Cover Page
Cover Page - shares | 3 Months Ended | |
Dec. 31, 2022 | Feb. 06, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-12997 | |
Entity Registrant Name | Maximus, Inc. | |
Entity Incorporation, State or Country Code | VA | |
Entity Tax Identification Number | 54-1000588 | |
Entity Address, Address Line One | 1600 Tysons Boulevard | |
Entity Address, City or Town | McLean | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22102 | |
City Area Code | 703 | |
Local Phone Number | 251-8500 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | MMS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Reporting Company | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 60,773,258 | |
Entity Central Index Key | 0001032220 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 1,249,246 | $ 1,150,876 |
Cost of revenue | 1,004,499 | 922,721 |
Gross profit | 244,747 | 228,155 |
Selling, general, and administrative expenses | 146,452 | 124,221 |
Amortization of intangible assets | 23,518 | 22,405 |
Operating income | 74,777 | 81,529 |
Interest expense | 21,606 | 9,638 |
Other income/(expense), net | 266 | (311) |
Income before income taxes | 53,437 | 71,580 |
Provision for income taxes | 13,442 | 18,250 |
Net income | $ 39,995 | $ 53,330 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.65 | $ 0.86 |
Diluted (in dollars per share) | $ 0.65 | $ 0.85 |
Weighted average shares outstanding: | ||
Basic (in shares) | 61,117 | 62,262 |
Diluted (in shares) | 61,196 | 62,445 |
Dividends declared per share (in dollars per share) | $ 0.28 | $ 0.28 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 39,995 | $ 53,330 |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | 8,036 | 459 |
Net (losses)/gains on cash flow hedges, net of tax effect of $(1,349) and $957, respectively | (3,781) | 2,685 |
Other comprehensive income | 4,255 | 3,144 |
Comprehensive income | $ 44,250 | $ 56,474 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net gains/(losses) on cash flow hedge, tax | $ (1,349) | $ 957 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Assets: | ||
Cash and cash equivalents | $ 63,050 | $ 40,658 |
Accounts receivable, net | 1,014,046 | 807,110 |
Income taxes receivable | 4,486 | 2,158 |
Prepaid expenses and other current assets | 174,505 | 182,387 |
Total current assets | 1,256,087 | 1,032,313 |
Property and equipment, net | 50,181 | 52,258 |
Capitalized software, net | 64,963 | 58,740 |
Operating lease right-of-use assets | 162,289 | 132,885 |
Goodwill | 1,783,239 | 1,779,415 |
Intangible assets, net | 782,821 | 804,904 |
Deferred contract costs, net | 49,030 | 47,732 |
Deferred compensation plan assets | 39,606 | 37,050 |
Deferred income taxes | 5,038 | 4,970 |
Other assets | 41,661 | 42,447 |
Total assets | 4,234,915 | 3,992,714 |
Liabilities: | ||
Accounts payable and accrued liabilities | 272,196 | 264,553 |
Accrued compensation and benefits | 118,505 | 178,199 |
Deferred revenue, current portion | 96,201 | 87,146 |
Income taxes payable | 12,422 | 718 |
Long-term debt, current portion | 77,479 | 63,458 |
Operating lease liabilities, current portion | 59,553 | 63,999 |
Other current liabilities | 109,866 | 116,374 |
Total current liabilities | 746,222 | 774,447 |
Deferred revenue, non-current portion | 29,624 | 21,414 |
Deferred income taxes | 203,545 | 206,099 |
Long-term debt, non-current portion | 1,486,975 | 1,292,483 |
Deferred compensation plan liabilities, non-current portion | 44,688 | 40,210 |
Operating lease liabilities, non-current portion | 119,081 | 86,175 |
Other liabilities | 23,773 | 22,515 |
Total liabilities | 2,653,908 | 2,443,343 |
Commitments and contingencies (Note 10) | ||
Shareholders' equity: | ||
Common stock, no par value; 100,000 shares authorized; 60,774 shares issued and outstanding as of December 31, 2022 and September 30 2022, respectively (shares in thousands) | 562,679 | 557,978 |
Accumulated other comprehensive loss | (29,706) | (33,961) |
Retained earnings | 1,048,034 | 1,025,354 |
Total shareholders' equity | 1,581,007 | 1,549,371 |
Total liabilities and shareholders' equity | $ 4,234,915 | $ 3,992,714 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares shares in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized (in shares) | 100,000 | 100,000 |
Common stock, shares issued (in shares) | 60,774 | |
Common stock, shares outstanding (in shares) | 60,774 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 39,995 | $ 53,330 |
Adjustments to reconcile net income to cash flows from operations: | ||
Depreciation and amortization of property, equipment and capitalized software | 12,280 | 11,365 |
Amortization of intangible assets | 23,518 | 22,405 |
Amortization of debt issuance costs and debt discount | 1,034 | 649 |
Deferred income taxes | (1,331) | (229) |
Stock compensation expense | 4,403 | 8,248 |
Change in assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (200,749) | (14,114) |
Prepaid expenses and other current assets | 10,624 | (5,115) |
Deferred contract costs | (1,013) | (6,811) |
Accounts payable and accrued liabilities | 3,642 | (32,452) |
Accrued compensation and benefits | (53,271) | (56,305) |
Deferred revenue | 14,764 | 5,929 |
Income taxes | 9,465 | 10,321 |
Operating lease right-of-use assets and liabilities | (948) | (6,370) |
Other assets and liabilities | 2,928 | 6,230 |
Net cash used in operating activities | (134,659) | (2,919) |
Cash flows from investing activities: | ||
Purchases of property and equipment and capitalized software | (15,697) | (6,327) |
Net cash used in investing activities | (15,697) | (6,327) |
Cash flows from financing activities: | ||
Cash dividends paid to Maximus shareholders | (17,017) | (17,347) |
Purchases of Maximus common stock | 0 | (1,379) |
Tax withholding related to RSU vesting | (8,475) | (9,673) |
Payments for contingent consideration | (1,415) | 0 |
Proceeds from borrowings | 268,702 | 100,000 |
Principal payments for debt | (61,355) | (16,685) |
Restricted cash movements | (9,473) | 0 |
Net cash provided by financing activities | 170,967 | 54,916 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 2,421 | 372 |
Net change in cash, cash equivalents, and restricted cash | 23,032 | 46,042 |
Cash, cash equivalents and restricted cash, beginning of period | 136,795 | 156,570 |
Cash, cash equivalents and restricted cash, end of period | $ 159,827 | $ 202,612 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Accumulated Other Comprehensive Loss | Retained Earnings |
Balance (in shares) at Sep. 30, 2021 | 61,954 | |||
Beginning balance at Sep. 30, 2021 | $ 1,480,329 | $ 532,411 | $ (39,908) | $ 987,826 |
Increase (Decrease) in Shareholders' Equity | ||||
Net income | 53,330 | 53,330 | ||
Foreign currency translation | 459 | 459 | ||
Cash flow hedge, net of tax | 2,685 | 2,685 | ||
Cash dividends | (17,347) | (17,347) | ||
Dividends on RSUs | 0 | $ 272 | (272) | |
Purchases of Maximus common stock (in shares) | (18) | |||
Purchases of Maximus common stock | (1,379) | (1,379) | ||
Stock compensation expense | 8,248 | $ 8,248 | ||
Tax withholding adjustment related to RSU vesting | 2,101 | $ 2,101 | ||
Ending (in shares) at Dec. 31, 2021 | 61,936 | |||
Ending balance at Dec. 31, 2021 | 1,528,426 | $ 543,032 | (36,764) | 1,022,158 |
Balance (in shares) at Sep. 30, 2022 | 60,774 | |||
Beginning balance at Sep. 30, 2022 | 1,549,371 | $ 557,978 | (33,961) | 1,025,354 |
Increase (Decrease) in Shareholders' Equity | ||||
Net income | 39,995 | 39,995 | ||
Foreign currency translation | 8,036 | 8,036 | ||
Cash flow hedge, net of tax | (3,781) | (3,781) | ||
Cash dividends | (17,017) | (17,017) | ||
Dividends on RSUs | 0 | 298 | (298) | |
Stock compensation expense | $ 4,403 | $ 4,403 | ||
Ending (in shares) at Dec. 31, 2022 | 60,774 | 60,774 | ||
Ending balance at Dec. 31, 2022 | $ 1,581,007 | $ 562,679 | $ (29,706) | $ 1,048,034 |
Organization
