Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Nov. 01, 2014 | Mar. 31, 2014 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'MAXIMUS INC | ' | ' |
Entity Central Index Key | '0001032220 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 30-Sep-14 | ' | ' |
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 | ' | ' | $2,985,201,164 |
Entity Common Stock, Shares Outstanding | ' | 65,859,637 | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
CONSOLIDATED STATEMENTS OF OPERATIONS | ' | ' | ' |
Revenue | $1,700,912 | $1,331,279 | $1,050,145 |
Cost of revenue | 1,248,789 | 945,246 | 762,202 |
Gross profit | 452,123 | 386,033 | 287,943 |
Selling, general and administrative expenses | 226,815 | 200,878 | 160,609 |
Operating income | 225,308 | 185,155 | 127,334 |
Interest and other income, net | 2,061 | 3,867 | 4,172 |
Income before income taxes | 227,369 | 189,022 | 131,506 |
Provision for income taxes | 81,973 | 71,673 | 55,675 |
Net Income | 145,396 | 117,349 | 75,831 |
Loss/(income) attributable to noncontrolling interests | 44 | -618 | 302 |
Net income attributable to MAXIMUS | $145,440 | $116,731 | $76,133 |
Basic earnings per share attributable to MAXIMUS (in dollars per share) | $2.15 | $1.71 | $1.12 |
Diluted earnings per share attributable to MAXIMUS (in dollars per share) | $2.11 | $1.67 | $1.09 |
Dividends per share (in dollars per share) | $0.18 | $0.18 | $0.18 |
Weighted average shares outstanding: | ' | ' | ' |
Basic (in shares) | 67,680 | 68,165 | 67,734 |
Diluted (in shares) | 69,087 | 69,893 | 69,611 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ' |
Net income | $145,396 | $117,349 | $75,831 |
Foreign currency translation adjustments | -7,757 | -12,253 | 7,760 |
Comprehensive income | 137,639 | 105,096 | 83,591 |
Comprehensive loss/(income) attributable to noncontrolling interests | 44 | -618 | 302 |
Comprehensive income attributable to MAXIMUS | $137,683 | $104,478 | $83,893 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $158,112 | $125,617 |
Accounts receivable - billed and billable, net | 263,011 | 264,300 |
Accounts receivable - unbilled | 26,556 | 28,656 |
Deferred income taxes | 28,108 | 26,443 |
Prepaid expenses and other current assets | 56,673 | 44,583 |
Total current assets | 532,460 | 489,599 |
Property and equipment, net | 80,246 | 77,710 |
Capitalized software, net | 39,734 | 40,456 |
Goodwill | 170,626 | 171,867 |
Intangible assets, net | 39,239 | 42,039 |
Deferred contract costs, net | 12,046 | 14,318 |
Deferred compensation plan assets | 17,126 | 10,314 |
Other assets | 9,519 | 11,675 |
Total assets | 900,996 | 857,978 |
Current liabilities: | ' | ' |
Accounts payable and accrued liabilities | 103,181 | 109,020 |
Accrued compensation and benefits | 94,137 | 83,280 |
Deferred revenue | 55,878 | 53,137 |
Income taxes payable | 4,693 | 8,327 |
Other liabilities | 7,432 | 8,276 |
Total current liabilities | 265,321 | 262,040 |
Deferred revenue, less current portion | 32,257 | 32,953 |
Deferred income taxes | 21,383 | 16,359 |
Deferred compensation plan liabilities, less current portion | 18,768 | 13,953 |
Other liabilities | 7,082 | 2,898 |
Total liabilities | 344,811 | 328,203 |
Commitments and contingencies | ' | ' |
Shareholders' equity: | ' | ' |
Common stock, no par value; 100,000 shares authorized; 66,613 and 68,525 shares issued and outstanding at September 30, 2014 and 2013, at stated amount, respectively | 429,857 | 415,271 |
Accumulated other comprehensive income | 230 | 7,987 |
Retained earnings | 125,875 | 106,250 |
Total MAXIMUS shareholders' equity | 555,962 | 529,508 |
Noncontrolling interests | 223 | 267 |
Total equity | 556,185 | 529,775 |
Total liabilities and equity | $900,996 | $857,978 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ' | ' |
Common stock, no par value (in dollars per share) | ' | ' |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 66,613 | 68,525 |
Common stock, shares outstanding | 66,613 | 68,525 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' | ' |
