Maximus, Inc. | |||||||||||||||||||||||||||||
(Exact name of registrant as specified in its charter) | |||||||||||||||||||||||||||||
Virginia | 1-12997 | 54-1000588 | |||||||||||||||||||||||||||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
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1600 Tysons Boulevard | McLean | , | VA | 22102 | |||||||||||||||||||||||||
(Address of principal executive offices) |
(Zip Code) |
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Registrant's telephone number, including the area code | ( | 703 | ) | 251-8500 | |||||||||||||||||||||||||
No Change | |||||||||||||||||||||||||||||
(Former name or former address, if changed since last report) | |||||||||||||||||||||||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Stock, no par value | MMS | New York Stock Exchange |
Exhibit No. | Description | ||||
Press release dated 11/20/2024. | |||||
104 | Inline XBRL for the cover page of this Current Report on Form 8-K. | ||||
Maximus, Inc. | ||||||||
(Registrant) | ||||||||
Date: November 20, 2024 | /s/ John T. Martinez | |||||||
John T. Martinez | ||||||||
General Counsel and Secretary |
FOR IMMEDIATE RELEASE | CONTACT: | James Francis, VP - IR |
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Jessica Batt, VP - IR & ESG |
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Date: November 20, 2024 | IR@maximus.com |
FY25 Guidance Reconciliation - Non-GAAP | |||||||||||
($ in millions except per share items) | Low End | High End | |||||||||
Operating income | $ | 439 | $ | 464 | |||||||
Add: amortization of intangible assets | 92 | 92 | |||||||||
Add: depreciation & amortization of property, equipment and capitalized software | 45 | 45 | |||||||||
Add: divestiture-related charges | — | — | |||||||||
Adjusted EBITDA | $ | 576 | $ | 601 | |||||||
Revenue | $ | 5,275 | $ | 5,425 | |||||||
Adjusted EBITDA Margin | 10.9 | % | 11.1 | % | |||||||
Diluted EPS | $ | 4.60 | $ | 4.90 | |||||||
Add: effect of amortization of intangible assets on diluted EPS | 1.10 | 1.10 | |||||||||
Add: divestiture-related charges | — | — | |||||||||
Adjusted diluted EPS | $ | 5.70 | $ | 6.00 | |||||||
Cash flows from operating activities | $ | 435 | $ | 465 | |||||||
Remove: purchases of property and equipment and capitalized software costs | (90) | (90) | |||||||||
Free cash flow | $ | 345 | $ | 375 |
For the Three Months Ended September 30, |
For the Year Ended September 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||||
Revenue | $ | 1,315,870 | $ | 1,259,953 | $ | 5,306,197 | $ | 4,904,728 | |||||||||||||||
Cost of revenue | 1,014,175 | 969,059 | 4,054,545 | 3,876,120 | |||||||||||||||||||
Gross profit | 301,695 | 290,894 | 1,251,652 | 1,028,608 | |||||||||||||||||||
Selling, general, and administrative expenses | 166,901 | 167,778 | 671,583 | 639,223 | |||||||||||||||||||
Amortization of intangible assets | 23,038 | 23,992 | 91,570 | 94,591 | |||||||||||||||||||
Operating income | 111,756 | 99,124 | 488,499 | 294,794 | |||||||||||||||||||
Interest expense | 20,012 | 20,507 | 82,440 | 84,138 | |||||||||||||||||||
Other (income)/expense, net | (925) | 442 | (450) | 363 | |||||||||||||||||||
Income before income taxes | 92,669 | 78,175 | 406,509 | 210,293 | |||||||||||||||||||
Provision for income taxes | 20,165 | 19,029 | 99,595 | 48,501 | |||||||||||||||||||
Net income | $ | 72,504 | $ | 59,146 | $ | 306,914 | $ | 161,792 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 1.20 | 0.97 | $ | 5.03 | $ | 2.65 | ||||||||||||||||
Diluted | $ | 1.19 | 0.96 | $ | 4.99 | $ | 2.63 | ||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 60,553 | 61,138 | 61,049 | 61,125 | |||||||||||||||||||
Diluted | 61,085 | 61,617 | 61,484 | 61,450 | |||||||||||||||||||
Dividends declared per share | $ | 0.30 | $ | 0.28 | $ | 1.20 | $ | 1.12 |
As of September 30, | |||||||||||
2024 | 2023 | ||||||||||
(in thousands) | |||||||||||
Assets: | |||||||||||