Organization | 3 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | ORGANIZATION Maximus, a Virginia corporation established in 1975, is a leading operator of government health and human services programs and provider of technology solutions to governments. Under our mission of Moving People Forward , we offer industry-leading expertise, including citizen engagement, eligibility and program integrity, independent clinical assessments, case management, and technology modernization services to enable citizens around the globe to successfully engage with their governments at all levels. We are a proud partner to government agencies in the United States, Australia, Canada, Italy, Saudi Arabia, Singapore, South Korea, Sweden, United Arab Emirates, and the United Kingdom. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements, including the notes, include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). All intercompany balances and transactions have been eliminated in consolidation. Basis of Presentation for Interim Periods Certain information and footnote disclosures normally included for the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted for the interim periods presented. We believe that the unaudited interim financial statements include all adjustments (which are normal and recurring in nature) necessary to present fairly our financial position and the results of operations and cash flows for the periods presented. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for the year or future periods. The financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the year ended September 30, 2022 included in our Annual Report on Form 10-K for the fiscal year then ended (the "2022 10-K"). We have continued to follow the accounting policies set forth in those financial statements. Use of Estimates The preparation of these financial statements, in conformity with U.S. GAAP, requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenue and expenses. At each reporting period end, we make estimates, including those related to revenue recognition and cost estimation on certain contracts, the realizability of goodwill, and amounts related to income taxes, certain accrued liabilities, and contingencies and litigation. In May 2021, we acquired VES Group, Inc. As part of the acquisition, we allocated a valuation of $27 million to certain technology assets used by the business, which we elected to amortize over twelve years, which was our best estimate of asset life at that time. In fiscal year 2023, we have taken the opportunity to improve our technology portfolio, including the development of technology which will eventually replace much of the acquired technology. Accordingly, we have revised the asset life on the existing technology assuming the assets will cease being used by September 2026. This change in estimated useful life will result in additional annual amortization expense of $3.8 million per year. In the three months ended December 31, 2022, this change reduced our diluted earnings per share by approximately $0.01. |
Business Segments
Business Segments | 3 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Business Segments | BUSINESS SEGMENTS We conduct our operations through three business segments: U.S. Federal Services, U.S. Services, and Outside the U.S. U.S. Federal Services Our U.S. Federal Services Segment delivers end-to-end solutions that help various U.S. federal government agencies better deliver on their mission, including program operations and management, clinical services, and technology solutions. This also includes appeals and assessments services, system and application development, IT modernization, and maintenance services. The segment also contains certain state-based assessments and appeals work that is part of the segment's heritage which continues to be managed within this segment. Benefiting from the 2021 acquisition of the Attain Federal business, now managed as Technology Consulting Services, the segment executes on its digital strategy to deliver technology solutions that advance agency missions, including the challenge to modernize, provide better customer experience, and drive process efficiencies. The segment continues to expand its clinical solutions with the acquisition of VES Group, Inc., which manages the clinical evaluation process for U.S. veterans and service members on behalf of the U.S. Department of Veterans Affairs. U.S. Services Our U.S. Services Segment provides a variety of business process services ("BPS"), such as program administration, assessments, and related consulting work for U.S. state and local government programs. These services support a variety of programs, including the Affordable Care Act ("ACA"), Medicaid, the Children's Health Insurance Program ("CHIP"), Temporary Assistance to Needy Families ("TANF"), and child support programs. As part of the government's COVID-19 response efforts, the segment supported contact tracing, disease investigation, and vaccine distribution support services during the peak of the pandemic . The segment also successfully expanded into the unemployment insurance market where longer term opportunities have materialized. As part of the broader strategy to evolve clinically and address societal macro trends such as aging populations and rising costs, the segment continues to expand its offerings in public health with new work in in-person assessments. Outside the U.S. Our Outside the U.S. Segment provides BPS for international governments and commercial clients, transforming the lives of people around the world. Helping people find employment, access vital support, and remain healthy, these services include health and disability assessments, program administration for employment services, wellbeing solutions, and other job seeker-related services. We support programs and deliver services in the U.K., including the Health Assessment Advisory Service ("HAAS") and Restart; Australia, including Workforce Australia and the Disability Employment Service; Canada, including the Employment Program of British Columbia; in addition to Italy, Saudi Arabia, Singapore, South Korea, Sweden, and UAE where we predominantly provide employment support and job seeker services. Table 3.1: Results of Operation by Business Segment For the Three Months Ended December 31, 2022 December 31, 2021 Amount % (1) Amount % (1) (dollars in thousands) Revenue: U.S. Federal Services $ 618,167 $ 581,871 U.S. Services 439,478 386,417 Outside the U.S. 191,601 182,588 Revenue $ 1,249,246 $ 1,150,876 Gross profit: U.S. Federal Services $ 122,694 19.8 % $ 126,576 21.8 % U.S. Services 83,598 19.0 % 89,699 23.2 % Outside the U.S. 38,455 20.1 % 11,880 6.5 % Gross profit $ 244,747 19.6 % $ 228,155 19.8 % Selling, general, and administrative expenses: U.S. Federal Services $ 71,649 11.6 % $ 64,925 11.2 % U.S. Services 45,842 10.4 % 35,102 9.1 % Outside the U.S. 28,389 14.8 % 21,340 11.7 % Other (2) 572 NM 2,854 NM Selling, general, and administrative expenses $ 146,452 11.7 % $ 124,221 10.8 % Operating income: U.S. Federal Services $ 51,045 8.3 % $ 61,651 10.6 % U.S. Services 37,756 8.6 % 54,597 14.1 % Outside the U.S. 10,066 5.3 % (9,460) (5.2) % Amortization of intangible assets (23,518) NM (22,405) NM Other (2) (572) NM (2,854) NM Operating income $ 74,777 6.0 % $ 81,529 7.1 % (1) Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM." (2) Other expenses includes credits and costs that are not allocated to a particular segment. This includes expenses incurred as part of our acquisitions, as well as potential acquisitions which have not been or may not be completed. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION We recognize revenue as, or when, we satisfy performance obligations under a contract. The majority of our contracts have performance obligations that are satisfied over time. In most cases, we view our performance obligations as promises to transfer a series of distinct services to our customers that are substantially the same and which have the same pattern of service. We recognize revenue over the performance period as a customer receives the benefits of our services. Disaggregation of Revenue In addition to our segment reporting, we disaggregate our revenues by contract type and customer type. Our operating segments represent the manner in which our Chief Executive Officer reviews our financial results, which is further discussed in "Note 3. Business Segments." Table 4.1: Revenue by Contract Type For the Three Months Ended December 31, 2022 December 31, 2021 (dollars in thousands) Performance-based $ 569,217 45.6 % $ 490,956 42.7 % Cost-plus 347,319 27.8 % 340,081 29.5 % Fixed price 175,073 14.0 % 151,505 13.2 % Time and materials 157,637 12.6 % 168,334 14.6 % Total revenue $ 1,249,246 $ 1,150,876 Table 4.2: Revenue by Customer Type For the Three Months Ended December 31, 2022 December 31, 2021 (dollars in thousands) U. S. federal government agencies $ 603,918 48.3 % $ 564,094 49.0 % U.S. state government agencies 437,362 35.0 % 371,547 32.3 % International government agencies 181,760 14.5 % 171,375 14.9 % Other, including local municipalities and commercial customers 26,206 2.1 % 43,860 3.8 % Total revenue $ 1,249,246 $ 1,150,876 Contract balances Differences in timing between revenue recognition and cash collection result in contract assets and contract liabilities. We classify these assets as accounts receivable — billed and billable and unbilled receivables; the liabilities are classified as deferred revenue. In many contracts, we bill our customers on a monthly basis shortly after the month end for work performed in that month and such balances are considered collectible and are included within accounts receivable, net. Exceptions to this pattern will arise for various reasons, including those listed below. • Under cost-plus contracts, we are typically required to estimate a contract's share of our general and administrative expenses. This share is based upon estimates of total costs, which may vary over time. We typically invoice our customers at an agreed provisional billing rate which may differ from actual rates incurred. If our actual rates are higher than the provisional billing rates, an asset is recorded for this variance; if the provisional billing rates are higher than our actual rates, we record a liability. • Certain contracts include retainage balances, whereby revenue is earned, but some portion of cash payments are held back by the customer for a period of time, typically to allow the customer to confirm the objective criteria laid out by the contract have been met. This balance is classified as accounts receivable - unbilled until restrictions on billing are lifted. As of December 31, 2022 and September 30, 2022, $19.0 million and $13.1 million, respectively, of our unbilled receivables related to amounts pursuant to contractual retainage provisions. • In certain contracts, we may receive funds from our customers prior to performing operations. These funds are typically referred to as "set-up costs" and reflect the need for us to make investments in infrastructure prior to providing a service. This investment in infrastructure is not a performance obligation that is distinct from the service that is subsequently provided and, as a result, revenue is not recognized based upon the establishment of this infrastructure, but rather over the course of the contractual relationship. The funds are initially recorded as deferred revenue and recognized over the term of the contract. Other contracts may not include set-up fees but will provide higher fees in earlier periods of the contract. The premium on these fees is deferred. • Some of our contracts, notably our employment services contracts in the Outside the U.S. Segment, include payments for desired outcomes, such as job placement and job retention, and these outcome payments occur over several months. We are required to estimate these outcome fees ahead of their realization and recognize this estimated fee over the period of delivery. During the three months ended December 31, 2022, we recognized revenue of $51.1 million included in our deferred revenue balances at September 30, 2022. During the three months ended December 31, 2021, we recognized revenue of $41.2 million included in our deferred revenue balances at September 30, 2021. Contract estimates We are required to use estimates in recognizing revenue from some of our contracts. Some of our performance-based contract revenue is recognized based upon future outcomes defined in each contract. This is the case in many of our employment services contracts in the Outside the U.S. Segment, where we are paid as individuals attain employment goals, which may take many months to achieve. We recognize revenue on these contracts over the period of performance. Our estimates vary from contract to contract but may include estimates of the number of participants, the length of the contract, and the participants reaching employment milestones. We are required to estimate these outcome fees ahead of their collection and recognize this estimated fee over the period of delivery. Changes to our estimates are recognized on a cumulative catch-up basis. For the three months ended December 31, 2022, there was no material effect on revenue or diluted earnings per share from changes in estimates. The corresponding change for the three months ended December 31, 2021 was a reduction to revenue and diluted earnings per share of $4.7 million and $0.05, respectively. Remaining performance obligations As of December 31, 2022, we had approximately $425 million of remaining performance obligations. We anticipate that we will recognize revenue on approximately 60% of this balance within the next 12 months. This balance excludes contracts with an original duration of twelve months or less, including contracts with a penalty-free termination for convenience clause, and any variable consideration which is allocated entirely to future performance obligations, including variable transaction fees or fees tied directly to costs incurred. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Table 5: Weighted Average Number of Shares - Earnings Per Share For the Three Months Ended December 31, 2022 December 31, 2021 (in thousands) Basic weighted average shares outstanding 61,117 62,262 Dilutive effect of unvested RSUs and PSUs 79 183 Denominator for diluted earnings per share 61,196 62,445 |
Debt And Derivatives
Debt And Derivatives | 3 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt And Derivatives | DEBT AND DERIVATIVES Table 6.1: Details of Debt December 31, 2022 September 30, 2022 (in thousands) Term Loan A, due 2026 $ 957,500 $ 971,250 Term Loan B, due 2028 347,592 395,000 Revolver 261,566 — Subsidiary loan agreements 7,135 64 Total debt principal 1,573,793 1,366,314 Less: Unamortized debt-issuance costs and discounts (9,339) (10,373) Total debt 1,564,454 1,355,941 Less: Current portion of long-term debt (77,479) (63,458) Long-term debt $ 1,486,975 $ 1,292,483 We entered into a credit agreement with JPMorgan Chase Bank, N.A. in May 2021 comprised of Term Loan A, Term Loan B, and a $600.0 million revolving credit facility ("Revolver"). During the first quarter of fiscal year 2023, we converted our interest rate index from the London Interbank Overnight Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR"). The Credit Agreement requires us to comply with a number of covenants, including leverage and interest coverage ratios. At December 31, 2022, we are in compliance with all covenants. We do not believe that the covenants represent a significant restriction on our ability to successfully operate the business or to pay dividends. In addition to the corporate Credit Agreement, we hold smaller credit facilities in Australia, Canada, and the United Kingdom. These allow our businesses to borrow funds to meet any short-term working capital needs. The following table sets forth future minimum principal payments due under our debt obligations as of December 31, 2022 for the remainder of fiscal year 2023 through fiscal year 2027 and thereafter: Table 6.2: Details of Future Minimum Principal Payments Due Amount Due (in thousands) January 1, 2023 through September 30, 2023 $ 57,873 Year ended September 30, 2024 85,985 Year ended September 30, 2025 92,860 Year ended September 30, 2026 1,002,551 Year ended September 30, 2027 3,485 Thereafter 331,039 Total Payments $ 1,573,793 Interest Rate Derivative Instruments To reduce our interest rate credit risk, we entered into interest-rate swap agreements covering $500 million of our Term Loan A, effectively setting a fixed rate for a portion of our debt. The balance of the debt pays interest based upon an index. The floating interest rate on these instruments was converted from LIBOR to SOFR in December 2022, concurrent with our debt agreements. In converting our debt and interest-rate swaps, we utilized the practical expedients allowed under ASU No. 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which allowed us to treat these amendments as though the modification was not substantial. At December 31, 2022, our effective interest rate, including the original issuance costs and discount rate, was 6.0%. Our interest-rate swap agreements expire in May 2026, concurrently with the Term Loan A maturity. As of December 31, 2022, we had an asset of $29.0 million and a liability of $2.7 million, compared to an asset of $31.4 million as of September 30, 2022. These balances were recorded in "other assets" and "other liabilities", respectively, on our consolidated balance sheet. As these hedges are considered effective, all gains and losses are reported within accumulated other comprehensive income on our consolidated statement of comprehensive income. |
