Press release

Maximus Reports Fourth Quarter and Full Year Results for Fiscal Year 2023

0
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Maximus (NYSE: MMS), a leading provider of government services worldwide, reported financial results for the three months and year ended September 30, 2023.

Highlights for the fourth quarter and full fiscal year 2023 include:

  • Full year revenue increased 5.9% to $4.90 billion, compared to $4.63 billion for the prior year. Organic growth was 7.1% and driven by higher volumes on key programs in the U.S. segments. Fourth quarter revenue grew 7.0%, or 7.4% on an organic basis.

  • Full year diluted earnings per share were $2.63, and adjusted diluted earnings per share were $3.83. Fourth quarter diluted earnings per share were $0.96, and adjusted diluted earnings per share were $1.29. Excluding the previously disclosed cybersecurity incident, adjusted earnings per share were $4.18 and $1.38 for the full year and fourth quarter, respectively, of fiscal year 2023.

  • Record contract backlog of $20.7 billion at September 30, 2023, or 4 times trailing twelve months revenue, and signed contract awards totaling $6.1 billion in fiscal year 2023.

  • A quarterly cash dividend of $0.30 per share payable on November 30, 2023, to shareholders of record on November 15, 2023.

“We are proud of the team for an excellent finish to the year and demonstrating a healthy core business operating at its true potential,” said Bruce Caswell, President and Chief Executive Officer. “We kick off fiscal 2024 with strong visibility to our guidance targets, carrying forward the momentum of the last quarter.

Caswell continued, “As a provider of tech-enabled services to mission-critical government programs, we can remain confident in our outlook, even with a temporary U.S. federal government shut-down remaining a potential scenario during fiscal 2024. We would expect nearly all of our U.S. Federal Services programs to be designated essential which insulates our business during periods of government budget uncertainty.”

Consolidated Fiscal Year 2023 Fourth Quarter and Full Year Results

Revenue for the full fiscal year 2023 increased 5.9% to $4.90 billion, compared to $4.63 billion for the prior year. Organic growth was 7.1% over the prior year. Revenue for the fourth quarter of fiscal year grew 7.0% to $1.26 billion, or 7.4% on an organic basis. Both periods benefited from volume growth on expanded programs in the U.S. Federal Services segment. The U.S. Services Segment had new programs operating in the year and Medicaid redeterminations made a full period contribution in the fourth quarter.

For the full fiscal year 2023, the operating margin was 6.0%, and the adjusted margin operating margin was 8.0%. This compares to margins of 7.0% and 9.0%, respectively, for the prior year, which had benefited from profitable, short-term work.

Diluted earnings per share were $2.63 and adjusted diluted earnings per share were $3.83. This compares to $3.29 and $4.37, respectively, for the prior-year period. The company’s definition of adjusted earnings is expanded to include gains or losses resulting from a divestiture or other charges arising in preparing a business for sale. As with prior reporting periods, the definition retains adjustment for intangibles amortization expense.

Divestiture-related charges for the full fiscal year 2023 totaled $0.06. The previously-disclosed cybersecurity incident is not included in the definition and had a $0.35 and $0.09 per share impact to the full year and fourth quarter, respectively, of fiscal year 2023. Adjusted diluted earnings excluding the incident were $4.18 and $1.38 per share for the full year and fourth quarter, respectively, of fiscal year 2023.

U.S. Federal Services Segment

U.S. Federal Services Segment revenue for fiscal year 2023 increased 6.4% to $2.40 billion, compared to $2.26 billion reported for the prior year. All growth was organic and driven predominantly by the continued ramp of volumes on the Veterans Affairs Medical Disability Exams (VA MDE) contracts, which comprise the VES business, as the overall program grows to meet client expectations.

The segment operating margin for the full fiscal year 2023 was 10.4%, as compared to 10.4% reported for the prior year. For the fourth quarter of fiscal year 2023, the segment operating margin was 12.4% and was supported by a higher run-rate of volumes on the VA MDE contracts.

