change. Payments falling due may be deferred again by the employee, delaying the obligation. Payments may also be accelerated if an employee ceases employment with us or applies for a
|
(3)
|
Due to the uncertainty with respect to the timing of future cash flows associated with the Company's unrecognized income tax benefits at September 30,
2017
, we are unable to reasonably estimate settlements with taxing authorities. The above table does not reflect unrecognized income tax benefits of approximately
$1.1 million
, of which approximately
$0.6 million
is related interest and penalties. See "Note 15. Income taxes" of the Consolidated Financial Statements for a further discussion on income taxes.
|
|
|
Year ended September 30,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income attributable to MAXIMUS
|
|
$
|
209,426
|
|
|
$
|
178,362
|
|
|
$
|
157,772
|
|
Interest expense
|
|
379
|
|
|
3,466
|
|
|
673
|
|
|||
Provision for income taxes
|
|
102,053
|
|
|
105,808
|
|
|
99,770
|
|
|||
Amortization of intangible assets
|
|
12,208
|
|
|
13,377
|
|
|
9,348
|
|
|||
Stock compensation expense
|
|
21,365
|
|
|
18,751
|
|
|
17,237
|
|
|||
Acquisition-related expenses
|
|
83
|
|
|
832
|
|
|
4,745
|
|
|||
Gain on sale of a business
|
|
(650
|
)
|
|
(6,880
|
)
|
|
—
|
|
|||
Adjusted EBITA
|
|
344,864
|
|
|
313,716
|
|
|
289,545
|
|
|||
Depreciation and amortization of property, plant, equipment and capitalized software
|
|
55,769
|
|
|
58,404
|
|
|
46,849
|
|
|||
Adjusted EBITDA
|
|
$
|
400,633
|
|
|
$
|
372,120
|
|
|
$
|
336,394
|
|
|
As of September 30,
|
||||||
|
2017
|
|
2016
|
||||
Comprehensive income attributable to MAXIMUS
|
$
|
(18,680
|
)
|
|
$
|
(20,390
|
)
|
Net decrease in cash and cash equivalents
|
(6,370
|
)
|
|
(6,300
|
)
|
/s/ Ernst & Young LLP
|
|
|
|
Tysons, Virginia
|
|
November 20, 2017
|
|
|
Year ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
$
|
2,450,961
|
|
|
$
|
2,403,360
|
|
|
$
|
2,099,821
|
|
Cost of revenue
|
1,839,056
|
|
|
1,841,169
|
|
|
1,587,104
|
|
|||
Gross profit
|
611,905
|
|
|
562,191
|
|
|
512,717
|
|
|||
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
284,510
|
|
|
268,259
|
|
|
238,792
|
|
|||
Amortization of intangible assets
|
12,208
|
|
|
13,377
|
|
|
9,348
|
|
|||
Restructuring costs
|
2,242
|
|
|
—
|
|
|
—
|
|
|||
Acquisition-related expenses
|
83
|
|
|
832
|
|
|
4,745
|
|
|||
|
|
|
|
|
|
||||||
Gain on sale of a business
|
650
|
|
|
6,880
|
|
|
—
|
|
|||
Operating income
|
313,512
|
|
|
286,603
|
|
|
259,832
|
|
|||
|
|
|
|
|
|
||||||
Interest expense
|
2,162
|
|
|
4,134
|
|
|
1,398
|
|
|||
|
|
|
|
|
|
||||||
Other income, net
|
2,885
|
|
|
3,499
|
|
|
1,385
|
|
|||
Income before income taxes
|
314,235
|
|
|
285,968
|
|
|
259,819
|
|
|||
Provision for income taxes
|
102,053
|
|
|
105,808
|
|
|
99,770
|
|
|||
Net income
|
212,182
|
|
|
180,160
|
|
|
160,049
|
|
|||
Income attributable to noncontrolling interests
|
2,756
|
|
|
1,798
|
|
|
2,277
|
|
|||
Net income attributable to MAXIMUS
|
$
|
209,426
|
|
|
$
|
178,362
|
|
|
$
|
157,772
|
|
Basic earnings per share attributable to MAXIMUS
|
$
|
3.19
|
|
|
$
|
2.71
|
|
|
$
|
2.37
|
|
Diluted earnings per share attributable to MAXIMUS
|
$
|
3.17
|
|
|
$
|
2.69
|
|
|
$
|
2.35
|
|
Dividends per share
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|||
Basic
|
65,632
|
|
|
65,822
|
|
|
66,682
|
|
|||
Diluted
|
66,065
|
|
|
66,229
|
|
|
67,275
|
|
|
Year ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
212,182
|
|
|
$
|
180,160
|
|
|
$
|
160,049
|
|
Foreign currency translation adjustments
|
8,549
|
|
|
(13,828
|
)
|
|
(22,570
|
)
|
|||
Interest rate hedge, net of income taxes of $-, $(16) and $16
|
1
|
|
|
24
|
|
|
(25
|
)
|
|||
Comprehensive income
|
220,732
|
|
|
166,356
|
|
|
137,454
|
|
|||
Comprehensive income attributable to noncontrolling interests
|
2,756
|
|
|
1,798
|
|
|
2,277
|
|
|||
Comprehensive income attributable to MAXIMUS
|
$
|
217,976
|
|
|
$
|
164,558
|
|
|
$
|
135,177
|
|
|
September 30,
|
||||||
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
166,252
|
|
|
$
|
66,199
|
|
Accounts receivable—billed and billable, net
|
394,338
|
|
|
444,357
|
|
||
Accounts receivable—unbilled
|
36,475
|
|
|
36,433
|
|
||
Income taxes receivable
|
4,528
|
|
|
17,273
|
|
||
Prepaid expenses and other current assets
|
55,649
|
|
|
56,718
|
|
||
Total current assets
|
657,242
|
|
|
620,980
|
|
||
Property and equipment, net
|
101,651
|
|
|
131,569
|
|
||
Capitalized software, net
|
26,748
|
|
|
30,139
|
|
||
Goodwill
|
402,976
|
|
|
397,558
|
|
||
Intangible assets, net
|
98,769
|
|
|
109,027
|
|
||
Deferred contract costs, net
|
16,298
|
|
|
18,182
|
|
||
Deferred compensation plan assets
|
28,548
|
|
|
23,307
|
|
||
Deferred income taxes
|
7,691
|
|
|
8,644
|
|
||
Other assets
|
10,739
|
|
|
9,413
|
|
||
Total assets
|
$
|
1,350,662
|
|
|
$
|
1,348,819
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
122,083
|
|
|
$
|
150,711
|
|
Accrued compensation and benefits
|
105,667
|
|
|
96,480
|
|
||
Deferred revenue
|
71,722
|
|
|
73,692
|
|
||
Income taxes payable
|
4,703
|
|
|
7,979
|
|
||
Long-term debt, current portion
|
141
|
|
|
277
|
|
||
Other liabilities
|
11,950
|
|
|
11,617
|
|
||
Total current liabilities
|
316,266
|
|
|
340,756
|
|
||
Deferred revenue, less current portion
|
28,182
|
|
|
40,007
|
|
||
Deferred income taxes
|
20,106
|
|
|
16,813
|
|
||
Long-term debt
|
527
|
|
|
165,338
|
|
||
Deferred compensation plan liabilities, less current portion
|
30,707
|
|
|
24,012
|
|
||
Other liabilities
|
9,106
|
|
|
8,753
|
|
||
Total liabilities
|
404,894
|
|
|
595,679
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Shareholders' equity:
|
|
|
|
|
|
||
Common stock, no par value; 100,000 shares authorized; 65,137 and 65,223 shares issued and outstanding at September 30, 2017 and 2016, at stated amount, respectively
|
475,592
|
|
|
461,679
|
|
||
Accumulated other comprehensive income
|
(27,619
|
)
|
|
(36,169
|
)
|
||
Retained earnings
|
492,112
|
|
|
323,571
|
|
||
Total MAXIMUS shareholders' equity
|
