Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2017 | Nov. 06, 2017 | Mar. 31, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | MAXIMUS INC | ||
Entity Central Index Key | 1,032,220 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 3,963,270,858 | ||
Entity Common Stock, Shares Outstanding | 65,136,568 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | |||
Revenue | $ 2,450,961 | $ 2,403,360 | $ 2,099,821 |
Cost of revenue | 1,839,056 | 1,841,169 | 1,587,104 |
Gross profit | 611,905 | 562,191 | 512,717 |
Selling, general and administrative expenses | 284,510 | 268,259 | 238,792 |
Amortization of intangible assets | 12,208 | 13,377 | 9,348 |
Restructuring costs | 2,242 | 0 | 0 |
Acquisition-related expenses | 83 | 832 | 4,745 |
Gain on sale of a business | 650 | 6,880 | 0 |
Operating income | 313,512 | 286,603 | 259,832 |
Interest expense | 2,162 | 4,134 | 1,398 |
Other income, net | 2,885 | 3,499 | 1,385 |
Income before income taxes | 314,235 | 285,968 | 259,819 |
Provision for income taxes | 102,053 | 105,808 | 99,770 |
Net income | 212,182 | 180,160 | 160,049 |
Income attributable to noncontrolling interests | 2,756 | 1,798 | 2,277 |
Net income attributable to MAXIMUS | $ 209,426 | $ 178,362 | $ 157,772 |
Basic earnings per share attributable to MAXIMUS (in dollars per share) | $ 3.19 | $ 2.71 | $ 2.37 |
Diluted earnings per share attributable to MAXIMUS (in dollars per share) | 3.17 | 2.69 | 2.35 |
Dividends per share (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.18 |
Weighted average shares outstanding: | |||
Basic (in shares) | 65,632 | 65,822 | 66,682 |
Diluted (in shares) | 66,065 | 66,229 | 67,275 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 212,182 | $ 180,160 | $ 160,049 |
Foreign currency translation adjustments | 8,549 | (13,828) | (22,570) |
Interest rate hedge, net of income taxes of $-, $(16) and $16 | 1 | 24 | (25) |
Comprehensive income | 220,732 | 166,356 | 137,454 |
Comprehensive income attributable to noncontrolling interests | 2,756 | 1,798 | 2,277 |
Comprehensive income attributable to MAXIMUS | $ 217,976 | $ 164,558 | $ 135,177 |
CONSOLIDATED STATEMENTS OF COM4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Interest rate hedge, tax | $ 0 | $ (16) | $ 16 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Sep. 30, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 166,252 | $ 66,199 |
Accounts receivable—billed and billable, net | 394,338 | 444,357 |
Accounts receivable—unbilled | 36,475 | 36,433 |
Income taxes receivable | 4,528 | 17,273 |
Prepaid expenses and other current assets | 55,649 | 56,718 |
Total current assets | 657,242 | 620,980 |
Property and equipment, net | 101,651 | 131,569 |
Capitalized software, net | 26,748 | 30,139 |
Goodwill | 402,976 | 397,558 |
Intangible assets, net | 98,769 | 109,027 |
Deferred contract costs, net | 16,298 | 18,182 |
Deferred compensation plan assets | 28,548 | 23,307 |
Deferred income taxes | 7,691 | 8,644 |
Other assets | 10,739 | 9,413 |
Total assets | 1,350,662 | 1,348,819 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 122,083 | 150,711 |
Accrued compensation and benefits | 105,667 | 96,480 |
Deferred revenue | 71,722 | 73,692 |
Income taxes payable | 4,703 | 7,979 |
Long-term debt, current portion | 141 | 277 |
Other liabilities | 11,950 | 11,617 |
Total current liabilities | 316,266 | 340,756 |
Deferred revenue, less current portion | 28,182 | 40,007 |
Deferred income taxes | 20,106 | 16,813 |
Long-term debt | 527 | 165,338 |
Deferred compensation plan liabilities, less current portion | 30,707 | 24,012 |
Other liabilities | 9,106 | 8,753 |
Total liabilities | 404,894 | 595,679 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Common stock, no par value; 100,000 shares authorized; 65,137 and 65,223 shares issued and outstanding at September 30, 2017 and 2016, at stated amount, respectively | 475,592 | 461,679 |
Accumulated other comprehensive income | (27,619) | (36,169) |
Retained earnings | 492,112 | 323,571 |
Total MAXIMUS shareholders' equity | 940,085 | 749,081 |
Noncontrolling interests | 5,683 | 4,059 |
Total equity | 945,768 | 753,140 |
Total liabilities and equity | $ 1,350,662 | $ 1,348,819 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Sep. 30, 2017 | Sep. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 65,137,000 | 65,223,000 |
Common stock, shares outstanding | 65,137,000 | 65,223,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operations: | |||
Net income | $ 212,182 | $ 180,160 | $ 160,049 |
Adjustments to reconcile net income to net cash provided by operations: | |||
Depreciation and amortization of property, plant, equipment and capitalized software | 55,769 | 58,404 | 46,849 |
Amortization of intangible assets | 12,208 | 13,377 | 9,348 |
Deferred income taxes | 4,762 | 5,652 | 807 |
Stock compensation expense | 21,365 | 18,751 | 17,237 |
Gain on sale of business | (650) | (6,880) | 0 |
Changes in assets and liabilities, net of effects of business combinations: | |||
Accounts receivable—billed and billable | 53,025 | (51,986) | (103,774) |
Accounts receivable—unbilled | 26 | (5,590) | (911) |
Prepaid expenses and other current assets | 2,584 | (2,027) | (6,475) |
Deferred contract costs | 2,037 | (398) | (7,245) |
Accounts payable and accrued liabilities | (28,309) | (2,371) | 44,351 |
Accrued compensation and benefits | 8,849 | (869) | (3,157) |
Deferred revenue | (15,401) | (11,661) | 47,948 |
Income taxes | 8,901 | (13,125) | 9,134 |
Other assets and liabilities | (148) | (1,411) | (7,944) |
Cash provided by operations | 337,200 | 180,026 | 206,217 |
Cash flows from investing activities: | |||
Acquisition of businesses, net of cash acquired | (2,677) | (46,651) | (289,212) |
Purchases of property and equipment and capitalized software costs | (24,154) | (46,391) | (105,149) |
Proceeds from the sale of a business | 1,035 | 5,515 | 0 |
Other | 575 | 424 | 489 |
Cash used in investing activities | (25,221) | (87,103) | (393,872) |
Cash flows from financing activities: | |||
Cash dividends paid to MAXIMUS shareholders | (11,674) | (11,701) | (11,852) |
Repurchases of common stock | (28,863) | (33,335) | (82,787) |
Stock compensation tax benefit | 0 | 5,172 | 9,474 |
Tax withholding related to RSU vesting | (9,175) | (11,614) | (12,451) |
Stock option exercises | 924 | 546 | 868 |
Borrowings under credit facility | 185,000 | 149,823 | 330,993 |
Repayment of credit facility and other long-term debt | (349,981) | (195,200) | (121,611) |
Other | (1,660) | (533) | (75) |
Expansion of credit facility | 0 | 0 | (1,444) |
Cash (used in)/provided by financing activities | (215,429) | (96,842) | 111,115 |
Effect of exchange rate changes on cash | 3,503 | (4,554) | (6,900) |
Net increase/(decrease) in cash and cash equivalents | 100,053 | (8,473) | (83,440) |
Cash and cash equivalents, beginning of period | 66,199 | 74,672 | 158,112 |
Cash and cash equivalents, end of period | $ 166,252 | $ 66,199 | $ 74,672 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Accumulated Other Comprehensive Income | Retained Earnings | Noncontrolling Interest | Unvested restricted stock unitsCommon Stock |
Balance (in shares) at Sep. 30, 2014 | 66,613 | |||||
Balance at Sep. 30, 2014 | $ 556,185 | $ 429,857 | $ 230 | $ 125,875 | $ 223 | |
Increase (Decrease) in Shareholders' Equity | ||||||
Net income | 160,049 | 157,772 | 2,277 | |||
Foreign currency translation | (22,570) | (22,570) | ||||
Interest rate hedge, net of income taxes | (25) | (25) | ||||
Cash dividends | (11,927) | (11,852) | (75) | |||
Dividends on RSUs | $ 397 | (397) | ||||
Repurchases of common stock | $ (82,787) | (82,787) | ||||
Repurchases of common stock (in shares) | (1,600) | (1,619) | ||||
Stock compensation expense | $ 17,237 | $ 17,237 | ||||
Stock compensation tax benefit | 9,474 | 9,474 | ||||
Tax withholding relating to RSU vesting | (11,701) | $ (11,701) | ||||
Stock options exercised and RSUs vesting | 868 | $ 868 | ||||
Stock options exercised and RSUs vesting (in shares) | 443 | |||||
Addition of noncontrolling interest from acquisition | 896 | 896 | ||||
Balance (in shares) at Sep. 30, 2015 | 65,437 | |||||
Balance at Sep. 30, 2015 | 615,699 | $ 446,132 | (22,365) | 188,611 | 3,321 | |
Increase (Decrease) in Shareholders' Equity | ||||||
Net income | 180,160 | 178,362 | 1,798 | |||
Foreign currency translation | (13,828) | (13,828) | ||||
Interest rate hedge, net of income taxes | 24 | 24 | ||||
Cash dividends | (12,761) | (11,701) | (1,060) | |||
Dividends on RSUs | $ 363 | (363) | ||||
Repurchases of common stock | $ (31,338) | (31,338) | ||||
Repurchases of common stock (in shares) | (600) | (587) | ||||
Stock compensation expense | $ 18,751 | $ 18,751 | ||||
Stock compensation tax benefit | 5,172 | 5,172 | ||||
Tax withholding relating to RSU vesting | (9,285) | $ (9,285) | ||||
Stock options exercised and RSUs vesting | $ 546 | $ 546 | ||||
Stock options exercised and RSUs vesting (in shares) | 373 | |||||
Balance (in shares) at Sep. 30, 2016 | 65,223 | 65,223 | ||||
Balance at Sep. 30, 2016 | $ 753,140 | $ 461,679 | (36,169) | 323,571 | 4,059 | |
Increase (Decrease) in Shareholders' Equity | ||||||
Net income | 212,182 | 209,426 | 2,756 | |||
Foreign currency translation | 8,549 | 8,549 | ||||
Interest rate hedge, net of income taxes | 1 | 1 | ||||
Cash dividends | (12,806) | (11,674) | (1,132) | |||
Dividends on RSUs | $ 348 | (348) | ||||
Repurchases of common stock | $ (28,863) | (28,863) | ||||
Repurchases of common stock (in shares) | (600) | (558) | ||||
Stock compensation expense | $ 21,365 | $ 21,365 | ||||
Tax withholding relating to RSU vesting | (8,724) | (8,724) | ||||
Stock options exercised and RSUs vesting | $ 924 | $ 924 | ||||
Stock options exercised and RSUs vesting (in shares) | 472 | |||||
Balance (in shares) at Sep. 30, 2017 | 65,137 | 65,137 | ||||
Balance at Sep. 30, 2017 | $ 945,768 | $ 475,592 | $ (27,619) | $ 492,112 | $ 5,683 |
Business and summary of signifi
Business and summary of significant accounting policies | 12 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and summary of significant accounting policies | Business and summary of significant accounting policies Description of business MAXIMUS, Inc. (the "Company" or "we") is a leading operator of government health and human services programs worldwide. We conduct our operations through three business segments: Health Services, U.S. Federal Services and Human Services. • The Health Services Segment provides a variety of business process services, appeals and assessments as well as related consulting services, for state, provincial and national government programs. These services support Medicaid, the Children's Health Insurance Program (CHIP) and the Affordable Care Act (ACA) in the U.S., Health Insurance BC (British Columbia) in Canada, and the Health Assessment Advisory Service (HAAS) in the United Kingdom. • The U.S. Federal Services Segment provides business process services and program management for large U.S. Federal Government programs, independent health review and appeals services for both the U.S. Federal Government and similar state-based programs and technology solutions for civilian agencies. • The Human Services Segment provides national, state and local human services agencies with a variety of business process services and related consulting services for government programs. Principles of consolidation The consolidated financial statements include the accounts of MAXIMUS, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Where MAXIMUS owns less than 100% of the share capital of its subsidiaries, but is still considered to have sufficient ownership to control the businesses, the results of these business operations are consolidated within our financial statements. The ownership interests held by other parties are shown as noncontrolling interests. Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during each reporting period. Actual results could differ from those estimates. Our significant estimates include revenue recognition, estimates of the fair value of assets acquired and liabilities assumed in business combinations, estimates of the collectibility of receivables, estimates of future discounts in performance-based contracts, evaluation of asset impairment, accrual of estimated liabilities, valuation of acquisition-related contingent consideration liabilities and income taxes. Revenue recognition Revenue is generated from contracts with various pricing arrangements with total revenue contributions in fiscal year 2017 as follows: • performance-based criteria ( 42% ); • costs incurred plus a negotiated fee ("cost-plus") ( 35% ); • fixed-price ( 18% ); and • time-and-materials ( 5% ). We recognize revenue on arrangements as work is performed and amounts are earned. We consider amounts to be earned once evidence of an arrangement has been obtained, services have been delivered, fees are fixed or determinable and collectability of revenue is reasonably assured. We recognize revenue on performance-based contracts when earned, which occurs when we have achieved the performance obligation. This may result in revenue being recognized in irregular increments. In certain performance-based contracts, we may negotiate arrangements where we are reimbursed at higher levels at the beginning of an arrangement. Where we believe the rates in the latter part of the contract represent a significant and incremental discount to the customer, we recognize revenue at an average per-transaction rate. This results in a deferred revenue balance and requires us to estimate future volumes over the life of an arrangement. Adjustments to estimates of future volumes result in adjustments to revenue. Revenue on cost-plus contracts is recognized as services are performed, based on costs incurred plus the negotiated fee earned. In certain contracts with the U.S. Federal Government, we may be paid an award fee, based upon the quality of the service we perform. Where this fee can be objectively determined, it is recognized ratably over the period of performance, which is between four and six months. Where the fee cannot be determined objectively, all revenue is deferred until the fee has been earned. We recognize revenue on fixed-priced contracts when earned, as services are provided. Revenue is generally recognized on a straight-line basis unless evidence suggests that revenue is earned or obligations are fulfilled in a different pattern. The timing of expense recognition may result in irregular profit margins. Revenue on time-and-materials contracts is recognized as services are performed, based on hours worked and expenses incurred. Where contracts have multiple deliverables, we evaluate these deliverables at the inception of each contract and as each item is delivered. As part of this evaluation, we consider whether a delivered item has value to a customer on a stand-alone basis and whether the delivery of the undelivered items is considered probable and substantially within our control, if a general right of return exists. Where deliverables, or groups of deliverables, have both of these characteristics, we treat each deliverable item as a separate element in the arrangement, allocate a portion of the allocable arrangement consideration using the estimated relative selling price method to each element and apply the relevant revenue recognition guidance to each element. Sales and purchases in jurisdictions subject to indirect taxes, such as value added tax, are recorded net of tax collected and paid. New accounting standards We have adopted two new accounting standard updates during the current fiscal year. In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-09, Stock Compensation, Improvements to Employee Share-Based Payment Accounting . We adopted this standard in fiscal year 2017. The new standard requires us to record the tax benefit or expense related to the vesting of RSUs or the exercise of stock options within our provision for income taxes in the consolidated statement of operations; this benefit was previously reported in the statement of changes in shareholders’ equity. The cash flow effects of the tax benefit are now reported in cash flows from operations; they were previously in cash flows from financing activities. The new standard allows us more flexibility in net settling RSUs as they vest. The new standard also allows for changes in accounting for the forfeiture of stock awards; we will continue to estimate our stock award forfeitures as we expense each award. This new standard has had the following effects in fiscal year 2017: • During the year ended September 30, 2017 , approximately 0.5 million shares were issued through the vesting of RSUs and the exercise of stock options, resulting in a decrease in our provision for income taxes of $6.6 million and a corresponding benefit to our cash flows from operations. • Our diluted weighted average shares outstanding was higher by approximately 90,000 shares than it would have been if the former standard had been in place. • The combination of these factors resulted in a net increase of $0.10 to our basic and diluted earnings per share for the year ended September 30, 2017 , compared to what would have been recorded under the former accounting guidance. The new standard does not require us to adjust previously reported results. Accordingly, we have made no changes to our consolidated statements of operations, cash flows or changes in shareholders' equity for any comparative periods. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The new standard requires us to evaluate whether there are conditions or events that raise substantial doubt about our ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. This new standard would only affect our financial reporting in the event that substantial doubt over our existence was identified. The adoption of this standard did not have a material impact on the financial statements. We are evaluating the effects of guidance issued in two significant areas of financial reporting. These new standards will have a significant effect on how we report and disclose transactions. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. In addition, the FASB has issued additional updates covering technical items and changing the date of adoption. This new standard will change the manner in which we evaluate revenue recognition for all contracts with customers, although the effect of the changes on revenue recognition will vary from contract to contract. We will adopt this standard during our 2019 fiscal year. We have established a cross-functional steering committee which includes representatives from across all our business and support segments. The steering committee is responsible for evaluating the impact of the standard on our operations including accounting, taxation, internal audit and financial systems. Our approach to analyzing these impacts includes reviewing our current accounting policies and practices to identify potential differences that will result from applying the requirements of the new standard to our existing contracts. In addition, we are in the process of evaluating the changes needed to our business processes, systems and controls in order to support revenue recognition and the related disclosures under the new standard. The standard permits a retrospective or cumulative effect transition method. We anticipate that we will adopt the new standard using the retrospective method. In February 2016, the FASB issued ASU No. 2016-02, Leases . The new standard will change the manner in which we will present our leasing arrangements. We will adopt this standard during our 2020 fiscal year. We are evaluating the likely effects on our business. We are also evaluating the effect of a new standard related to goodwill impairment. This standard would only have a significant effect on our results if our goodwill balance was determined to be impaired. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. This standard will not change the manner in which we would identify a goodwill impairment but would change the manner of the calculation of any resulting impairment. Under existing guidance, we would calculate goodwill for each of our reporting units by calculating the fair value of all existing assets and liabilities within that reporting unit and comparing this to the fair value of the reporting unit; to the extent that this difference is less than our existing goodwill balance related to that reporting unit, we would record an impairment. The new standard will require us to calculate goodwill based upon the difference between the fair value and reported value of a reporting unit. This standard would be effective for our 2021 fiscal year, although early adoption is permitted. We do not anticipate any significant effect on our financial statements as a result of adopting this standard. With the exception of the new accounting standards discussed above, there have been no new accounting pronouncements that have significance, or potential significance, to the Company's consolidated financial statements. Cash and cash equivalents We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Where we are obliged to hold cash balances as collateral for lease, credit card or letter of credit arrangements, or where we hold funds on behalf of clients, this balance is reported within other current assets. These restricted cash balances totaled $13.5 million and $14.1 million at September 30, 2017 and 2016 , respectively. Accounts receivable—billed, billable and unbilled Billed receivables are balances where an invoice has been prepared and issued and is collectible under standard contract terms. Many of our clients require invoices to be prepared on a monthly basis. Where we anticipate that an invoice will be issued within a short period of time and where the funds are considered collectible from within standard contract terms, we include this balance as billable accounts receivable. Both billed and billable balances are recorded at their face amount less an allowance for doubtful accounts. We re-evaluate our client receivables on a quarterly basis, especially receivables that are past due, and reassess our allowance for doubtful accounts based on specific client collection issues. We present unbilled receivables as a separate component of our consolidated balance sheet. Unbilled receivables represents a timing difference between when amounts are billed or billable and when revenue has been recognized or has occurred as of period end. The timing of these billings is generally driven by the contractual terms, which may have billing milestones which are different from revenue recognition milestones. Our unbilled receivables balance also includes retainage balances, where customers may hold back payment for work performed for a period of time to allow opportunities to evaluate the quality of our performance. Our unbilled receivable balance is recorded at fair value which is the value which we expect to invoice for the services performed, once the criteria for billing have been met. Business combinations and goodwill The purchase price of an acquired business is allocated to tangible assets, separately identifiable intangible assets acquired and liabilities assumed based upon their respective fair values. Any excess balance is recorded as goodwill. Costs incurred directly related to an acquisition, including legal, accounting and valuation services, are expensed as incurred. Intangible assets are separately identified and recorded at fair value. These assets are amortized on a straight-line basis over useful lives estimated at the time of the business combination. Goodwill is not amortized but is subject to impairment testing on an annual basis, or more frequently if impairment indicators arise. Impairment testing is performed at the reporting unit level. A reporting unit is the operating segment, or a business one level below that operating segment (the component level) if discrete financial information is prepared and reviewed regularly by segment management. However, components are aggregated if they have similar economic characteristics. The evaluation is performed by comparing the fair value of the relevant reporting unit to the carrying value, including goodwill, of the reporting unit. If the fair value of the reporting unit exceeds the carrying value, no impairment loss is recognized. However, if the carrying value of the reporting unit exceeds the fair value, the goodwill of the reporting unit may be impaired. Our reporting units are consistent with our operating segments, Health Services, U.S. Federal Services and Human Services. We perform our annual impairment test as of July 1 of each year. We performed the annual impairment test, as of July 1, 2017 , and determined that there had been no impairment of goodwill. In performing this assessment, we utilized an income approach. Such an approach requires estimation of future operating cash flows including business growth, utilization of working capital and discount rates. The valuation of the business as a whole is compared to our market value at the date of the test in order to verify the calculation. Long-lived assets (excluding goodwill) Property and equipment is recorded at cost. Depreciation is recorded over the assets' respective useful economic lives using the straight-line method, which are not to exceed 39 years for our buildings and seven years for office furniture and equipment. Leasehold improvements are amortized over the shorter of their useful life or the remaining term of the lease. Repairs and maintenance costs are expensed as incurred. All of the Company's capitalized software represents development costs for software that is intended for our internal use. Direct costs of time and material incurred for the development of application software for internal use are capitalized and depreciated using the straight-line method over the estimated useful life of the software, ranging from three to eight years . Costs incurred for upgrades and enhancements that do not result in additional functionality are expensed as incurred. Deferred contract costs consist of contractually recoverable direct set-up costs related to long-term service contracts. These costs include direct and incremental costs incurred prior to the commencement of providing service to our customer. These costs are expensed over the period the services are provided using the straight-line method. We review long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be fully recoverable. Our review is based on our projection of the undiscounted future operating cash flows of the related asset group. To the extent such projections indicate that future undiscounted cash flows are not sufficient to recover the carrying amount, we recognize a non-cash impairment charge to reduce the carrying amount to equal projected future discounted cash flows. No impairment charges were recorded in the three years ending September 30, 2017 . Income taxes Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities and are measured by applying enacted tax rates and laws for the taxable years in which those differences are expected to reverse. In addition, a valuation allowance is recorded if it is believed more likely than not that a deferred tax asset will not be fully realized. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would "more likely than not" sustain the position following an audit. For tax positions meeting the "more likely than not" threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Foreign currency For all foreign operations, the functional currency is the local currency. The assets and liabilities of foreign operations are translated into U.S. Dollars at period-end exchange rates, and revenue and expenses are translated at average exchange rates for the year. The resulting cumulative translation adjustment is included in accumulated other comprehensive income on the consolidated balance sheet. Gains and losses from foreign currency transactions are included in other income, net. Contingencies From time to time, we are involved in legal proceedings, including contract and employment claims, in the ordinary course of business. We assess the likelihood of any adverse judgments or outcomes to these contingencies, as well as potential ranges of probable losses and establish reserves accordingly. The amount of reserves required may change in future periods due to new developments in each matter or changes in approach to a matter such as a change in settlement strategy. Fair value measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Assets and liabilities subject to fair value measurements are required to be disclosed within a fair value hierarchy. The fair value hierarchy ranks the quality and reliability of inputs used to determine fair value. Accordingly, assets and liabilities carried at, or permitted to be carried at, fair value are classified within the fair value hierarchy in one of the following categories based on the lowest level input that is significant in measuring fair value: Level 1 - Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities. Level 2 - Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models such as interest rates and yield curves that can be corroborated by observable market data. Level 3 - Fair value is determined by using inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgment. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and other amounts included within current assets and liabilities that meet the definition of a financial instrument approximate fair value due to the short-term nature of these balances. We hold investments in a Rabbi Trust on behalf of our deferred compensation plan. These assets are recorded on our consolidated balance sheet at fair value under the heading of "Deferred Compensation Plan Assets". These assets have quoted prices in active markets (Level 1). See "Note 13. Employee benefit plans and deferred compensation" for further details. We have two acquisitions where our payment is contingent upon events which take place after the acquisition date. The related liability is recorded on our consolidated balance sheet as a liability at estimated fair value and updated on a quarterly basis as an acquisition-related expense or benefit. The valuation of this liability is derived from internal estimates of future performance and not from inputs that are observable (Level 3). |
Business segments
Business segments | 12 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Business segments | Business segments We have three business segments, Health Services, U.S. Federal Services and Human Services. These segments reflect the way in which we organize and manage the business and is consistent with the manner in which our Chief Executive Officer operates and reviews the results of the business. Expenses which are not specifically included in the segments are included in other categories, including amortization of intangible assets, costs incurred in restructuring our U.K. Human Services business, the direct costs of acquisitions and the gain on sale of the K-12 Education business. These costs are excluded from measuring each segment's operating performance. The results of these segments for the three years ended September 30, 2017 are shown below (in thousands). Year ended September 30, 2017 2016 2015 Revenue: Health Services $ 1,380,151 $ 1,298,304 $ 1,109,238 U.S. Federal Services 545,573 591,728 502,484 Human Services 525,237 513,328 488,099 Total $ 2,450,961 $ 2,403,360 $ 2,099,821 Gross Profit: Health Services $ 347,325 $ 292,181 $ 254,108 U.S. Federal Services 139,321 138,168 118,646 Human Services 125,259 131,842 139,963 Total $ 611,905 $ 562,191 $ 512,717 Selling, general and administrative expense: Health Services $ 132,081 $ 107,155 $ 99,815 U.S. Federal Services 74,345 74,792 59,252 Human Services 76,675 84,157 79,719 Other 1,409 2,155 6 Total $ 284,510 $ 268,259 $ 238,792 Operating income: Health Services $ 215,244 $ 185,026 $ 154,293 U.S. Federal Services 64,976 63,376 59,394 Human Services 48,584 47,685 60,244 Amortization of intangible assets (12,208 ) (13,377 ) (9,348 ) Restructuring costs (2,242 ) — — Acquisition-related expenses (83 ) (832 ) (4,745 ) Gain on sale of a business 650 6,880 — Other (1,409 ) (2,155 ) (6 ) Total $ 313,512 $ 286,603 $ 259,832 Operating income as a percentage of revenue: Health Services 15.6 % 14.3 % 13.9 % U.S. Federal Services 11.9 % 10.7 % 11.8 % Human Services 9.2 % 9.3 % 12.3 % Total 12.8 % 11.9 % 12.4 % Depreciation and amortization: Health Services $ 29,114 $ 31,916 $ 27,694 U.S. Federal Services 11,175 9,953 10,363 Human Services 15,480 16,535 8,792 Total $ 55,769 $ 58,404 $ 46,849 Acquisition-related expenses are costs directly incurred from the purchases of Revitalised Limited in 2017, Ascend Management Innovations, LLC (Ascend) and Assessments Australia in 2016 and Acentia, LLC (Acentia) and Remploy in 2015, as well as any unsuccessful transactions. We principally operate in the U.S., the U.K., Australia, Canada, Saudi Arabia and Singapore. Our revenue was distributed as follows (in thousands): Year ended September 30, 2017 2016 2015 United States $ 1,765,661 $ 1,721,261 $ 1,559,769 United Kingdom 346,342 384,649 267,702 Australia 232,434 200,539 178,167 Rest of World 106,524 96,911 94,183 Total $ 2,450,961 $ 2,403,360 $ 2,099,821 Identifiable assets for the segments are shown below (in thousands): Year Ended 2017 2016 Health Services $ 515,850 $ 543,361 U.S. Federal Services 397,824 440,006 Human Services 169,523 153,141 Corporate/Other 267,465 212,311 Total $ 1,350,662 $ 1,348,819 Our long-lived assets, consisting of property and equipment, capitalized software costs and deferred compensation plan assets, were distributed as follows (in thousands): Year Ended 2017 2016 United States $ 101,530 $ 118,751 Australia 32,165 38,852 Canada 13,670 16,209 United Kingdom 9,251 11,086 Rest of World 331 117 Total $ 156,947 $ 185,015 |
Concentrations of credit risk a
Concentrations of credit risk and major customers | 12 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentrations of credit risk and major customers | Concentrations of credit risk and major customers Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of accounts receivable - billed, billable and unbilled. The majority of our business is in the United States. Revenue from foreign projects and offices was 28% , 28% and 26% of total revenue for the years ended September 30, 2017 , 2016 and 2015 , respectively. In the year ended September 30, 2017 , approximately 49% of our total revenue was derived from state government agencies, many of whose programs received significant federal funding, 26% from foreign government agencies, 19% from U.S.-based Federal Government agencies, and 6% from other sources including local municipalities and commercial customers. We believe that the credit risk associated with our receivables is limited due to the credit worthiness of these customers. During fiscal year 2017 , the U.S. Federal Government, the U.K. Government and the state of New York each provided more than 10% of our annual revenue. Within these governments, we may be serving several distinct agencies. Revenue from the U.S. Federal Government was exclusively within the U.S. Federal Segment. Revenue from the U.K. Government was both within the Health Services and Human Services Segments. Revenue from the state of New York was exclusively within our Health Services Segment. The proportion of revenue recognized from customers providing in excess of 10% of our consolidated revenue for each of the three years ended September 30, 2017 was from the following governments: Year ended 2017 2016 2015 U.S. Federal Government 19 % 22 % 20 % New York 15 % 12 % 10 % United Kingdom 12 % 16 % * _________________________________________ * Government provided less than 10% of our consolidated revenue in this year. |
Earnings per share
Earnings per share | 12 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share The weighted average number of shares outstanding used to compute earnings per shares was as follows (in thousands): Year ended September 30, 2017 2016 2015 Weighted average shares outstanding 65,632 65,822 66,682 Effect of employee stock options and unvested restricted stock awards 433 407 593 Denominator for diluted earnings per share 66,065 66,229 67,275 For the years ended September 30, 2017 , 2016 and 2015 , 9,000 , 21,000 and 15,000 unvested restricted stock units, respectively, have been excluded from the calculation of diluted earnings per share as the effect of including them would have been anti-dilutive. |
Business combinations and dispo
