MAXIMUS(US:MMS)2020-08-09 11:06Financial Data and Key Metrics Changes - Revenue for Q3 FY 2020 increased to $901.3 million from $730.7 million in the prior period, driven by the Census contract and new COVID-19 response work [13] - Operating margin for Q3 FY 2020 was 9.7%, reflecting lower revenue from performance-based contracts [14] - Diluted earnings per share were $1.04, benefiting from a change order worth $9 million or $0.11 per share [14] - Revenue guidance for the full year is now expected to range between $3.375 billion and $3.425 billion, with diluted earnings per share between $3.20 to $3.30 [10] Business Line Data and Key Metrics Changes - US Health & Human Services segment revenue totaled $337 million, a 15.7% increase over the prior period, all organic growth [15] - US Federal Services segment revenue increased to $450.1 million from $292.3 million in the prior year period, with organic growth of 4.1% [17] - Outside the US segment revenue was $114.2 million, with an operating loss of $5.8 million, impacted by pandemic-related disruptions [21][22] Market Data and Key Metrics Changes - The Census contract delivered $170 million of revenue in Q3, with an estimated total of approximately $500 million for the full fiscal year 2020 [20] - The outside US segment is expected to end the full year in an operating loss position, with improvements anticipated in FY '21 as economies recover [23] Company Strategy and Development Direction - The company is focused on digital transformation, clinical evolution, and market expansion as strategic goals [66] - Management emphasizes the importance of maintaining liquidity and flexibility in operations amid uncertainties [26] - The company is optimistic about the ongoing benefits from COVID-19 response work into fiscal 2021, anticipating improvements in operations outside the US [28] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the unpredictability of the pandemic and its impact on operations, emphasizing the need for adaptability [36][41] - The company expects to face both headwinds and tailwinds, with new COVID-19 response work providing a favorable uptick [9] - Management remains cautious about the future, noting potential budget challenges from government clients and the impact of economic recovery on service demand [31][37] Other Important Information - The company finished Q3 with cash and cash equivalents of approximately $81.5 million, with outstanding draws on the credit facility totaling $145 million [24] - The total contract value pipeline at June 30 was $28.9 billion, with 67.7% representing new work [58] Q&A Session Summary Question: How much of the revenue increase this year is temporary versus durable? - Management estimates that $150 million to $200 million of revenue this year is related to COVID response work, which is dynamic and subject to change [70] Question: What is the outlook for the HAAS contract? - The HAAS contract is facing challenges due to the pandemic, with a shift towards telephonic assessments being piloted [76][79] Question: Breakdown of revenue in US Health & Human Services? - COVID response work contributed about $35 million to $40 million in the quarter [85] Question: Impact of the Census count potentially ending early? - Management is in dialogue with the Census Bureau and has not been instructed to make programmatic changes yet [96] Question: Financial uncertainty with states and potential impact on cash flows? - Management feels confident about liquidity despite potential delays in payments, as most work is deemed essential [101]