940,085
|
|
|
749,081
|
|
||
Noncontrolling interests
|
5,683
|
|
|
4,059
|
|
||
Total equity
|
945,768
|
|
|
753,140
|
|
||
Total liabilities and equity
|
$
|
1,350,662
|
|
|
$
|
1,348,819
|
|
|
Year ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operations:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
212,182
|
|
|
$
|
180,160
|
|
|
$
|
160,049
|
|
Adjustments to reconcile net income to net cash provided by operations:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization of property, plant, equipment and capitalized software
|
55,769
|
|
|
58,404
|
|
|
46,849
|
|
|||
Amortization of intangible assets
|
12,208
|
|
|
13,377
|
|
|
9,348
|
|
|||
Deferred income taxes
|
4,762
|
|
|
5,652
|
|
|
807
|
|
|||
Stock compensation expense
|
21,365
|
|
|
18,751
|
|
|
17,237
|
|
|||
Gain on sale of business
|
(650
|
)
|
|
(6,880
|
)
|
|
—
|
|
|||
Changes in assets and liabilities, net of effects of business combinations:
|
|
|
|
|
|
||||||
Accounts receivable—billed and billable
|
53,025
|
|
|
(51,986
|
)
|
|
(103,774
|
)
|
|||
Accounts receivable—unbilled
|
26
|
|
|
(5,590
|
)
|
|
(911
|
)
|
|||
Prepaid expenses and other current assets
|
2,584
|
|
|
(2,027
|
)
|
|
(6,475
|
)
|
|||
Deferred contract costs
|
2,037
|
|
|
(398
|
)
|
|
(7,245
|
)
|
|||
Accounts payable and accrued liabilities
|
(28,309
|
)
|
|
(2,371
|
)
|
|
44,351
|
|
|||
Accrued compensation and benefits
|
8,849
|
|
|
(869
|
)
|
|
(3,157
|
)
|
|||
Deferred revenue
|
(15,401
|
)
|
|
(11,661
|
)
|
|
47,948
|
|
|||
Income taxes
|
8,901
|
|
|
(13,125
|
)
|
|
9,134
|
|
|||
Other assets and liabilities
|
(148
|
)
|
|
(1,411
|
)
|
|
(7,944
|
)
|
|||
Cash provided by operations
|
337,200
|
|
|
180,026
|
|
|
206,217
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Acquisition of businesses, net of cash acquired
|
(2,677
|
)
|
|
(46,651
|
)
|
|
(289,212
|
)
|
|||
Purchases of property and equipment and capitalized software costs
|
(24,154
|
)
|
|
(46,391
|
)
|
|
(105,149
|
)
|
|||
Proceeds from the sale of a business
|
1,035
|
|
|
5,515
|
|
|
—
|
|
|||
Other
|
575
|
|
|
424
|
|
|
489
|
|
|||
Cash used in investing activities
|
(25,221
|
)
|
|
(87,103
|
)
|
|
(393,872
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Cash dividends paid to MAXIMUS shareholders
|
(11,674
|
)
|
|
(11,701
|
)
|
|
(11,852
|
)
|
|||
Repurchases of common stock
|
(28,863
|
)
|
|
(33,335
|
)
|
|
(82,787
|
)
|
|||
Stock compensation tax benefit
|
—
|
|
|
5,172
|
|
|
9,474
|
|
|||
Tax withholding related to RSU vesting
|
(9,175
|
)
|
|
(11,614
|
)
|
|
(12,451
|
)
|
|||
Stock option exercises
|
924
|
|
|
546
|
|
|
868
|
|
|||
Borrowings under credit facility
|
185,000
|
|
|
149,823
|
|
|
330,993
|
|
|||
Repayment of credit facility and other long-term debt
|
(349,981
|
)
|
|
(195,200
|
)
|
|
(121,611
|
)
|
|||
Other
|
(1,660
|
)
|
|
(533
|
)
|
|
(75
|
)
|
|||
Expansion of credit facility
|
—
|
|
|
—
|
|
|
(1,444
|
)
|
|||
Cash (used in)/provided by financing activities
|
(215,429
|
)
|
|
(96,842
|
)
|
|
111,115
|
|
|||
Effect of exchange rate changes on cash
|
3,503
|
|
|
(4,554
|
)
|
|
(6,900
|
)
|
|||
Net increase/(decrease) in cash and cash equivalents
|
100,053
|
|
|
(8,473
|
)
|
|
(83,440
|
)
|
|||
Cash and cash equivalents, beginning of period
|
66,199
|
|
|
74,672
|
|
|
158,112
|
|
|||
Cash and cash equivalents, end of period
|
$
|
166,252
|
|
|
$
|
66,199
|
|
|
$
|
74,672
|
|
|
Common
Shares
Outstanding
|
|
Common
Stock
|
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings
|
|
Noncontrolling
Interest
|
|
Total
|
|||||||||||
Balance at September 30, 2014
|
66,613
|
|
|
$
|
429,857
|
|
|
$
|
230
|
|
|
$
|
125,875
|
|
|
$
|
223
|
|
|
$
|
556,185
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
157,772
|
|
|
2,277
|
|
|
160,049
|
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
(22,570
|
)
|
|
—
|
|
|
—
|
|
|
(22,570
|
)
|
|||||
Interest rate hedge, net of income taxes
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|||||
Cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,852
|
)
|
|
(75
|
)
|
|
(11,927
|
)
|
|||||
Dividends on RSUs
|
—
|
|
|
397
|
|
|
—
|
|
|
(397
|
)
|
|
—
|
|
|
—
|
|
|||||
Repurchases of common stock
|
(1,619
|
)
|
|
—
|
|
|
—
|
|
|
(82,787
|
)
|
|
—
|
|
|
(82,787
|
)
|
|||||
Stock compensation expense
|
—
|
|
|
17,237
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,237
|
|
|||||
Stock compensation tax benefit
|
—
|
|
|
9,474
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,474
|
|
|||||
Tax withholding relating to RSU vesting
|
—
|
|
|
(11,701
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,701
|
)
|
|||||
Stock option exercises and RSU vesting
|
443
|
|
|
868
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
868
|
|
|||||
Addition of noncontrolling interest from acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
896
|
|
|
896
|
|
|||||
Balance at September 30, 2015
|
65,437
|
|
|
446,132
|
|
|
(22,365
|
)
|
|
188,611
|
|
|
3,321
|
|
|
615,699
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
178,362
|
|
|
1,798
|
|
|
180,160
|
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
(13,828
|
)
|
|
—
|
|
|
—
|
|
|
(13,828
|
)
|
|||||
Interest rate hedge, net of income taxes
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,701
|
)
|
|
(1,060
|
)
|
|
(12,761
|
)
|
|||||
Dividends on RSUs
|
—
|
|
|
363
|
|
|
—
|
|
|
(363
|
)
|
|
—
|
|
|
—
|
|
|||||
Repurchases of common stock
|
(587
|
)
|
|
—
|
|
|
—
|
|
|
(31,338
|
)
|
|
—
|
|
|
(31,338
|
)
|
|||||
Stock compensation expense
|
—
|
|
|
18,751
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,751
|
|
|||||
Stock compensation tax benefit
|
—
|
|
|
5,172
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,172
|
|
|||||
Tax withholding related to RSU vesting
|
—
|
|
|
(9,285
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,285
|
)
|
|||||
Stock option exercises and RSU vesting
|
373
|
|
|
546
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
546
|
|
|||||
Balance at September 30, 2016
|
65,223
|
|
|
461,679
|
|
|
(36,169
|
)
|
|
323,571
|
|
|
4,059
|
|