U.S. Services Segment

U.S. Services Segment revenue for fiscal year 2023 increased by 12.7% to $1.81 billion, compared to $1.61 billion reported in the prior year. All growth was organic and driven by new work wins across multiple categories, including eligibility support, multi-year contracts for unemployment insurance assistance, and assessments for long-term care.

The segment operating margin for fiscal year 2023 was 10.1% compared to 11.3% reported for the prior-year period which benefited from residual short-term work with higher profit margins. The fourth quarter of fiscal year 2023 benefited from a full period of resumed Medicaid redeterminations, delivering a 11.6% margin for the segment.

Outside the U.S. Segment

Outside the U.S. Segment revenue for fiscal year 2023 decreased 9.8% to $689.1 million as compared to $763.7 million reported for the prior year, which was net of a 4.6% currency headwind. The remaining reductions were lower volumes on employment services contracts and the effect of divestitures during fiscal year 2023.

The segment realized an operating loss of $9.1 million for fiscal year 2023, compared to an operating loss of $15.2 million in the prior year. The effect of lower volumes on employment services contracts negatively impacted segment profitability both years. The segment broke even in the fourth quarter of fiscal 2023.

The company recently announced another divestiture of employment services businesses, including in Canada, Singapore, and Italy, as it executes on further optimization of the Outside the U.S. portfolio to deliver consistent profitability and improve alignment with the broader Maximus strategy.

Sales and Pipeline

Year-to-date signed contract awards at September 30, 2023, totaled $6.1 billion, and contracts pending (awarded but unsigned) totaled $878 million. These awards include the previously announced IDIQ for the Federal Student Aid office valued at more than $2 billion and the Functional Assessment Services contract in the United Kingdom valued at $1 billion. The book-to-bill ratio at September 30, 2023, was 1.2x on a trailing twelve-month basis.

The sales pipeline at September 30, 2023, was $37.1 billion (comprised of approximately $1.2 billion in proposals pending, $0.97 billion in proposals in preparation, and $34.9 billion in opportunities tracking). New work opportunities represent approximately 76% of the total sales pipeline.

Balance Sheet and Cash Flows

At September 30, 2023, cash and cash equivalents totaled $65.4 million, and gross debt was $1.26 billion. The ratio of debt, net of allowed cash, to pro-forma EBITDA for the full year ended September 30, 2022, as calculated in accordance with our credit agreement, was 2.2x. This reflects debt pay downs of approximately $60 million in the most recent quarter and compares to 2.5x at June 30, 2022. The company’s target leverage range is 2x to 3x, with a bias towards the lower end.

For fiscal year 2023, cash flows from operating activities totaled $314.3 million, and free cash flow was $223.6 million. This compares to $289.8 million and $233.7 million, respectively, in the prior year. As expected, fourth quarter of fiscal year 2023 cash flows were strong at $144.6 million cash flows from operating activities and free cash flow of $112.8 million.

As of September 30, 2023, DSO were 60 days and at the bottom of the target range of 60 to 70 days.

On October 6, 2023, our Board of Directors declared an increased quarterly cash dividend of $0.30 for each share of our common stock outstanding, which compares to the previous quarterly cash dividend of $0.28 per share. The dividend is payable on November 30, 2023, to shareholders of record on November 15, 2023.

Fiscal Year 2024 Outlook

Maximus is establishing fiscal year 2024 guidance. The company expects revenue to range between $5.05 billion and $5.2 billion. Adjusted operating income is expected to range between $488 million and $513 million, which excludes an estimated $88 million of expense for amortization of intangible assets. Adjusted diluted earnings per share is expected to range between $5.05 and $5.35 per share.

The midpoint of revenue guidance implies organic growth of approximately 5% over fiscal year 2023. The midpoint of adjusted operating income implies an adjusted operating margin of 9.8% as compared to the midpoint of revenue guidance.

Free cash flow is expected to range between $290 million and $340 million for fiscal year 2024. The company forecasts interest expense of approximately $70 million, an effective income tax rate between 24.5% and 25.5%, and weighted average shares outstanding between 62.2 million and 62.3 million shares for fiscal year 2024.