Net income | $145,396 | $117,349 | $75,831 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization of property, plant, equipment and capitalized software | 42,778 | 30,933 | 23,730 |
Amortization of intangible assets | 5,890 | 4,883 | 2,730 |
Deferred income taxes | 2,898 | 2,396 | -3,274 |
Stock compensation expense | 17,278 | 14,555 | 12,077 |
Changes in assets and liabilities, net of effects of business combinations and divestitures: | ' | ' | ' |
Accounts receivable-billed and billable | -144 | -87,999 | -8,170 |
Accounts receivable - unbilled | 2,056 | -14,998 | 3,171 |
Prepaid expenses and other current assets | -2,540 | -2,492 | -6,018 |
Deferred contract costs | 2,254 | -5,073 | -1,221 |
Accounts payable and accrued liabilities | -2,928 | 31,453 | 6,451 |
Accrued compensation and benefits | 12,277 | 21,308 | -2,648 |
Deferred revenue | 2,841 | 6,304 | 9,827 |
Income taxes | -10,974 | 2,034 | 6,885 |
Other assets and liabilities | -3,482 | 285 | -4,211 |
Cash provided by operating activities | 213,600 | 120,938 | 115,160 |
Cash flows from investing activities: | ' | ' | ' |
Acquisition of businesses, net of cash acquired | -2,670 | -71,435 | -66,003 |
Proceeds from settlement of final PSI price | ' | 3,380 | ' |
Purchases of property and equipment | -36,262 | -43,580 | -18,369 |
Capitalized software costs | -10,886 | -18,596 | -4,779 |
Proceeds from note receivable | 429 | 398 | 299 |
Proceeds from sale of discontinued operations | ' | ' | 2,240 |
Cash used in investing activities | -49,389 | -129,833 | -86,612 |
Cash flows from financing activities: | ' | ' | ' |
Cash dividends paid | -12,187 | -12,272 | -12,180 |
Repurchases of common stock | -111,141 | -33,287 | -12,977 |
Stock compensation tax benefit | 9,665 | 10,569 | 7,268 |
Tax withholding related to RSU vesting | -14,681 | -8,868 | -4,464 |
Stock option exercises | 1,362 | 2,168 | 6,441 |
Issuance of debt | 15,000 | ' | ' |
Repayment of debt | -15,162 | -172 | -44 |
Acquisition-related contingent consideration | ' | ' | -1,809 |
Cash used in financing activities | -127,144 | -41,862 | -17,765 |
Effect of exchange rate changes on cash | -4,572 | -12,938 | 5,579 |
Net increase (decrease) in cash and cash equivalents | 32,495 | -63,695 | 16,362 |
Cash and cash equivalents, beginning of period | 125,617 | 189,312 | 172,950 |
Cash and cash equivalents, end of period | $158,112 | $125,617 | $189,312 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Common Stock | Accumulated Other Comprehensive Income | Retained Earnings | Noncontrolling Interest [Member] | Total |
In Thousands, unless otherwise specified | |||||
Balance at Sep. 30, 2011 | $377,579 | $12,480 | ($15,602) | ($49) | $374,408 |
Balance (in shares) at Sep. 30, 2011 | 67,587 | ' | ' | ' | ' |
Increase (Decrease) in Shareholders' Equity | ' | ' | ' | ' | ' |
Net income | ' | ' | 76,133 | -302 | 75,831 |
Foreign currency translation | ' | 7,760 | ' | ' | 7,760 |
Cash dividends | ' | ' | -12,180 | ' | -12,180 |
Dividends on RSUs | 656 | ' | -656 | ' | ' |
Repurchases of common stock | ' | ' | -12,796 | ' | -12,796 |
Repurchases of common stock (in shares) | -612 | ' | ' | ' | -600 |
Stock compensation expense | 12,077 | ' | ' | ' | 12,077 |
Stock compensation tax benefit | 7,268 | ' | ' | ' | 7,268 |
Tax withholding related to RSU vesting | -8,054 | ' | ' | ' | -8,054 |
Stock option exercises and RSU releases | 6,441 | ' | ' | ' | 6,441 |
Stock option exercises and RSU releases (in shares) | 996 | ' | ' | ' | ' |
Balance at Sep. 30, 2012 | 395,967 | 20,240 | 34,899 | -351 | 450,755 |
Balance (in shares) at Sep. 30, 2012 | 67,971 | ' | ' | ' | ' |
Increase (Decrease) in Shareholders' Equity | ' | ' | ' | ' | ' |
Net income | ' | ' | 116,731 | 618 | 117,349 |
Foreign currency translation | ' | -12,253 | ' | ' | -12,253 |
Cash dividends | ' | ' | -12,272 | ' | -12,272 |
Dividends on RSUs | 583 | ' | -583 | ' | ' |
Repurchases of common stock | ' | ' | -32,525 | ' | -32,525 |
Repurchases of common stock (in shares) | -974 | ' | ' | ' | -1,000 |
Stock compensation expense | 14,555 | ' | ' | ' | 14,555 |
Stock compensation tax benefit | 10,569 | ' | ' | ' | 10,569 |