|
753,140
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
209,426
|
|
|
2,756
|
|
|
212,182
|
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
8,549
|
|
|
—
|
|
|
—
|
|
|
8,549
|
|
|||||
Interest rate hedge, net of income taxes
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,674
|
)
|
|
(1,132
|
)
|
|
(12,806
|
)
|
|||||
Dividends on RSUs
|
—
|
|
|
348
|
|
|
—
|
|
|
(348
|
)
|
|
—
|
|
|
—
|
|
|||||
Repurchases of common stock
|
(558
|
)
|
|
—
|
|
|
—
|
|
|
(28,863
|
)
|
|
—
|
|
|
(28,863
|
)
|
|||||
Stock compensation expense
|
—
|
|
|
21,365
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,365
|
|
|||||
Tax withholding related to RSU vesting
|
—
|
|
|
(8,724
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,724
|
)
|
|||||
Stock option exercises and RSU vesting
|
472
|
|
|
924
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
924
|
|
|||||
Balance at September 30, 2017
|
65,137
|
|
|
$
|
475,592
|
|
|
$
|
(27,619
|
)
|
|
$
|
492,112
|
|
|
$
|
5,683
|
|
|
$
|
945,768
|
|
•
|
The Health Services Segment provides a variety of business process services, appeals and assessments as well as related consulting services, for state, provincial and national government programs. These services support Medicaid, the Children's Health Insurance Program (CHIP) and the Affordable Care Act (ACA) in the U.S., Health Insurance BC (British Columbia) in Canada, and the Health Assessment Advisory Service (HAAS) in the United Kingdom.
|
•
|
The U.S. Federal Services Segment provides business process services and program management for large U.S. Federal Government programs, independent health review and appeals services for both the U.S. Federal Government and similar state-based programs and technology solutions for civilian agencies.
|
•
|
The Human Services Segment provides national, state and local human services agencies with a variety of business process services and related consulting services for government programs.
|
•
|
performance-based criteria (
42%
);
|
•
|
costs incurred plus a negotiated fee ("cost-plus") (
35%
);
|
•
|
fixed-price (
18%
); and
|
•
|
time-and-materials (
5%
).
|
•
|
During the year ended
September 30, 2017
, approximately
0.5 million
shares were issued through the vesting of RSUs and the exercise of stock options, resulting in a decrease in our provision for income taxes of
$6.6 million
and a corresponding benefit to our cash flows from operations.
|
•
|
Our diluted weighted average shares outstanding was higher by approximately
90,000
shares than it would have been if the former standard had been in place.
|
•
|
The combination of these factors resulted in a net increase of
$0.10
to our basic and diluted earnings per share for the year ended
September 30, 2017
, compared to what would have been recorded under the former accounting guidance.
|
|
Year ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||
Health Services
|
$
|
1,380,151
|
|
|
$
|
1,298,304
|
|
|
$
|
1,109,238
|
|
U.S. Federal Services
|
545,573
|
|
|
591,728
|
|
|
502,484
|
|
|||
Human Services
|
525,237
|
|
|
513,328
|
|
|
488,099
|
|
|||
Total
|
$
|
2,450,961
|
|
|
$
|
2,403,360
|
|
|
$
|
2,099,821
|
|
Gross Profit:
|
|
|
|
|
|
|
|
|
|||
Health Services
|
$
|
347,325
|
|
|
$
|
292,181
|
|
|
$
|
254,108
|
|
U.S. Federal Services
|
139,321
|
|
|
138,168
|
|
|
118,646
|
|
|||
Human Services
|
125,259
|
|
|
131,842
|
|
|
139,963
|
|
|||
Total
|
$
|
611,905
|
|
|
$
|
562,191
|
|
|
$
|
512,717
|
|
Selling, general and administrative expense:
|
|
|
|
|
|
|
|
|
|||
Health Services
|
$
|
132,081
|
|
|
$
|
107,155
|
|
|
$
|
99,815
|
|
U.S. Federal Services
|
74,345
|
|
|
74,792
|
|
|
59,252
|
|
|||
Human Services
|
76,675
|
|
|
84,157
|
|
|
79,719
|
|
|||
Other
|
1,409
|
|
|
2,155
|
|
|
6
|
|
|||
Total
|
$
|
284,510
|
|
|
$
|
268,259
|
|
|
$
|
238,792
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|||
Health Services
|
$
|
215,244
|
|
|
$
|
185,026
|
|
|
$
|
154,293
|
|
U.S. Federal Services
|
64,976
|
|
|
63,376
|
|
|
59,394
|
|
|||
Human Services
|
48,584
|
|
|
47,685
|
|
|
60,244
|
|
|||
Amortization of intangible assets
|
(12,208
|
)
|
|
(13,377
|
)
|
|
(9,348
|
)
|
|||
Restructuring costs
|
(2,242
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition-related expenses
|
(83
|
)
|
|
(832
|
)
|
|
(4,745
|
)
|
|||
Gain on sale of a business
|
650
|
|
|
6,880
|
|
|
—
|
|
|||
Other
|
(1,409
|
)
|
|
(2,155
|
)
|
|
(6
|
)
|
|||
Total
|
$
|
313,512
|
|
|
$
|
286,603
|
|
|
$
|
259,832
|
|
Operating income as a percentage of revenue:
|
|
|
|
|
|
||||||
Health Services
|
15.6
|
%
|
|
14.3
|
%
|
|
13.9
|
%
|
|||
U.S. Federal Services
|
11.9
|
%
|
|
10.7
|
%
|
|
11.8
|
%
|
|||
Human Services
|
9.2
|
%
|
|
9.3
|
%
|
|
12.3
|
%
|
|||
Total
|
12.8
|
%
|
|
11.9
|
%
|
|
12.4
|
%
|
|||
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|||
Health Services
|
$
|
29,114
|
|
|
$
|
31,916
|
|
|
$
|
27,694
|
|
U.S. Federal Services
|
11,175
|
|
|
9,953
|
|
|
10,363
|
|
|||
Human Services
|
15,480
|
|
|
16,535
|
|
|
8,792
|
|
|||
Total
|
$
|
55,769
|
|
|
$
|
58,404
|
|
|
$
|
46,849
|
|
|
Year ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
$
|
1,765,661
|
|
|
$
|
1,721,261
|
|
|
$
|
1,559,769
|
|
United Kingdom
|
346,342
|
|
|
384,649
|
|
|
267,702
|
|
|||
Australia
|
232,434
|
|
|
200,539
|
|
|
178,167
|
|
|||
Rest of World
|
106,524
|
|
|
96,911
|
|
|
94,183
|
|
|||
Total
|
$
|
2,450,961
|
|
|
$
|
2,403,360
|
|
|
$
|
2,099,821
|
|
|
Year Ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
Health Services
|
$
|
515,850
|
|
|
$
|
543,361
|
|
U.S. Federal Services
|
397,824
|
|
|
440,006
|
|
||
Human Services
|
169,523
|
|
|
153,141
|
|
||
Corporate/Other
|
267,465
|
|
|
212,311
|
|
||
Total
|
$
|
1,350,662
|
|
|
$
|
1,348,819
|
|
|
Year ended
September 30, |
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
U.S. Federal Government
|
19
|
%
|
|
22
|
%
|
|
20
|
%
|
New York
|
15
|
%
|
|
12
|
%
|
|
10
|
%
|
United Kingdom
|
12
|
%
|
|
16
|
%
|
|
*
|
|
*
|
Government provided less than
10%
of our consolidated revenue in this year.
