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MAXIMUS, Inc. (MMS)
Citi Global Healthcare Conference Call
February 26, 2013 3:00 pm ET
Richard A. Montoni – President and Chief Executive Officer
Bruce L. Caswell – President and General Manager of the Health Services Segment
James Naklicki – Citigroup
Richard A. Montoni
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I think we have a mix of individuals in the audience, some of whom are probably very familiar with MAXIMUS and some of whom I think are relatively new to MAXIMUS. So the approach we’re going to take here is, I’ll go through these slides. It will give you a high level overview of MAXIMUS, who we are and what we do, task performance, and I hope if we’re successful in this presentation, still to give you an understanding of why we’ve managed to grow quite handsomely in our recent past. Why we think the rest of our fiscal 2013 which end September 30, 2013, should be a very solid year for growth top line and bottom line. But also why we think our future has a lot of great growth potential above and beyond fiscal 2013?
And my associate here Bruce Caswell, he and I are going to take team through this presentation and then afterwards, we’re going to try to wrap and leave sufficient time for Q&A. Okay. So MAXIMUS hold this so far to be a leading provider, operator. I think you better have to think of operator of Government Health and Human Services programs, and we do this on a worldwide basis.
We think we are very well positioned, first, I point to the economics and demographic factors that we see driving social reform, not only here in the United States and we think we’re a very formidable player in Healthcare reform in the U.S. but in many, many governments around the globe.
In particular, we would point to the fact that many governments are suffering through some pretty significant fiscal challenges. And in addition, we are seeing very significant demographic factors as there are not only more people on this planet, but more of them are in need of healthcare. More of them are elderly, and that’s what government has to step up, and that’s how we help government serve the people.
We have an excellent – we have two external segments; one is our Health segment the other one is our Human segment, within which we have our Welfare Reform Work. We think we are very well positioned to take advantage of these demographic drivers. From a balance sheet perspective, we have $167 million in cash that was at 12/31/2012. We have a quarterly cash dividend of which we are very proud, opportunistic shift buyback program, and we have no long-term debt.
From a fiscal 2013 perspective here is what we are looking at. We are expecting our top line to grow in the vicinity of 19% to 24% and we are expecting our earnings per share to grow 27% to 33%. I do want to emphasize when we say earnings per share here, this is our adjusted earnings per share. What we routinely do every quarter is that, we have an item, we had a debit or credit favorable or unfavorable if we see it as non-recurring in nature and not reflective of future operations we will adjust it out and present adjusted earnings per share.
So how we’ve done in the last five years and where do we think we’re going to be in fiscal 2013. From the top line perspective, our compound annual growth rate has been 12.4%. We are looking currently for fiscal 2013 to come in at $1.250 billion to $1.3 billion, and we’re looking for our adjusted diluted earnings per share to range from $3 to $3.15 added all up, we will be looking at a five-year compound annual growth rate of 17.8%.
And with this, Bruce and I’m going to impose upon you to talk about our two segments, and I will see back at a few.
Bruce L. Caswell
Great. Thank you, Rich, and good afternoon. As Rich mentioned, we have two business segments that we report externally, the Heath Services business, which I run and the Human Services business, but I just take a moment and talk a little bit about the work that we do and how we’re paid in those segments.
On the Health Services business, you can maybe grossly simplify by saying the work that we do help individuals and apply for we determine eligible for enrolled in public health benefit programs. So with the nations leading provider of Medicaid and CHIP, enrollment services, we serve 23 states nationally, and do that actually the enrollment broker in 19 states and in addition to that provide support for the health insurance exchanges now in the State of Minnesota, where we’re building to help insurance exchange.
And then we have recently you may have noticed in the announcement from the company yesterday, where we were selected to provide the service center operations for the State of Connecticut. So that’s a growing market where our core competencies service very well to serve, clients that are undertaking state-based exchanges; and as I’ll talk about in just a couple of minutes, we’re also very optimistic about the opportunities of the federal level at the federal exchanges.