MAXIMUS(US:MMS)2019-02-07 16:01Revenue Performance - Revenue for the three months ended December 31, 2018, increased by 6.7% to $664.6 million compared to $623.1 million in the same period of fiscal year 2018[98] - Revenue for the three months ended December 31, 2018, decreased by 3.3% to $294,213,000 compared to $304,241,000 in the same period of 2017[112] - The U.S. Federal Services Segment reported revenue of $216,987,000, a 63.2% increase from $132,983,000 in the previous year, driven by the acquisition of the citizen engagement centers business[116] - Outside the U.S. Segment revenue decreased by 17.5% to $153,419,000, with a gross profit percentage of 15.2%, down from 18.5%[122] - In fiscal year 2018, 29% of the company's revenue was generated outside the U.S.[141] Profitability and Margins - The U.S. Health & Human Services Segment reported steady revenue and a slight improvement in profitability, driven by solid operational performance across health services contracts[96] - The gross profit margin for the three months ended December 31, 2018, was 24.0%, slightly down from 24.4% in the same period of fiscal year 2017[98] - Gross profit increased to $88,031,000, resulting in a gross profit percentage of 29.9%, up from 27.7% in the prior year[112] - Operating income for the U.S. Federal Services Segment was $21,353,000, with an operating margin percentage of 9.8%, down from 12.6%[116] - The company anticipates operating margins for the U.S. Federal Services Segment to range between 16% to 19% for the fiscal year[114] Expenses and Cash Flow - The company incurred acquisition-related expenses of $2.7 million and recorded amortization for intangible assets acquired of $3.0 million, with a projected full-year expense of $23.6 million for fiscal year 2019[96] - Cash flows from operations for the three months ended December 31, 2018, were $59,340,000, compared to $37,997,000 in the same period last year[131] - Cash used in investing activities was $411.7 million, primarily for the acquisition of the citizen engagement centers business[133] - Free cash flow for the three months ended December 31, 2018, was $53,909,000, an increase from $31,483,000 in the prior year[136] Tax and Financial Metrics - The effective tax rate for the three months ended December 31, 2018, was 26.2%, compared to 24.9% in the same period of fiscal year 2018[108] - Adjusted EBITDA for the three months ended December 31, 2018, was $99.1 million, down from $100.5 million in the same period of 2017[145] - Adjusted EBITA for the three months ended December 31, 2018, was $87.9 million, compared to $86.8 million in the same period of 2017[145] Foreign Currency and Debt - At December 31, 2018, the company held net assets denominated in foreign currencies amounting to $111.2 million, with cash and cash equivalents comprising $28.9 million[147] - A 10% unfavorable exchange rate movement would result in a comprehensive income decrease of $11.1 million for the company as of December 31, 2018[148] - The company had borrowings of $125.4 million as of December 31, 2018, with an interest rate based on the one-month LIBOR plus a premium of 1%[150] - The one-month LIBOR at December 31, 2018, was approximately 2.5%, and a hypothetical increase to 3.5% would raise annual interest expense by approximately $1.3 million[150] Operational Insights - The company maintains a portfolio target operating profit margin ranging between 10% and 15% with high cash conversion and access to a $400 million credit facility[91] - The financial impact of the U.S. Federal government shutdown was approximately $0.5 million in revenue for both the first and second quarters[120] - The company utilizes non-GAAP measures to provide a clearer understanding of its financial performance, including organic revenue growth and free cash flow[140] - The company reported a DSO (Days Sales Outstanding) calculation for the three months ended December 31, 2018, reflecting the impact of the citizen engagement centers acquisition[143] Net Income - For the three months ended December 31, 2018, net income attributable to MAXIMUS was $55.9 million, compared to $59.1 million in the same period of 2017[145]