Debt And Derivatives | DEBT AND DERIVATIVES Table 6.1: Details of Debt December 31, 2022 September 30, 2022 (in thousands) Term Loan A, due 2026 $ 957,500 $ 971,250 Term Loan B, due 2028 347,592 395,000 Revolver 261,566 — Subsidiary loan agreements 7,135 64 Total debt principal 1,573,793 1,366,314 Less: Unamortized debt-issuance costs and discounts (9,339) (10,373) Total debt 1,564,454 1,355,941 Less: Current portion of long-term debt (77,479) (63,458) Long-term debt $ 1,486,975 $ 1,292,483 We entered into a credit agreement with JPMorgan Chase Bank, N.A. in May 2021 comprised of Term Loan A, Term Loan B, and a $600.0 million revolving credit facility ("Revolver"). During the first quarter of fiscal year 2023, we converted our interest rate index from the London Interbank Overnight Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR"). The Credit Agreement requires us to comply with a number of covenants, including leverage and interest coverage ratios. At December 31, 2022, we are in compliance with all covenants. We do not believe that the covenants represent a significant restriction on our ability to successfully operate the business or to pay dividends. In addition to the corporate Credit Agreement, we hold smaller credit facilities in Australia, Canada, and the United Kingdom. These allow our businesses to borrow funds to meet any short-term working capital needs. The following table sets forth future minimum principal payments due under our debt obligations as of December 31, 2022 for the remainder of fiscal year 2023 through fiscal year 2027 and thereafter: Table 6.2: Details of Future Minimum Principal Payments Due Amount Due (in thousands) January 1, 2023 through September 30, 2023 $ 57,873 Year ended September 30, 2024 85,985 Year ended September 30, 2025 92,860 Year ended September 30, 2026 1,002,551 Year ended September 30, 2027 3,485 Thereafter 331,039 Total Payments $ 1,573,793 Interest Rate Derivative Instruments To reduce our interest rate credit risk, we entered into interest-rate swap agreements covering $500 million of our Term Loan A, effectively setting a fixed rate for a portion of our debt. The balance of the debt pays interest based upon an index. The floating interest rate on these instruments was converted from LIBOR to SOFR in December 2022, concurrent with our debt agreements. In converting our debt and interest-rate swaps, we utilized the practical expedients allowed under ASU No. 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which allowed us to treat these amendments as though the modification was not substantial. At December 31, 2022, our effective interest rate, including the original issuance costs and discount rate, was 6.0%. Our interest-rate swap agreements expire in May 2026, concurrently with the Term Loan A maturity. As of December 31, 2022, we had an asset of $29.0 million and a liability of $2.7 million, compared to an asset of $31.4 million as of September 30, 2022. These balances were recorded in "other assets" and "other liabilities", respectively, on our consolidated balance sheet. As these hedges are considered effective, all gains and losses are reported within accumulated other comprehensive income on our consolidated statement of comprehensive income. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The following assets and liabilities are recorded at fair value on a recurring basis. • We hold mutual fund assets within a Rabbi Trust to cover liabilities in our deferred compensation plan. These assets have prices quoted within active markets and, accordingly, are classified as level 1 within the fair value hierarchy. • We have two interest rate swap agreements, serving to reduce our interest rate risk on our debt. These assets and liabilities can be valued using observable data and, accordingly, are classified as level 2 within the fair value hierarchy. • We anticipate paying additional consideration for certain acquisitions based upon the subsequent performance of the businesses acquired. This liability is based upon our internal assumptions over revenues, margins, volumes, and contract terms. Accordingly, these inputs are not observable and are classified as level 3 within the fair value hierarchy. The tables below present assets and liabilities measured and recorded at fair value in our consolidated balance sheets on a recurring basis and their corresponding level within the fair value hierarchy. No transfers between Level 1, Level 2, and Level 3 fair value measurements occurred for the three months ended December 31, 2022. Table 7.1: Fair Value Measurements As of December 31, 2022 Level 1 Level 2 Level 3 Balance (in thousands) Assets: Deferred compensation assets - Rabbi Trust $ 24,316 $ — $ — $ 24,316 Interest rate swap - $300 million notional value — 29,012 — 29,012 Total assets $ 24,316 $ 29,012 $ — $ 53,328 Liabilities: Interest rate swap - $200 million notional value $ — $ 2,733 $ — $ 2,733 Contingent consideration — — 16,439 16,439 Total liabilities $ — $ 2,733 $ 16,439 $ 19,172 The fair values of receivables, prepaids, other assets, accounts payable, accrued costs, and other current liabilities approximate the carrying values as a result of the short-term nature of these instruments. The carrying value of our debt is consistent with the fair value as the stated interest rates in the agreements are consistent with the current market rates used in notes with similar terms in the markets (Level 2 inputs). Accumulated Other Comprehensive Income All amounts recorded in accumulated other comprehensive loss are related to our foreign currency translations and interest rate swap, net of tax. The following table shows changes in accumulated other comprehensive loss: Table 7.2: Details of Changes in Accumulated Other Comprehensive Loss by Category Foreign currency translation adjustment Net unrealized gain on derivatives, net of tax Total (in thousands) Balance as of September 30, 2022 $ (57,109) $ 23,148 $ (33,961) Other comprehensive income before reclassifications 8,036 (2,467) 5,569 Amounts reclassified from accumulated other comprehensive loss — (1,314) (1,314) Net current period other comprehensive losses 8,036 (3,781) 4,255 Balance as of December 31, 2022 $ (49,073) $ 19,367 $ (29,706) Contingent Consideration The fair value of our contingent considerations are based upon estimates of the likely payments, which are based upon assumptions over future performance. The liabilities are reviewed on a quarterly basis and, where changes in estimates arise, these are recorded to selling and general administrative expenses. Our contingent consideration relates to the businesses below: • In October 2021, we acquired the student loan servicing business from Navient, rebranded as Aidvantage. Future payments are based upon volumes, up to a maximum payment of $65.0 million. At December 31, 2022 and September 30, 2022, the Aidvantage contingent consideration was $14.0 million and $13.8 million, respectively. • In January 2022, we acquired BZ Bodies Limited. Future payments are based upon the performance of the business through December 2023, up to a maximum payment of $2.4 million (£2.0 million British Pounds). At December 31, 2022 and September 30, 2022, we recorded a contingent consideration liability for the maximum payment, which we anticipate making in fiscal year 2024. • In December 2015, we acquired companies doing business as Assessments Australia. Future payments were based upon future revenue earnings. The deadline for the payment expired on December 31, 2022, with no payment being required. Movement in our contingent consideration balance is as follows: Table 7.3: Fair Value Measurement Using Significant Unobservable Inputs (Level 3) Contingent Consideration (in thousands) Opening contingent consideration as of September 30, 2022 $ 16,236 Adjustments to fair value recorded in the period 1,414 Cash payments (1,415) Foreign currency translations 204 Closing contingent consideration as of December 31, 2022 $ 16,439 |