Business combinations and disposal | 12 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Business combinations and disposal | Business combinations and disposals Revitalised On July 18, 2017, MAXIMUS Companies Limited, a wholly owned subsidiary of MAXIMUS, Inc., acquired 100% of the share capital of Revitalised Limited ("Revitalised"). Consideration is comprised of $2.7 million in cash and up to $1.4 million in contingent consideration. Revitalised provides digital solutions to engage communities in the areas of health, fitness and well-being. We acquired Revitalised in order to enhance the capabilities of our health services programs in the United Kingdom and, accordingly, the business was integrated into our Health Services Segment. The acquisition agreement includes the potential for adjustments based upon working capital at the date of acquisition. We have not yet completed our assessment of the fair value of the total consideration, including the contingent consideration, or our assessment of the fair value of the assets acquired and liabilities assumed. K-12 Education On May 9, 2016, we sold our K-12 Education business, which was previously part of the Human Services Segment. As a result of this transaction, we recorded a gain of approximately $6.9 million for the fiscal year ended September 30, 2016 . This gain excluded a balance of $0.7 million which we had reserved to cover potential contingencies related to the sale. As payment of these contingencies is no longer considered probable, we have recorded additional gain in the fiscal year ended September 30, 2017 . The cash balance related to this contingency had been in escrow; and was received in June 2017. The K-12 Education business contributed revenue of $2.2 million and $4.7 million for the years ended September 30, 2016 and 2015, respectively. We reported operating loss of $0.2 million and operating income of $0.9 million in the respective years. Ascend Management Innovations, LLC On February 29, 2016, MAXIMUS Health Services, Inc., a wholly-owned subsidiary of MAXIMUS, Inc. acquired 100% of the share capital of Ascend for cash consideration of $44.1 million . Ascend is a provider of independent health assessments and data management tools to government agencies in the U.S. We acquired Ascend to broaden our ability to help our existing government clients deal with the rising demand for long-term care services. This business was integrated into our Health Services Segment. Management has estimated the fair value of intangible assets acquired as $22.3 million , with an average weighted life of 18 years , and the fair value of goodwill as $18.0 million , which is expected to be deductible for tax purposes. We believe that this goodwill represents the value of the assembled workforce of Ascend, as well as the enhanced knowledge and capabilities resulting from this business combination. We completed our evaluation of the fair value of all of the assets and liabilities acquired in fiscal year 2017. Our allocation of fair value for the assets and liabilities acquired is shown below. (Amounts in thousands) Updated through September 30, 2016 Adjustments Updated through September 30, 2017 Cash consideration, net of cash acquired $ 44,069 $ — $ 44,069 Billed and unbilled receivables $ 4,069 $ — $ 4,069 Other assets 407 — 407 Property and equipment and other assets 707 — 707 Deferred income taxes — 557 557 Intangible assets 22,300 — 22,300 Total identifiable assets acquired 27,483 557 28,040 Accounts payable and other liabilities 1,414 — 1,414 Deferred revenue 554 — 554 Total liabilities assumed 1,968 — 1,968 Net identifiable assets acquired 25,515 557 26,072 Goodwill 18,554 (557 ) 17,997 Net assets acquired $ 44,069 $ — $ 44,069 The valuation of the intangible assets acquired is summarized below: (Dollars in thousands) Useful life Fair value Customer relationships 19 years $ 20,400 Technology-based intangible assets 8 years 1,700 Trade name 1 year 200 Total intangible assets $ 22,300 Assessments Australia On December 15, 2015, MAXIMUS acquired 100% of the share capital of three companies doing business as "Assessments Australia." We acquired Assessments Australia to expand our service offerings within Australia. The consideration was comprised of $2.6 million in cash and contingent consideration of $0.5 million to the sellers of Assessments Australia if sufficient contracts with a specific government agency are won by MAXIMUS prior to December 2022. We performed a probability weighted assessment of this payment. Future changes in our assessment of this liability will be recorded through the consolidated statement of operations. This business was integrated into our Human Services Segment. Management identified goodwill and intangible assets acquired as $3.0 million and $0.4 million , respectively. We believe that the goodwill represents the value of the assembled workforce of Assessments Australia, as well as the enhanced capabilities which the business will provide us. We completed our evaluation of the fair value of all of the assets and liabilities acquired in fiscal year 2017. The intangible assets acquired represent customer relationships. These are being amortized on a straight-line basis over six years . At September 30, 2017 , we have recorded our estimate of the fair value of the contingent consideration to be $0.5 million . Acentia On April 1, 2015 (the "acquisition date"), we acquired 100% of the ownership interests of Acentia for cash consideration of $293.5 million . Acentia provides system modernization, software development, program management and other information technology services and solutions to the U.S. Federal Government. We acquired Acentia, among other reasons, to expand our ability to provide complementary business services and offerings across government markets. The acquired assets and liabilities was integrated into our U.S. Federal Services Segment. We have completed the process of allocating the acquisition price to the fair value of the assets and liabilities of Acentia as of the acquisition date. Purchase price (Amounts in thousands) allocation Cash consideration, net of cash acquired $ 293,504 Accounts receivable and unbilled receivables 35,333 Other current assets 3,091 Property and equipment 2,140 Intangible assets—customer relationships 69,900 Total identifiable assets acquired 110,464 Accounts payable and other liabilities 31,350 Deferred revenue 251 Capital lease obligations 567 Deferred tax liabilities 6,741 Total liabilities assumed 38,909 Net identifiable assets acquired 71,555 Goodwill 221,949 Net assets acquired $ 293,504 The excess of the acquisition date consideration over the estimated fair value of the net assets acquired was recorded as goodwill. We consider the goodwill to represent the value of the assembled workforce of Acentia, as well as the enhanced knowledge and capabilities resulting from this business combination. Approximately $175 million of the goodwill balance is anticipated to be deductible for tax purposes. The intangible assets acquired represent customer relationships. These are being amortized on a straight-line basis over 14 years . Remploy On April 7, 2015 (the "Remploy acquisition date"), we acquired 70% of the ownership interests of Remploy (2015) Limited, whose assets had previously operated under the "Remploy" tradename. The remaining 30% is held in a trust for the benefit of the employees. The acquisition consideration was $3.0 million ( £2.0 million ). Remploy provides services to the U.K. Government, particularly in supporting employment opportunities for the disabled. We acquired Remploy to complement our welfare-to-work services in the U.K. The acquired assets and liabilities have been integrated into our Human Services Segment. The principal asset held by Remploy on the Remploy acquisition date was a contract worth $4.6 million . This asset was amortized over two years on a straight-line basis. DeltaWare Systems, Inc. Following our acquisition of DeltaWare Systems, Inc. in 2010, we agreed to make payments of up to $4.0 million (Canadian) if we made sales in particular geographic markets prior to December 31, 2016. No such sales were made prior to the expiry of this deadline. At September 30, 2017 and 2016, we had recorded no liability for this obligation. |
Debt
Debt | 12 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Credit Facilities Our credit agreement provides for a revolving line of credit up to $400 million that may be used for revolving loans, swingline loans (subject to a sublimit of $5 million ), and to request letters of credit, subject to a sublimit of $50 million . The line of credit is available for general corporate purposes, including working capital, capital expenditures and acquisitions. Borrowings are permitted in currencies other than the U.S. Dollar. In September 2017, we extended the term of our credit agreement to September 2022, at which time all outstanding borrowings must be repaid. At September 30, 2017 , we had no borrowings under the credit agreement. In addition to borrowings under the credit agreement, we have an outstanding loan of $0.7 million ( 0.8 million Canadian Dollars) with the Atlantic Innovation Fund of Canada. There is no interest charge on this loan. The Atlantic Innovation Fund loan is repayable over 19 remaining quarterly installments. At September 30, 2017 , we held two letters of credit under our credit agreement totaling $0.7 million . Each of these letters of credit may be called by vendors in the event that the Company defaults under the terms of a contract, the probability of which we believe is remote. In addition, two letters of credit totaling $3.0 million , secured with restricted cash balances, are held with another financial institution to cover similar obligations to customers. Our credit agreement requires us to comply with certain financial covenants and other covenants including a maximum total leverage ratio and a minimum fixed charge coverage ratio. We were in compliance with all covenants as of September 30, 2017 . Our obligations under the credit agreement are guaranteed by material domestic subsidiaries of the Company, but are otherwise unsecured. In the event that our total leverage ratio, as defined in the credit agreement, exceeds 2.50 : 1 , we would be obliged to provide security in the form of the assets of the parent Company and certain of its subsidiaries. Our credit agreement contains no restrictions on the payment of dividends as long as our leverage ratio does not exceed 2.50 :1. At September 30, 2017 , our total leverage ratio was less than 1.0 : 1.0 . We do not believe that the provisions of the credit agreement represent a significant restriction to the successful operation of the business or to our ability to pay dividends. The Credit Agreement provides for an annual commitment fee payable on funds not borrowed or utilized for letters of credit. This charge is based upon our leverage and varies between 0.125% and 0.275% . Borrowings under the Credit Agreement bear interest at our choice at either (a) a Base Rate plus a margin that varies between 0.0% and 0.75% per year, (b) a Eurocurrency Rate plus an applicable margin that varies between 1.0% and 1.75% per year or (c) an Index Rate plus an applicable margin which varies between 1.0% and 1.75% per year. The Base Rate, Eurocurrency Rate and Index Rate are defined by the Credit Agreement. Derivative Arrangement In order to add stability to our interest expense and manage our exposure to interest rate movements, we may enter into derivative arrangements to fix payments on part of an outstanding loan balance. We agree to pay a fixed rate of interest to a financial institution and receive a balance equivalent to the floating rate payable. Our outstanding derivative instruments expired during fiscal year 2017. As this cash flow hedge was considered effective, the gains and losses in the fair value of this derivative instrument were reported in accumulated other comprehensive income (AOCI) in the consolidated statement of comprehensive income. Interest Payments During the fiscal years ended September 30, 2017 , 2016 and 2015 , we made interest payments of $2.0 million , $3.7 million and $1.2 million , respectively. |
Goodwill and intangible assets
Goodwill and intangible assets | 12 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets | Goodwill and intangible assets Changes in goodwill for the years ended September 30, 2017 and 2016 are as follows (in thousands): Health U.S. Federal Human Total Balance as of September 30, 2015 $ 113,427 $ 220,524 $ 42,351 $ 376,302 Acquisitions of Ascend and Assessments Australia, respectively 18,554 — 2,899 21,453 Adjustment to goodwill acquired with Acentia — 7,624 — 7,624 Disposal of K-12 Education business — — (224 ) (224 ) Foreign currency translation (8,302 ) — 705 (7,597 ) Balance as of September 30, 2016 123,679 228,148 45,731 397,558 Adjustment to goodwill acquired with Ascend (557 ) — — (557 ) Adjustment to goodwill acquired with Assessments Australia — — 71 71 Acquisition of Revitalised 2,830 — — 2,830 Foreign currency translation 2,508 — 566 3,074 Balance as of September 30, 2017 $ 128,460 $ 228,148 $ 46,368 $ 402,976 There have been no impairment charges to our goodwill. The following table sets forth the components of intangible assets (in thousands): As of September 30, 2017 As of September 30, 2016 Cost Accumulated Amortization Intangible Assets, net Cost Accumulated Amortization Intangible Assets, net Customer contracts and relationships $ 129,916 $ 33,457 $ 96,459 $ 132,221 $ 26,238 $ 105,983 Technology-based intangible assets 7,664 5,475 2,189 6,967 4,613 2,354 Trademarks and trade names 4,513 4,392 121 4,487 3,797 690 Total $ 142,093 $ 43,324 $ 98,769 $ 143,675 $ 34,648 $ 109,027 Our intangible assets have a weighted average remaining life of 12.5 years , comprising 12.7 years for customer contracts and relationships, 5.2 years for technology-based intangible assets and 2.3 years for trademarks and trade names. Estimated future amortization expense is estimated for the following five fiscal years ending September 30th as follows (in thousands): 2018 $ 10,320 2019 9,416 2020 8,316 2021 7,452 2022 7,385 |
Property and equipment
Property and equipment | 12 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment Property and equipment, at cost, consists of the following (in thousands): As of September 30, 2017 2016 Land $ 1,738 $ 1,738 Building and improvements 11,799 11,726 Office furniture and equipment 207,140 261,752 Leasehold improvements 53,531 52,493 274,208 327,709 Less: Accumulated depreciation and amortization (172,557 ) (196,140 ) Total property and equipment, net $ 101,651 $ 131,569 Depreciation expense for the years ended September 30, 2017 , 2016 and 2015 was $45.2 million , $49.2 million and $37.0 million , respectively. During fiscal year 2017, we made significant disposals of our property and equipment, principally related to older items with limited remaining useful lives. |
Capitalized software
Capitalized software | 12 Months Ended |
Sep. 30, 2017 | |
Capitalized Computer Software, Net [Abstract] | |
Capitalized software | Capitalized software Capitalized software consists of the following (in thousands): As of September 30, 2017 2016 Capitalized software $ 88,627 $ 80,646 Less: Accumulated amortization (61,879 ) (50,507 ) Total Capitalized software, net $ 26,748 $ 30,139 Amortization expense for the years ended September 30, 2017 , 2016 and 2015 was $10.6 million , $9.2 million and $9.9 million , respectively. |
Deferred contract costs
Deferred contract costs | 12 Months Ended |
Sep. 30, 2017 | |
Deferred contract costs | |
Deferred contract costs | Deferred contract costs Deferred contract costs consist of the following (in thousands): As of September 30, 2017 2016 Deferred contract costs $ 30,776 $ 30,114 Less: Accumulated amortization (14,478 ) (11,932 ) Total Deferred contract costs, net $ 16,298 $ 18,182 |
Accounts receivable reserves
Accounts receivable reserves | 12 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Accounts receivable reserves | Accounts receivable reserves Changes in the reserves against accounts receivable were as follows (in thousands): Year ended September 30, 2017 2016 2015 Balance at beginning of year $ 4,226 $ 3,385 $ 3,138 Additions to reserve 5,106 2,335 2,690 Deductions (2,489 ) (1,494 ) (2,443 ) Balance at end of year $ 6,843 $ 4,226 $ 3,385 In evaluating the net realizable value of accounts receivable, we consider such factors as current economic trends, customer credit-worthiness, and changes in the customer payment terms and collection trends. Changes in the assumptions used in analyzing a specific account receivable may result in a reserve being recognized in the period in which the change occurs. At September 30, 2017 and 2016 , $10.3 million and $16.2 million of our unbilled receivables related to amounts pursuant to contractual retainage provisions. We anticipate that the majority of the fiscal 2017 balance will be collected during the 2018 fiscal year. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Performance bonds Certain contracts require us to provide a surety bond as a guarantee of performance. At September 30, 2017 , we had performance bond commitments totaling $17.7 million . These bonds are typically renewed annually and remain in place until the contractual obligations have been satisfied. Although the triggering events vary from contract to contract, in general we would only be liable for the amount of these guarantees in the event of default in our performance of our obligations under each contract, the probability of which we believe is remote. Operating Leases We lease office space and equipment under various operating leases. Lease expense for the years ended September 30, 2017 , 2016 and 2015 was $80.6 million , $75.4 million and $67.1 million , respectively. Our operating leases may contain rent escalations or concessions. Lease expense is recorded on a straight-line basis over the life of the respective lease. Minimum future lease commitments under leases in effect as of September 30, 2017 are as follows (in thousands): Office space Equipment Total Year ending September 30, 2018 $ 65,230 $ 4,252 $ 69,482 2019 50,908 3,482 54,390 2020 34,159 2,133 36,292 2021 10,459 13 10,472 2022 4,198 2 4,200 Thereafter 241 — 241 Total minimum lease payments $ 165,195 $ 9,882 $ 175,077 Sublease income for the year ended September 30, 2017 was $1.2 million , and we anticipate future sublease income of $1.2 million per fiscal year through fiscal year 2020. Collective bargaining agreements Approximately 14% of our employees are covered by collective bargaining agreements or similar arrangements. Shareholder lawsuit In August 2017, the Company and certain officers were named as defendants in a putative class action lawsuit filed in the U.S. District Court for the Eastern District of Virginia. The plaintiff alleges the defendants made a variety of materially false and misleading statements, or failed to disclose material information, concerning the status of the Company’s Health Assessment Advisory Services project for the U.K. Department for Work and Pensions from the period October 20, 2014 through February 3, 2016. The defendants deny the allegations and intend to defend the matter vigorously. At this time, it is not possible to predict whether this matter will be permitted to proceed as a class or to estimate the value of the claims asserted. No assurances can be given that we will be successful in our defense of this action on the merits or otherwise. For these reasons, we are unable to estimate the potential loss or range of loss in this matter. |
