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MAXIMUS Second Quarter Fiscal 2005 May 5, 2005

MAXIMUS Second Quarter Fiscal 2005 May 5, 2005.

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MAXIMUS Second Quarter Fiscal 2005 May 5, 2005

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  1. MAXIMUSSecond Quarter Fiscal 2005 May 5, 2005 • A number of statements being made today will be forward-looking in nature. Such statements are only predictions, and actual events or results may differ materially as a result of risks we face, including those discussed in our SEC filings. We encourage you to review the summary of these risks in Exhibit 99.1 to our most recent Form 10-Q filed with the SEC on February 8, 2005. The Company does not assume any obligation to revise or update these forward-looking statements to reflect subsequent events or circumstances.

  2. Rich Montoni Chief Financial Officer

  3. Q2 2005 Financial Highlights • Revenue of $154.1 million • Net income of $9.5 million • Diluted EPS of $0.44 • Strong cash flow from operations of $27.1 million • Excellent liquidity: cash, cash equivalents and marketable securities of $161.3 million

  4. Segment Results Consulting Segment: 16% of total revenue • Revenue of $25.4 million for the second quarter of 2005 compared to $24.8 million for the second quarter of 2004 • Second quarter 2005 operating income of $678,000 • Year-over-year revenue and profit declines are a result of reduced performance from financial services

  5. Segment Results Systems Segment: 22% of total revenue • Revenue of $33.7 million for the second quarter of 2005 compared to $36.5 million for the second quarter of 2004 • Operating income of $3.1 million • Operating margin was 9.2%, returning to a more normalized level in the second quarter • Systems segment margin may fluctuate as a result of the timing of license revenue and project job cycles

  6. Segment Results Operations Segment: 62% of total revenue • Revenue growth of 6% to $94.9 million for the second quarter of 2005 compared to 2004, despite “grow over” quarter for CAHF • Operating income grew 21% to $10.4 million in the second quarter of 2005 compared to 2004 • Health: growth driven by expansions on current contracts, new federal work and increased contributions from California Healthy Families • Human Services: revenue declines from child support attrition but improving profitability and positive outlook

  7. Expenses & Margin • Second quarter 2005 operating margin was 9.7% compared to 10.2% reported in the second quarter of 2004, flat sequentially • Year-over-year decrease in operating margin attributable to softer performance in the Consulting Segment • SG&A decrease reflects cost management initiatives • YTD legal costs of approximately $600,000, of which approximately $400,000 incurred in 2Q.

  8. DSOs were 99 days (including $4.4 million in long-term receivables) • Improved billed AR • Increase in unbilled AR driven by a milestone-based contract for the implementation of a student information system • DSOs within the range, improvement being aggressively pursued • Cash, cash equivalents and marketable securities of $161.3 million reflects cash from operations of $27.1 million for the second quarter and $37.2 million year to date. • Purchased 102,000 shares with $28.8 million available for future stock repurchases Balance Sheet Highlights

  9. Full year 2005 estimates unchanged • Revenue of $625 million to $650 million • Diluted EPS of $1.78 to $1.88 • Operating income improvement in 2H of 2005: • Improved results from Consulting and Operations • Operations improvement primarily in Q4 • Systems to run at similar levels Guidance

  10. Lynn Davenport Chief Executive Officer

  11. Agenda • Highlights for the quarter • Status update of six-point plan for FY 2005 • New sales and prospects for growth

  12. Q2 2005 in-line with previous expectations • Strong cash position & healthy balance sheet provide continued flexibility • Paid quarterly cash dividend • Significant number of new wins including potential new breakout win in Texas • Total YTD awarded & awarded unsigned sales tops $1 billion, highest sales in MAXIMUS history Q2 2005

  13. Stabilize and strengthen organization • Service quality • Business unit profitability • Cost management • Focus on core practice areas • Growth Six-Point Plan: Status Update

  14. New wins & growth • Member of winning bid team led by Accenture in Texas, still under contract negotiations • Launched British Columbia operations April 1, 2005 • Nearly $50 million of new work in ERP with wins in San Francisco, Miami and New Mexico) • $72 million Massachusetts health benefits re-bid • $34 million San Diego workforce services re-bid • New federal healthcare work: Medicare appeals & QIC • $7 million human services contract in Ontario • $15 million workforce services contract in Israel

  15. Future Growth Implications • Major sales successes this year: over $1 billion new sales YTD, including large awarded but unsigned contracts • Over $100 million in net new annual revenue base • Equal to at least 15% of current revenue base • Strong growth platform for 2006

  16. YTD Contracts Signed FY 2005 FY 2004 Not included above: Awarded but unsigned of $452 million at May 3, 2005

  17. Sales Pipeline Total Sales Opportunities $1.3B $1.2B $1.2B $1.1B $1.1B ($ in Millions) Proposals Pending Proposals In Preparation RFPs Tracking

  18. Conclusion • Pleased with many aspects, need to improve other areas • Many new hires • Continuing efforts to improve profitability & reduce costs • Significant new sales: Adds over $100 million in new annual revenue base • Winning larger contracts with longer, recurring revenue streams • Success beyond new outsourcing & technology opportunities • Working to improve DSOs & underperforming business units

  19. Questions & Answers

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