Conference Call and Webcast Information

Maximus will host a conference call tomorrow, November 16, 2023, at 9:00 a.m. ET. Shareholders are invited to submit questions for management’s consideration by emailing IR@maximus.com up to one hour prior to the call.

The call is open to the public and available by webcast or by phone at: 877.407.8289 (Domestic) / +1.201.689.8341 (International)

For those unable to listen to the live call, a recording of the webcast will be available on investor.maximus.com.

About Maximus

As a leading strategic partner to governments across the globe, Maximus helps improve the delivery of public services amid complex technology, health, economic, environmental, and social challenges. With a deep understanding of program service delivery, acute insights that achieve operational excellence, and an extensive awareness of the needs of the people being served, our employees advance the critical missions of our partners. Maximus delivers innovative business process management, impactful consulting services, and technology solutions that provide improved outcomes for the public and higher levels of productivity and efficiency of government-sponsored programs. For more information, visit maximus.com.

Non-GAAP Measures and Risk Factors

This release refers to non-GAAP measures and other indicators, including organic growth normalized for the effects of COVID-19 response work, free cash flow, operating income, and EPS adjusted for amortization of intangible assets and divestiture-related charges, pro-forma EBITDA, and other non-GAAP measures.

A description of these non-GAAP measures, the reasons why we use and present them, and details as to how they are calculated are included in our earnings presentation and forthcoming Form 10-K.

The presentation of these non-GAAP numbers is not meant to be considered in isolation, nor as alternatives to cash flows from operations, revenue growth, or net income as measures of performance. These non-GAAP financial measures, as determined and presented by us, may not be comparable to related or similarly titled measures presented by other companies.

Statements that are not historical facts, including statements about the company’s confidence and strategies, and the company’s expectations about revenues, results of operations, profitability, future contracts, market opportunities, market demand, or acceptance of the company’s products are forward-looking statements that involve risks and uncertainties.

These risks could cause the company’s actual results to differ materially from those indicated by such forward-looking statements. A summary of risk factors can be found in Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2023, expected to be filed shortly with the Securities and Exchange Commission (SEC). The Company’s SEC reports are accessible on maximus.com.

 
 
 

Maximus, Inc.

Consolidated Statements of Operations

(Unaudited)
 

 

 

For the Three Months Ended

September 30,

 

For the Year Ended

September 30,

 

2023

 

2022

 

2023

 

2022

 

(in thousands, except per share amounts)

Revenue

$

1,259,953

 

$

1,177,031

 

$

4,904,728

 

$

4,631,018

Cost of revenue

 

969,059

 

 

904,048

 

 

3,876,120

 

 

3,691,208

Gross profit

 

290,894

 

 

272,983

 

 

1,028,608

 

 

939,810

Selling, general, and administrative expenses

 

167,778

 

 

146,991

 

 

639,223

 

 

534,493

Amortization of intangible assets

 

23,992

 

 

22,514

 

 

94,591

 

 

90,465

Gain on sale of land and building

 

 

 

11,046

 

 

 

 

11,046

Operating income

 

99,124

 

 

114,524

 

 

294,794

 

 

325,898

Interest expense

 

20,507

 

 

16,098

 

 

84,138

 

 

45,965

Other expense, net

 

442

 

 

742

 

 

363

 

 

2,835

Income before income taxes

 

78,175

 

 

97,684

 

 

210,293

 

 

277,098

Provision for income taxes

 

19,029

 

 

28,617

 

 

48,501

 

 

73,270

Net income

$

59,146

 

$

69,067

 

$

161,792

 

$

203,828

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

0.97

 

$

1.13

 

$

2.65

 

$

3.30

Diluted

$

0.96

 

$

1.13

 

$

2.63

 

$

3.29

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

61,138

 

 

61,010

 

 

61,125

 

 

61,774

Diluted

 

61,617

 

 

61,292

 

 

61,450

 

 

61,969

 

 

 

 

 

 

 

 

Dividends declared per share

$

0.28

 

$

0.28

 

$

1.12

 

$

1.12

 
 
 
 

Maximus, Inc.