Common stock issued pursuant to acquisition of HML | 6,425 | ' | ' | ' | 6,425 |
Common stock issued pursuant to acquisition of HML (in shares) | 203 | ' | ' | ' | ' |
Tax withholding related to RSU vesting | -14,996 | ' | ' | ' | -14,996 |
Stock option exercises and RSU releases | 2,168 | ' | ' | ' | 2,168 |
Stock option exercises and RSU releases (in shares) | 1,325 | ' | ' | ' | ' |
Balance at Sep. 30, 2013 | 415,271 | 7,987 | 106,250 | 267 | 529,775 |
Balance (in shares) at Sep. 30, 2013 | 68,525 | ' | ' | ' | 68,525 |
Increase (Decrease) in Shareholders' Equity | ' | ' | ' | ' | ' |
Net income | ' | ' | 145,440 | -44 | 145,396 |
Foreign currency translation | ' | -7,757 | ' | ' | -7,757 |
Cash dividends | ' | ' | -12,187 | ' | -12,187 |
Dividends on RSUs | 493 | ' | -493 | ' | ' |
Repurchases of common stock | ' | ' | -113,135 | ' | -113,135 |
Repurchases of common stock (in shares) | -2,672 | ' | ' | ' | -2,700 |
Stock compensation expense | 17,278 | ' | ' | ' | 17,278 |
Stock compensation tax benefit | 9,665 | ' | ' | ' | 9,665 |
Tax withholding related to RSU vesting | -14,212 | ' | ' | ' | -14,212 |
Stock option exercises and RSU releases | 1,362 | ' | ' | ' | 1,362 |
Stock option exercises and RSU releases (in shares) | 760 | ' | ' | ' | ' |
Balance at Sep. 30, 2014 | $429,857 | $230 | $125,875 | $223 | $556,185 |
Balance (in shares) at Sep. 30, 2014 | 66,613 | ' | ' | ' | 66,613 |
Business_and_summary_of_signif
Business and summary of significant accounting policies | 12 Months Ended | |
Sep. 30, 2014 | ||
Business and summary of significant accounting policies | ' | |
Business and summary of significant accounting policies | ' | |
1. Business and summary of significant accounting policies | ||
(a) Description of business | ||
MAXIMUS, Inc. (the "Company" or "we") provides business process services (BPS) to government health and human services agencies in the United States and to foreign governments. We conduct our operations through two business segments: Health Services and Human Services. The Health Services Segment provides a variety of business process services, as well as related consulting services, for state, provincial and national government programs, including Medicaid, CHIP, Supplemental Nutrition Assistance Program (SNAP), Medicare, the Affordable Care Act (ACA), Health Insurance BC (British Columbia) and the Health and Work Programme in the United Kingdom. The Human Services Segment provides national, state and county human services agencies with a variety of business process services and related consulting services for welfare-to-work, child support, higher education and K-12 special education programs. | ||
(b) 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. | ||
(c) 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 estimates of the fair value of assets acquired and liabilities assumed in business combinations, estimates of the collectability of receivables, estimates of future discounts in performance-based contracts, evaluation of asset impairment, accrual of estimated liabilities and valuation of acquisition-related contingent consideration liabilities. | ||
(d) Revenue recognition | ||
Revenue is generated from contracts with various pricing arrangements, including: | ||
• | performance-based criteria, constituting approximately 49% of total revenue in fiscal year 2014; | |
• | costs incurred plus a negotiated fee ("cost-plus") (25%); | |
• | fixed-price (23%); and | |
• | time-and-materials (3%). | |
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 goal. This revenue generally occurs when amounts are billable to customers and may result in revenue being recognized in irregular increments. | ||
Revenue on cost-plus contracts is recognized based on costs incurred plus an estimate of the negotiated fee 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. | ||