|
|
Year ended September 30,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Weighted average shares outstanding
|
65,632
|
|
|
65,822
|
|
|
66,682
|
|
Effect of employee stock options and unvested restricted stock awards
|
433
|
|
|
407
|
|
|
593
|
|
Denominator for diluted earnings per share
|
66,065
|
|
|
66,229
|
|
|
67,275
|
|
(Amounts in thousands)
|
|
Updated through September 30, 2016
|
Adjustments
|
Updated through September 30, 2017
|
||||||
Cash consideration, net of cash acquired
|
|
$
|
44,069
|
|
$
|
—
|
|
$
|
44,069
|
|
|
|
|
|
|
||||||
Billed and unbilled receivables
|
|
$
|
4,069
|
|
$
|
—
|
|
$
|
4,069
|
|
Other assets
|
|
407
|
|
—
|
|
407
|
|
|||
Property and equipment and other assets
|
|
707
|
|
—
|
|
707
|
|
|||
Deferred income taxes
|
|
—
|
|
557
|
|
557
|
|
|||
Intangible assets
|
|
22,300
|
|
—
|
|
22,300
|
|
|||
Total identifiable assets acquired
|
|
27,483
|
|
557
|
|
28,040
|
|
|||
Accounts payable and other liabilities
|
|
1,414
|
|
—
|
|
1,414
|
|
|||
Deferred revenue
|
|
554
|
|
—
|
|
554
|
|
|||
Total liabilities assumed
|
|
1,968
|
|
—
|
|
1,968
|
|
|||
Net identifiable assets acquired
|
|
25,515
|
|
557
|
|
26,072
|
|
|||
Goodwill
|
|
18,554
|
|
(557
|
)
|
17,997
|
|
|||
Net assets acquired
|
|
$
|
44,069
|
|
$
|
—
|
|
$
|
44,069
|
|
(Dollars in thousands)
|
|
Useful life
|
|
Fair value
|
||
Customer relationships
|
|
19 years
|
|
$
|
20,400
|
|
Technology-based intangible assets
|
|
8 years
|
|
1,700
|
|
|
Trade name
|
|
1 year
|
|
200
|
|
|
Total intangible assets
|
|
|
|
$
|
22,300
|
|
|
|
Purchase price
|
||
(Amounts in thousands)
|
|
allocation
|
||
Cash consideration, net of cash acquired
|
|
$
|
293,504
|
|
|
|
|
||
Accounts receivable and unbilled receivables
|
|
35,333
|
|
|
Other current assets
|
|
3,091
|
|
|
Property and equipment
|
|
2,140
|
|
|
Intangible assets—customer relationships
|
|
69,900
|
|
|
Total identifiable assets acquired
|
|
110,464
|
|
|
Accounts payable and other liabilities
|
|
31,350
|
|
|
Deferred revenue
|
|
251
|
|
|
Capital lease obligations
|
|
567
|
|
|
Deferred tax liabilities
|
|
6,741
|
|
|
Total liabilities assumed
|
|
38,909
|
|
|
Net identifiable assets acquired
|
|
71,555
|
|
|
Goodwill
|
|
221,949
|
|
|
Net assets acquired
|
|
$
|
293,504
|
|
|
Health
Services |
|
U.S. Federal
Services |
|
Human
Services |
|
Total
|
||||||||
Balance as of September 30, 2015
|
$
|
113,427
|
|
|
$
|
220,524
|
|
|
$
|
42,351
|
|
|
$
|
376,302
|
|
Acquisitions of Ascend and Assessments Australia, respectively
|
18,554
|
|
|
—
|
|
|
2,899
|
|
|
21,453
|
|
||||
Adjustment to goodwill acquired with Acentia
|
—
|
|
|
7,624
|
|
|
—
|
|
|
7,624
|
|
||||
Disposal of K-12 Education business
|
—
|
|
|
—
|
|
|
(224
|
)
|
|
(224
|
)
|
||||
Foreign currency translation
|
(8,302
|
)
|
|
—
|
|
|
705
|
|
|
(7,597
|
)
|
||||
Balance as of September 30, 2016
|
123,679
|
|
|
228,148
|
|
|
45,731
|
|
|
397,558
|
|
||||
Adjustment to goodwill acquired with Ascend
|
(557
|
)
|
|
—
|
|
|
—
|
|
|
(557
|
)
|
||||
Adjustment to goodwill acquired with Assessments Australia
|
—
|
|
|
—
|
|
|
71
|
|
|
71
|
|
||||
Acquisition of Revitalised
|
2,830
|
|
|
—
|
|
|
—
|
|
|
2,830
|
|
||||
Foreign currency translation
|
2,508
|
|
|
—
|
|
|
566
|
|
|
3,074
|
|
||||
Balance as of September 30, 2017
|
$
|
128,460
|
|
|
$
|
228,148
|
|
|
$
|
46,368
|
|
|
$
|
402,976
|
|
|
As of September 30, 2017
|
|
As of September 30, 2016
|
||||||||||||||||||||
|
Cost
|
|
Accumulated
Amortization
|
|
Intangible
Assets, net
|
|
Cost
|
|
Accumulated
Amortization
|
|
Intangible
Assets, net
|
||||||||||||
Customer contracts and relationships
|
$
|
129,916
|
|
|
$
|
33,457
|
|
|
$
|
96,459
|
|
|
$
|
132,221
|
|
|
$
|
26,238
|
|
|
$
|
105,983
|
|
Technology-based intangible assets
|
7,664
|
|
|
5,475
|
|
|
2,189
|
|
|
6,967
|
|
|
4,613
|
|
|
2,354
|
|
||||||
Trademarks and trade names
|
4,513
|
|
|
4,392
|
|
|
121
|
|
|
4,487
|
|
|
3,797
|
|
|
690
|
|
||||||
Total
|
$
|
142,093
|
|
|
$
|
43,324
|
|
|
$
|
98,769
|
|
|
$
|
143,675
|
|
|
$
|
34,648
|
|
|
$
|
109,027
|
|
2018
|
$
|
10,320
|
|
2019
|
9,416
|
|
|
2020
|
8,316
|
|
|
2021
|
7,452
|
|
|
2022
|
7,385
|
|
|
As of September 30,
|
||||||
|
2017
|
|
2016
|
||||
Land
|
$
|
1,738
|
|
|
$
|
1,738
|
|
Building and improvements
|
11,799
|
|
|
11,726
|
|
||
Office furniture and equipment
|
207,140
|
|
|
261,752
|
|
||
Leasehold improvements
|
53,531
|
|
|
52,493
|
|
||
|
274,208
|
|
|
327,709
|
|
||
Less: Accumulated depreciation and amortization
|
(172,557
|
)
|
|
(196,140
|
)
|
||
Total property and equipment, net
|
$
|
101,651
|
|
|
$
|
131,569
|
|
|
As of September 30,
|
||||||
|
2017
|
|
2016
|
||||
Capitalized software
|
$
|
88,627
|
|
|
$
|
80,646
|
|