Equity
Equity | 3 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity | EQUITY Stock Compensation We grant restricted stock units ("RSUs") and performance stock units ("PSUs") to eligible participants under our 2021 Omnibus Incentive Plan, which was approved by the Board of Directors and stockholders. The RSUs granted to employees vest ratably over three During the three months ended December 31, 2022, we issued approximately 308,000 RSUs, which will vest ratably over three |
Other Balance Sheet Items
Other Balance Sheet Items | 3 Months Ended |
Dec. 31, 2022 | |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract] | |
Other Balance Sheet Items | OTHER BALANCE SHEET ITEMS Cash, Cash Equivalents, and Restricted Cash Table 9.1: Details of Cash and Cash Equivalents and Restricted Cash December 31, 2022 September 30, 2022 (in thousands) Cash and cash equivalents $ 63,050 $ 40,658 Restricted cash (1) 96,777 96,137 Cash, cash equivalents, and restricted cash $ 159,827 $ 136,795 (1) Restricted cash is recorded within "Prepaid expenses and other current assets" on the Consolidated Balance Sheets. At December 31, 2022 and September 30, 2022, this balance includes $52.3 million and $60.7 million, respectively, of funds received from a customer which had previously been sold under our Receivables Purchase Agreement; this is offset by a corresponding liability in "Other current liabilities". The majority of the remaining balance are funds held in trust on behalf of certain clients; this asset is similarly offset with a corresponding liability in "Other current liabilities". Table 9.2: Supplemental Disclosures of Cash Flow Information For the Three Months Ended December 31, 2022 December 31, 2021 (in thousands) Interest payments $ 19,748 $ 8,943 Income tax payments $ 4,982 $ 8,009 Accounts Receivable, Net Table 9.3: Details of Accounts Receivable, Net December 31, 2022 September 30, 2022 (in thousands) Billed and billable receivables $ 879,851 $ 723,979 Unbilled receivables 142,844 91,404 Allowance for credit losses (8,649) (8,273) Accounts receivable, net $ 1,014,046 $ 807,110 In September 2022, we entered into a Receivables Purchase Agreement with Wells Fargo Bank N.A., under which we may sell certain US-originated accounts receivable balances up to a maximum amount of $110.0 million at any given time. In return for these sales, we receive a cash payment equal to the face value of the receivables less a financing charge. We account for these transfers as sales. We have no retained interest in the transferred receivables other than administrative responsibilities, and Wells Fargo has no recourse for any credit risk. We estimate that the implicit servicing fees for an arrangement of this size and type would be immaterial. For the three months ended December 31, 2022, the gross fair value of accounts receivables transferred to Wells Fargo and derecognized from our balance sheet was $209.6 million. In exchange for these sales, we received $208.5 million of cash. The balance, representing a loss on sale from these transfers, is included within our selling, general and administrative expenses. We have recorded these transactions within our operating cash flows. The effective annual interest rate under this program was 4.8%. |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES Litigation We are subject to audits, investigations, and reviews relating to compliance with the laws and regulations that govern our role as a contractor to agencies and departments of federal, state, local, and foreign governments, and otherwise in connection with performing services in countries outside of the U.S. Adverse findings could lead to criminal, civil, or administrative proceedings, and we could be faced with penalties, fines, suspension, or debarment. Adverse findings could also have a material adverse effect on us because of our reliance on government contracts. We are subject to periodic audits by federal, state, local, and foreign governments for taxes. We are also involved in various claims, arbitrations, and lawsuits arising in the normal conduct of our business. These include but are not limited to bid protests, employment matters, contractual disputes, and charges before administrative agencies. Although we can give no assurance, based upon our evaluation and taking into account the advice of legal counsel, we do not believe that the outcome of any existing matter would likely have a material adverse effect on our consolidated financial position, results of operations, or cash flows. We evaluate, on a regular basis, developments in our litigation matters and establish or make adjustments to our accruals as appropriate. A liability is accrued if a loss is probable and the amount of such loss can be reasonably estimated. If the risk of loss is probable, but the amount cannot be reasonably estimated, or the risk of loss is only reasonably possible, a liability is not accrued. Due to the inherent uncertainty in the outcome of litigation, our estimates and assessments may prove to be incomplete or inaccurate and could be impacted by unanticipated events and circumstances, adverse outcomes or other future determinations. Arizona Medicaid claims From 2004 through 2009, we had a contract with the Arizona Health Care Cost Containment System (AHCCCS) in support of the state’s school-based Medicaid claims. We assisted local school districts with preparing and submitting claims to AHCCCS which, in turn, submitted claims for reimbursement to the Centers for Medicare and Medicaid Services (CMS). CMS subsequently asserted two disallowances against AHCCCS. AHCCCS contested the first disallowance and ultimately settled that claim with CMS. The second disallowance of approximately $19.9 million was being contested by AHCCCS in court. AHCCCS previously asserted that its agreement with us required us to reimburse AHCCCS for the amounts owed to CMS and, on October 18, 2022, AHCCCS sued Maximus pertaining to the first disallowance - Snyder v. Maximus, Case No. CV2022-053302, Superior Court for the County of Maricopa. AHCCCS sought damages from us of $5.4 million. In December 2022, Maximus and AHCCCS agreed to settle both the lawsuit pertaining to the first disallowance and any assertions by AHCCCS pertaining to the second disallowance. The amount of the settlement had previously been accrued by the company. We exited the federal healthcare-claiming business in 2009 and no longer provide the services at issue in this matter. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENTOn January 6, 2023, our Board of Directors declared a quarterly cash dividend of $0.28 for each share of our common stock outstanding. The dividend is payable on February 28, 2023, to shareholders of record on February 15, 2023. Based upon the number of shares outstanding, we anticipate a cash payment of approximately $17.1 million. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements, including the notes, include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of these financial statements, in conformity with U.S. GAAP, requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenue and expenses. At each reporting period end, we make estimates, including those related to revenue recognition and cost estimation on certain contracts, the realizability of goodwill, and amounts related to income taxes, certain accrued liabilities, and contingencies and litigation. In May 2021, we acquired VES Group, Inc. As part of the acquisition, we allocated a valuation of $27 million to certain technology assets used by the business, which we elected to amortize over twelve years, which was our best estimate of asset life at that time. In fiscal year 2023, we have taken the opportunity to improve our technology portfolio, including the development of technology which will eventually replace much of the acquired technology. Accordingly, we have revised the asset life on the existing technology assuming the assets will cease being used by September 2026. This change in estimated useful life will result in additional annual amortization expense of $3.8 million per year. In the three months ended December 31, 2022, this change reduced our diluted earnings per share by approximately $0.01. |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information for each of the Company's Business Segments | Table 3.1: Results of Operation by Business Segment For the Three Months Ended December 31, 2022 December 31, 2021 Amount % (1) Amount % (1) (dollars in thousands) Revenue: U.S. Federal Services $ 618,167 $ 581,871 U.S. Services 439,478 386,417 Outside the U.S. 191,601 182,588 Revenue $ 1,249,246 $ 1,150,876 Gross profit: U.S. Federal Services $ 122,694 19.8 % $ 126,576 21.8 % U.S. Services 83,598 19.0 % 89,699 23.2 % Outside the U.S. 38,455 20.1 % 11,880 6.5 % Gross profit $ 244,747 19.6 % $ 228,155 19.8 % Selling, general, and administrative expenses: U.S. Federal Services $ 71,649 11.6 % $ 64,925 11.2 % U.S. Services 45,842 10.4 % 35,102 9.1 % Outside the U.S. 28,389 14.8 % 21,340 11.7 % Other (2) 572 NM 2,854 NM Selling, general, and administrative expenses $ 146,452 11.7 % $ 124,221 10.8 % Operating income: U.S. Federal Services $ 51,045 8.3 % $ 61,651 10.6 % U.S. Services 37,756 8.6 % 54,597 14.1 % Outside the U.S. 10,066 5.3 % (9,460) (5.2) % Amortization of intangible assets (23,518) NM (22,405) NM Other (2) (572) NM (2,854) NM Operating income $ 74,777 6.0 % $ 81,529 7.1 % (1) Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM." (2) Other expenses includes credits and costs that are not allocated to a particular segment. This includes expenses incurred as part of our acquisitions, as well as potential acquisitions which have not been or may not be completed. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Table 4.1: Revenue by Contract Type For the Three Months Ended December 31, 2022 December 31, 2021 (dollars in thousands) Performance-based $ 569,217 45.6 % $ 490,956 42.7 % Cost-plus 347,319 27.8 % 340,081 29.5 % Fixed price 175,073 14.0 % 151,505 13.2 % Time and materials 157,637 12.6 % 168,334 14.6 % Total revenue $ 1,249,246 $ 1,150,876 Table 4.2: Revenue by Customer Type For the Three Months Ended December 31, 2022 December 31, 2021 (dollars in thousands) U. S. federal government agencies $ 603,918 48.3 % $ 564,094 49.0 % U.S. state government agencies 437,362 35.0 % 371,547 32.3 % International government agencies 181,760 14.5 % 171,375 14.9 % Other, including local municipalities and commercial customers 26,206 2.1 % 43,860 3.8 % Total revenue $ 1,249,246 $ 1,150,876 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares used toCompute Earnings Per Share | Table 5: Weighted Average Number of Shares - Earnings Per Share For the Three Months Ended December 31, 2022 December 31, 2021 (in thousands) Basic weighted average shares outstanding 61,117 62,262 Dilutive effect of unvested RSUs and PSUs 79 183 Denominator for diluted earnings per share 61,196 62,445 |
Debt And Derivatives (Tables)
Debt And Derivatives (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Table 6.1: Details of Debt December 31, 2022 September 30, 2022 (in thousands) Term Loan A, due 2026 $ 957,500 $ 971,250 Term Loan B, due 2028 347,592 395,000 Revolver 261,566 — Subsidiary loan agreements 7,135 64 Total debt principal 1,573,793 1,366,314 Less: Unamortized debt-issuance costs and discounts (9,339) (10,373) Total debt 1,564,454 1,355,941 Less: Current portion of long-term debt (77,479) (63,458) Long-term debt $ 1,486,975 $ 1,292,483 |
Schedule of Maturities of Long-term Debt | Table 6.2: Details of Future Minimum Principal Payments Due Amount Due (in thousands) January 1, 2023 through September 30, 2023 $ 57,873 Year ended September 30, 2024 85,985 Year ended September 30, 2025 92,860 Year ended September 30, 2026 1,002,551 Year ended September 30, 2027 3,485 Thereafter 331,039 Total Payments $ 1,573,793 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Assets and Liabilities | Table 7.1: Fair Value Measurements As of December 31, 2022 Level 1 Level 2 Level 3 Balance (in thousands) Assets: Deferred compensation assets - Rabbi Trust $ 24,316 $ — $ — $ 24,316 Interest rate swap - $300 million notional value — 29,012 — 29,012 Total assets $ 24,316 $ 29,012 $ — $ 53,328 Liabilities: Interest rate swap - $200 million notional value $ — $ 2,733 $ — $ 2,733 Contingent consideration — — 16,439 16,439 Total liabilities $ — $ 2,733 $ 16,439 $ 19,172 The fair values of receivables, prepaids, other assets, accounts payable, accrued costs, and other current liabilities approximate the carrying values as a result of the short-term nature of these instruments. The carrying value of our debt is consistent with the fair value as the stated interest rates in the agreements are consistent with the current market rates used in notes with similar terms in the markets (Level 2 inputs). Accumulated Other Comprehensive Income All amounts recorded in accumulated other comprehensive loss are related to our foreign currency translations and interest rate swap, net of tax. The following table shows changes in accumulated other comprehensive loss: Table 7.2: Details of Changes in Accumulated Other Comprehensive Loss by Category Foreign currency translation adjustment Net unrealized gain on derivatives, net of tax Total (in thousands) Balance as of September 30, 2022 $ (57,109) $ 23,148 $ (33,961) Other comprehensive income before reclassifications 8,036 (2,467) 5,569 Amounts reclassified from accumulated other comprehensive loss — (1,314) (1,314) Net current period other comprehensive losses 8,036 (3,781) 4,255 Balance as of December 31, 2022 $ (49,073) $ 19,367 $ (29,706) Contingent Consideration The fair value of our contingent considerations are based upon estimates of the likely payments, which are based upon assumptions over future performance. The liabilities are reviewed on a quarterly basis and, where changes in estimates arise, these are recorded to selling and general administrative expenses. Our contingent consideration relates to the businesses below: • In October 2021, we acquired the student loan servicing business from Navient, rebranded as Aidvantage. Future payments are based upon volumes, up to a maximum payment of $65.0 million. At December 31, 2022 and September 30, 2022, the Aidvantage contingent consideration was $14.0 million and $13.8 million, respectively. • In January 2022, we acquired BZ Bodies Limited. Future payments are based upon the performance of the business through December 2023, up to a maximum payment of $2.4 million (£2.0 million British Pounds). At December 31, 2022 and September 30, 2022, we recorded a contingent consideration liability for the maximum payment, which we anticipate making in fiscal year 2024. • In December 2015, we acquired companies doing business as Assessments Australia. Future payments were based upon future revenue earnings. The deadline for the payment expired on December 31, 2022, with no payment being required. Movement in our contingent consideration balance is as follows: Table 7.3: Fair Value Measurement Using Significant Unobservable Inputs (Level 3) Contingent Consideration (in thousands) Opening contingent consideration as of September 30, 2022 $ 16,236 Adjustments to fair value recorded in the period 1,414 Cash payments (1,415) Foreign currency translations 204 Closing contingent consideration as of December 31, 2022 $ 16,439 |
Other Balance Sheet Items (Tabl
Other Balance Sheet Items (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | Table 9.1: Details of Cash and Cash Equivalents and Restricted Cash December 31, 2022 September 30, 2022 (in thousands) Cash and cash equivalents $ 63,050 $ 40,658 Restricted cash (1) 96,777 96,137 Cash, cash equivalents, and restricted cash $ 159,827 $ 136,795 |
Restrictions on Cash and Cash Equivalents | Table 9.1: Details of Cash and Cash Equivalents and Restricted Cash December 31, 2022 September 30, 2022 (in thousands) Cash and cash equivalents $ 63,050 $ 40,658 Restricted cash (1) 96,777 96,137 Cash, cash equivalents, and restricted cash $ 159,827 $ 136,795 |
Supplementary Cash Flow Information | Table 9.2: Supplemental Disclosures of Cash Flow Information For the Three Months Ended December 31, 2022 December 31, 2021 (in thousands) Interest payments $ 19,748 $ 8,943 Income tax payments $ 4,982 $ 8,009 |