For certain fixed-price contracts, primarily systems design, development and implementation, we generally recognize revenue based upon costs incurred to date and our anticipated gross profit. The cumulative impact of any revisions in estimated revenue and costs is recognized in the period in which the facts that give rise to the revision become known. Provisions for estimated losses on incomplete contracts are provided for in full in the period in which such losses become known. This policy may result in revenue being recognized at different points from amounts being billable. Where we enter into contracts where significant uncertainty exists over the ability of management to estimate the future costs, we will typically defer all revenue until such time as future costs are estimable or the system implementation is complete. | ||
Revenue on time-and-materials contracts is recognized 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. | ||
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. 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 2018 fiscal year. The standard permits a retrospective or cumulative effect transition method. At present, we are continuing to evaluate the effect of this standard and have not yet determined a transition method or the likely effects on the business. | ||
(e) 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. The balance was $10.6 million and $12.2 million at September 30, 2014 and 2013, respectively. | ||
(f) Accounts receivable and allowance for doubtful accounts | ||
Accounts receivable are recorded at their face amount less an allowance for doubtful accounts. We maintain an allowance for doubtful accounts at an amount we estimate to be sufficient to cover the risk of collecting less than full payment on our receivables. 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. | ||
(g) Business combinations and goodwill | ||
The purchase price of an acquired business is allocated to tangible assets and separately identifiable intangible assets acquired less liabilities assumed based upon their respective fair values. The excess balance is recorded as goodwill. Costs incurred directly related to an acquisition, including legal, accounting and valuation services, are expensed as incurred. | ||
The separately identifiable intangible 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. | ||
We perform our annual impairment test as of July 1 of each year. At July 1, 2014, we performed the annual impairment test 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. | ||
(h) Long-lived assets (excluding goodwill) | ||
Property and equipment is recorded at cost. Depreciation is recorded over the assets' respective useful economic lives, which are not to exceed 39.5 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 amortized 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 us providing service to enable us to provide the contracted services to our customer. These costs are expensed over the period the services are provided on a straight-line basis. | ||
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, 2014. | ||
(i) 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. | ||
(j) 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 interest and other income and are typically immaterial. | ||
(k) 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. | ||
(l) Fair Value of Financial Instruments | ||
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. | ||
(m) Reclassifications | ||
Certain financial results have been reclassified to conform to the current year presentation. | ||
The statements of operations have been reclassified to exclude immaterial discontinued operations. We recorded a loss of $0.4 million and a profit of less than $0.1 million for the years ended September 30, 2013 and 2012, respectively. These balances are now included in "Selling, general and administrative expense" and in "Interest and other income, net." | ||
The statements of operations, balance sheet and statements of cash flows have been reclassified to show noncontrolling interests that were previously considered to be immaterial. | ||
The balance sheet and statements of cash flows have been reclassified to show retainage balances as unbilled receivables. | ||