Consolidated Balance Sheets

(Unaudited)
 

 

 

As of September 30,

 

 

2023

 

 

 

2022

 

 

(in thousands)

Assets:

 

 

 

Cash and cash equivalents

$

65,405

 

 

$

40,658

 

Accounts receivable, net

 

826,873

 

 

 

807,110

 

Income taxes receivable

 

16,556

 

 

 

2,158

 

Prepaid expenses and other current assets

 

146,632

 

 

 

182,387

 

Total current assets

 

1,055,466

 

 

 

1,032,313

 

Property and equipment, net

 

38,831

 

 

 

52,258

 

Capitalized software, net

 

107,811

 

 

 

58,740

 

Operating lease right-of-use assets

 

163,929

 

 

 

132,885

 

Goodwill

 

1,779,215

 

 

 

1,779,415

 

Intangible assets, net

 

703,648

 

 

 

804,904

 

Deferred contract costs, net

 

45,372

 

 

 

47,732

 

Deferred compensation plan assets

 

42,919

 

 

 

37,050

 

Deferred income taxes

 

2,459

 

 

 

4,970

 

Other assets

 

46,147

 

 

 

42,447

 

Total assets

$

3,985,797

 

 

$

3,992,714

 

Liabilities and Shareholders’ Equity:

 

 

 

Liabilities:

 

 

 

Accounts payable and accrued liabilities

$

282,081

 

 

$

264,553

 

Accrued compensation and benefits

 

194,251

 

 

 

178,199

 

Deferred revenue, current portion

 

60,477

 

 

 

87,146

 

Income taxes payable

 

451

 

 

 

718

 

Long-term debt, current portion

 

86,844

 

 

 

63,458

 

Operating lease liabilities, current portion

 

49,852

 

 

 

63,999

 

Other current liabilities

 

49,058

 

 

 

116,374

 

Total current liabilities

 

723,014

 

 

 

774,447

 

Deferred revenue, non-current portion

 

38,849

 

 

 

21,414

 

Deferred income taxes

 

203,898

 

 

 

206,099

 

Long-term debt, non-current portion

 

1,163,149

 

 

 

1,292,483

 

Deferred compensation plan liabilities, non-current portion

 

46,432

 

 

 

40,210

 

Operating lease liabilities, non-current portion

 

129,367

 

 

 

86,175

 

Other liabilities

 

13,253

 

 

 

22,515

 

Total liabilities

 

2,317,962

 

 

 

2,443,343

 

Shareholders’ equity:

 

 

 

Common stock, no par value; 100,000 shares authorized; 60,998 and 60,774 shares issued and outstanding as of September 30, 2023 and 2022, respectively

 

577,898

 

 

 

557,978

 

Accumulated other comprehensive loss

 

(27,615

)

 

 

(33,961

)

Retained earnings

 

1,117,552

 

 

 

1,025,354

 

Total shareholders’ equity

 

1,667,835

 

 

 

1,549,371

 

Total liabilities and shareholders’ equity

$

3,985,797

 

 

$

3,992,714

 

 
 
 
 

Maximus, Inc.

Consolidated Statements of Cash Flows

(Unaudited)
 

 

 

For the Three Months Ended

September 30,

 

For the Year Ended

September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

(in thousands)

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

$

59,146

 

 

$

69,067

 

 

$

161,792

 

 

$

203,828

 

Adjustments to reconcile net income to cash flows from operations:

 

 

 

 

 

 

 

Depreciation and amortization of property, equipment and capitalized software

 

17,633

 

 

 

12,455

 

 

 

54,725

 

 

 

42,330

 

Amortization of intangible assets

 

23,992

 

 

 

22,514

 

 

 

94,591

 

 

 

90,465

 

Amortization of debt issuance costs and debt discount

 

601

 

 

 

1,066

 

 

 

2,837

 

 

 

3,012

 

Gain on sale of land and building

 

 

 

 

(11,046

)

 

 

 

 

 

(11,046

)

Deferred income taxes

 

(823

)

 

 

17,383

 

 

 

1,552

 