Employee benefit plans and defe
Employee benefit plans and deferred compensation | 12 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Employee benefit plans and deferred compensation | Employee benefit plans and deferred compensation We have 401(k) plans for the benefit of employees who meet certain eligibility requirements. The plans provide for Company match, specified Company contributions and discretionary Company contributions. During the years ended September 30, 2017 , 2016 and 2015 , we contributed $7.0 million , $6.0 million and $4.7 million to the 401(k) plans, respectively. We also have a deferred compensation plan, which is a non-qualified plan available to a restricted number of highly compensated employees. The plan enables participants to defer compensation for tax purposes. These deferred employee contributions are held within a Rabbi Trust with investments directed by the respective employees. The assets of the Rabbi Trust are available to satisfy the claims of general creditors in the event of bankruptcy. The assets of the plan are sufficient to meet 88% of the liabilities as of September 30, 2017 . The assets within the Rabbi Trust include $15.5 million invested in mutual funds which have quoted prices in active markets. These assets, as well as the related employee liabilities, are recorded at fair value with changes in fair value being recorded in the consolidated statement of operations. |
Equity
Equity | 12 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity | Equity Stock compensation At September 30, 2017 , 1.5 million shares remained available for grants under our 2017 Equity Incentive Plan. We typically issue new shares in satisfying our obligations under our stock plans. We grant equity awards to officers, employees and directors in the form of restricted stock units (RSUs). RSUs issued generally vest ratably over one or five years . The fair value of the RSUs, based on our stock price at the grant date, is expensed in equal installments over the vesting period. For the fiscal years ended September 30, 2017 , 2016 and 2015 , compensation expense recognized related to RSUs was $21.4 million , $18.8 million and $17.2 million , respectively. All individuals who are granted RSUs also receive dividend-equivalent payments in the form of additional RSUs. However, until the shares are issued, they have no voting rights and may not be bought or sold. In the event that an award is forfeited, the dividend-equivalent payments received by the holder with respect to that award are also forfeited. A summary of our RSU activity for the year ended September 30, 2017 , is as follows: Shares Weighted-Average Grant-Date Fair Value Non-vested shares outstanding at September 30, 2016 809,306 $ 47.64 Granted 448,289 53.63 Vested (400,583 ) 46.17 Forfeited (34,185 ) 46.00 Non-vested shares outstanding at September 30, 2017 822,827 51.69 In addition to the non-vested shares, certain directors and employees held approximately 0.7 million vested awards whose issuance has been deferred as of September 30, 2017. The weighted-average grant-date fair value of RSUs granted in the years ended September 30, 2016 and 2015 was $52.00 and $50.82 , respectively. The total fair value of RSUs which vested during the years ended September 30, 2017 , 2016 and 2015 was $24.9 million , $27.1 million and $68.6 million , respectively. As of September 30, 2017 , the total remaining unrecognized compensation cost related to unvested RSUs was $37.6 million . This expense is expected to be realized over the next five years , with a weighted average life of 1.5 years . Prior to fiscal year 2008, we granted stock options to certain employees. These were granted at exercise prices equal to the fair market value of our common stock at the date of grant, vested over a period of four years and expired ten years after the date of the grant. No compensation expenses related to stock options were recorded in any of the years shown. In fiscal year 2017, our remaining 80,000 stock options were exercised for a weighted average strike price of $11.55 . We have no outstanding stock options at September 30, 2017. The following table summarizes information pertaining to the stock options vested and exercised for the years presented (in thousands): Year ended September 30, 2017 2016 2015 Aggregate intrinsic value of all stock options exercised $ 4,025 $ 4,077 $ 5,536 Net cash proceeds from exercise of stock options 924 546 868 The total income tax benefit recognized in the consolidated statement of operations for share-based compensation arrangements was $15.0 million , $7.4 million and $7.1 million for the fiscal years ended September 30, 2017 , 2016 and 2015 , respectively. Our tax benefit in fiscal year 2017 was affected by the adoption of a new accounting standard, as detailed in "Note 1. Business and summary of significant accounting policies." Employees are permitted to forfeit a certain number of shares to cover their personal tax liability, with the Company making tax payments to the relevant authorities. These payments are reported in the consolidated statements of cash flows as financing cash flows. During the three years ending September 30, 2017, 2016 and 2015, we incurred liabilities related to these forfeitures of $8.7 million , $9.3 million and $11.7 million , respectively. Stock repurchase programs Under a resolution adopted in August 2015, the Board of Directors authorized the repurchase, at management's discretion, of up to an aggregate of $200 million of our common stock. This resolution superseded similar authorizations from November 2011 and June 2014. The resolution also authorizes the use of option exercise proceeds for the repurchase of our common stock. During the years ended September 30, 2017 , 2016 and 2015 , we repurchased 0.6 million , 0.6 million and 1.6 million common shares at a cost of $28.9 million , $31.3 million and $82.8 million , respectively. At September 30, 2017 , $109.9 million remained available for future stock repurchases. |
Income taxes
Income taxes | 12 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The components of income before income taxes and the corresponding provision for income taxes are as follows (in thousands): Year ended September 30, 2017 2016 2015 Income before income taxes: United States $ 257,910 $ 238,871 $ 232,359 Foreign 56,325 47,097 27,460 Income before income taxes $ 314,235 $ 285,968 $ 259,819 Year ended September 30, 2017 2016 2015 Current provision: Federal $ 70,476 $ 69,025 $ 74,050 State and local 15,594 15,595 15,332 Foreign 11,221 15,536 9,581 Total current provision 97,291 100,156 98,963 Deferred tax expense (benefit): Federal 5,490 7,778 2,233 State and local 643 902 403 Foreign (1,371 ) (3,028 ) (1,829 ) Total deferred tax expense (benefit) 4,762 5,652 807 Provision for income taxes $ 102,053 $ 105,808 $ 99,770 The provision for income taxes differs from that which would have resulted from the use of the federal statutory income tax rate as follows (in thousands): Year ended September 30, 2017 2016 2015 Federal income tax provision at statutory rate of 35% $ 109,982 $ 100,089 $ 90,937 State income taxes, net of federal benefit 10,554 10,723 9,847 Foreign taxation (6,940 ) (3,976 ) (2,208 ) Permanent items 970 1,284 1,602 Tax credits (4,851 ) (1,592 ) (961 ) Vesting of equity compensation (6,569 ) — — Other (1,093 ) (720 ) 553 Provision for income taxes $ 102,053 $ 105,808 $ 99,770 The significant items comprising our deferred tax assets and liabilities as of September 30, 2017 and 2016 are as follows (in thousands): As of September 30, 2017 2016 Net deferred tax assets/(liabilities) Costs deductible in future periods $ 30,794 $ 27,738 Deferred revenue 20,703 23,469 Stock compensation 4,976 5,085 Net operating loss carryforwards 360 1,291 Amortization of goodwill and intangible assets (36,100 ) (34,484 ) Capitalized software (9,197 ) (10,126 ) Accounts receivable - unbilled (12,953 ) (13,810 ) Property and equipment (3,924 ) (5,517 ) Prepaid expenses (3,741 ) (1,296 ) Other (3,333 ) (519 ) $ (12,415 ) $ (8,169 ) Our deferred tax assets and liabilities are held in various national and international jurisdictions which do not allow right of offset. Accordingly, our presentation of deferred taxes on our consolidated balance sheet is split between jurisdictions which show a net deferred tax asset and a net deferred tax liability. Our net deferred tax position is summarized below (in thousands): As of September 30, 2017 2016 Balance of tax jurisdictions with net deferred tax assets $ 7,691 $ 8,644 Balance of tax jurisdictions with net deferred tax liabilities (20,106 ) (16,813 ) Net deferred tax liabilities $ (12,415 ) $ (8,169 ) At September 30, 2017 , our foreign subsidiaries held approximately $219 million of cumulative earnings. We consider undistributed earnings of our foreign subsidiaries to be indefinitely reinvested outside of the U.S. and, accordingly, no U.S. deferred taxes have been recorded with respect to such earnings in accordance with the relevant accounting guidance for income taxes. Should the earnings be remitted as dividends, we may be subject to additional U.S. taxes, net of allowable foreign tax credits. It is not practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings given the various tax planning alternatives we could employ should we decide to repatriate these earnings in a tax-efficient manner. Cash paid for income taxes during the years ended September 30, 2017 , 2016 , and 2015 was $87.8 million , $108.3 million and $81.3 million , respectively. The provision for income taxes includes all provision to return adjustments included in the year recognized in the financial statements. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is "more-likely-than-not" that the position will be sustained upon examination. The total amount of unrecognized tax benefits that, if recognized, would affect our annual effective income tax rate was $1.1 million and $1.1 million at September 30, 2017 and 2016 , respectively. We report interest and penalties as a component of income tax expense. In the fiscal years ending September 30, 2017 , 2016 and 2015 , we recognized interest expense relating to unrecognized tax benefits of less than $0.1 million in each year. The net liability balance at September 30, 2017 and 2016 includes approximately $0.6 million of interest and penalties. We recognize and present uncertain tax positions on a gross basis (i.e., without regard to likely offsets for deferred tax assets, deductions and/or credits that would result from payment of uncertain tax amounts). The reconciliation of the beginning and ending amount of gross unrecognized tax benefits was as follows (in thousands): Year ended September 30, 2017 2016 2015 Balance at beginning of year $ 448 $ 529 $ 812 Lapse of statute of limitation — — (200 ) Increases for tax positions taken in current year 185 — — Reductions for tax positions of prior years — (81 ) (83 ) Balance at end of year $ 633 $ 448 $ 529 We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are no longer subject to federal income tax examinations for years before 2013 and to state and local income tax examinations by tax authorities for years before 2012. In international jurisdictions, similar rules apply to filed income tax returns, although the tax examination limitations and requirements may vary. We are no longer subject to audit by tax authorities for foreign jurisdictions for years prior to 2012. |
Quarterly information (unaudite
Quarterly information (unaudited) | 12 Months Ended |
Sep. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly information (unaudited) | Quarterly information (unaudited) Set forth below are selected quarterly consolidated statement of operations data for the fiscal years ended September 30, 2017 and 2016 . We derived this information from unaudited quarterly financial statements that include, in the opinion of our management, all adjustments necessary for a fair presentation of the information for such periods. Results of operations for any fiscal quarter are not necessarily indicative of results for any future period. Earnings per share amounts are computed independently each quarter. As a result, the sum of each quarter's earnings per share amount may not equal the total earnings per share amount for the respective year. Quarter Ended Dec. 31, March 31, June 30, Sept. 30, (In thousands, except per share data) Health Services $ 340,729 $ 348,994 $ 335,090 $ 355,338 U.S. Federal Services 141,298 145,370 131,589 127,316 Human Services 125,537 127,683 133,768 138,249 Revenue $ 607,564 $ 622,047 $ 600,447 $ 620,903 Health Services $ 78,234 $ 86,454 $ 83,269 $ 99,368 U.S. Federal Services 37,576 36,571 33,627 31,547 Human Services 29,008 29,292 35,293 31,666 Gross profit $ 144,818 $ 152,317 $ 152,189 $ 162,581 Health Services $ 50,127 $ 56,540 $ 51,553 $ 57,024 U.S. Federal Services 17,881 17,644 15,870 13,581 Human Services 11,769 9,629 16,368 10,818 Amortization of intangible assets (3,402 ) (3,386 ) (2,720 ) (2,700 ) Restructuring costs (2,242 ) — — — Acquisition-related expenses — — — (83 ) Gain on sale of a business — — 650 — Other/Corporate (357 ) (92 ) 90 (1,050 ) Operating Income $ 73,776 $ 80,335 $ 81,811 $ 77,590 Net income 46,329 53,097 57,788 54,968 Net income attributable to MAXIMUS 46,664 52,515 56,918 53,329 Diluted earnings per share attributable to MAXIMUS $ 0.71 $ 0.80 $ 0.86 $ 0.81 Quarter Ended Dec. 31, March 31, June 30, Sept. 30, (In thousands, except per share data) Health Services $ 291,903 $ 330,567 $ 333,699 $ 342,135 U.S. Federal Services 145,285 150,191 149,601 146,651 Human Services 119,534 125,695 133,794 134,305 Revenue $ 556,722 $ 606,453 $ 617,094 $ 623,091 Health Services $ 51,972 $ 82,717 $ 76,775 $ 80,717 U.S. Federal Services 28,238 33,421 38,980 37,529 Human Services 30,005 31,529 35,624 34,684 Gross profit $ 110,215 $ 147,667 $ 151,379 $ 152,930 Health Services $ 26,808 $ 56,914 $ 50,430 $ 50,874 U.S. Federal Services 10,716 14,983 19,119 18,558 Human Services 9,107 9,794 14,251 14,533 Amortization of intangible assets (3,149 ) (3,262 ) (3,517 ) (3,449 ) Acquisition-related expenses (46 ) (529 ) — (257 ) Gain on sale of a business — — 6,453 427 Other/Corporate (650 ) — (2,127 ) 622 Operating Income $ 42,786 $ 77,900 $ 84,609 $ 81,308 Net income 26,882 49,341 52,750 51,187 Net income attributable to MAXIMUS 26,609 48,785 52,225 50,743 Diluted earnings per share attributable to MAXIMUS $ 0.40 $ 0.74 $ 0.79 $ 0.77 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Dividend On October 6, 2017 , our Board of Directors declared a quarterly cash dividend of $0.045 for each share of the Company's common stock outstanding. The dividend is to be paid on November 30, 2017 to shareholders of record on November 15, 2017 . Based on the number of shares outstanding, the payment will be approximately $2.9 million . |
Business and summary of signi26
Business and summary of significant accounting policies (Policies) | 12 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of MAXIMUS, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Where MAXIMUS owns less than 100% of the share capital of its subsidiaries, but is still considered to have sufficient ownership to control the businesses, the results of these business operations are consolidated within our financial statements. The ownership interests held by other parties are shown as noncontrolling interests. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during each reporting period. Actual results could differ from those estimates. Our significant estimates include revenue recognition, estimates of the fair value of assets acquired and liabilities assumed in business combinations, estimates of the collectibility of receivables, estimates of future discounts in performance-based contracts, evaluation of asset impairment, accrual of estimated liabilities, valuation of acquisition-related contingent consideration liabilities and income taxes. |
Revenue recognition | Revenue recognition Revenue is generated from contracts with various pricing arrangements with total revenue contributions in fiscal year 2017 as follows: • performance-based criteria ( 42% ); • costs incurred plus a negotiated fee ("cost-plus") ( 35% ); • fixed-price ( 18% ); and • time-and-materials ( 5% ). We recognize revenue on arrangements as work is performed and amounts are earned. We consider amounts to be earned once evidence of an arrangement has been obtained, services have been delivered, fees are fixed or determinable and collectability of revenue is reasonably assured. We recognize revenue on performance-based contracts when earned, which occurs when we have achieved the performance obligation. This may result in revenue being recognized in irregular increments. In certain performance-based contracts, we may negotiate arrangements where we are reimbursed at higher levels at the beginning of an arrangement. Where we believe the rates in the latter part of the contract represent a significant and incremental discount to the customer, we recognize revenue at an average per-transaction rate. This results in a deferred revenue balance and requires us to estimate future volumes over the life of an arrangement. Adjustments to estimates of future volumes result in adjustments to revenue. Revenue on cost-plus contracts is recognized as services are performed, based on costs incurred plus the negotiated fee earned. In certain contracts with the U.S. Federal Government, we may be paid an award fee, based upon the quality of the service we perform. Where this fee can be objectively determined, it is recognized ratably over the period of performance, which is between four and six months. Where the fee cannot be determined objectively, all revenue is deferred until the fee has been earned. We recognize revenue on fixed-priced contracts when earned, as services are provided. Revenue is generally recognized on a straight-line basis unless evidence suggests that revenue is earned or obligations are fulfilled in a different pattern. The timing of expense recognition may result in irregular profit margins. Revenue on time-and-materials contracts is recognized as services are performed, based on hours worked and expenses incurred. Where contracts have multiple deliverables, we evaluate these deliverables at the inception of each contract and as each item is delivered. As part of this evaluation, we consider whether a delivered item has value to a customer on a stand-alone basis and whether the delivery of the undelivered items is considered probable and substantially within our control, if a general right of return exists. Where deliverables, or groups of deliverables, have both of these characteristics, we treat each deliverable item as a separate element in the arrangement, allocate a portion of the allocable arrangement consideration using the estimated relative selling price method to each element and apply the relevant revenue recognition guidance to each element. Sales and purchases in jurisdictions subject to indirect taxes, such as value added tax, are recorded net of tax collected and paid. |
