Maximus Q4 Results Top Estimates, Backs 2014 Outlook

(RTTNews) - Business process services provider Maximus, Inc. (MMS) reported Friday a profit for the fourth quarter that increased from last year, reflecting improved operating margins and double-digit revenue growth.

Both earnings per share and quarterly revenues topped analysts' expectations. The company also maintained its earnings and revenue guidance for the full-year 2014.

"We are very pleased with the solid financial results for the fourth quarter and fiscal year. Over the last year, we achieved important milestones under our three long-term growth objectives of securing our fair share of work related to the Affordable Care Act, growing our federal services business, and expanding our international operations," CEO Richard Montoni said in a statement.

The Reston, Virginia-based company reported net income of $35.63 million or $0.51 per share for the fourth quarter, higher than $23.67 million or $0.34 per share in the prior-year quarter, which included $0.03 per share of charges.

On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.50 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenue for the quarter increased 28 percent to $384.34 million from $300.74 million in the same quarter last year, and topped five Wall Street analysts' consensus estimate of $359.35 million.

Organic revenue growth was 23 percent, while revenues grew 30 percent on a constant currency basis.

Health services revenues surged 49 percent to $271 million, while human services revenues declined 5 percent to $113 million from the year-ago quarter.

Operating margin for the quarter expanded 150 basis points to 14.8 percent from last year's 13.3 percent, as gross margin improved 250 basis points, partially offset by a 130 basis points increase in selling, general, and administrative expense as a percentage of total revenues.

The company reported record backlog of $3.4 billion at the end of the fourth quarter, compared to $2.9 billion at the end of the year-ago quarter.

At the end of the quarter, sales pipeline stood at $2.4 billion, slightly lower than $2.6 billion at the end of the prior-year quarter, due to opportunities converting into new sales.

For fiscal 2013, the company reported net income of $116.73 million or $1.67 per share, higher than $76.13 million or $1.09 per share in the prior year. Income from continuing operations for the latest quarter was $117.13 million or $1.68 per share. Excluding items, adjusted income from continuing operations was $1.60 per share, compared to $1.18 per share last year. Revenues for the full year grew 27 percent to $1.33 billion from $1.05 billion in the previous year.

Analysts expected the company to report full-year 2013 earnings of $1.57 on revenues of $1.30 billion.

Looking ahead to fiscal 2014, the company continues to expect earnings in a range of $1.75 to $1.85 per share, on projected revenues between $1.555 billion and $1.650 billion. Street is currently looking for full-year 2014 earnings of $1.85 per share on annual revenues of $1.61 billion.

"With our formalized fiscal 2014 guidance in place, we continue to focus on the areas where we can best maximize shareholder value. We continue to see opportunities in the U.S. and abroad that dovetail nicely with our core capabilities, and we remain confident about our continued growth into fiscal 2014 and beyond," Montoni added.

MMS closed Thursday's regular trading session at $46.93, up $0.11 on a volume of 0.40 million shares.