Details of Accounts Receivable | Table 9.3: Details of Accounts Receivable, Net December 31, 2022 September 30, 2022 (in thousands) Billed and billable receivables $ 879,851 $ 723,979 Unbilled receivables 142,844 91,404 Allowance for credit losses (8,649) (8,273) Accounts receivable, net $ 1,014,046 $ 807,110 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended |
May 31, 2021 | Dec. 31, 2022 | Sep. 30, 2023 | |
Property, Plant and Equipment [Line Items] | |||
Adjustment to diluted earnings per share (in dollars per share) | $ 0.01 | ||
Technology Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Technology assets | $ 27 | ||
Intangible assets, estimated useful life | 12 years | ||
Technology Equipment | Forecast | |||
Property, Plant and Equipment [Line Items] | |||
Additional annual amortization expense following change in estimated useful life | $ 3.8 |
Business Segments - Financial i
Business Segments - Financial information by segment (Details) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | |
Financial information for each of the Company's business segments | ||
Number of operating segments | segment | 3 | |
Revenue: | ||
Revenue | $ 1,249,246 | $ 1,150,876 |
Gross profit: | ||
Gross profit | $ 244,747 | $ 228,155 |
Gross profit (as a percent) | 19.60% | 19.80% |
Selling, general, and administrative expenses: | ||
Selling, general, and administrative expenses | $ 146,452 | $ 124,221 |
Selling, general, and administrative expense (as a percent) | 11.70% | 10.80% |
Operating income: | ||
Operating income | $ 74,777 | $ 81,529 |
Operating income (as a percent) | 6% | 7.10% |
Amortization of intangible assets | $ (23,518) | $ (22,405) |
Segment Reconciling Items | ||
Selling, general, and administrative expenses: | ||
Selling, general, and administrative expenses | 572 | 2,854 |
Operating income: | ||
Amortization of intangible assets | (23,518) | (22,405) |
U.S. Federal Services | Operating Segments | ||
Revenue: | ||
Revenue | 618,167 | 581,871 |
Gross profit: | ||
Gross profit | $ 122,694 | $ 126,576 |
Gross profit (as a percent) | 19.80% | 21.80% |
Selling, general, and administrative expenses: | ||
Selling, general, and administrative expenses | $ 71,649 | $ 64,925 |
Selling, general, and administrative expense (as a percent) | 11.60% | 11.20% |
Operating income: | ||
Operating income | $ 51,045 | $ 61,651 |
Operating income (as a percent) | 8.30% | 10.60% |
U.S. Services | Operating Segments | ||
Revenue: | ||
Revenue | $ 439,478 | $ 386,417 |
Gross profit: | ||
Gross profit | $ 83,598 | $ 89,699 |
Gross profit (as a percent) | 19% | 23.20% |
Selling, general, and administrative expenses: | ||
Selling, general, and administrative expenses | $ 45,842 | $ 35,102 |
Selling, general, and administrative expense (as a percent) | 10.40% | 9.10% |
Operating income: | ||
Operating income | $ 37,756 | $ 54,597 |
Operating income (as a percent) | 8.60% | 14.10% |
Outside the U.S. | Operating Segments | ||
Revenue: | ||
Revenue | $ 191,601 | $ 182,588 |
Gross profit: | ||
Gross profit | $ 38,455 | $ 11,880 |
Gross profit (as a percent) | 20.10% | 6.50% |
Selling, general, and administrative expenses: | ||
Selling, general, and administrative expenses | $ 28,389 | $ 21,340 |
Selling, general, and administrative expense (as a percent) | 14.80% | 11.70% |
Operating income: | ||
Operating income | $ 10,066 | $ (9,460) |
Operating income (as a percent) | 5.30% | (5.20%) |
Other | Operating Segments | ||
Operating income: | ||
Operating income | $ (572) | $ (2,854) |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 1,249,246 | $ 1,150,876 |
U. S. federal government agencies | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 603,918 | $ 564,094 |
U. S. federal government agencies | Revenue Benchmark | Customer Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue in % | 48.30% | 49% |
U.S. state government agencies | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 437,362 | $ 371,547 |
U.S. state government agencies | Revenue Benchmark | Customer Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue in % | 35% | 32.30% |
International government agencies | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 181,760 | $ 171,375 |
International government agencies | Revenue Benchmark | Customer Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue in % | 14.50% | 14.90% |
Other, including local municipalities and commercial customers | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 26,206 | $ 43,860 |
Other, including local municipalities and commercial customers | Revenue Benchmark | Customer Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue in % | 2.10% | 3.80% |
Performance-based | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 569,217 | $ 490,956 |
Performance-based | Revenue Benchmark | Contract Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue in % | 45.60% | 42.70% |
Cost-plus | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 347,319 | $ 340,081 |
Cost-plus | Revenue Benchmark | Contract Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue in % | 27.80% | 29.50% |
Fixed price | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 175,073 | $ 151,505 |
Fixed price | Revenue Benchmark | Contract Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue in % | 14% | 13.20% |
Time and materials | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 157,637 | $ 168,334 |
Time and materials | Revenue Benchmark | Contract Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Revenue in % | 12.60% | 14.60% |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Deferred revenue, revenue recognized | $ 51.1 | $ 41.2 | |
Cumulative catch-up adjustment to revenue from change in estimates | $ (4.7) | ||
Cumulative catch-up adjustment to diluted earnings per share from change in estimates (in dollars per share) | $ 0.05 | ||
Unbilled receivables | |||
Disaggregation of Revenue [Line Items] | |||
Unbilled contracts receivable | $ 19 | $ 13.1 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligation (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 425 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 60% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Basic weighted average shares outstanding (in shares) | 61,117,000 | 62,262,000 |
Dilutive effect of unvested RSUs and PSUs (in shares) | 79,000 | 183,000 |
Denominator for diluted earnings per share (in shares) | 61,196,000 | 62,445,000 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 804,000 | 135,000 |
Debt And Derivatives - Schedule
Debt And Derivatives - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Debt Instrument [Line Items] | ||
Term loans | $ 1,573,793 | |
Total debt principal | 1,573,793 | $ 1,366,314 |
Less: Unamortized debt-issuance costs and discounts | (9,339) | (10,373) |
Total debt | 1,564,454 | 1,355,941 |
Less: Current portion of long-term debt | (77,479) | (63,458) |
Long-term debt | 1,486,975 | 1,292,483 |
Secured Debt | Term Loan A, due 2026 | ||
Debt Instrument [Line Items] | ||
Term loans | 957,500 | 971,250 |
Secured Debt | Term Loan B, due 2028 | ||
Debt Instrument [Line Items] | ||
Term loans | 347,592 | 395,000 |
Revolver | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Term loans | 261,566 | 0 |
Subsidiary loan agreements | ||
Debt Instrument [Line Items] | ||
Term loans | $ 7,135 | $ 64 |
Debt And Derivatives - Narrativ
Debt And Derivatives - Narrative (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 | May 31, 2021 | May 28, 2021 |
Debt Instrument [Line Items] | ||||
Annual effective interest rate | 6% | |||
Other Assets | ||||
Debt Instrument [Line Items] | ||||
Fair value of derivative asset | $ 29,000,000 | $ 31,400,000 | ||
Other Liabilities | ||||
Debt Instrument [Line Items] | ||||
Fair value of derivative liability | $ (2,700,000) | |||
Revolver | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 600,000,000 | |||
Term Loan A, due 2026 | Secured Debt | Interest Rate Swap | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 500,000,000 |
Debt And Derivatives - Schedu_2
Debt And Derivatives - Schedule of Repayments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
January 1, 2023 through September 30, 2023 | $ 57,873 |
Year ended September 30, 2024 | 85,985 |
Year ended September 30, 2025 | 92,860 |