Certain immaterial items have been consolidated on the balance sheet. | ||
Business_segments
Business segments | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Business segments | ' | ||||||||||
Business segments | ' | ||||||||||
2. Business segments | |||||||||||
The Company is organized and managed based upon the services it provides. We operate in two business segments, Health Services and Human Services. The results of these segments for the three years ended September 30, 2014 are shown below (in thousands): | |||||||||||
Year ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenue: | |||||||||||
Health Services | $ | 1,250,565 | $ | 862,879 | $ | 671,181 | |||||
Human Services | 450,347 | 468,400 | 378,964 | ||||||||
Total | $ | 1,700,912 | $ | 1,331,279 | $ | 1,050,145 | |||||
Gross Profit: | |||||||||||
Health services | $ | 325,559 | $ | 248,100 | $ | 172,456 | |||||
Human Services | 126,564 | 137,933 | 115,487 | ||||||||
Total | $ | 452,123 | $ | 386,033 | $ | 287,943 | |||||
Selling, general and administrative expense: | |||||||||||
Health Services | $ | 150,181 | $ | 118,266 | $ | 91,837 | |||||
Human Services | 76,022 | 79,842 | 65,565 | ||||||||
Acquisition-related expenses | — | 2,168 | 2,876 | ||||||||
Legal and settlement expenses /(recoveries), net | 596 | (202 | ) | 90 | |||||||
Other | 16 | 804 | 241 | ||||||||
Total | $ | 226,815 | $ | 200,878 | $ | 160,609 | |||||
Operating income | |||||||||||
Health Services | $ | 175,378 | $ | 129,834 | $ | 80,619 | |||||
Human Services | 50,542 | 58,091 | 49,922 | ||||||||
Acquisition-related expenses | — | (2,168 | ) | (2,876 | ) | ||||||
Legal and settlement recoveries / (expenses), net | (596 | ) | 202 | (90 | ) | ||||||
Other | (16 | ) | (804 | ) | (241 | ) | |||||
Total | $ | 225,308 | $ | 185,155 | $ | 127,334 | |||||
Depreciation and amortization: | |||||||||||
Health Services | $ | 36,740 | $ | 20,846 | $ | 16,908 | |||||
Human Services | 11,928 | 14,970 | 9,552 | ||||||||
Total | $ | 48,668 | $ | 35,816 | $ | 26,460 | |||||
Acquisition-related expenses are costs directly incurred from the purchases of HML in 2013 and PSI in 2012, as well as any unsuccessful transactions. No significant costs were incurred in the acquisition of Centacare. Legal and settlement expenses (recoveries), net consists of costs, net of reimbursed insurance claims, related to significant legal settlements and non-routine legal matters, including future probable legal costs estimated to be incurred in connection with those matters. Legal expenses incurred in the ordinary course of business are included in their respective business segments. | |||||||||||
We operate primarily in the United States, Australia, Canada, the United Kingdom and Saudi Arabia. | |||||||||||
Our revenue was distributed as follows (in thousands): | |||||||||||
Year ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
United States | $ | 1,306,026 | $ | 999,419 | $ | 775,871 | |||||
Australia | 170,727 | 157,383 | 163,482 | ||||||||
Rest of World | 224,159 | 174,477 | 110,792 | ||||||||
Total | $ | 1,700,912 | $ | 1,331,279 | $ | 1,050,145 | |||||
Identifiable assets for the segments are shown below (in thousands): | |||||||||||
Year Ended | |||||||||||
September 30, | |||||||||||
2014 | 2013 | ||||||||||
Health Services | $ | 511,188 | $ | 518,914 | |||||||
Human Services | 152,243 | 221,604 | |||||||||
Corporate / Other | 237,565 | 117,460 | |||||||||
Total | $ | 900,996 | $ | 857,978 | |||||||
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 | |||||||||||
September 30, | |||||||||||
2014 | 2013 | ||||||||||
United States | $ | 93,500 | $ | 88,812 | |||||||
Canada | 27,043 | 24,135 | |||||||||
Australia | 8,769 | 9,459 | |||||||||
Rest of World | 7,794 | 6,074 | |||||||||
Total | $ | 137,106 | $ | 128,480 | |||||||
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Earnings Per Share | ' | ||||||||||
Earnings Per Share | ' | ||||||||||
3. Earnings per share | |||||||||||
The following table sets forth the components of basic and diluted earnings per share (in thousands): | |||||||||||
Year ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||