Cash and cash equivalents | $ | 183,123 | $ | 65,405 | |||||||
Accounts receivable, net | 879,514 | 826,873 | |||||||||
Income taxes receivable | 5,282 | 16,556 | |||||||||
Prepaid expenses and other current assets | 132,625 | 146,632 | |||||||||
Total current assets | 1,200,544 | 1,055,466 | |||||||||
Property and equipment, net | 38,977 | 38,831 | |||||||||
Capitalized software, net | 187,677 | 107,811 | |||||||||
Operating lease right-of-use assets | 133,594 | 163,929 | |||||||||
Goodwill | 1,782,871 | 1,779,215 | |||||||||
Intangible assets, net | 630,569 | 703,648 | |||||||||
Deferred contract costs, net | 59,432 | 45,372 | |||||||||
Deferred compensation plan assets | 55,913 | 42,919 | |||||||||
Deferred income taxes | 14,801 | 2,459 | |||||||||
Other assets | 27,130 | 46,147 | |||||||||
Total assets | $ | 4,131,508 | $ | 3,985,797 | |||||||
Liabilities and Shareholders' Equity: | |||||||||||
Liabilities: | |||||||||||
Accounts payable and accrued liabilities | $ | 303,321 | $ | 282,081 | |||||||
Accrued compensation and benefits | 237,121 | 194,251 | |||||||||
Deferred revenue, current portion | 83,238 | 60,477 | |||||||||
Income taxes payable | 26,535 | 451 | |||||||||
Long-term debt, current portion | 40,139 | 86,844 | |||||||||
Operating lease liabilities, current portion | 47,656 | 49,852 | |||||||||
Other current liabilities | 69,519 | 49,058 | |||||||||
Total current liabilities | 807,529 | 723,014 | |||||||||
Deferred revenue, non-current portion | 45,077 | 38,849 | |||||||||
Deferred income taxes | 169,118 | 203,898 | |||||||||
Long-term debt, non-current portion | 1,091,954 | 1,163,149 | |||||||||
Deferred compensation plan liabilities, non-current portion | 57,599 | 46,432 | |||||||||
Operating lease liabilities, non-current portion | 97,221 | 129,367 | |||||||||
Other liabilities | 20,195 | 13,253 | |||||||||
Total liabilities | 2,288,693 | 2,317,962 | |||||||||
Shareholders' equity: | |||||||||||
Common stock, no par value; 100,000 shares authorized; 60,352 and 60,998 shares issued and outstanding as of September 30, 2024 and 2023, respectively |
598,304 | 577,898 | |||||||||
Accumulated other comprehensive loss | (32,460) | (27,615) | |||||||||
Retained earnings | 1,276,971 | 1,117,552 | |||||||||
Total shareholders' equity | 1,842,815 | 1,667,835 | |||||||||
Total liabilities and shareholders' equity | $ | 4,131,508 | $ | 3,985,797 |
For the Three Months Ended September 30, |
For the Year Ended September 30, |
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2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||
Net income | $ | 72,504 | $ | 59,146 | $ | 306,914 | $ | 161,792 | |||||||||||||||
Adjustments to reconcile net income to cash flows from operations: | |||||||||||||||||||||||
Depreciation and amortization of property, equipment and capitalized software | 9,811 | 17,633 | 33,957 | 54,725 | |||||||||||||||||||
Amortization of intangible assets | 23,038 | 23,992 | 91,570 | 94,591 | |||||||||||||||||||
Amortization of debt issuance costs and debt discount | 635 | 601 | 3,534 | 2,837 | |||||||||||||||||||
Deferred income taxes | (32,252) | (823) | (36,022) | 1,552 | |||||||||||||||||||
Stock compensation expense | 7,744 | 7,283 | 35,349 | 29,522 | |||||||||||||||||||
Loss on sale of businesses | — | — | 1,018 | 883 | |||||||||||||||||||
Change in assets and liabilities, net of effects of business combinations and disposals: | |||||||||||||||||||||||
Accounts receivable | (24,034) | (31,076) | (50,562) | (23,401) | |||||||||||||||||||
Prepaid expenses and other current assets | (8,751) | (20,242) | 10,565 | 859 | |||||||||||||||||||
Deferred contract costs | (4,778) | 443 | (13,155) | 2,688 | |||||||||||||||||||
Accounts payable and accrued liabilities | 19,926 | 814 | 18,267 | 17,729 | |||||||||||||||||||
Accrued compensation and benefits | 59,290 | 44,262 | 38,247 | 12,650 | |||||||||||||||||||
Deferred revenue | 10,455 | 19,624 | 28,534 | (12,123) | |||||||||||||||||||