Year ended September 30, 2026 | 1,002,551 |
Year ended September 30, 2027 | 3,485 |
Thereafter | 331,039 |
Total Payments | $ 1,573,793 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Interest Rate Swap | |
Financial information for each of the Company's business segments | |
Notional value, asset | $ 300,000 |
Notional value, liability | 200,000 |
Fair Value, Recurring | |
Financial information for each of the Company's business segments | |
Total assets | 53,328 |
Contingent consideration | 16,439 |
Total liabilities | 19,172 |
Fair Value, Recurring | Interest Rate Swap | |
Financial information for each of the Company's business segments | |
Total assets | 29,012 |
Interest rate swap | 2,733 |
Fair Value, Recurring | Deferred compensation assets - Rabbi Trust | |
Financial information for each of the Company's business segments | |
Total assets | 24,316 |
Level 1 | Fair Value, Recurring | |
Financial information for each of the Company's business segments | |
Total assets | 24,316 |
Contingent consideration | 0 |
Total liabilities | 0 |
Level 1 | Fair Value, Recurring | Interest Rate Swap | |
Financial information for each of the Company's business segments | |
Total assets | 0 |
Interest rate swap | 0 |
Level 1 | Fair Value, Recurring | Deferred compensation assets - Rabbi Trust | |
Financial information for each of the Company's business segments | |
Total assets | 24,316 |
Level 2 | Fair Value, Recurring | |
Financial information for each of the Company's business segments | |
Total assets | 29,012 |
Contingent consideration | 0 |
Total liabilities | 2,733 |
Level 2 | Fair Value, Recurring | Interest Rate Swap | |
Financial information for each of the Company's business segments | |
Total assets | 29,012 |
Interest rate swap | 2,733 |
Level 2 | Fair Value, Recurring | Deferred compensation assets - Rabbi Trust | |
Financial information for each of the Company's business segments | |
Total assets | 0 |
Level 3 | Fair Value, Recurring | |
Financial information for each of the Company's business segments | |
Total assets | 0 |
Contingent consideration | 16,439 |
Total liabilities | 16,439 |
Level 3 | Fair Value, Recurring | Interest Rate Swap | |
Financial information for each of the Company's business segments | |
Total assets | 0 |
Interest rate swap | 0 |
Level 3 | Fair Value, Recurring | Deferred compensation assets - Rabbi Trust | |
Financial information for each of the Company's business segments | |
Total assets | $ 0 |
Fair Value Measurements - Accum
Fair Value Measurements - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||
Balance as of December 31, 2022 | $ 1,581,007 | $ 1,549,371 | $ 1,528,426 | $ 1,480,329 |
Other comprehensive income before reclassifications | 5,569 | |||
Amounts reclassified from accumulated other comprehensive loss | (1,314) | |||
Foreign currency translation adjustment | ||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||
Balance as of December 31, 2022 | (49,073) | (57,109) | ||
Other comprehensive income before reclassifications | 8,036 | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | |||
Net current period other comprehensive losses | 8,036 | |||
Net unrealized gain on derivatives, net of tax | ||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||
Balance as of December 31, 2022 | 19,367 | 23,148 | ||
Other comprehensive income before reclassifications | (2,467) | |||
Amounts reclassified from accumulated other comprehensive loss | (1,314) | |||
Net current period other comprehensive losses | (3,781) | |||
Total | ||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||
Balance as of December 31, 2022 | (29,706) | $ (33,961) | ||
Net current period other comprehensive losses | $ 4,255 |
Fair Value Measurements - Unobs
Fair Value Measurements - Unobservable Inputs (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2022 USD ($) | |
Contingent Consideration | |
Beginning balance | $ 16,236 |
Adjustments to fair value recorded in the period | $ 1,414 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other income/(expense), net |
Cash payments | $ (1,415) |
Foreign currency translations | $ 204 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Liability, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Foreign currency translation adjustments |
Ending balance | $ 16,439 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands, £ in Millions | Dec. 31, 2022 USD ($) segment | Dec. 31, 2022 GBP (£) segment | Sep. 30, 2022 USD ($) | Sep. 30, 2022 GBP (£) | Oct. 06, 2021 USD ($) |
Fair Value, Recurring | |||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | |||||
Contingent consideration | $ 16,439 | ||||
Fair Value, Recurring | Interest Rate Swap | |||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | |||||
Number of instruments | segment | 2 | 2 | |||
Aidvantage | |||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | |||||
Contingent consideration | $ 14,000 | $ 13,800 | |||
BZ Bodies Limited | |||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | |||||
Contingent consideration | $ 2,400 | £ 2 | $ 2,400 | £ 2 | |
Maximum | Navient | |||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | |||||
Contingent consideration | $ 65,000 |
Equity - Narrative (Details)
Equity - Narrative (Details) | 3 Months Ended |
Dec. 31, 2022 shares | |
Restricted Stock Units (RSUs) | |
Stock-based compensation | |
Shares issued (in shares) | 308,000 |
Restricted Stock Units (RSUs) | Member of Board of Directors | A2021 Stock Incentive Plan | |
Stock-based compensation | |
Vesting period | 1 year |
Restricted Stock Units (RSUs) | Minimum | |
Stock-based compensation | |
Vesting period | 3 years |
Restricted Stock Units (RSUs) | Minimum | A2021 Stock Incentive Plan | |
Stock-based compensation | |
Vesting period | 3 years |
Restricted Stock Units (RSUs) | Maximum | |
Stock-based compensation | |
Vesting period | 4 years |
Restricted Stock Units (RSUs) | Maximum | A2021 Stock Incentive Plan | |
Stock-based compensation | |
Vesting period | 5 years |
Performance Shares | |
Stock-based compensation | |
Vesting period | 3 years |
Shares issued (in shares) | 137,000 |
Performance Shares | Minimum | A2021 Stock Incentive Plan | |
Stock-based compensation | |
Vesting rights, percentage | 0% |
Performance Shares | Maximum | A2021 Stock Incentive Plan | |
Stock-based compensation | |
Vesting rights, percentage | 200% |
Other Balance Sheet Items - Sch
Other Balance Sheet Items - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 63,050 | $ 40,658 | ||
Restricted cash | 96,777 | 96,137 | ||
Cash, cash equivalents, and restricted cash | 159,827 | 136,795 | $ 202,612 | $ 156,570 |
Obligation payable under Receivables Purchase Agreement | $ 52,300 | $ 60,700 |
Other Balance Sheet Items - Sup
Other Balance Sheet Items - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract] | ||
Interest payments | $ 19,748 | $ 8,943 |
Income tax payments | $ 4,982 | $ 8,009 |
Other Balance Sheet Items - Det
Other Balance Sheet Items - Details of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for credit losses | $ (8,649) | $ (8,273) |
Accounts receivable, net | 1,014,046 | 807,110 |
Billed and billable receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable gross | 879,851 | 723,979 |
Unbilled receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable gross | $ 142,844 | $ 91,404 |
Other Balance Sheet Items - Nar
Other Balance Sheet Items - Narratives (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Sep. 30, 2022 |
Cash and Cash Equivalents [Abstract] | ||
Receivables purchase agreement, maximum sales amount | $ 110 | |
Receivables purchase program, effective interest rate | 4.80% | |
Transfer of financial assets, accounted for as sales | $ 209.6 | |
Cash received from transfer of financial assets | $ 208.5 |
Commitments and contingencies (
Commitments and contingencies (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Pending Litigation | |
Loss Contingencies [Line Items] | |
Disallowance | $ 19.9 |
Settled Litigation | |
Loss Contingencies [Line Items] | |
Disallowance | $ 5.4 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 28, 2023 | Jan. 06, 2023 |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Cash dividend declared (in dollars per share) | $ 0.28 | |
Common Stock | Forecast | ||
Subsequent Event [Line Items] | ||
Payments of dividends | $ 17.1 |