Net income | $ | 145,396 | $ | 117,349 | $ | 75,831 | |||||
Loss/(income) attributable to noncontrolling interests | 44 | (618 | ) | 302 | |||||||
Net income attributable to MAXIMUS | $ | 145,440 | $ | 116,731 | $ | 76,133 | |||||
Denominator: | |||||||||||
Weighted average shares outstanding | 67,680 | 68,165 | 67,734 | ||||||||
Effect of employee stock options and unvested restricted stock awards | 1,407 | 1,728 | 1,877 | ||||||||
Denominator for diluted earnings per share | 69,087 | 69,893 | 69,611 | ||||||||
For the year ended September 30, 2014, 286,000 unvested restricted stock units have been excluded from the calculation of diluted earnings per share as the effect of including them would have been anti-dilutive. The number of unvested restricted stock units excluded from the calculations in earlier years is immaterial. | |||||||||||
Business_combinations
Business combinations | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Business combinations | ' | ||||||||||
Business combinations | ' | ||||||||||
4. Business combinations | |||||||||||
Centacare | |||||||||||
On January 31, 2014, we acquired certain businesses from Centacare for $2.7 million ($3.1 million Australian) in cash. The operations of these businesses are consistent with the welfare-to-work services we provide Australia. The Company acquired these businesses in order to expand our operations in Australia. | |||||||||||
Of the purchase price, we allocated $3.2 million to intangible assets, representing customer relationships, and $0.5 million to deferred revenue. The intangible assets will be amortized over the anticipated lives of the customer relationships, which are approximately four years. | |||||||||||
The businesses acquired with Centacare were immediately integrated into our existing business within our Human Services segment. The results of the acquired business would not be material for any periods shown. | |||||||||||
Health Management Limited | |||||||||||
On July 1, 2013 (the acquisition date), we acquired 100% of the share capital of Health Management Limited (HML) for total consideration of $77.9 million (£51.1 million). The consideration was comprised of $71.4 million (£46.9 million) in cash and 202,972 shares of MAXIMUS stock worth $6.4 million (£4.2 million). | |||||||||||
HML provides independent health assessments within the U.K. We acquired HML, among other reasons, to expand the Company's independent medical assessment business and to establish a strong presence in the U.K. health services market. The acquired assets and business have been integrated into our Health Services Segment. | |||||||||||
We allocated the acquisition price to the fair value of the assets and liabilities of HML at the acquisition date. We provided estimates of these balances at September 30, 2013 and updated these estimates as more information became available. We have completed this exercise. The assets and liabilities of HML recorded in our financial statements at the acquisition date are summarized below (in thousands): | |||||||||||
Updated through | Adjustments | Updated through | |||||||||
September 30, 2013 | September 30, 2014 | ||||||||||
Cash consideration, net of cash acquired | $ | 71,435 | $ | — | $ | 71,435 | |||||
Stock consideration | 6,425 | — | 6,425 | ||||||||
Purchase consideration, net of cash acquired | $ | 77,860 | $ | — | $ | 77,860 | |||||
Accounts receivable and unbilled receivables | $ | 7,671 | $ | — | $ | 7,671 | |||||
Other current assets | 1,382 | — | 1,382 | ||||||||
Property and equipment | 2,752 | — | 2,752 | ||||||||
Intangible assets | 20,542 | — | 20,542 | ||||||||
Total identifiable assets acquired | 32,347 | — | 32,347 | ||||||||
Accounts payable and other liabilities | 6,228 | — | 6,228 | ||||||||
Deferred revenue | 1,149 | — | 1,149 | ||||||||
Current income tax liability | 612 | 144 | 756 | ||||||||
Deferred tax liability | 4,814 | (113 | ) | 4,701 | |||||||
Total liabilities assumed | 12,803 | 31 | 12,834 | ||||||||
Net identifiable assets acquired | 19,544 | (31 | ) | 19,513 | |||||||