Less: Accumulated amortization
|
(61,879
|
)
|
|
(50,507
|
)
|
||
Total Capitalized software, net
|
$
|
26,748
|
|
|
$
|
30,139
|
|
|
As of September 30,
|
||||||
|
2017
|
|
2016
|
||||
Deferred contract costs
|
$
|
30,776
|
|
|
$
|
30,114
|
|
Less: Accumulated amortization
|
(14,478
|
)
|
|
(11,932
|
)
|
||
Total Deferred contract costs, net
|
$
|
16,298
|
|
|
$
|
18,182
|
|
|
Year ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
4,226
|
|
|
$
|
3,385
|
|
|
$
|
3,138
|
|
Additions to reserve
|
5,106
|
|
|
2,335
|
|
|
2,690
|
|
|||
Deductions
|
(2,489
|
)
|
|
(1,494
|
)
|
|
(2,443
|
)
|
|||
Balance at end of year
|
$
|
6,843
|
|
|
$
|
4,226
|
|
|
$
|
3,385
|
|
|
Office space
|
|
Equipment
|
|
Total
|
||||||
Year ending September 30,
|
|
|
|
|
|
|
|
|
|||
2018
|
$
|
65,230
|
|
|
$
|
4,252
|
|
|
$
|
69,482
|
|
2019
|
50,908
|
|
|
3,482
|
|
|
54,390
|
|
|||
2020
|
34,159
|
|
|
2,133
|
|
|
36,292
|
|
|||
2021
|
10,459
|
|
|
13
|
|
|
10,472
|
|
|||
2022
|
4,198
|
|
|
2
|
|
|
4,200
|
|
|||
Thereafter
|
241
|
|
|
—
|
|
|
241
|
|
|||
Total minimum lease payments
|
$
|
165,195
|
|
|
$
|
9,882
|
|
|
$
|
175,077
|
|
|
Shares
|
|
Weighted-Average
Grant-Date
Fair Value
|
|||
Non-vested shares outstanding at September 30, 2016
|
809,306
|
|
|
$
|
47.64
|
|
Granted
|
448,289
|
|
|
53.63
|
|
|
Vested
|
(400,583
|
)
|
|
46.17
|
|
|
Forfeited
|
(34,185
|
)
|
|
46.00
|
|
|
Non-vested shares outstanding at September 30, 2017
|
822,827
|
|
|
51.69
|
|
|
Year ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Aggregate intrinsic value of all stock options exercised
|
$
|
4,025
|
|
|
$
|
4,077
|
|
|
$
|
5,536
|
|
Net cash proceeds from exercise of stock options
|
924
|
|
|
546
|
|
|
868
|
|
|
Year ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income before income taxes:
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
257,910
|
|
|
$
|
238,871
|
|
|
$
|
232,359
|
|
Foreign
|
56,325
|
|
|
47,097
|
|
|
27,460
|
|
|||
Income before income taxes
|
$
|
314,235
|
|
|
$
|
285,968
|
|
|
$
|
259,819
|
|
|
Year ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current provision:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
70,476
|
|
|
$
|
69,025
|
|
|
$
|
74,050
|
|
State and local
|
15,594
|
|
|
15,595
|
|
|
15,332
|
|
|||
Foreign
|
11,221
|
|
|
15,536
|
|
|
9,581
|
|
|||
Total current provision
|
97,291
|
|
|
100,156
|
|
|
98,963
|
|
|||
Deferred tax expense (benefit):
|
|
|
|
|
|
|
|
|
|||
Federal
|
5,490
|
|
|
7,778
|
|
|
2,233
|
|
|||
State and local
|
643
|
|
|
902
|
|
|
403
|
|
|||
Foreign
|
(1,371
|
)
|
|
(3,028
|
)
|
|
(1,829
|
)
|
|||
Total deferred tax expense (benefit)
|
4,762
|
|
|
5,652
|
|
|
807
|
|
|||
Provision for income taxes
|
$
|
102,053
|
|
|
$
|
105,808
|
|
|
$
|
99,770
|
|
|
Year ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Federal income tax provision at statutory rate of 35%
|
$
|
109,982
|
|
|
$
|
100,089
|
|
|
$
|
90,937
|
|
State income taxes, net of federal benefit
|
10,554
|
|
|
10,723
|
|
|
9,847
|
|
|||
Foreign taxation
|
(6,940
|
)
|
|
(3,976
|
)
|
|
(2,208
|
)
|
|||
Permanent items
|
970
|
|
|
1,284
|
|
|
1,602
|
|
|||
Tax credits
|
(4,851
|
)
|
|
(1,592
|
)
|
|
(961
|
)
|
|||
Vesting of equity compensation
|
(6,569
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
(1,093
|
)
|
|
(720
|
)
|
|
553
|
|
|||
Provision for income taxes
|
$
|
102,053
|
|
|
$
|
105,808
|
|
|
$
|
99,770
|
|
|
As of September 30,
|
||||||
|
2017
|
|
2016
|
||||
Net deferred tax assets/(liabilities)
|
|
|
|
|
|
||
Costs deductible in future periods
|
$
|
30,794
|
|
|
$
|
27,738
|
|
Deferred revenue
|
20,703
|
|
|
23,469
|
|
||
Stock compensation
|
4,976
|
|
|
5,085
|
|
||
Net operating loss carryforwards
|
360
|
|
|
1,291
|
|
||
Amortization of goodwill and intangible assets
|
(36,100
|
)
|
|
(34,484
|
)
|
||
Capitalized software
|
(9,197
|
)
|
|
(10,126
|
)
|
||
Accounts receivable - unbilled
|
(12,953
|
)
|
|
(13,810
|
)
|
||
Property and equipment
|
(3,924
|
)
|
|
(5,517
|
)
|
||
Prepaid expenses
|
(3,741
|
)
|
|
(1,296
|
)
|
||
Other
|
(3,333
|
)
|
|
(519
|
)
|
||
|
$
|
(12,415
|
)
|
|
$
|
(8,169
|
)
|
|
As of September 30,
|
||||||
|
2017
|
|
2016
|
||||
Balance of tax jurisdictions with net deferred tax assets
|
$
|
7,691
|
|
|
$
|
8,644
|
|
Balance of tax jurisdictions with net deferred tax liabilities
|
(20,106
|
)
|
|
(16,813
|
)
|
||
Net deferred tax liabilities
|
$
|
(12,415
|
)
|
|
$
|
(8,169
|
)
|
|
Year ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
448
|
|
|
$
|
529
|
|
|
$
|
812
|
|
Lapse of statute of limitation
|
—
|
|
|
—
|
|
|
(200
|
)
|
|||
Increases for tax positions taken in current year
|
185
|
|
|
—
|
|
|
—
|
|
|||
Reductions for tax positions of prior years
|
—
|
|
|