New accounting standards | New accounting standards We have adopted two new accounting standard updates during the current fiscal year. In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-09, Stock Compensation, Improvements to Employee Share-Based Payment Accounting . We adopted this standard in fiscal year 2017. The new standard requires us to record the tax benefit or expense related to the vesting of RSUs or the exercise of stock options within our provision for income taxes in the consolidated statement of operations; this benefit was previously reported in the statement of changes in shareholders’ equity. The cash flow effects of the tax benefit are now reported in cash flows from operations; they were previously in cash flows from financing activities. The new standard allows us more flexibility in net settling RSUs as they vest. The new standard also allows for changes in accounting for the forfeiture of stock awards; we will continue to estimate our stock award forfeitures as we expense each award. This new standard has had the following effects in fiscal year 2017: • During the year ended September 30, 2017 , approximately 0.5 million shares were issued through the vesting of RSUs and the exercise of stock options, resulting in a decrease in our provision for income taxes of $6.6 million and a corresponding benefit to our cash flows from operations. • Our diluted weighted average shares outstanding was higher by approximately 90,000 shares than it would have been if the former standard had been in place. • The combination of these factors resulted in a net increase of $0.10 to our basic and diluted earnings per share for the year ended September 30, 2017 , compared to what would have been recorded under the former accounting guidance. The new standard does not require us to adjust previously reported results. Accordingly, we have made no changes to our consolidated statements of operations, cash flows or changes in shareholders' equity for any comparative periods. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The new standard requires us to evaluate whether there are conditions or events that raise substantial doubt about our ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. This new standard would only affect our financial reporting in the event that substantial doubt over our existence was identified. The adoption of this standard did not have a material impact on the financial statements. We are evaluating the effects of guidance issued in two significant areas of financial reporting. These new standards will have a significant effect on how we report and disclose transactions. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. In addition, the FASB has issued additional updates covering technical items and changing the date of adoption. This new standard will change the manner in which we evaluate revenue recognition for all contracts with customers, although the effect of the changes on revenue recognition will vary from contract to contract. We will adopt this standard during our 2019 fiscal year. We have established a cross-functional steering committee which includes representatives from across all our business and support segments. The steering committee is responsible for evaluating the impact of the standard on our operations including accounting, taxation, internal audit and financial systems. Our approach to analyzing these impacts includes reviewing our current accounting policies and practices to identify potential differences that will result from applying the requirements of the new standard to our existing contracts. In addition, we are in the process of evaluating the changes needed to our business processes, systems and controls in order to support revenue recognition and the related disclosures under the new standard. The standard permits a retrospective or cumulative effect transition method. We anticipate that we will adopt the new standard using the retrospective method. In February 2016, the FASB issued ASU No. 2016-02, Leases . The new standard will change the manner in which we will present our leasing arrangements. We will adopt this standard during our 2020 fiscal year. We are evaluating the likely effects on our business. We are also evaluating the effect of a new standard related to goodwill impairment. This standard would only have a significant effect on our results if our goodwill balance was determined to be impaired. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. This standard will not change the manner in which we would identify a goodwill impairment but would change the manner of the calculation of any resulting impairment. Under existing guidance, we would calculate goodwill for each of our reporting units by calculating the fair value of all existing assets and liabilities within that reporting unit and comparing this to the fair value of the reporting unit; to the extent that this difference is less than our existing goodwill balance related to that reporting unit, we would record an impairment. The new standard will require us to calculate goodwill based upon the difference between the fair value and reported value of a reporting unit. This standard would be effective for our 2021 fiscal year, although early adoption is permitted. We do not anticipate any significant effect on our financial statements as a result of adopting this standard. |
Cash and cash equivalents | Cash and cash equivalents We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Where we are obliged to hold cash balances as collateral for lease, credit card or letter of credit arrangements, or where we hold funds on behalf of clients, this balance is reported within other current assets. These restricted cash balances totaled $13.5 million and $14.1 million at September 30, 2017 and 2016 , respectively. |
Accounts receivable - billed, billable and unbilled | Accounts receivable—billed, billable and unbilled Billed receivables are balances where an invoice has been prepared and issued and is collectible under standard contract terms. Many of our clients require invoices to be prepared on a monthly basis. Where we anticipate that an invoice will be issued within a short period of time and where the funds are considered collectible from within standard contract terms, we include this balance as billable accounts receivable. Both billed and billable balances are recorded at their face amount less an allowance for doubtful accounts. We re-evaluate our client receivables on a quarterly basis, especially receivables that are past due, and reassess our allowance for doubtful accounts based on specific client collection issues. We present unbilled receivables as a separate component of our consolidated balance sheet. Unbilled receivables represents a timing difference between when amounts are billed or billable and when revenue has been recognized or has occurred as of period end. The timing of these billings is generally driven by the contractual terms, which may have billing milestones which are different from revenue recognition milestones. Our unbilled receivables balance also includes retainage balances, where customers may hold back payment for work performed for a period of time to allow opportunities to evaluate the quality of our performance. Our unbilled receivable balance is recorded at fair value which is the value which we expect to invoice for the services performed, once the criteria for billing have been met. |
Business combinations and goodwill | Business combinations and goodwill The purchase price of an acquired business is allocated to tangible assets, separately identifiable intangible assets acquired and liabilities assumed based upon their respective fair values. Any excess balance is recorded as goodwill. Costs incurred directly related to an acquisition, including legal, accounting and valuation services, are expensed as incurred. Intangible assets are separately identified and recorded at fair value. These assets are amortized on a straight-line basis over useful lives estimated at the time of the business combination. Goodwill is not amortized but is subject to impairment testing on an annual basis, or more frequently if impairment indicators arise. Impairment testing is performed at the reporting unit level. A reporting unit is the operating segment, or a business one level below that operating segment (the component level) if discrete financial information is prepared and reviewed regularly by segment management. However, components are aggregated if they have similar economic characteristics. The evaluation is performed by comparing the fair value of the relevant reporting unit to the carrying value, including goodwill, of the reporting unit. If the fair value of the reporting unit exceeds the carrying value, no impairment loss is recognized. However, if the carrying value of the reporting unit exceeds the fair value, the goodwill of the reporting unit may be impaired. Our reporting units are consistent with our operating segments, Health Services, U.S. Federal Services and Human Services. We perform our annual impairment test as of July 1 of each year. We performed the annual impairment test, as of July 1, 2017 , and determined that there had been no impairment of goodwill. In performing this assessment, we utilized an income approach. Such an approach requires estimation of future operating cash flows including business growth, utilization of working capital and discount rates. The valuation of the business as a whole is compared to our market value at the date of the test in order to verify the calculation. |
Long-lived assets (excluding goodwill) | Long-lived assets (excluding goodwill) Property and equipment is recorded at cost. Depreciation is recorded over the assets' respective useful economic lives using the straight-line method, which are not to exceed 39 years for our buildings and seven years for office furniture and equipment. Leasehold improvements are amortized over the shorter of their useful life or the remaining term of the lease. Repairs and maintenance costs are expensed as incurred. All of the Company's capitalized software represents development costs for software that is intended for our internal use. Direct costs of time and material incurred for the development of application software for internal use are capitalized and depreciated using the straight-line method over the estimated useful life of the software, ranging from three to eight years . Costs incurred for upgrades and enhancements that do not result in additional functionality are expensed as incurred. Deferred contract costs consist of contractually recoverable direct set-up costs related to long-term service contracts. These costs include direct and incremental costs incurred prior to the commencement of providing service to our customer. These costs are expensed over the period the services are provided using the straight-line method. We review long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be fully recoverable. Our review is based on our projection of the undiscounted future operating cash flows of the related asset group. To the extent such projections indicate that future undiscounted cash flows are not sufficient to recover the carrying amount, we recognize a non-cash impairment charge to reduce the carrying amount to equal projected future discounted cash flows. |
Income taxes | Income taxes Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities and are measured by applying enacted tax rates and laws for the taxable years in which those differences are expected to reverse. In addition, a valuation allowance is recorded if it is believed more likely than not that a deferred tax asset will not be fully realized. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would "more likely than not" sustain the position following an audit. For tax positions meeting the "more likely than not" threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. |
Foreign currency | Foreign currency For all foreign operations, the functional currency is the local currency. The assets and liabilities of foreign operations are translated into U.S. Dollars at period-end exchange rates, and revenue and expenses are translated at average exchange rates for the year. The resulting cumulative translation adjustment is included in accumulated other comprehensive income on the consolidated balance sheet. Gains and losses from foreign currency transactions are included in other income, net. |
Contingencies | Contingencies From time to time, we are involved in legal proceedings, including contract and employment claims, in the ordinary course of business. We assess the likelihood of any adverse judgments or outcomes to these contingencies, as well as potential ranges of probable losses and establish reserves accordingly. The amount of reserves required may change in future periods due to new developments in each matter or changes in approach to a matter such as a change in settlement strategy. |
Fair value measurements | Fair value measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Assets and liabilities subject to fair value measurements are required to be disclosed within a fair value hierarchy. The fair value hierarchy ranks the quality and reliability of inputs used to determine fair value. Accordingly, assets and liabilities carried at, or permitted to be carried at, fair value are classified within the fair value hierarchy in one of the following categories based on the lowest level input that is significant in measuring fair value: Level 1 - Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities. Level 2 - Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models such as interest rates and yield curves that can be corroborated by observable market data. Level 3 - Fair value is determined by using inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgment. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and other amounts included within current assets and liabilities that meet the definition of a financial instrument approximate fair value due to the short-term nature of these balances. We hold investments in a Rabbi Trust on behalf of our deferred compensation plan. These assets are recorded on our consolidated balance sheet at fair value under the heading of "Deferred Compensation Plan Assets". These assets have quoted prices in active markets (Level 1). See "Note 13. Employee benefit plans and deferred compensation" for further details. We have two acquisitions where our payment is contingent upon events which take place after the acquisition date. The related liability is recorded on our consolidated balance sheet as a liability at estimated fair value and updated on a quarterly basis as an acquisition-related expense or benefit. The valuation of this liability is derived from internal estimates of future performance and not from inputs that are observable (Level 3). |
Business segments (Tables)
Business segments (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of results for each of the Company's business segments | The results of these segments for the three years ended September 30, 2017 are shown below (in thousands). Year ended September 30, 2017 2016 2015 Revenue: Health Services $ 1,380,151 $ 1,298,304 $ 1,109,238 U.S. Federal Services 545,573 591,728 502,484 Human Services 525,237 513,328 488,099 Total $ 2,450,961 $ 2,403,360 $ 2,099,821 Gross Profit: Health Services $ 347,325 $ 292,181 $ 254,108 U.S. Federal Services 139,321 138,168 118,646 Human Services 125,259 131,842 139,963 Total $ 611,905 $ 562,191 $ 512,717 Selling, general and administrative expense: Health Services $ 132,081 $ 107,155 $ 99,815 U.S. Federal Services 74,345 74,792 59,252 Human Services 76,675 84,157 79,719 Other 1,409 2,155 6 Total $ 284,510 $ 268,259 $ 238,792 Operating income: Health Services $ 215,244 $ 185,026 $ 154,293 U.S. Federal Services 64,976 63,376 59,394 Human Services 48,584 47,685 60,244 Amortization of intangible assets (12,208 ) (13,377 ) (9,348 ) Restructuring costs (2,242 ) — — Acquisition-related expenses (83 ) (832 ) (4,745 ) Gain on sale of a business 650 6,880 — Other (1,409 ) (2,155 ) (6 ) Total $ 313,512 $ 286,603 $ 259,832 Operating income as a percentage of revenue: Health Services 15.6 % 14.3 % 13.9 % U.S. Federal Services 11.9 % 10.7 % 11.8 % Human Services 9.2 % 9.3 % 12.3 % Total 12.8 % 11.9 % 12.4 % Depreciation and amortization: Health Services $ 29,114 $ 31,916 $ 27,694 U.S. Federal Services 11,175 9,953 10,363 Human Services 15,480 16,535 8,792 Total $ 55,769 $ 58,404 $ 46,849 |
Schedule of distribution of revenues | Our revenue was distributed as follows (in thousands): Year ended September 30, 2017 2016 2015 United States $ 1,765,661 $ 1,721,261 $ 1,559,769 United Kingdom 346,342 384,649 267,702 Australia 232,434 200,539 178,167 Rest of World 106,524 96,911 94,183 Total $ 2,450,961 $ 2,403,360 $ 2,099,821 |
Schedule of identifiable assets by segment | Identifiable assets for the segments are shown below (in thousands): Year Ended 2017 2016 Health Services $ 515,850 $ 543,361 U.S. Federal Services 397,824 440,006 Human Services 169,523 153,141 Corporate/Other 267,465 212,311 Total $ 1,350,662 $ 1,348,819 |
Schedule of distribution of total long-lived assets, consisting of property and equipment, capitalized software costs and deferred compensation plan assets | Our long-lived assets, consisting of property and equipment, capitalized software costs and deferred compensation plan assets, were distributed as follows (in thousands): Year Ended 2017 2016 United States $ 101,530 $ 118,751 Australia 32,165 38,852 Canada 13,670 16,209 United Kingdom 9,251 11,086 Rest of World 331 117 Total $ 156,947 $ 185,015 |
Concentrations of credit risk28