 

 

10,204

 

Stock compensation expense

 

7,283

 

 

 

8,396

 

 

 

29,522

 

 

 

30,476

 

Loss on sale of businesses

 

 

 

 

 

 

 

883

 

 

 

 

Change in assets and liabilities, net of effects of business combinations and disposals:

 

 

 

 

 

 

 

Accounts receivable

 

(31,076

)

 

 

54,129

 

 

 

(23,401

)

 

 

14,132

 

Prepaid expenses and other current assets

 

(20,242

)

 

 

(16,199

)

 

 

859

 

 

 

(6,745

)

Deferred contract costs

 

443

 

 

 

(4,354

)

 

 

2,688

 

 

 

(12,056

)

Accounts payable and accrued liabilities

 

814

 

 

 

9,855

 

 

 

17,729

 

 

 

(32,722

)

Accrued compensation and benefits

 

44,262

 

 

 

(10,558

)

 

 

12,650

 

 

 

3,288

 

Deferred revenue

 

19,624

 

 

 

(19,684

)

 

 

(12,123

)

 

 

(19,342

)

Income taxes

 

16,228

 

 

 

(688

)

 

 

(16,958

)

 

 

(13,510

)

Operating lease right-of-use assets and liabilities

 

1,707

 

 

 

218

 

 

 

(2,035

)

 

 

(1,112

)

Other assets and liabilities

 

4,997

 

 

 

(12,491

)

 

 

(10,971

)

 

 

(11,363

)

Net cash provided by operating activities

 

144,589

 

 

 

120,063

 

 

 

314,340

 

 

 

289,839

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property and equipment and capitalized software

 

(31,832

)

 

 

(20,209

)

 

 

(90,695

)

 

 

(56,145

)

Acquisitions of businesses, net of cash acquired

 

 

 

 

(151

)

 

 

 

 

 

(14,295

)

Proceeds from the sale of businesses

 

608

 

 

 

 

 

 

9,732

 

 

 

 

Proceeds from the sale of land and building

 

 

 

 

14,431

 

 

 

 

 

 

16,431

 

Net cash used in investing activities

 

(31,224

)

 

 

(5,929

)

 

 

(80,963

)

 

 

(54,009

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Cash dividends paid to Maximus shareholders

 

(17,020

)

 

 

(16,954

)

 

 

(68,073

)

 

 

(68,716

)

Purchases of Maximus common stock

 

 

 

 

(22,255

)

 

 

 

 

 

(96,119

)

Tax withholding related to RSU vesting

 

 

 

 

 

 

 

(8,475

)

 

 

(9,673

)

Payments for contingent consideration

 

(2,769

)

 

 

(1,369

)

 

 

(9,431

)

 

 

(1,369

)

Proceeds from borrowings

 

161,901

 

 

 

200,000

 

 

 

844,299

 

 

 

615,000

 

Principal payments for debt

 

(222,460

)

 

 

(327,685

)

 

 

(952,974

)

 

 

(770,658

)

Cash-collateralized escrow liabilities

 

(1,601

)

 

 

83,264

 

 

 

(56,144

)

 

 

83,264

 

Net cash (used in)/provided by financing activities

 

(81,949

)

 

 

(84,999

)

 

 

(250,798

)

 

 

(248,271

)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

(1,018

)

 

 

(2,965

)

 

 

2,717

 

 

 

(7,334

)

Net change in cash, cash equivalents, and restricted cash

 

30,398

 

 

 

26,170

 

 

 

(14,704

)

 

 

(19,775

)

Cash, cash equivalents and restricted cash, beginning of period

 

91,693

 

 

 

110,625

 

 

 

136,795

 

 

 

156,570

 

Cash, cash equivalents and restricted cash, end of period

$

122,091

 

 

$

136,795

 

 

$

122,091

 

 

$

136,795

 

 
 
 
 

Maximus, Inc.

