MAXIMUS(US:MMS)2022-11-22 18:36Financial Performance - Revenue for fiscal year 2022 increased to $4,631,018, representing an 8.9% growth compared to $4,254,485 in fiscal year 2021[172] - Gross profit for fiscal year 2022 was $939,810, with a gross profit margin of 20.3%, down from 22.3% in fiscal year 2021[172] - Operating income decreased to $325,898 in fiscal year 2022, resulting in an operating margin of 7.0%, compared to 9.6% in fiscal year 2021[172] - The company's net income for the same period was $203,828,000, a decrease of 30% compared to $291,200,000 in 2021[255] - Earnings per share (EPS) for 2022 were $3.30, down from $4.69 in 2021, reflecting a decline of 29.6%[255] - Comprehensive income for the year ended September 30, 2022, was $209,775,000, down from $293,930,000 in 2021, reflecting a decline of 28.6%[257] - Free cash flow was $233.694 million, a decrease of 51.4% from $480.757 million in 2021[212] Revenue Segments - The U.S. Federal Services Segment revenue increased by 19.4% to $2,259,744 in fiscal year 2022, driven by acquired growth[181] - Revenue for the U.S. Services Segment decreased by 3.3% to $1,607,612, while gross profit percentage declined to 21.3% from 24.6% in fiscal year 2021[185] - The Outside the U.S. Segment reported a revenue increase of 9.2% to $763,662, but gross profit percentage fell to 10.1% from 15.2%[190] - Revenue from performance-based fees for the year ended September 30, 2022, was $142.4 million, with $55.4 million recorded as unbilled receivables[219] - Performance-based revenue grew to $2,091,608, accounting for 45.2% of total revenue, up from 33.3% in 2021[332] - Revenue from U.S. federal government agencies increased to $2,189,303, representing 47.3% of total revenue, up from 42.4% in 2021[333] Expenses and Liabilities - Interest expense rose significantly to $45,965 in fiscal year 2022 from $14,744 in fiscal year 2021, primarily due to debt incurred for acquisitions[172] - The effective tax rate for fiscal year 2022 was 26.4%, an increase from 24.1% in fiscal year 2021, with expectations for fiscal year 2023 to be between 24.5% and 25.5%[179] - The company made net debt repayments of $155.7 million in fiscal year 2022, compared to net cash flows of $1.47 billion in fiscal year 2021[208] - Current and long-term operating lease liabilities amounted to $64.0 million and $86.2 million, respectively, as of September 30, 2022[214] - The gross balance of debt owed as of September 30, 2022, was $1.4 billion, exposing the company to interest rate risk[237] Cash Flow and Assets - Net cash provided by operating activities decreased by $227.5 million to $289,839 in fiscal year 2022 compared to $517,322 in fiscal year 2021[204] - Total assets decreased to $3,992,714,000 as of September 30, 2022, from $4,118,965,000 in 2021, representing a reduction of 3.1%[260] - Total cash, cash equivalents, and restricted cash at the end of the period was $136,795, a decrease from $156,570 at the end of the previous year[263] - As of September 30, 2022, total outstanding borrowings under term loans were $1.37 billion, with $600 million available under the Credit Agreement revolver[213] Acquisitions and Intangible Assets - The acquisition of VES Group, Inc. was completed for a purchase price of $1.37 billion, enhancing the company's position in the U.S. Federal market[345] - The acquisition of Attain, LLC was completed for $419.1 million, aimed at strengthening the company's capabilities in delivering federal solutions[351] - The estimated fair value of intangible assets acquired from VES was $664 million, with a useful life of 12 years[349] - The company recorded a single intangible asset related to customer contracts and relationships of $16.7 million, amortized over 27 months[356] - As of September 30, 2022, the total goodwill balance was $1,779.4 million, with no impairment charges recorded for the years ended September 30, 2022, 2021, and 2020[365] Market and Economic Factors - The company anticipates that the end of the Public Health Emergency will positively impact its established U.S. programs, which are currently operating at reduced capacity[170] - A hypothetical 10% unfavorable exchange rate movement would have resulted in a $15.657 million decrease in comprehensive income as of September 30, 2022[236] - The company mitigated interest rate risk through interest rate swaps totaling a notional amount of $500 million, which includes a recent swap of $200 million[239] - Credit risk is limited due to the creditworthiness of customers, primarily government entities[288]