Concentrations of credit risk and major customers (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Schedule of revenue recognized from customers | The proportion of revenue recognized from customers providing in excess of 10% of our consolidated revenue for each of the three years ended September 30, 2017 was from the following governments: Year ended 2017 2016 2015 U.S. Federal Government 19 % 22 % 20 % New York 15 % 12 % 10 % United Kingdom 12 % 16 % * _________________________________________ * Government provided less than 10% of our consolidated revenue in this year. |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of the components of basic and diluted earnings per share | The weighted average number of shares outstanding used to compute earnings per shares was as follows (in thousands): Year ended September 30, 2017 2016 2015 Weighted average shares outstanding 65,632 65,822 66,682 Effect of employee stock options and unvested restricted stock awards 433 407 593 Denominator for diluted earnings per share 66,065 66,229 67,275 |
Business combinations and dis30
Business combinations and disposals (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Ascend Management Innovations LLC | |
Business Acquisition [Line Items] | |
Schedule of assets and liabilities recorded in the Company's financial statements at their fair values at the acquisition date | Our allocation of fair value for the assets and liabilities acquired is shown below. (Amounts in thousands) Updated through September 30, 2016 Adjustments Updated through September 30, 2017 Cash consideration, net of cash acquired $ 44,069 $ — $ 44,069 Billed and unbilled receivables $ 4,069 $ — $ 4,069 Other assets 407 — 407 Property and equipment and other assets 707 — 707 Deferred income taxes — 557 557 Intangible assets 22,300 — 22,300 Total identifiable assets acquired 27,483 557 28,040 Accounts payable and other liabilities 1,414 — 1,414 Deferred revenue 554 — 554 Total liabilities assumed 1,968 — 1,968 Net identifiable assets acquired 25,515 557 26,072 Goodwill 18,554 (557 ) 17,997 Net assets acquired $ 44,069 $ — $ 44,069 |
Summary of valuation of the intangible assets acquired | The valuation of the intangible assets acquired is summarized below: (Dollars in thousands) Useful life Fair value Customer relationships 19 years $ 20,400 Technology-based intangible assets 8 years 1,700 Trade name 1 year 200 Total intangible assets $ 22,300 |
Acentia | |
Business Acquisition [Line Items] | |
Schedule of assets and liabilities recorded in the Company's financial statements at their fair values at the acquisition date | Purchase price (Amounts in thousands) allocation Cash consideration, net of cash acquired $ 293,504 Accounts receivable and unbilled receivables 35,333 Other current assets 3,091 Property and equipment 2,140 Intangible assets—customer relationships 69,900 Total identifiable assets acquired 110,464 Accounts payable and other liabilities 31,350 Deferred revenue 251 Capital lease obligations 567 Deferred tax liabilities 6,741 Total liabilities assumed 38,909 Net identifiable assets acquired 71,555 Goodwill 221,949 Net assets acquired $ 293,504 |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill | Changes in goodwill for the years ended September 30, 2017 and 2016 are as follows (in thousands): Health U.S. Federal Human Total Balance as of September 30, 2015 $ 113,427 $ 220,524 $ 42,351 $ 376,302 Acquisitions of Ascend and Assessments Australia, respectively 18,554 — 2,899 21,453 Adjustment to goodwill acquired with Acentia — 7,624 — 7,624 Disposal of K-12 Education business — — (224 ) (224 ) Foreign currency translation (8,302 ) — 705 (7,597 ) Balance as of September 30, 2016 123,679 228,148 45,731 397,558 Adjustment to goodwill acquired with Ascend (557 ) — — (557 ) Adjustment to goodwill acquired with Assessments Australia — — 71 71 Acquisition of Revitalised 2,830 — — 2,830 Foreign currency translation 2,508 — 566 3,074 Balance as of September 30, 2017 $ 128,460 $ 228,148 $ 46,368 $ 402,976 |
Schedule of components of intangible assets | The following table sets forth the components of intangible assets (in thousands): As of September 30, 2017 As of September 30, 2016 Cost Accumulated Amortization Intangible Assets, net Cost Accumulated Amortization Intangible Assets, net Customer contracts and relationships $ 129,916 $ 33,457 $ 96,459 $ 132,221 $ 26,238 $ 105,983 Technology-based intangible assets 7,664 5,475 2,189 6,967 4,613 2,354 Trademarks and trade names 4,513 4,392 121 4,487 3,797 690 Total $ 142,093 $ 43,324 $ 98,769 $ 143,675 $ 34,648 $ 109,027 |
Schedule of estimated future amortization expense | Estimated future amortization expense is estimated for the following five fiscal years ending September 30th as follows (in thousands): 2018 $ 10,320 2019 9,416 2020 8,316 2021 7,452 2022 7,385 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Property and equipment, at cost, consists of the following (in thousands): As of September 30, 2017 2016 Land $ 1,738 $ 1,738 Building and improvements 11,799 11,726 Office furniture and equipment 207,140 261,752 Leasehold improvements 53,531 52,493 274,208 327,709 Less: Accumulated depreciation and amortization (172,557 ) (196,140 ) Total property and equipment, net $ 101,651 $ 131,569 |
Capitalized software (Tables)
Capitalized software (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Capitalized Computer Software, Net [Abstract] | |
Components of capitalized software | Capitalized software consists of the following (in thousands): As of September 30, 2017 2016 Capitalized software $ 88,627 $ 80,646 Less: Accumulated amortization (61,879 ) (50,507 ) Total Capitalized software, net $ 26,748 $ 30,139 |
Deferred contract costs (Tables
Deferred contract costs (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Deferred contract costs | |
Deferred contract costs | Deferred contract costs consist of the following (in thousands): As of September 30, 2017 2016 Deferred contract costs $ 30,776 $ 30,114 Less: Accumulated amortization (14,478 ) (11,932 ) Total Deferred contract costs, net $ 16,298 $ 18,182 |
Accounts receivable reserves (T
Accounts receivable reserves (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Schedule of accounts receivable reserve | Changes in the reserves against accounts receivable were as follows (in thousands): Year ended September 30, 2017 2016 2015 Balance at beginning of year $ 4,226 $ 3,385 $ 3,138 Additions to reserve 5,106 2,335 2,690 Deductions (2,489 ) (1,494 ) (2,443 ) Balance at end of year $ 6,843 $ 4,226 $ 3,385 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum future lease commitments under leases | Minimum future lease commitments under leases in effect as of September 30, 2017 are as follows (in thousands): Office space Equipment Total Year ending September 30, 2018 $ 65,230 $ 4,252 $ 69,482 2019 50,908 3,482 54,390 2020 34,159 2,133 36,292 2021 10,459 13 10,472 2022 4,198 2 4,200 Thereafter 241 — 241 Total minimum lease payments $ 165,195 $ 9,882 $ 175,077 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of the Company's RSU activity | A summary of our RSU activity for the year ended September 30, 2017 , is as follows: Shares Weighted-Average Grant-Date Fair Value Non-vested shares outstanding at September 30, 2016 809,306 $ 47.64 Granted 448,289 53.63 Vested (400,583 ) 46.17 Forfeited (34,185 ) 46.00 Non-vested shares outstanding at September 30, 2017 822,827 51.69 |
Summary of information pertaining to stock options vested and exercised | The following table summarizes information pertaining to the stock options vested and exercised for the years presented (in thousands): Year ended September 30, 2017 2016 2015 Aggregate intrinsic value of all stock options exercised $ 4,025 $ 4,077 $ 5,536 Net cash proceeds from exercise of stock options 924 546 868 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of income from continuing operations before income taxes | The components of income before income taxes and the corresponding provision for income taxes are as follows (in thousands): Year ended September 30, 2017 2016 2015 Income before income taxes: United States $ 257,910 $ 238,871 $ 232,359 Foreign 56,325 47,097 27,460 Income before income taxes $ 314,235 $ 285,968 $ 259,819 |
Provision for income taxes | Year ended September 30, 2017 2016 2015 Current provision: Federal $ 70,476 $ 69,025 $ 74,050 State and local 15,594 15,595 15,332 Foreign 11,221 15,536 9,581 Total current provision 97,291 100,156 98,963 Deferred tax expense (benefit): Federal 5,490 7,778 2,233 State and local 643 902 403 Foreign (1,371 ) (3,028 ) (1,829 ) Total deferred tax expense (benefit) 4,762 5,652 807 Provision for income taxes $ 102,053 $ 105,808 $ 99,770 |
Reconciliation of tax provision using the federal statutory income tax rate to reported provision | The provision for income taxes differs from that which would have resulted from the use of the federal statutory income tax rate as follows (in thousands): Year ended September 30, 2017 2016 2015 Federal income tax provision at statutory rate of 35% $ 109,982 $ 100,089 $ 90,937 State income taxes, net of federal benefit 10,554 10,723 9,847 Foreign taxation (6,940 ) (3,976 ) (2,208 ) Permanent items 970 1,284 1,602 Tax credits (4,851 ) (1,592 ) (961 ) Vesting of equity compensation (6,569 ) — — Other (1,093 ) (720 ) 553 Provision for income taxes $ 102,053 $ 105,808 $ 99,770 |
Significant items comprising the Company's deferred tax assets and liabilities | Our net deferred tax position is summarized below (in thousands): As of September 30, 2017 2016 Balance of tax jurisdictions with net deferred tax assets $ 7,691 $ 8,644 Balance of tax jurisdictions with net deferred tax liabilities (20,106 ) (16,813 ) Net deferred tax liabilities $ (12,415 ) $ (8,169 ) The significant items comprising our deferred tax assets and liabilities as of September 30, 2017 and 2016 are as follows (in thousands): As of September 30, 2017 2016 Net deferred tax assets/(liabilities) Costs deductible in future periods $ 30,794 $ 27,738 Deferred revenue 20,703 23,469 Stock compensation 4,976 5,085 Net operating loss carryforwards 360 1,291 Amortization of goodwill and intangible assets (36,100 ) (34,484 ) Capitalized software (9,197 ) (10,126 ) Accounts receivable - unbilled (12,953 ) (13,810 ) Property and equipment (3,924 ) (5,517 ) Prepaid expenses (3,741 ) (1,296 ) Other (3,333 ) (519 ) $ (12,415 ) $ (8,169 ) |
Schedule of reconciliation of the beginning and ending amount of gross unrecognized tax benefits | The reconciliation of the beginning and ending amount of gross unrecognized tax benefits was as follows (in thousands): Year ended September 30, 2017 2016 2015 Balance at beginning of year $ 448 $ 529 $ 812 Lapse of statute of limitation — — (200 ) Increases for tax positions taken in current year 185 — — Reductions for tax positions of prior years — (81 ) (83 ) Balance at end of year $ 633 $ 448 $ 529 |
Quarterly information (unaudi39
Quarterly information (unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of selected quarterly income statement data | Earnings per share amounts are computed independently each quarter. As a result, the sum of each quarter's earnings per share amount may not equal the total earnings per share amount for the respective year. Quarter Ended Dec. 31, March 31, June 30, Sept. 30, (In thousands, except per share data) Health Services $ 340,729 $ 348,994 $ 335,090 $ 355,338 U.S. Federal Services 141,298 145,370 131,589 127,316 Human Services 125,537 127,683 133,768 138,249 Revenue $ 607,564 $ 622,047 $ 600,447 $ 620,903 Health Services $ 78,234 $ 86,454 $ 83,269 $ 99,368 U.S. Federal Services 37,576 36,571 33,627 31,547 Human Services 29,008 29,292 35,293 31,666 Gross profit $ 144,818 $ 152,317 $ 152,189 $ 162,581 Health Services $ 50,127 $ 56,540 $ 51,553 $ 57,024 U.S. Federal Services 17,881 17,644 15,870 13,581 Human Services 11,769 9,629 16,368 10,818 Amortization of intangible assets (3,402 ) (3,386 ) (2,720 ) (2,700 ) Restructuring costs (2,242 ) — — — Acquisition-related expenses — — — (83 ) Gain on sale of a business — — 650 — Other/Corporate (357 ) (92 ) 90 (1,050 ) Operating Income $ 73,776 $ 80,335 $ 81,811 $ 77,590 Net income 46,329 53,097 57,788 54,968 Net income attributable to MAXIMUS 46,664 52,515 56,918 53,329 Diluted earnings per share attributable to MAXIMUS $ 0.71 $ 0.80 $ 0.86 $ 0.81 Quarter Ended Dec. 31, March 31, June 30, Sept. 30, (In thousands, except per share data) Health Services $ 291,903 $ 330,567 $ 333,699 $ 342,135 U.S. Federal Services 145,285 150,191 149,601 146,651 Human Services 119,534 125,695 133,794 134,305 Revenue $ 556,722 $ 606,453 $ 617,094 $ 623,091 Health Services $ 51,972 $ 82,717 $ 76,775 $ 80,717 U.S. Federal Services 28,238 33,421 38,980 37,529 Human Services 30,005 31,529 35,624 34,684 Gross profit $ 110,215 $ 147,667 $ 151,379 $ 152,930 Health Services $ 26,808 $ 56,914 $ 50,430 $ 50,874 U.S. Federal Services 10,716 14,983 19,119 18,558 Human Services 9,107 9,794 14,251 14,533 Amortization of intangible assets (3,149 ) (3,262 ) (3,517 ) (3,449 ) Acquisition-related expenses (46 ) (529 ) — (257 ) Gain on sale of a business — — 6,453 427 Other/Corporate (650 ) — (2,127 ) 622 Operating Income $ 42,786 $ 77,900 $ 84,609 $ 81,308 Net income 26,882 49,341 52,750 51,187 Net income attributable to MAXIMUS 26,609 48,785 52,225 50,743 Diluted earnings per share attributable to MAXIMUS $ 0.40 $ 0.74 $ 0.79 $ 0.77 |
Business and summary of signi40
Business and summary of significant accounting policies - Description of Business (Details) | 12 Months Ended |
Sep. 30, 2017segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 3 |
Business and summary of signi41
Business and summary of significant accounting policies - Revenue Recognition (Details) - Total Revenue | 12 Months Ended |
Sep. 30, 2017 | |
Performance-based contracts | |
Concentration Risk [Line Items] | |
Percentage of total revenue | 42.00% |
Cost-plus contracts | |
Concentration Risk [Line Items] | |
Percentage of total revenue | 35.00% |
Fixed-price contracts | |
Concentration Risk [Line Items] | |
Percentage of total revenue | 18.00% |
Time and materials contracts | |
Concentration Risk [Line Items] | |
Percentage of total revenue | 5.00% |
Business and summary of signi42
Business and summary of significant accounting policies - New Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Item Effected [Line Items] | |||
Vesting of equity compensation | $ (6,569) | $ 0 | $ 0 |
Increase in cash provided by operations | 337,200 | $ 180,026 | $ 206,217 |
Accounting Standards Update 2016-09 | |||
Item Effected [Line Items] | |||
Increase (decrease) in income taxes | $ (6,600) | ||
Increase in number of diluted weighted average shares | 90,000 | ||
Increase in basic and diluted earnings per share | $ 0.10 | ||
Increase in cash provided by operations | $ 6,600 | ||
Unvested restricted stock units | Accounting Standards Update 2016-09 | |||
Item Effected [Line Items] | |||
Stock options exercised and RSUs vesting (in shares) | 500,000 |
Business and summary of signi43
Business and summary of significant accounting policies - Cash, Goodwill and Long-lived Assets (Details) - USD ($) | Jul. 01, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
Property and Equipment | ||||
Goodwill, impairment loss | $ 0 | $ 0 | ||
Restricted cash | 13,500,000 | $ 14,100,000 | ||
Impairment of long-lived assets held-for-use | $ 0 | $ 0 | $ 0 | |
Buildings | Maximum | ||||
Property and Equipment | ||||
Estimated useful lives | 39 years | |||
Office furniture and equipment. | Maximum | ||||
Property and Equipment | ||||
Estimated useful lives | 7 years | |||
Software development costs. | Minimum | ||||
Property and Equipment | ||||
Estimated useful lives | 3 years | |||
Software development costs. | Maximum | ||||
Property and Equipment | ||||
Estimated useful lives | 8 years |
Business and summary of signi44
Business and summary of significant accounting policies - Fair Value Measurements (Details) | 12 Months Ended |
Sep. 30, 2017acquisition | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of businesses acquired with contingent payments | 2 |
Business segments - Schedule of
Business segments - Schedule of Segment Reporting Results By Segment (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of business segments | segment | 3 | ||||||||||
Financial information for each of the Company's business segments | |||||||||||
Revenue | $ 620,903 | $ 600,447 | $ 622,047 | $ 607,564 | $ 623,091 | $ 617,094 | $ 606,453 | $ 556,722 | $ 2,450,961 | $ 2,403,360 | $ 2,099,821 |
Gross profit | 162,581 | 152,189 | 152,317 | 144,818 | 152,930 | 151,379 | 147,667 | 110,215 | 611,905 | 562,191 | 512,717 |
Selling, general and administrative expense | 284,510 | 268,259 | 238,792 | ||||||||
Operating income | 77,590 | 81,811 | 80,335 | 73,776 | 81,308 | 84,609 | 77,900 | 42,786 | 313,512 | 286,603 | 259,832 |
Amortization of intangible assets | (12,208) | (13,377) | (9,348) | ||||||||
Acquisition-related expenses | (83) | (832) | (4,745) | ||||||||
Gain on sale of a business | $ 650 | $ 6,880 | $ 0 | ||||||||
Percentage of total revenue | 12.80% | 11.90% | 12.40% | ||||||||
Depreciation and amortization | $ 55,769 | $ 58,404 | $ 46,849 | ||||||||
Corporate/Other | |||||||||||
Financial information for each of the Company's business segments | |||||||||||
Selling, general and administrative expense | 1,050 | (90) | 92 | 357 | (622) | 2,127 | 0 | 650 | 1,409 | 2,155 | 6 |
Other | (1,409) | (2,155) | (6) | ||||||||
Segment Reconciling Items | |||||||||||
Financial information for each of the Company's business segments | |||||||||||
Amortization of intangible assets | (2,700) | (2,720) | (3,386) | (3,402) | (3,449) | (3,517) | (3,262) | (3,149) | (12,208) | (13,377) | (9,348) |
Restructuring Costs | (2,242) | 0 | 0 | ||||||||
Acquisition-related expenses | (83) | 0 | 0 | 0 | (257) | 0 | (529) | (46) | (83) | (832) | (4,745) |
Gain on sale of a business | $ 0 | $ 650 | $ 0 | $ 0 | $ 427 | $ 6,453 | $ 0 | $ 0 | 650 | 6,880 | 0 |
Health Services | |||||||||||
Financial information for each of the Company's business segments | |||||||||||
Revenue | 1,380,151 | 1,298,304 | 1,109,238 | ||||||||
Gross profit | 347,325 | 292,181 | 254,108 | ||||||||
Selling, general and administrative expense | 132,081 | 107,155 | 99,815 | ||||||||
Operating income | $ 215,244 | $ 185,026 | $ 154,293 | ||||||||
Percentage of total revenue | 15.60% | 14.30% | 13.90% | ||||||||
Depreciation and amortization | $ 29,114 | $ 31,916 | $ 27,694 | ||||||||
U.S. Federal Services | |||||||||||
Financial information for each of the Company's business segments | |||||||||||
Revenue | 545,573 | 591,728 | 502,484 | ||||||||
Gross profit | 139,321 | 138,168 | 118,646 | ||||||||
Selling, general and administrative expense | 74,345 | 74,792 | 59,252 | ||||||||
Operating income | $ 64,976 | $ 63,376 | $ 59,394 | ||||||||
Percentage of total revenue | 11.90% | 10.70% | 11.80% | ||||||||
Depreciation and amortization | $ 11,175 | $ 9,953 | $ 10,363 | ||||||||
Human Services | |||||||||||