Consolidated Results of Operations by Segment

(Unaudited)
 

 

 

For the Three Months Ended

September 30,

 

For the Year Ended

September 30,

 

2023

 

2022

 

2023

 

2022

 

Amount (1)

 

% (2)

 

Amount (1)

 

% (2)

 

Amount (1)

 

% (2)

 

Amount (1)

 

% (2)

 

(dollars in thousands)

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Federal Services

$

617,404

 

 

 

 

$

579,066

 

 

 

 

$

2,403,606

 

 

 

 

$

2,259,744

 

 

 

U.S. Services

 

473,827

 

 

 

 

 

423,798

 

 

 

 

 

1,812,069

 

 

 

 

 

1,607,612

 

 

 

Outside the U.S.

 

168,722

 

 

 

 

 

174,167

 

 

 

 

 

689,053

 

 

 

 

 

763,662

 

 

 

Revenue

$

1,259,953

 

 

 

 

$

1,177,031

 

 

 

 

$

4,904,728

 

 

 

 

$

4,631,018

 

 

 

Gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Federal Services

$

155,373

 

 

25.2

%

 

$

153,508

 

 

26.5

%

 

$

557,886

 

 

23.2

%

 

$

519,440

 

 

23.0

%

U.S. Services

 

109,389

 

 

23.1

%

 

 

94,199

 

 

22.2

%

 

 

377,541

 

 

20.8

%

 

 

343,004

 

 

21.3

%

Outside the U.S.

 

26,132

 

 

15.5

%

 

 

25,276

 

 

14.5

%

 

 

93,181

 

 

13.5

%

 

 

77,366

 

 

10.1

%

Gross profit

$

290,894

 

 

23.1

%

 

$

272,983

 

 

23.2

%

 

$

1,028,608

 

 

21.0

%

 

$

939,810

 

 

20.3

%

Selling, general, and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Federal Services

$

78,606

 

 

12.7

%

 

$

81,169

 

 

14.0

%

 

$

308,197

 

 

12.8

%

 

$

284,509

 

 

12.6

%

U.S. Services

 

54,198

 

 

11.4

%

 

 

45,176

 

 

10.7

%

 

 

194,991

 

 

10.8

%

 

 

160,902

 

 

10.0

%

Outside the U.S.

 

26,375

 

 

15.6

%

 

 

24,084

 

 

13.8

%

 

 

102,311

 

 

14.8

%

 

 

92,536

 

 

12.1

%

Divestiture related charges (2)

 

2,868

 

 

NM

 

 

 

 

 

NM

 

 

 

3,751

 

 

NM

 

 

 

 

 

NM

 

Other (4)

 

5,731

 

 

NM

 

 

 

(3,438

)

 

NM

 

 

 

29,973

 

 

NM

 

 

 

(3,454

)

 

NM

 

Selling, general, and administrative expenses

$

167,778

 

 

13.3

%

 

$

146,991

 

 

12.5

%

 

$

639,223

 

 

13.0

%

 

$

534,493

 

 

11.5

%

Operating income/(loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Federal Services

$

76,767

 

 

12.4

%

 

$

72,339

 

 

12.5

%

 

$

249,689

 

 

10.4

%

 

$

234,931

 

 

10.4

%

U.S. Services

 

55,191

 

 

11.6

%

 

 

49,023

 

 

11.6

%

 

 

182,550

 

 

10.1

%

 

 

182,102

 

 

11.3

%

Outside the U.S.

 

(243

)

 

(0.1

)%

 

 

1,192

 

 

0.7

%

 

 

(9,130

)

 

(1.3

)%

 

 

(15,170

)

 

(2.0

)%

Amortization of intangible assets

 

(23,992

)

 

NM

 

 

 

(22,514

)

 

NM

 

 

 

(94,591

)

 

NM

 

 

 

(90,465

)

 

NM

 

Divestiture related charges (2)

 

(2,868

)

 

NM

 

 

 

 

 

NM

 

 

 

(3,751

)

 

NM

 

 

 

 

 

NM

 

Gain on sale of land and building (3)

 

 

 

NM

 

 

 

11,046

 

 

NM

 

 

 

 

 

NM

 

 

 

11,046

 

 

NM

 

Other (4)

 

(5,731

)

 

NM

 

 

 

3,438

 

 

NM

 

 

 

(29,973

)

 

NM

 

 

 

3,454

 

 

NM

 

Operating income

$

99,124

 

 

7.9

%

 

$

114,524

 

 

9.7

%

 

$

294,794

 

 

6.0

%

 

$

325,898

 

 

7.0

%

(1)

Percentage of respective segment revenue. Percentages not considered meaningful are marked “NM.” 

