MAXIMUS, Inc. (NYSE:MMS) Q2 2019 Earnings Conference Call - Final Transcript

May 09, 2019 • 09:00 am ET


MAXIMUS, Inc. (NYSE:MMS) Q2 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, greetings and welcome to the MAXIMUS Fiscal 2019 Second Quarter Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this program is being recorded.

It is now my pleasure to introduce your host, Lisa Miles, Senior Vice President of Investor Relations for MAXIMUS. Thank you, Ms. Miles. You may begin.

Lisa Miles

Good morning, and thank you for joining us. With me today is Bruce Caswell, President and CEO and Rick Nadeau, Chief Financial Officer. I'd like to remind everyone that the number of statements being made today will be forward-looking in nature. Please remember that such statements are only predictions. Actual events and results may differ materially as a result of risks we face, including those discussed in Exhibit 99.1 of our SEC filings. We encourage you to review the information contained in our earnings release today and the most recent Forms 10-Q and 10-K filed with the SEC. The Company does not assume any obligation to revise or update these forward-looking statements to reflect subsequent events or circumstances, except as required by law.

Today's presentation may contain non-GAAP financial information. Management uses this information in its internal analysis of results and believes this information may be informative to investors in gauging the quality of our financial performance, identifying trends in our results and providing meaningful period-to-period comparisons. For a reconciliation of the non-GAAP measures presented in this document, please see the Company's most recent quarterly earnings press release.

And with that, I'll hand the call over to Rick.

Rick Nadeau

Thanks, Lisa. This morning, MAXIMUS has reported revenue for the second quarter of fiscal year 2019 of $736.5 million, an increase of 20% over the comparable period last year. Top-line growth was driven by expected increases in the US Federal Services segment from the acquisition of the citizen engagement centers in November 2018. Revenue growth from the acquisition was partially offset by unfavorable foreign currency translation of $11.9 million. Organic revenue decreased compared to the same period last year, principally due to the rebid or extension of certain larger contracts as well as expected decreases in our employment services businesses in the United Kingdom and Australia.

Total company operating margin was 11.1% for the second quarter, GAAP diluted earnings per share were $0.96 in line with company expectations and driven by solid operational performance in both in the US Health and Human Services and US Federal Services segments. Our second quarter results included amortization expense related to intangible assets of $9.5 million or $0.11 diluted earnings per share of which $7.1 million resulted from the acquisition.

I will now speak to our segment results in the second quarter. As expected, second quarter revenue for the US Health and Human Services segment, decreased to $290.7 million compared to the same period last year, resulting from the rebid or extension of certain larger contracts. As a reminder, it is not unusual during a rebid or