Income taxes | 21,729 | 16,228 | 32,305 | (16,958) | |||||||||||||||||||
Operating lease right-of-use assets and liabilities | 225 | 1,707 | (1,906) | (2,035) | |||||||||||||||||||
Other assets and liabilities | 8,292 | 4,997 | 16,643 | (10,971) | |||||||||||||||||||
Net cash provided by operating activities | 163,834 | 144,589 | 515,258 | 314,340 | |||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Purchases of property and equipment and capitalized software | (31,953) | (31,832) | (114,190) | (90,695) | |||||||||||||||||||
Asset acquisition | 7 | — | (17,999) | — | |||||||||||||||||||
Proceeds from divestitures | 7 | 608 | 3,085 | 9,732 | |||||||||||||||||||
Net cash used in investing activities | (31,939) | (31,224) | (129,104) | (80,963) | |||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Cash dividends paid to Maximus shareholders | (18,054) | (17,020) | (72,901) | (68,073) | |||||||||||||||||||
Purchases of Maximus common stock | (25,794) | — | (73,069) | — | |||||||||||||||||||
Tax withholding related to RSU vesting | — | — | (13,455) | (8,475) | |||||||||||||||||||
Payments for contingent consideration | — | (2,769) | (10,977) | (9,431) | |||||||||||||||||||
Payments for debt financing costs | — | — | (9,724) | — | |||||||||||||||||||
Proceeds from borrowings | 250,000 | 161,901 | 1,100,166 | 844,299 | |||||||||||||||||||
Principal payments for debt | (259,377) | (222,460) | (1,212,202) | (952,974) | |||||||||||||||||||
Cash-collateralized escrow liabilities | 7,398 | (1,601) | 16,516 | (56,144) | |||||||||||||||||||
Net cash used in financing activities | (45,827) | (81,949) | (275,646) | (250,798) | |||||||||||||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 1,894 | (1,018) | 3,164 | 2,717 | |||||||||||||||||||
Net change in cash, cash equivalents, and restricted cash | 87,962 | 30,398 | 113,672 | (14,704) | |||||||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 147,801 | 91,693 | 122,091 | 136,795 | |||||||||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 235,763 | $ | 122,091 | $ | 235,763 | $ | 122,091 |
For the Three Months Ended September 30, |
For the Year Ended September 30, |
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2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Amount | % (1) | Amount | % (1) | Amount | % (1) | Amount | % (1) | ||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. Federal Services | $ | 675,117 | $ | 617,404 | $ | 2,737,244 | $ | 2,403,606 | |||||||||||||||||||||||||||||||||||||||
U.S. Services | 463,555 | 473,827 | 1,911,813 | 1,812,069 | |||||||||||||||||||||||||||||||||||||||||||
Outside the U.S. | 177,198 | 168,722 | 657,140 | 689,053 | |||||||||||||||||||||||||||||||||||||||||||
Revenue | $ | 1,315,870 | $ | 1,259,953 | $ | 5,306,197 | $ | 4,904,728 | |||||||||||||||||||||||||||||||||||||||
Gross profit: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. Federal Services | $ | 159,688 | 23.7% | $ | 155,373 | 25.2% | $ | 665,762 | 24.3% | $ | 557,886 | 23.2% | |||||||||||||||||||||||||||||||||||
U.S. Services | 110,290 | 23.8% | 109,389 | 23.1% | 479,787 | 25.1% | 377,541 | 20.8% | |||||||||||||||||||||||||||||||||||||||
Outside the U.S. | 31,717 | 17.9% | 26,132 | 15.5% | 106,103 | 16.1% | 93,181 | 13.5% | |||||||||||||||||||||||||||||||||||||||
Gross profit | $ | 301,695 | 22.9% | $ | 290,894 | 23.1% | $ | 1,251,652 | 23.6% | $ | 1,028,608 | 21.0% | |||||||||||||||||||||||||||||||||||
Selling, general, and administrative expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. Federal Services | $ | 84,469 | 12.5% | $ | 78,606 | 12.7% | $ | 332,140 | 12.1% | $ | 308,197 | 12.8% | |||||||||||||||||||||||||||||||||||
U.S. Services | 58,773 | 12.7% | 54,198 | 11.4% | 232,805 | 12.2% | 194,991 | 10.8% | |||||||||||||||||||||||||||||||||||||||
Outside the U.S. | 23,149 | 13.1% | 26,375 | 15.6% | 98,398 | 15.0% | 102,311 | 14.8% | |||||||||||||||||||||||||||||||||||||||