(81
|
)
|
|
(83
|
)
|
|||
Balance at end of year
|
$
|
633
|
|
|
$
|
448
|
|
|
$
|
529
|
|
|
Quarter Ended
|
||||||||||||||
|
Dec. 31,
2016 |
|
March 31,
2017 |
|
June 30,
2017 |
|
Sept. 30,
2017 |
||||||||
|
(In thousands, except per share data)
|
||||||||||||||
Health Services
|
$
|
340,729
|
|
|
$
|
348,994
|
|
|
$
|
335,090
|
|
|
$
|
355,338
|
|
U.S. Federal Services
|
141,298
|
|
|
145,370
|
|
|
131,589
|
|
|
127,316
|
|
||||
Human Services
|
125,537
|
|
|
127,683
|
|
|
133,768
|
|
|
138,249
|
|
||||
Revenue
|
$
|
607,564
|
|
|
$
|
622,047
|
|
|
$
|
600,447
|
|
|
$
|
620,903
|
|
|
|
|
|
|
|
|
|
||||||||
Health Services
|
$
|
78,234
|
|
|
$
|
86,454
|
|
|
$
|
83,269
|
|
|
$
|
99,368
|
|
U.S. Federal Services
|
37,576
|
|
|
36,571
|
|
|
33,627
|
|
|
31,547
|
|
||||
Human Services
|
29,008
|
|
|
29,292
|
|
|
35,293
|
|
|
31,666
|
|
||||
Gross profit
|
$
|
144,818
|
|
|
$
|
152,317
|
|
|
$
|
152,189
|
|
|
$
|
162,581
|
|
|
|
|
|
|
|
|
|
||||||||
Health Services
|
$
|
50,127
|
|
|
$
|
56,540
|
|
|
$
|
51,553
|
|
|
$
|
57,024
|
|
U.S. Federal Services
|
17,881
|
|
|
17,644
|
|
|
15,870
|
|
|
13,581
|
|
||||
Human Services
|
11,769
|
|
|
9,629
|
|
|
16,368
|
|
|
10,818
|
|
||||
Amortization of intangible assets
|
(3,402
|
)
|
|
(3,386
|
)
|
|
(2,720
|
)
|
|
(2,700
|
)
|
||||
Restructuring costs
|
(2,242
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
||||
Gain on sale of a business
|
—
|
|
|
—
|
|
|
650
|
|
|
—
|
|
||||
Other/Corporate
|
(357
|
)
|
|
(92
|
)
|
|
90
|
|
|
(1,050
|
)
|
||||
Operating Income
|
$
|
73,776
|
|
|
$
|
80,335
|
|
|
$
|
81,811
|
|
|
$
|
77,590
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
46,329
|
|
|
53,097
|
|
|
57,788
|
|
|
54,968
|
|
||||
Net income attributable to MAXIMUS
|
46,664
|
|
|
52,515
|
|
|
56,918
|
|
|
53,329
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share attributable to MAXIMUS
|
$
|
0.71
|
|
|
$
|
0.80
|
|
|
$
|
0.86
|
|
|
$
|
0.81
|
|
|
Quarter Ended
|
||||||||||||||
|
Dec. 31,
2015 |
|
March 31,
2016 |
|
June 30,
2016 |
|
Sept. 30,
2016 |
||||||||
|
(In thousands, except per share data)
|
||||||||||||||
Health Services
|
$
|
291,903
|
|
|
$
|
330,567
|
|
|
$
|
333,699
|
|
|
$
|
342,135
|
|
U.S. Federal Services
|
145,285
|
|
|
150,191
|
|
|
149,601
|
|
|
146,651
|
|
||||
Human Services
|
119,534
|
|
|
125,695
|
|
|
133,794
|
|
|
134,305
|
|
||||
Revenue
|
$
|
556,722
|
|
|
$
|
606,453
|
|
|
$
|
617,094
|
|
|
$
|
623,091
|
|
|
|
|
|
|
|
|
|
||||||||
Health Services
|
$
|
51,972
|
|
|
$
|
82,717
|
|
|
$
|
76,775
|
|
|
$
|
80,717
|
|
U.S. Federal Services
|
28,238
|
|
|
33,421
|
|
|
38,980
|
|
|
37,529
|
|
||||
Human Services
|
30,005
|
|
|
31,529
|
|
|
35,624
|
|
|
34,684
|
|
||||
Gross profit
|
$
|
110,215
|
|
|
$
|
147,667
|
|
|
$
|
151,379
|
|
|
$
|
152,930
|
|
|
|
|
|
|
|
|
|
||||||||
Health Services
|
$
|
26,808
|
|
|
$
|
56,914
|
|
|
$
|
50,430
|
|
|
$
|
50,874
|
|
U.S. Federal Services
|
10,716
|
|
|
14,983
|
|
|
19,119
|
|
|
18,558
|
|
||||
Human Services
|
9,107
|
|
|
9,794
|
|
|
14,251
|
|
|
14,533
|
|
||||
Amortization of intangible assets
|
(3,149
|
)
|
|
(3,262
|
)
|
|
(3,517
|
)
|
|
(3,449
|
)
|
||||
Acquisition-related expenses
|
(46
|
)
|
|
(529
|
)
|
|
—
|
|
|
(257
|
)
|
||||
Gain on sale of a business
|
—
|
|
|
—
|
|
|
6,453
|
|
|
427
|
|
||||
Other/Corporate
|
(650
|
)
|
|
—
|
|
|
(2,127
|
)
|
|
622
|
|
||||
Operating Income
|
$
|
42,786
|
|
|
$
|
77,900
|
|
|
$
|
84,609
|
|
|
$
|
81,308
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
26,882
|
|
|
49,341
|
|
|
52,750
|
|
|
51,187
|
|
||||
Net income attributable to MAXIMUS
|
26,609
|
|
|
48,785
|
|
|
52,225
|
|
|
50,743
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share attributable to MAXIMUS
|
$
|
0.40
|
|
|
$
|
0.74
|
|
|
$
|
0.79
|
|
|
$
|
0.77
|
|
/s/ Ernst & Young LLP
|
|
|
|
Tysons, Virginia
|
|
November 20, 2017
|
|
|
Number of securities
to be issued
upon exercise of
outstanding options,
warrants and rights
|
|
Weighted average
exercise price of
outstanding options,
warrants and rights
|
|
Number of securities
remaining available
for future issuance
under equity
compensation plans(1)
|
||||
Equity compensation plans/arrangements approved by the shareholders(2)
|
822,827
|
|
|
$
|
—
|
|
|
1,542,730
|
|
Equity compensation plans/arrangements not approved by the shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
822,827
|
|
|
$
|
—
|
|
|
1,542,730
|
|
(1)
|
In addition to being available for future issuance upon exercise of options that may be granted after
September 30, 2017
, all shares under the 2017 Equity Incentive Plan may be issued in the form of restricted stock, performance shares, stock appreciation rights, stock units or other stock-based awards.