(2)

During fiscal year 2023, we sold a small commercial practice in the United Kingdom and our employment services business in Sweden, both subsidiaries within our Outside the U.S. Segment, resulting in a loss of $0.9 million. In addition, we recorded impairment losses of $2.9 million on businesses sold subsequent to fiscal year end. 

(3)

During fiscal year 2022, we sold the land and building that held our corporate headquarters, resulting in a gain on sale of $11.0 million. 

(4)

Other includes credits and costs that are not allocated to a particular segment. For the fiscal year 2023, these charges include $29.3 million related to the costs of a previously disclosed cybersecurity incident. Other charges include direct costs of acquisitions. These costs are excluded from measuring each segment’s operating performance. 

 
 
 
 

Maximus, Inc.

Consolidated Free Cash Flows – Non-GAAP

(Unaudited)
 

 

 

For the Three Months Ended

September 30,

 

For the Year Ended

September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

(in thousands)

Net cash provided by operating activities

$

144,589

 

 

$

120,063

 

 

$

314,340

 

 

$

289,839

 

Purchases of property and equipment and capitalized software

 

(31,832

)

 

 

(20,209

)

 

 

(90,695

)

 

 

(56,145

)

Free cash flow

$

112,757

 

 

$

99,854

 

 

$

223,645

 

 

$

233,694

 

 
 
 
 

Maximus, Inc.

Non-GAAP Adjusted Results – Operating Income, Net Income, and Diluted Earnings per Share

(Unaudited)
 

 

 

 

 

For the Three Months Ended

September 30,

 

For the Year Ended

September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

(dollars in thousands, except per share data)

Operating income

$

99,124

 

 

$

114,524

 

 

$

294,794

 

 

$

325,898

 

Add back: Amortization of intangible assets

 

23,992

 

 

 

22,514

 

 

 

94,591

 

 

 

90,465

 

Add back: Divestiture-related charges

 

2,868

 

 

 

 

 

 

3,751

 

 

 

 

Adjusted operating income excluding amortization of intangible assets and divestiture-related charges (Non-GAAP)

$

125,984

 

 

$

137,038

 

 

$

393,136

 

 

$

416,363

 

Adjusted operating income margin excluding amortization of intangible assets and divestiture-related charges (Non-GAAP)

 

10.0

%

 

 

11.6

%

 

 

8.0

%

 

 

9.0

%

 

 

 

 

 

 

 

 

Net income

$

59,146

 

 

$

69,067

 

 

$

161,792

 

 

$

203,828

 

Add back: Amortization of intangible assets, net of tax

 

17,682

 

 

 

16,622

 

 

 

69,714

 

 

 

66,786

 

Add back: Divestiture-related charges

 

2,868

 

 

 

 

 

 

3,751

 

 

 

 

Adjusted net income excluding amortization of intangible assets and divestiture-related charges (Non-GAAP)

$

79,696

 

 

$

85,689

 

 

$

235,257

 

 

$

270,614

 

 

 

 

 

 

 

 

 

Diluted earnings per share

$

0.96

 

 

$

1.13

 

 

$

2.63

 

 

$

3.29

 

Add back: Effect of amortization of intangible assets on diluted earnings per share

 

0.28

 

 

 

0.27

 

 

 

1.14

 

 

 

1.08

 

Add back: Effect of divestiture-related charges on diluted earnings per share

 

0.05

 

 

 

 

 

 

0.06

 

 

 

 

Adjusted diluted earnings per share excluding amortization of intangible assets and divestiture-related charges (Non-GAAP)

$

1.29

 

 

$

1.40

 

 

$

3.83

 

 

$

4.37