Financial information for each of the Company's business segments | |||||||||||
Revenue | 525,237 | 513,328 | 488,099 | ||||||||
Gross profit | 125,259 | 131,842 | 139,963 | ||||||||
Selling, general and administrative expense | 76,675 | 84,157 | 79,719 | ||||||||
Operating income | $ 48,584 | $ 47,685 | $ 60,244 | ||||||||
Percentage of total revenue | 9.20% | 9.30% | 12.30% | ||||||||
Depreciation and amortization | $ 15,480 | $ 16,535 | $ 8,792 |
Business segments - Revenue fro
Business segments - Revenue from External Customers by Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues and total long-lived assets | |||||||||||
Revenue | $ 620,903 | $ 600,447 | $ 622,047 | $ 607,564 | $ 623,091 | $ 617,094 | $ 606,453 | $ 556,722 | $ 2,450,961 | $ 2,403,360 | $ 2,099,821 |
United States | |||||||||||
Revenues and total long-lived assets | |||||||||||
Revenue | 1,765,661 | 1,721,261 | 1,559,769 | ||||||||
United Kingdom | |||||||||||
Revenues and total long-lived assets | |||||||||||
Revenue | 346,342 | 384,649 | 267,702 | ||||||||
Australia | |||||||||||
Revenues and total long-lived assets | |||||||||||
Revenue | 232,434 | 200,539 | 178,167 | ||||||||
Rest of World | |||||||||||
Revenues and total long-lived assets | |||||||||||
Revenue | $ 106,524 | $ 96,911 | $ 94,183 |
Business segments - Schedule 47
Business segments - Schedule of Identifiable Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Sep. 30, 2016 |
Segment Reporting Information [Line Items] | ||
Identifiable assets | $ 1,350,662 | $ 1,348,819 |
Operating segments | Health Services | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | 515,850 | 543,361 |
Operating segments | U.S. Federal Services | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | 397,824 | 440,006 |
Operating segments | Human Services | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | 169,523 | 153,141 |
Corporate/Other | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | $ 267,465 | $ 212,311 |
Business segments - Schedule 48
Business segments - Schedule of Long-Lived Assets by Geographical Areas (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Sep. 30, 2016 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $ 156,947 | $ 185,015 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 101,530 | 118,751 |
Australia | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 32,165 | 38,852 |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 13,670 | 16,209 |
United Kingdom | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 9,251 | 11,086 |
Rest of World | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $ 331 | $ 117 |
Concentrations of credit risk49
Concentrations of credit risk and major customers Narrative (Details) - Total Revenue | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Foreign Customers | |||
Concentration Risk [Line Items] | |||
Percentage of total revenue | 28.00% | 28.00% | 26.00% |
State And Local Government Agencies | |||
Concentration Risk [Line Items] | |||
Percentage of total revenue | 49.00% | ||
Foreign Government Agencies | |||
Concentration Risk [Line Items] | |||
Percentage of total revenue | 26.00% | ||
United States Based Federal Government Agencies | |||
Concentration Risk [Line Items] | |||
Percentage of total revenue | 19.00% | ||
Other Customers | |||
Concentration Risk [Line Items] | |||
Percentage of total revenue | 6.00% | ||
U.S. Federal Government | |||
Concentration Risk [Line Items] | |||
Percentage of total revenue | 19.00% | 22.00% | 20.00% |
United Kingdom | |||
Concentration Risk [Line Items] | |||
Percentage of total revenue | 12.00% | 16.00% | |
New York | |||
Concentration Risk [Line Items] | |||
Percentage of total revenue | 15.00% | 12.00% | 10.00% |
Minimum | U.S. Federal Government | |||
Concentration Risk [Line Items] | |||
Percentage of total revenue | 10.00% | ||
Minimum | United Kingdom | |||
Concentration Risk [Line Items] | |||
Percentage of total revenue | 10.00% | ||
Minimum | New York | |||
Concentration Risk [Line Items] | |||
Percentage of total revenue | 10.00% |
Concentrations of credit risk50
Concentrations of credit risk and major customers - Schedule of Concentration of Risk, by Risk Factor (Details) - Total Revenue | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
U.S. Federal Government | |||
Concentration Risk [Line Items] | |||
Revenue from major customers (as a percent) | 19.00% | 22.00% | 20.00% |
New York | |||
Concentration Risk [Line Items] | |||
Revenue from major customers (as a percent) | 15.00% | 12.00% | 10.00% |
United Kingdom | |||
Concentration Risk [Line Items] | |||
Revenue from major customers (as a percent) | 12.00% | 16.00% |
Earnings per share - Schedule o
Earnings per share - Schedule of the Components of Basic and Diluted Earnings Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |||
Weighted average shares outstanding | 65,632 | 65,822 | 66,682 |
Effect of employee stock options and unvested restricted stock awards | 433 | 407 | 593 |
Denominator for diluted earnings per share | 66,065 | 66,229 | 67,275 |
Earnings per share - Narrative
Earnings per share - Narrative (Details) - shares | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Unvested restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Awards excluded from the calculation of diluted earnings per share (in shares) | 9,000 | 21,000 | 15,000 |
Business combinations and dis53
Business combinations and disposal Revitalised (Details) - Revitalised $ in Millions | Jul. 18, 2017USD ($) |
Business Acquisition [Line Items] | |
Share capital acquired (as a percent) | 100.00% |
Cash consideration | $ 2.7 |
Contingent consideration arrangements, range of outcomes, value, high | $ 1.4 |
Business combinations and dis54
Business combinations and disposals - K-12 Education (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Gain on disposal | $ 650 | $ 6,880 | $ 0 | ||||||||
Revenue | $ 620,903 | $ 600,447 | $ 622,047 | $ 607,564 | $ 623,091 | $ 617,094 | $ 606,453 | $ 556,722 | 2,450,961 | 2,403,360 | 2,099,821 |
Operating income (loss) | $ 77,590 | $ 81,811 | $ 80,335 | $ 73,776 | $ 81,308 | $ 84,609 | $ 77,900 | $ 42,786 | 313,512 | 286,603 | 259,832 |
K-12 Education | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Revenue | 2,200 | 4,700 | |||||||||
Operating income (loss) | (200) | $ 900 | |||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Related to Disposition of K-12 Education [Member] | K-12 Education | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Gain on disposal | $ 700 | $ 6,880 |
Business combinations and dis55
Business combinations and disposal Business combinations and disposals - Ascend Management Innovations, LLC (Details) - USD ($) $ in Thousands | Feb. 29, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Business Acquisition [Line Items] | |||
Goodwill, acquired during period | $ 21,453 | ||
Ascend Management Innovations LLC | |||
Business Acquisition [Line Items] | |||
Share capital acquired (as a percent) | 100.00% | ||
Purchase consideration, net of cash acquired | $ 44,100 | $ 44,069 | |
Intangible assets | $ 22,300 | 22,300 | |
Amortization period of intangible assets | 18 years | ||
Goodwill, acquired during period | $ 18,000 | $ 17,997 |
Business combinations and dis56
Business combinations and disposals - Schedule of Assets and Liabilities Recorded in the Company's Financial Statements (Details) - USD ($) $ in Thousands | Feb. 29, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $ 21,453 | ||
Ascend Management Innovations LLC | |||
Business Combination, Consideration Transferred | |||
Purchase consideration, net of cash acquired | $ 44,100 | $ 44,069 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||
Billed and unbilled receivables | 4,069 | ||
Other assets | 407 | ||
Property and equipment and other assets | 707 | ||
Deferred income taxes | 557 | ||
Intangible assets | 22,300 | 22,300 | |
Total identifiable assets acquired | 28,040 | ||
Accounts payable and other liabilities | 1,414 | ||
Deferred revenue | 554 | ||
Total liabilities assumed | 1,968 | ||
Net identifiable assets acquired | 26,072 | ||
Goodwill | $ 18,000 | 17,997 | |
Net assets acquired | 44,069 | ||
Scenario, Previously Reported [Member] | Ascend Management Innovations LLC | |||
Business Combination, Consideration Transferred | |||
Purchase consideration, net of cash acquired | 44,069 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||
Billed and unbilled receivables | 4,069 | ||
Other assets | 407 | ||
Property and equipment and other assets | 707 | ||
Deferred income taxes | 0 | ||
Intangible assets | 22,300 | ||
Total identifiable assets acquired | 27,483 | ||
Accounts payable and other liabilities | 1,414 | ||
Deferred revenue | 554 | ||
Total liabilities assumed | 1,968 | ||
Net identifiable assets acquired | 25,515 | ||
Goodwill | 18,554 | ||
Net assets acquired | $ 44,069 | ||
Scenario, Adjustment [Member] | Ascend Management Innovations LLC | |||
Business Combination, Consideration Transferred | |||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred | 0 | ||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | |||
Adjustments, billed and unbilled receivables | 0 | ||
Adjustments, other noncurrent assets | 0 | ||
Adjustments, property and equipment and other assets | 0 | ||
Adjustments, deferred income taxes | 557 | ||
Adjustments, intangibles assets | 0 | ||
Adjustments, total identifiable assets acquired | 557 | ||
Adjustments, accounts payable and other liabilities | 0 | ||
Adjustments, deferred revenue | 0 | ||
Adjustments, total liabilities assumed | 0 | ||
Adjustments, net identifiable assets acquired | 557 | ||
Adjustments, goodwill | (557) | ||
Adjustments, recognized identifiable assets acquired, goodwill, and liabilities assumed, net | $ 0 |
Business combinations and dis57
Business combinations and disposals - Schedule of the Valuation of the Intangible Assets Acquired (Details) - Ascend Management Innovations LLC - USD ($) $ in Thousands | Feb. 29, 2016 | Sep. 30, 2017 |
Components of intangible assets | ||
Fair value | $ 22,300 | |
Customer relationships | ||
Components of intangible assets | ||
Useful life | 19 years | |
Fair value | 20,400 | |
Technology-Based Intangible Assets | ||
Components of intangible assets | ||
Useful life | 8 years | |
Fair value | 1,700 | |
Trade Names | ||
Components of intangible assets | ||
Useful life | 1 year | |
Fair value | $ 200 |
Business combinations and dis58
Business combinations and disposal Business combinations and disposals - Assessments Australia (Details) $ in Thousands | Dec. 15, 2015USD ($)company | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) |
Business Acquisition [Line Items] | |||
Goodwill, acquired during period | $ 21,453 | ||
Assessments Australia | |||
Business Acquisition [Line Items] | |||
Share capital acquired (as a percent) | 100.00% | ||
Number of businesses acquired | company | 3 | ||
Cash consideration | $ 2,600 | ||
Contingent consideration, liability, current | $ 500 | ||
Intangible assets | 400 | ||
Human Services | Assessments Australia | |||
Business Acquisition [Line Items] | |||
Goodwill, acquired during period | $ 3,000 | $ 2,899 | |
Customer relationships | Assessments Australia | |||
Business Acquisition [Line Items] | |||
Useful life | 6 years |
Business combinations and dis59
Business combinations and disposals - Acentia (Details) - USD ($) $ in Thousands | Apr. 01, 2015 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
Preliminary Purchase Price Accounting | |||||
Cash consideration, net of cash acquired | $ 2,677 | $ 46,651 | $ 289,212 | ||
Goodwill | $ 21,453 | ||||
Acentia | |||||
Business Acquisition [Line Items] | |||||
Share capital acquired (as a percent) | 100.00% | ||||
Goodwill, expected tax deductible amount | $ 175,000 | ||||
Preliminary Purchase Price Accounting | |||||
Cash consideration, net of cash acquired | $ 293,500 | $ 293,504 | |||
Accounts receivable and unbilled receivables | 35,333 | 35,333 | |||
Other current assets | 3,091 | 3,091 | |||
Property and equipment | 2,140 | 2,140 | |||
Intangible assets | 69,900 | 69,900 | |||
Total identifiable assets acquired | 110,464 | 110,464 | |||
Accounts payable and other liabilities | 31,350 | 31,350 | |||
Deferred revenue | 251 | 251 | |||
Capital lease obligations | 567 | 567 | |||
Deferred tax liabilities | 6,741 | 6,741 | |||
Total liabilities assumed | 38,909 | 38,909 | |||
Net identifiable assets acquired | 71,555 | 71,555 | |||
Goodwill | 221,949 | ||||
Net assets acquired | $ 293,504 | $ 293,504 | |||
Acentia | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Amortization period of intangible assets | 14 years |
Business combinations and dis60
Business combinations and disposals - Remploy (Details) - Remploy £ in Millions, $ in Millions | Apr. 07, 2015USD ($) | Apr. 07, 2015GBP (£) |
Business Acquisition [Line Items] | ||
Share capital acquired (as a percent) | 70.00% | |
Share capital held in trust for the benefit of employees (as a percent) | 30.00% | |
Preliminary Purchase Price Accounting | ||
Purchase consideration, net of cash acquired | $ 3 | £ 2 |
Contract-based intangible assets | ||
Preliminary Purchase Price Accounting | ||
Intangible assets | $ 4.6 | |
Amortization period of intangible assets | 2 years | 2 years |
Business combinations and dis61
Business combinations and disposals - DeltaWare Systems, Inc. (Details) | 3 Months Ended | 12 Months Ended | ||||||||||||
Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2017CAD | Sep. 30, 2016CAD | Dec. 31, 2010CAD | |
Business Acquisition [Line Items] | ||||||||||||||
Revenue | $ | $ 620,903,000 | $ 600,447,000 | $ 622,047,000 | $ 607,564,000 | $ 623,091,000 | $ 617,094,000 | $ 606,453,000 | $ 556,722,000 | $ 2,450,961,000 | $ 2,403,360,000 | $ 2,099,821,000 | |||
DeltaWare | Sales targets | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Contingent consideration arrangements, range of outcomes, value, high | CAD | CAD 4,000,000 | |||||||||||||
Revenue | $ | $ 0 | |||||||||||||
Liability for potential obligation | CAD | CAD 0 | CAD 0 |
Debt - Narrative (Details)
Debt - Narrative (Details) CAD in Millions | 12 Months Ended | |||
Sep. 30, 2017USD ($)periodletter_of_credit | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2017CADperiodletter_of_credit | |
Debt Instrument [Line Items] | ||||
Interest expense | $ 2,162,000 | $ 4,134,000 | $ 1,398,000 | |
Credit Agreement Expiring January 2020 | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 400,000,000 | |||
Leverage ratio | 2.5 | |||
Debt instrument, covenant consolidated leverage ratio actual | 1 | |||
Interest paid | $ 2,000,000 | $ 3,700,000 | $ 1,200,000 | |
Credit Agreement Expiring January 2020 | Minimum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Margin (as a percent) | 0.00% | |||
Credit Agreement Expiring January 2020 | Minimum | Eurocurrency Rate | ||||
Debt Instrument [Line Items] | ||||
Margin (as a percent) | 1.00% | |||
Credit Agreement Expiring January 2020 | Minimum | Index Rate | ||||
Debt Instrument [Line Items] | ||||
Margin (as a percent) | 1.00% | |||
Credit Agreement Expiring January 2020 | Maximum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Margin (as a percent) | 0.75% | |||
Credit Agreement Expiring January 2020 | Maximum | Eurocurrency Rate | ||||
Debt Instrument [Line Items] | ||||
Margin (as a percent) | 1.75% | |||
Credit Agreement Expiring January 2020 | Maximum | Index Rate | ||||
Debt Instrument [Line Items] | ||||
Margin (as a percent) | 1.75% | |||
Swingline loans | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 5,000,000 | |||
Letters of credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 50,000,000 | |||
Number of letters of credit issued | letter_of_credit | 2 | 2 | ||
Outstanding borrowings | $ 700,000 | |||
Letters of credit | Minimum | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio to calculate annual commitment fee (as a percent) | 0.125% | |||
Letters of credit | Maximum | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio to calculate annual commitment fee (as a percent) | 0.275% | |||
Atlantic Innovation Fund of Canada | ||||
Debt Instrument [Line Items] | ||||
Borrowings | $ 700,000 | CAD 0.8 | ||
Interest expense | $ 0 | |||
Number of remaining quarterly installments | period | 19 | 19 | ||
Letters of credit (Other than Revolving Credit Agreement) | ||||
Debt Instrument [Line Items] | ||||
Number of letters of credit issued | letter_of_credit | 2 | 2 | ||
Outstanding borrowings | $ 3,000,000 |
Goodwill and intangible asset63
Goodwill and intangible assets - Schedule of Goodwill (Details) - USD ($) | Jul. 01, 2017 | Feb. 29, 2016 | Dec. 15, 2015 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Changes in goodwill | ||||||
Balance at the beginning of the period | $ 397,558,000 | $ 376,302,000 | ||||
Goodwill, acquired during period | 21,453,000 | |||||
Adjustment to goodwill acquired with Acentia | 3,074,000 | (7,597,000) | ||||
Balance at the end of the period | $ 402,976,000 | 402,976,000 | 397,558,000 | |||
Impairment of goodwill related to continuing operations | $ 0 | 0 | ||||
Acentia | ||||||
Changes in goodwill | ||||||
Goodwill, acquired during period | 221,949,000 | |||||
Adjustment to goodwill acquired | 7,624,000 | |||||
Assessments Australia | ||||||
Changes in goodwill | ||||||
Adjustment to goodwill acquired | 71,000 | |||||
Ascend Management Innovations LLC | ||||||
Changes in goodwill | ||||||
Goodwill, acquired during period | $ 18,000,000 | 17,997,000 | ||||
Adjustment to goodwill acquired | (557,000) | |||||
Revitalised | ||||||
Changes in goodwill | ||||||
Goodwill, acquired during period | 2,830,000 | |||||
Health Services | ||||||
Changes in goodwill | ||||||
Balance at the beginning of the period | 123,679,000 | 113,427,000 | ||||
Adjustment to goodwill acquired with Acentia | 2,508,000 | (8,302,000) | ||||
Balance at the end of the period | 128,460,000 | 128,460,000 | 123,679,000 | |||
Health Services | Acentia | ||||||
Changes in goodwill | ||||||
Adjustment to goodwill acquired | 0 | |||||
Health Services | Assessments Australia | ||||||
Changes in goodwill | ||||||
Adjustment to goodwill acquired | 0 | |||||
Health Services | Ascend Management Innovations LLC | ||||||
Changes in goodwill | ||||||
Goodwill, acquired during period | 18,554,000 | |||||
Adjustment to goodwill acquired | (557,000) | |||||
Health Services | Revitalised | ||||||
Changes in goodwill | ||||||
Goodwill, acquired during period | 2,830,000 | |||||
U.S. Federal Services | ||||||
Changes in goodwill | ||||||
Balance at the beginning of the period | 228,148,000 | 220,524,000 | ||||
Goodwill, acquired during period | 0 | |||||
Adjustment to goodwill acquired with Acentia | 0 | 0 | ||||
Balance at the end of the period | 228,148,000 | 228,148,000 | 228,148,000 | |||