|
(2)
|
Includes the 2017 Equity Incentive Plan.
|
(a)
|
1. Financial Statements.
|
(b)
|
Exhibits—see Item 15(a)(3) above.
|
(c)
|
Financial Statement Schedules—see Item 15(a)(2) above.
|
Exhibit
Number
|
|
|
|
Incorporated by reference herein
|
||
|
Description
|
|
Form
|
|
Date
|
|
2.1
|
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
March 9, 2015
|
|
3.1
|
|
|
Quarterly Report on Form 10-Q (File No. 1-12997)
|
|
August 14, 2000
|
|
3.2
|
|
|
Quarterly Report on Form 10-Q (File No. 1-12997)
|
|
May 10, 2013
|
|
3.3
|
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
June 19, 2015
|
|
4.1
|
|
|
Quarterly Report on Form 10-Q (File No. 1-12997) (Exhibit 4.1)
|
|
August 14, 1997
|
|
10.1
|
*
|
|
Registration Statement on Form S-1 (File No. 333-21611) (Exhibit 10.10)
|
|
February 12, 1997
|
|
10.2
|
*
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
April 26, 2006
|
|
10.3
|
*
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
November 27, 2007
|
|
10.4
|
*
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
November 27, 2007
|
|
10.5
|
*
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
November 27, 2007
|
|
10.6
|
*
|
|
Annual Report on Form 10-K (File No. 1-12997)
|
|
November 16, 2015
|
|
10.7
|
*
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
November 27, 2007
|
|
10.8
|
*
|
|
Quarterly Report on Form 10-Q (File No. 1-12997)
|
|
February 4, 2010
|
|
10.9
|
*
|
|
Proxy Statement on Schedule 14A (File No. 1-12997)
|
|
January 27, 2012
|
|
10.10
|
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
December 21, 2015
|
|
10.11
|
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
March 21, 2013
|
|
10.12
|
*
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
October 7, 2013
|
|
10.13
|
*
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
March 4, 2014
|
Exhibit
Number
|
|
|
|
Incorporated by reference herein
|
||
|
Description
|
|
Form
|
|
Date
|
|
10.14
|
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
March 9, 2015
|
|
10.15
|
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
October 26, 2015
|
|
10.16
|
*
|
|
Registration Statement on Form S-8 (File No. 333-136400)
|
|
August 8, 2006
|
|
10.17
|
*
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
November 27, 2007
|
|
10.18
|
*
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
June 23, 2006
|
|
10.19
|
*
|
|
Current Report on Form 8-K (File No. 1-12997)
|
|
June 23, 2006
|
|
10.20
|
*
|
|
Annual Report on Form 10-K (File No. 1-12997) (Exhibit 10.2)
|
|
December 22, 1997
|
|
10.21
|
*
|
|
Registration Statement on Form S-8 (File No. 333-122711)
|
|
February 10, 2005
|
|
10.22
|
*
|
|
Registration Statement on Form S-8 (File No. 333-217657)
|
|
May 4, 2017
|
|
10.23
|
s
|
|
|
|
|
|
21.1
|
s
|
|
|
|
|
|
23.1
|
s
|
|
|
|
|
|
31.1
|
s
|
|
|
|
|
|
31.2
|
s
|
|
|
|
|
|
32.1
|
v
|
|
|
|
|
|
32.2
|
v
|
|
|
|
|
|
99.1
|
s
|
|
|
|
|
|
101
|
|
The following materials from the MAXIMUS, Inc. Annual Report on Form 10-K for the year ended September 30, 2017 formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Changes in Shareholders' Equity and (vi) Notes to Consolidated Financial Statements. Filed electronically herewith.
|
|
|
|
|
*
|
Denotes management contract or compensation plan.
|
s
|
Filed herewith.
|
v
|
Furnished herewith.
|
Dated: November 20, 2017
|
|
MAXIMUS, INC.
|
||
|
|
By:
|
|
/s/ RICHARD A. MONTONI
|
|
|
|
|
Richard A. Montoni
Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ RICHARD A. MONTONI
|
|
President, Chief Executive Officer and Director (principal executive officer)
|
|
November 20, 2017
|
Richard A. Montoni
|
|
|
|
|
|
|
|
|
|
/s/ RICHARD J. NADEAU
|
|
Chief Financial Officer and Treasurer (principal financial and accounting officer)
|
|
November 20, 2017
|
Richard J. Nadeau
|
|
|
|
|
|
|
|
|
|
/s/ PETER B. POND
|
|
Chairman of the Board of Directors
|
|
November 20, 2017
|
Peter B. Pond
|
|
|
|
|
|
|
|
|
|
/s/ ANNE K. ALTMAN
|
|
Director
|
|
November 20, 2017
|
Anne K. Altman
|
|
|
|
|
|
|
|
|
|
/s/ RUSSELL A. BELIVEAU
|
|
Director
|
|
November 20, 2017
|
Russell A. Beliveau
|
|
|
|
|
|
|
|
|
|
/s/ JOHN J. HALEY
|
|
Director
|
|
November 20, 2017
|
John J. Haley
|
|
|
|
|
|
|
|
|
|
/s/ PAUL R. LEDERER
|
|
Director
|
|
November 20, 2017
|
Paul R. Lederer
|
|
|
|
|
|
|
|
|
|
/s/ GAYATHRI RAJAN
|
|
Director
|
|
November 20, 2017
|
Gayathri Rajan
|
|
|
|
|
|
|
|
|
|
/s/ RAYMOND B. RUDDY
|
|
Director
|
|
November 20, 2017
|
Raymond B. Ruddy
|
|
|
|
|
|
|
|
|
|
/s/ WELLINGTON E. WEBB
|
|
Director
|
|
November 20, 2017
|
Wellington E. Webb
|
|
|
|
|
1.
|
Incorporation of Recitals
. The Recitals hereto are incorporated herein by reference to the same extent and with the same force and effect as if fully set forth herein.
|
Pricing
Level
|
Leverage Ratio
|
Applicable Margin for Eurocurrency Revolving Loans and Index Rate Revolving Loans
|
Applicable Margin for Base Rate Revolving Loans
|
Applicable Percentage for Commitment Fee
|
I
|
Less than 1.00:1
|
1.000% per annum
|
0.000% per annum
|
0.125% per annum
|
II
|
Greater than or equal to 1.00:1.00 but less than 1.50:1.00
|
1.250% per annum
|
0.250% per annum
|
0.175% per annum
|
III
|
Greater than or equal to 1.50:1.00 but less than 2.00:1.00
|
1.375% per annum
|
0.375% per annum
|
0.200% per annum
|
IV
|
Greater than or equal to 2.00:1.00 but less than 2.50:1.00
|
1.500% per annum
|
0.500% per annum
|
0.225% per annum
|
V
|
Greater than or equal to 2.50:1.00
|
1.750% per annum
|
0.750% per annum
|
0.275% per annum
|
Lender
|
Revolving Commitment Amount
|
SunTrust Bank
|
$70,000,000
|
Bank of America, N.A.
|
$60,000,000
|
HSBC Bank USA, N.A.