Divestiture related charges (2) | — | NM | 2,868 | NM | 1,018 | NM | 3,751 | NM | |||||||||||||||||||||||||||||||||||||||
Other (3) | 510 | NM | 5,731 | NM | 7,222 | NM | 29,973 | NM | |||||||||||||||||||||||||||||||||||||||
Selling, general, and administrative expenses | $ | 166,901 | 12.7% | $ | 167,778 | 13.3% | $ | 671,583 | 12.7% | $ | 639,223 | 13.0% | |||||||||||||||||||||||||||||||||||
Operating income/(loss): | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. Federal Services | $ | 75,219 | 11.1% | $ | 76,767 | 12.4% | $ | 333,622 | 12.2% | $ | 249,689 | 10.4% | |||||||||||||||||||||||||||||||||||
U.S. Services | 51,517 | 11.1% | 55,191 | 11.6% | 246,982 | 12.9% | 182,550 | 10.1% | |||||||||||||||||||||||||||||||||||||||
Outside the U.S. | 8,568 | 4.8% | (243) | (0.1)% | 7,705 | 1.2% | (9,130) | (1.3)% | |||||||||||||||||||||||||||||||||||||||
Amortization of intangible assets | (23,038) | NM | (23,992) | NM | (91,570) | NM | (94,591) | NM | |||||||||||||||||||||||||||||||||||||||
Divestiture related charges (2) | — | NM | (2,868) | NM | (1,018) | NM | (3,751) | NM | |||||||||||||||||||||||||||||||||||||||
Other (3) | (510) | NM | (5,731) | NM | (7,222) | NM | (29,973) | NM | |||||||||||||||||||||||||||||||||||||||
Operating income | $ | 111,756 | 8.5% | $ | 99,124 | 7.9% | $ | 488,499 | 9.2% | $ | 294,794 | 6.0% |
For the Three Months Ended September 30, |
For the Year Ended September 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Net cash provided by operating activities | $ | 163,834 | $ | 144,589 | $ | 515,258 | $ | 314,340 | |||||||||||||||
Purchases of property and equipment and capitalized software | (31,953) | (31,832) | (114,190) | (90,695) | |||||||||||||||||||
Free cash flow | $ | 131,881 | $ | 112,757 | $ | 401,068 | $ | 223,645 |
For the Three Months Ended September 30, | For the Year Ended September 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||||||||||
Operating income | $ | 111,756 | $ | 99,124 | $ | 488,499 | $ | 294,794 | |||||||||||||||
Add back: Amortization of intangible assets | 23,038 | 23,992 | 91,570 | 94,591 | |||||||||||||||||||
Add back: Divestiture-related charges | — | 2,868 | 1,018 | 3,751 | |||||||||||||||||||
Adjusted operating income excluding amortization of intangible assets and divestiture-related charges (Non-GAAP) | $ | 134,794 | $ | 125,984 | $ | 581,087 | $ | 393,136 | |||||||||||||||
Adjusted operating income margin excluding amortization of intangible assets and divestiture-related charges (Non-GAAP) | 10.2 | % | 10.0 | % | 11.0 | % | 8.0 | % | |||||||||||||||
Add back: Depreciation and amortization of property, equipment, and capitalized software | 9,811 | 17,633 | 33,957 | 54,725 | |||||||||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 144,605 | $ | 143,617 | $ | 615,044 | $ | 447,861 | |||||||||||||||
Adjusted EBITDA margin (Non-GAAP) | 11.0 | % | 11.4 | % | 11.6 | % | 9.1 | % | |||||||||||||||
Net income | $ | 72,504 | $ | 59,146 | $ | 306,914 | $ | 161,792 | |||||||||||||||
Add back: Amortization of intangible assets, net of tax | 16,973 | 17,682 | 67,481 | 69,714 | |||||||||||||||||||
Add back: Divestiture-related charges | — | 2,868 | 1,018 | 3,751 | |||||||||||||||||||
Adjusted net income excluding amortization of intangible assets and divestiture-related charges (Non-GAAP) | $ | 89,477 | $ | 79,696 | $ | 375,413 | $ | 235,257 | |||||||||||||||
Diluted earnings per share | $ | 1.19 | $ | 0.96 | $ | 4.99 | $ | 2.63 | |||||||||||||||
Add back: Effect of amortization of intangible assets on diluted earnings per share | 0.27 | 0.28 | 1.10 | 1.14 | |||||||||||||||||||
Add back: Effect of divestiture-related charges on diluted earnings per share | — | 0.05 | 0.02 | 0.06 | |||||||||||||||||||
Adjusted diluted earnings per share excluding amortization of intangible assets and divestiture-related charges (Non-GAAP) | $ | 1.46 | $ | 1.29 | $ | 6.11 | $ | 3.83 |