U.S. Federal Services | Acentia | ||||||
Changes in goodwill | ||||||
Adjustment to goodwill acquired | 7,624,000 | |||||
U.S. Federal Services | Assessments Australia | ||||||
Changes in goodwill | ||||||
Adjustment to goodwill acquired | 0 | |||||
U.S. Federal Services | Ascend Management Innovations LLC | ||||||
Changes in goodwill | ||||||
Adjustment to goodwill acquired | 0 | |||||
U.S. Federal Services | Revitalised | ||||||
Changes in goodwill | ||||||
Goodwill, acquired during period | 0 | |||||
Human Services | ||||||
Changes in goodwill | ||||||
Balance at the beginning of the period | 45,731,000 | 42,351,000 | ||||
Adjustment to goodwill acquired with Acentia | 566,000 | 705,000 | ||||
Balance at the end of the period | $ 46,368,000 | 46,368,000 | 45,731,000 | |||
Human Services | Acentia | ||||||
Changes in goodwill | ||||||
Adjustment to goodwill acquired | 0 | |||||
Human Services | Assessments Australia | ||||||
Changes in goodwill | ||||||
Goodwill, acquired during period | $ 3,000,000 | 2,899,000 | ||||
Adjustment to goodwill acquired | 71,000 | |||||
Human Services | Ascend Management Innovations LLC | ||||||
Changes in goodwill | ||||||
Adjustment to goodwill acquired | 0 | |||||
Human Services | Revitalised | ||||||
Changes in goodwill | ||||||
Goodwill, acquired during period | $ 0 | |||||
K-12 Education | ||||||
Changes in goodwill | ||||||
Adjustment to goodwill acquired with Ascend | (224,000) | |||||
K-12 Education | Health Services | ||||||
Changes in goodwill | ||||||
Adjustment to goodwill acquired with Ascend | 0 | |||||
K-12 Education | U.S. Federal Services | ||||||
Changes in goodwill | ||||||
Adjustment to goodwill acquired with Ascend | 0 | |||||
K-12 Education | Human Services | ||||||
Changes in goodwill | ||||||
Adjustment to goodwill acquired with Ascend | $ (224,000) |
Goodwill and intangible asset64
Goodwill and intangible assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Components of intangible assets | ||
Cost | $ 142,093 | $ 143,675 |
Accumulated Amortization | 43,324 | 34,648 |
Intangible Assets, net | 98,769 | 109,027 |
Customer contracts and relationships | ||
Components of intangible assets | ||
Cost | 129,916 | 132,221 |
Accumulated Amortization | 33,457 | 26,238 |
Intangible Assets, net | 96,459 | 105,983 |
Technology-based intangible assets | ||
Components of intangible assets | ||
Cost | 7,664 | 6,967 |
Accumulated Amortization | 5,475 | 4,613 |
Intangible Assets, net | 2,189 | 2,354 |
Trademarks and trade names | ||
Components of intangible assets | ||
Cost | 4,513 | 4,487 |
Accumulated Amortization | 4,392 | 3,797 |
Intangible Assets, net | $ 121 | $ 690 |
Weighted Average | ||
Components of intangible assets | ||
Weighted average remaining life of assets not fully amortized | 12 years 6 months | |
Weighted Average | Customer contracts and relationships | ||
Components of intangible assets | ||
Weighted average remaining life of assets not fully amortized | 12 years 8 months | |
Weighted Average | Technology-based intangible assets | ||
Components of intangible assets | ||
Weighted average remaining life of assets not fully amortized | 5 years 2 months | |
Weighted Average | Trademarks and trade names | ||
Components of intangible assets | ||
Weighted average remaining life of assets not fully amortized | 2 years 3 months |
Goodwill and intangible asset65
Goodwill and intangible assets - Schedule of Future Estimated Amortization Expense (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Estimated future amortization expense | |
2,018 | $ 10,320 |
2,019 | 9,416 |
2,020 | 8,316 |
2,021 | 7,452 |
2,022 | $ 7,385 |
Property and equipment - Schedu
Property and equipment - Schedule of Property and Equipment, at cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Property and equipment, at cost | |||
Property and equipment, gross | $ 274,208 | $ 327,709 | |
Less: Accumulated depreciation and amortization | (172,557) | (196,140) | |
Total property and equipment, net | 101,651 | 131,569 | |
Fixed asset depreciation expense | 45,200 | 49,200 | $ 37,000 |
Land | |||
Property and equipment, at cost | |||
Property and equipment, gross | 1,738 | 1,738 | |
Building and improvements | |||
Property and equipment, at cost | |||
Property and equipment, gross | 11,799 | 11,726 | |
Office furniture and equipment | |||
Property and equipment, at cost | |||
Property and equipment, gross | 207,140 | 261,752 | |
Leasehold improvements | |||
Property and equipment, at cost | |||
Property and equipment, gross | $ 53,531 | $ 52,493 |
Capitalized software - Schedule
Capitalized software - Schedule of Components of Capitalized Software (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Capitalized Computer Software, Net [Abstract] | |||
Capitalized software | $ 88,627 | $ 80,646 | |
Less: Accumulated amortization | (61,879) | (50,507) | |
Total Capitalized software, net | 26,748 | 30,139 | |
Capitalized software amortization expense | $ 10,600 | $ 9,200 | $ 9,900 |
Deferred contract costs - Sched
Deferred contract costs - Schedule of Deferred Contract Costs (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Sep. 30, 2016 |
Deferred contract costs | ||
Deferred contract costs | $ 30,776 | $ 30,114 |
Less: Accumulated amortization | (14,478) | (11,932) |
Total Deferred contract costs, net | $ 16,298 | $ 18,182 |
Accounts receivable reserves -
Accounts receivable reserves - Schedule of Accounts Receivable Reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Changes in the reserves against current billed accounts receivable | |||
Contractual retainage provisions | $ 10,300 | $ 16,200 | |
Accounts receivable, billed and unbilled | |||
Changes in the reserves against current billed accounts receivable | |||
Balance at beginning of year | 4,226 | 3,385 | $ 3,138 |
Additions to reserve | 5,106 | 2,335 | 2,690 |
Deductions | (2,489) | (1,494) | (2,443) |
Balance at end of year | $ 6,843 | $ 4,226 | $ 3,385 |
Commitments and contingencies70
Commitments and contingencies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Performance bonds | |||
Performance bond commitments | $ 17.7 | ||
Operating Lease expense | 80.6 | $ 75.4 | $ 67.1 |
Operating sublease income | 1.2 | ||
Sublease income, next twelve months | 1.2 | ||
Sublease income, two years | 1.2 | ||
Sublease income, three years | $ 1.2 | ||
Percentage of employees covered by collective bargaining agreements | 14.00% |
Commitments and contingencies C
Commitments and contingencies Commitments and contingencies - Schedule of Minimum Future Lease Commitments Under Leases (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Minimum future lease commitments under leases | |
2,018 | $ 69,482 |
2,019 | 54,390 |
2,020 | 36,292 |
2,021 | 10,472 |
2,022 | 4,200 |
Thereafter | 241 |
Total minimum lease payments | 175,077 |
Office space | |
Minimum future lease commitments under leases | |
2,018 | 65,230 |
2,019 | 50,908 |
2,020 | 34,159 |
2,021 | 10,459 |
2,022 | 4,198 |
Thereafter | 241 |
Total minimum lease payments | 165,195 |
Equipment | |
Minimum future lease commitments under leases | |
2,018 | 4,252 |
2,019 | 3,482 |
2,020 | 2,133 |
2,021 | 13 |
2,022 | 2 |
Thereafter | 0 |
Total minimum lease payments | $ 9,882 |
Employee benefit plans and de72
Employee benefit plans and deferred compensation - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Retirement Benefits [Abstract] | |||
Employer contribution to 401(k) plans | $ 7 | $ 6 | $ 4.7 |
Percentage of liabilities that can be met plan assets | 88.00% | ||
Investments in mutual funds within the rabbi trust | $ 15.5 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | Aug. 31, 2015 | |
Stock-based compensation | ||||
Shares available for grants (in shares) | 1,500,000 | |||
Compensation expense recognized | $ 21,365,000 | $ 18,751,000 | $ 17,237,000 | |
Total income tax benefit recognized | 15,000,000 | 7,400,000 | 7,100,000 | |
Cash paid to satisfy employees personal tax liability | $ 9,175,000 | $ 11,614,000 | $ 12,451,000 | |
Stock repurchase programs, authorized amount | $ 200,000,000 | |||
Common shares repurchased | 600,000 | 600,000 | 1,600,000 | |
Common shares repurchased, cost | $ 28,863,000 | $ 31,338,000 | $ 82,787,000 | |
Amount remaining available for future stock repurchases | 109,900,000 | |||
Restricted stock units (RSU) | ||||
Stock-based compensation | ||||
Compensation expense recognized | $ 21,400,000 | $ 18,800,000 | $ 17,200,000 | |
Deferred vested award | 700,000 | |||
Granted (in dollars per share) | $ 53.63 | $ 52 | $ 50.82 | |
Total fair value | $ 24,900,000 | $ 27,100,000 | $ 68,600,000 | |
Unrecognized compensation cost | $ 37,600,000 | |||
Expected realization period (in years) | 5 years | |||
Weighted average life (in years) | 1 year 6 months | |||
RSUs awarded in 2009 and after | Minimum | ||||
Stock-based compensation | ||||
Award vesting period (in years) | 1 year | |||
RSUs awarded in 2009 and after | Maximum | ||||
Stock-based compensation | ||||
Award vesting period (in years) | 5 years | |||
Stock options | ||||
Stock-based compensation | ||||
Award vesting period (in years) | 4 years | |||
Compensation expense recognized | $ 0 | $ 0 | 0 | |
Award expired period | 10 years | |||
Stock options, exercises in period (in shares) | 80,000 | |||
Stock options, outstanding (in shares) | 80,000 | |||
Stock options, exercises in period, weighted average exercise price (in dollars per share) | $ 11.55 | |||
Cash paid to satisfy employees personal tax liability | $ 8,700,000 | $ 9,300,000 | $ 11,700,000 |
Equity - Summary of the Company
Equity - Summary of the Company's RSU Activity (Details) - Unvested restricted stock units - $ / shares | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Summary of RSU activity | |||
Non-vested shares outstanding at the beginning of the period | 809,306 | ||
Granted (in shares) | 448,289 | ||
Vested (in shares) | (400,583) | ||
Forfeited (in shares) | (34,185) | ||
Non-vested shares outstanding at the end of the period | 822,827 | 809,306 | |
Weighted-Average Grant-Date Fair Value | |||
Non-vested shares outstanding at the beginning of the period (in dollars per share) | $ 47.64 | ||
Granted (in dollars per share) | 53.63 | $ 52 | $ 50.82 |
Vested (in dollars per share) | 46.17 | ||
Forfeited (in dollars per share) | 46 | ||
Non-vested shares outstanding at the end of the period (in dollars per share) | $ 51.69 | $ 47.64 |
Equity - Summary of Information
Equity - Summary of Information Pertaining to Stock Options Vested and Exercised (Details) - Stock options - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Information pertaining to stock options vested and exercised | |||
Aggregate intrinsic value of all stock options exercised | $ 4,025 | $ 4,077 | $ 5,536 |
Net cash proceeds from exercise of stock options | $ 924 | $ 546 | $ 868 |
Income taxes - Schedule of Comp
Income taxes - Schedule of Components of Income From Continuing Operations before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income before income taxes: | |||
United States | $ 257,910 | $ 238,871 | $ 232,359 |
Foreign | 56,325 | 47,097 | 27,460 |
Income before income taxes | $ 314,235 | $ 285,968 | $ 259,819 |
Income taxes Income taxes - Pro
Income taxes Income taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Current provision: | |||
Federal | $ 70,476 | $ 69,025 | $ 74,050 |
State and local | 15,594 | 15,595 | 15,332 |
Foreign | 11,221 | 15,536 | 9,581 |
Total current provision | 97,291 | 100,156 | 98,963 |
Deferred tax expense (benefit): | |||
Federal | 5,490 | 7,778 | 2,233 |
State and local | 643 | 902 | 403 |
Foreign | (1,371) | (3,028) | (1,829) |
Total deferred tax expense (benefit) | 4,762 | 5,652 | 807 |
Provision for income taxes | $ 102,053 | $ 105,808 | $ 99,770 |
Income taxes Income taxes - Rec
Income taxes Income taxes - Reconciliation of Tax Provision Using the Federal Statutory Income Tax Rate to Reported Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of actual provision for income taxes and provision for income taxes resulting from the use of federal statutory income tax | |||
Federal income tax provision at statutory rate of 35% | $ 109,982 | $ 100,089 | $ 90,937 |
State income taxes, net of federal benefit | 10,554 | 10,723 | 9,847 |
Foreign taxation | (6,940) | (3,976) | (2,208) |
Permanent items | 970 | 1,284 | 1,602 |
Tax credits | (4,851) | (1,592) | (961) |
Vesting of equity compensation | (6,569) | 0 | 0 |
Other | (1,093) | (720) | 553 |
Provision for income taxes | $ 102,053 | $ 105,808 | $ 99,770 |
Statutory income tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
Income taxes - Schedule of Defe
Income taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Sep. 30, 2016 |
Components of deferred tax assets and liabilities | ||
Costs deductible in future periods | $ 30,794 | $ 27,738 |
Deferred revenue | 20,703 | 23,469 |
Stock compensation | 4,976 | 5,085 |
Net operating loss carryforwards | 360 | 1,291 |
Amortization of goodwill and intangible assets | (36,100) | (34,484) |
Capitalized software | (9,197) | (10,126) |
Accounts receivable - unbilled | (12,953) | (13,810) |
Property and equipment | (3,924) | (5,517) |
Prepaid expenses | (3,741) | (1,296) |
Other | (3,333) | (519) |
Net deferred tax liabilities | $ (12,415) | $ (8,169) |
Income taxes - Schedule of Net
Income taxes - Schedule of Net Deferred Tax Position (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Sep. 30, 2016 |
Income Tax Disclosure [Abstract] | ||
Balance of tax jurisdictions with net deferred tax assets | $ 7,691 | $ 8,644 |
Balance of tax jurisdictions with net deferred tax liabilities | (20,106) | (16,813) |
Net deferred tax liabilities | $ (12,415) | $ (8,169) |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net operating loss carryforwards | |||
Cumulative earnings from foreign subsidiaries | $ 219 | ||
Income taxes paid | 87.8 | $ 108.3 | $ 81.3 |
Unrecognized tax benefits | |||
Unrecognized tax benefits that, if recognized, would affect the annual effective income tax rate | 1.1 | 1.1 | |
Interest and penalties included in net liability balance | 0.6 | 0.6 | |
Maximum | |||
Unrecognized tax benefits | |||
Interest expense recognized related to unrecognized tax benefits | $ 0.1 | $ 0.1 | $ 0.1 |
Income taxes - Summary of Incom
Income taxes - Summary of Income Tax Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits | |||
Balance at beginning of year | $ 448 | $ 529 | $ 812 |
Lapse of statute of limitation | 0 | 0 | (200) |
Increases for tax positions taken in current year | 185 | 0 | 0 |
Reductions for tax positions of prior years | 0 | (81) | (83) |
Balance at end of year | $ 633 | $ 448 | $ 529 |
Quarterly information (unaudi83
Quarterly information (unaudited) (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue | $ 620,903 | $ 600,447 | $ 622,047 | $ 607,564 | $ 623,091 | $ 617,094 | $ 606,453 | $ 556,722 | $ 2,450,961 | $ 2,403,360 | $ 2,099,821 |
Gross profit | 162,581 | 152,189 | 152,317 | 144,818 | 152,930 | 151,379 | 147,667 | 110,215 | 611,905 | 562,191 | 512,717 |
Operating income | 77,590 | 81,811 | 80,335 | 73,776 | 81,308 | 84,609 | 77,900 | 42,786 | 313,512 | 286,603 | 259,832 |
Amortization of intangible assets | (12,208) | (13,377) | (9,348) | ||||||||
Restructuring costs | (2,242) | 0 | 0 | ||||||||
Acquisition-related expenses | (83) | (832) | (4,745) | ||||||||
Gain on sale of a business | 650 | 6,880 | 0 | ||||||||
Selling, general and administrative expenses | (284,510) | (268,259) | (238,792) | ||||||||
Net income | 54,968 | 57,788 | 53,097 | 46,329 | 51,187 | 52,750 | 49,341 | 26,882 | 212,182 | 180,160 | 160,049 |
Net income attributable to MAXIMUS | $ 53,329 | $ 56,918 | $ 52,515 | $ 46,664 | $ 50,743 | $ 52,225 | $ 48,785 | $ 26,609 | $ 209,426 | $ 178,362 | $ 157,772 |
Diluted earnings per share attributable to MAXIMUS (in dollars per share) | $ 0.81 | $ 0.86 | $ 0.80 | $ 0.71 | $ 0.77 | $ 0.79 | $ 0.74 | $ 0.40 | $ 3.17 | $ 2.69 | $ 2.35 |
Segment Reconciling Items | |||||||||||
Amortization of intangible assets | $ (2,700) | $ (2,720) | $ (3,386) | $ (3,402) | $ (3,449) | $ (3,517) | $ (3,262) | $ (3,149) | $ (12,208) | $ (13,377) | $ (9,348) |
Restructuring costs | 0 | 0 | 0 | (2,242) | |||||||
Acquisition-related expenses | (83) | 0 | 0 | 0 | (257) | 0 | (529) | (46) | (83) | (832) | (4,745) |
Gain on sale of a business | 0 | 650 | 0 | 0 | 427 | 6,453 | 0 | 0 | 650 | 6,880 | 0 |
Corporate/Other | |||||||||||
Selling, general and administrative expenses | (1,050) | 90 | (92) | (357) | 622 | (2,127) | 0 | (650) | (1,409) | (2,155) | (6) |
Health Services | |||||||||||
Revenue | 1,380,151 | 1,298,304 | 1,109,238 | ||||||||
Gross profit | 347,325 | 292,181 | 254,108 | ||||||||
Operating income | 215,244 | 185,026 | 154,293 | ||||||||
Selling, general and administrative expenses | (132,081) | (107,155) | (99,815) | ||||||||
Health Services | Operating segments | |||||||||||
Revenue | 355,338 | 335,090 | 348,994 | 340,729 | 342,135 | 333,699 | 330,567 | 291,903 | |||
Gross profit | 99,368 | 83,269 | 86,454 | 78,234 | 80,717 | 76,775 | 82,717 | 51,972 | |||
Operating income | 57,024 | 51,553 | 56,540 | 50,127 | 50,874 | 50,430 | 56,914 | 26,808 | |||
U.S. Federal Services | |||||||||||
Revenue | 545,573 | 591,728 | 502,484 | ||||||||
Gross profit | 139,321 | 138,168 | 118,646 | ||||||||
Operating income | 64,976 | 63,376 | 59,394 | ||||||||
Selling, general and administrative expenses | (74,345) | (74,792) | (59,252) | ||||||||
U.S. Federal Services | Operating segments | |||||||||||
Revenue | 127,316 | 131,589 | 145,370 | 141,298 | 146,651 | 149,601 | 150,191 | 145,285 | |||
Gross profit | 31,547 | 33,627 | 36,571 | 37,576 | 37,529 | 38,980 | 33,421 | 28,238 | |||
Operating income | 13,581 | 15,870 | 17,644 | 17,881 | 18,558 | 19,119 | 14,983 | 10,716 | |||
Human Services | |||||||||||
Revenue | 525,237 | 513,328 | 488,099 | ||||||||
Gross profit | 125,259 | 131,842 | 139,963 | ||||||||
Operating income | 48,584 | 47,685 | 60,244 | ||||||||
Selling, general and administrative expenses | $ (76,675) | $ (84,157) | $ (79,719) | ||||||||
Human Services | Operating segments | |||||||||||
Revenue | 138,249 | 133,768 | 127,683 | 125,537 | 134,305 | 133,794 | 125,695 | 119,534 | |||
Gross profit | 31,666 | 35,293 | 29,292 | 29,008 | 34,684 | 35,624 | 31,529 | 30,005 | |||
Operating income | $ 10,818 | $ 16,368 | $ 9,629 | $ 11,769 | $ 14,533 | $ 14,251 | $ 9,794 | $ 9,107 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent events $ / shares in Units, $ in Millions | Oct. 06, 2017USD ($)$ / shares |
Subsequent events | |
Dividend declared date | Oct. 6, 2017 |
Cash dividend declared (in dollars per share) | $ / shares | $ 0.045 |
Dividends payable date | Nov. 30, 2017 |
Dividends payable date of record | Nov. 15, 2017 |
Dividend payable | $ | $ 2.9 |