|
$50,000,000
|
TD Bank, N.A.
|
$50,000,000
|
Branch Banking and Trust Company
|
$30,000,000
|
Fifth Third Bank
|
$30,000,000
|
JPMorgan Chase Bank, N.A.
|
$30,000,000
|
U.S. Bank National Association
|
$30,000,000
|
Wells Fargo Bank, National Association
|
$30,000,000
|
Citizens Bank of Pennsylvania
|
$20,000,000
|
Totals
|
$400,000,000
|
Name*
|
|
Jurisdiction of
Incorporation/Organization
|
2020 Company, LLC
|
|
Illinois
|
Aged Care Assessments Australia Pty Ltd
|
|
Australia
|
Ascend Management Innovations LLC
|
|
Tennessee
|
Assymetrics Pty Ltd
|
|
Australia
|
Cheviot Recruitment Ltd
|
|
England & Wales
|
Child Welfare Assessments Pty Ltd
|
|
Australia
|
GAEA Management Ltd
|
|
British Columbia
|
Goldfields Employment and Training Services Pty Ltd (51% owned)
|
|
Australia
|
Health Management Limited
|
|
England & Wales
|
Interactive Technology Solutions, LLC
|
|
Maryland
|
InSysCo, Inc.
|
|
Virginia
|
ITSolutions Net Government Solutions, Inc.
|
|
Maryland
|
ITSolutions Net Inc.
|
|
Delaware
|
ITEQ Holding Company, Inc.
|
|
Maryland
|
MAXIMUS Asia Pte Ltd
|
|
Singapore
|
MAXIMUS Australia Holding Company Pty Ltd
|
|
Australia
|
MAXIMUS BC Health Inc.
|
|
British Columbia
|
MAXIMUS BC Health Benefit Operations Inc.
|
|
British Columbia
|
MAXIMUS Canada, Inc.
|
|
Canada
|
MAXIMUS Canada Employment Services Inc.
|
|
British Columbia
|
MAXIMUS Canada Services, Inc.
|
|
Canada
|
MAXIMUS Companies Limited
|
|
England & Wales
|
MAXIMUS Consulting Services, Inc.
|
|
Virginia
|
MAXIMUS Federal LLC
|
|
Texas
|
MAXIMUS Federal Services, Inc.
|
|
Virginia
|
MAXIMUS Federal Systems, LLC
|
|
Maryland
|
MAXIMUS Gulf Company Ltd (70% owned)
|
|
Saudi Arabia
|
MAXIMUS People Services Ltd
|
|
England & Wales
|
MAXIMUS Health Services, Inc.
|
|
Indiana
|
MAXIMUS HHS Holdings Limited
|
|
England & Wales
|
MAXIMUS Human Services, Inc.
|
|
Virginia
|
MAXIMUS Properties LLC
|
|
Virginia
|
MAXSolutions Pty Limited
|
|
Australia
|
Optimos LLC
|
|
Maryland
|
Policy Studies, Inc.
|
|
Colorado
|
PSI Services Holding, Inc.
|
|
Delaware
|
Remploy Ltd (70% owned)
|
|
England & Wales
|
Revitalised Limited
|
|
England & Wales
|
The Centre for Health and Disability Assessments Ltd
|
|
England & Wales
|
Themis Program Management and Consulting Ltd
|
|
British Columbia
|
(1)
|
Registration Statements (Form S-8, Nos. 333-88012, 333-41871, 333-62380, 333-75263 and 333-136400) pertaining to the 1997 Equity Incentive Plan of MAXIMUS, Inc.;
|
(2)
|
Registration Statement (Form S-8, Nos. 333-41867 and 333-122711) pertaining to the 1997 Employee Stock Purchase Plan of MAXIMUS, Inc.; and
|
(3)
|
Registration Statement (Form S-8, No. 333-41869) pertaining to the 1997 Director Stock Option Plan of MAXIMUS, Inc.
|
(4)
|
Registration Statement (Form S-8. 333-217657) pertaining to the 2017 Equity Incentive Plan of MAXIMUS, Inc.
|
/s/ Ernst & Young LLP
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of MAXIMUS, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
November 20, 2017
|
/s/ RICHARD A. MONTONI
|
|
|
Richard A. Montoni
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of MAXIMUS, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
November 20, 2017
|
/s/ RICHARD J. NADEAU
|
|
|
Richard J. Nadeau
|
|
|
Chief Financial Officer
|
1.
|
The Annual Report on Form 10-K of the Company for the fiscal year ended
September 30, 2017
(the “Annual Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m or 78o(d)); and
|
2.
|
The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
November 20, 2017
|
/s/ RICHARD A. MONTONI
|
|
|
Richard A. Montoni
|
|
|
Chief Executive Officer
|
1.
|
The Annual Report on Form 10-K of the Company for the fiscal year ended
September 30, 2017
(the “Annual Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m or 78o(d)); and
|
2.
|
The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
November 20, 2017
|
/s/ RICHARD J. NADEAU
|
|
|
Richard J. Nadeau
|
|
|
Chief Financial Officer
|
•
|
experienced and innovative executive officers;
|
•
|
senior managers who have successfully managed or designed government services programs; and
|
•
|
information technology professionals who have designed or implemented complex information technology projects.
|
•
|
diversion of management’s attention;
|
•
|
loss of key personnel;
|
•
|
entry into unfamiliar markets;
|
•
|
assumption of unanticipated legal or financial liabilities;
|
•
|
becoming significantly leveraged as a result of incurring debt to finance an acquisition;
|
•
|
unanticipated operating, accounting or management difficulties in connection with the acquired entities;
|
•
|
impairment of acquired intangible assets, including goodwill; and
|
•
|
dilution to our earnings per share.
|
•
|
the terms and progress of contracts;
|
•
|
caseloads and other volume where revenue is derived on transactional volume on contracts;
|
•
|
the levels of revenue earned and profitability of fixed-price and performance-based contracts;
|
•
|
expenses related to certain contracts which may be incurred in periods prior to revenue being recognized;
|
•
|
the commencement, completion or termination of contracts during any particular quarter;
|
•
|
the schedules of government agencies for awarding contracts;
|
•
|
government budgetary delays or shortfalls;
|
•
|
the timing of change orders being signed;
|
•
|
the terms of awarded contracts; and
|
•
|
potential acquisitions.
|
•
|
foreign exchange fluctuations;
|
•
|
unexpected increases in tax rates or changes in U.S. or foreign tax laws;
|
•
|
non-compliance with international laws and regulations, such as data privacy, employment regulations and trade barriers;
|
•
|
non-compliance with U.S. laws affecting the activities of U.S. companies in international locations including the Foreign Corrupt Practices Act;
|
•
|
the absence in some jurisdictions of effective laws to protect our intellectual property rights;
|
•
|
new regulatory requirements or changes in local laws that materially affect the demand for our services or directly affect our foreign operations;
|
•
|
local economic and political conditions including severe or protracted recessions in foreign economies and inflation risk;
|
•
|
the length of payment cycles and potential difficulties in collecting accounts receivable;
|
•
|
unusual or unexpected monetary exchange controls, price controls or restrictions on transfers of cash; or
|
•
|
civil disturbance, terrorism or other catastrophic events that reduce business activity in other parts of the world.
|