Goodwill | 58,316 | 31 | 58,347 | ||||||||
Net assets acquired | $ | 77,860 | $ | — | $ | 77,860 | |||||
The difference between the acquisition date fair value of the consideration and the estimated fair value of the net assets acquired was recorded as goodwill. We consider the goodwill to represent benefits that are expected to be realized as a result of the business combination, including, but not limited to, the assembled workforce and the benefit of the enhanced knowledge and capabilities of HML. Goodwill is not deductible for tax purposes. | |||||||||||
The valuation of the intangible assets acquired is summarized below (in thousands). | |||||||||||
Useful life | Fair value | ||||||||||
Customer relationships | 20 years | $ | 19,933 | ||||||||
Technology-based intangible assets | 2 years | 609 | |||||||||
Total intangible assets | $ | 20,542 | |||||||||
The weighted average amortization period was 19.5 years. | |||||||||||
Policy Studies, Inc. | |||||||||||
On April 30, 2012 (the PSI acquisition date),we acquired 100% of the share capital of PSI Services Holding, Inc. and its wholly owned subsidiary, Policy Studies, Inc. (PSI) for cash consideration of $63.4 million. | |||||||||||
PSI supports government clients in the administration of a number of health and human services programs exclusively within the U.S. We acquired PSI, among other reasons, to strengthen our leadership in the administration of public health and human services programs. The acquired assets and business have been integrated into our Health Services and Human Services Segments. | |||||||||||
The assets and liabilities of PSI were recorded in our financial statements at their fair values as of the PSI acquisition date. The final valuation of the assets and liabilities acquired was as follows (in thousands): | |||||||||||
Accounts receivable and unbilled receivables | $ | 23,017 | |||||||||
Other current assets | 9,527 | ||||||||||
Deferred income taxes | 2,129 | ||||||||||
Property and equipment | 6,411 | ||||||||||
Other assets | 1,332 | ||||||||||
Intangible assets | 22,183 | ||||||||||
Total identifiable assets acquired | 64,599 | ||||||||||
Accounts payable and other liabilities | 20,666 | ||||||||||
Deferred revenue | 19,775 | ||||||||||
Total liabilities assumed | 40,441 | ||||||||||
Net identifiable assets acquired | 24,158 | ||||||||||
Goodwill—Health Services Segment | 19,963 | ||||||||||
Goodwill—Human Services Segment | 19,327 | ||||||||||
Net assets acquired | $ | 63,448 | |||||||||
The difference between the acquisition date fair value of the consideration and the estimated fair value of the net assets acquired was recorded as goodwill and allocated to our two segments, Health Services and Human Services, based upon the respective valuations of the businesses. We consider the goodwill to represent a number of potential strategic and financial benefits that are expected to be realized as a result of the acquisition, including, but not limited to, the assembled workforce and the addition of new capabilities within our existing business. Goodwill is not deductible for tax purposes. | |||||||||||
DeltaWare Systems, Inc. | |||||||||||
On February 10, 2010 (the DeltaWare acquisition date), we acquired 100% of the share capital of DeltaWare Systems, Inc. (DeltaWare). | |||||||||||
As part of the acquisition agreement, we must pay the former owners of DeltaWare up to $4.0 million (Canadian). These payments, considered contingent consideration, will be made based upon sales of DeltaWare's products in particular geographic markets prior to December 2016. The Company has recorded a long-term liability of $0.4 million that represents the payment that management assesses will likely be paid. In the event that such sales are anticipated, this could result in an increase to this liability based upon the size and location of the sales. No such sales have been made to date and the likelihood of future sales between this time and December 2016 is considered low. We review the likelihood of future sales on a quarterly basis and, to the extent that sales opportunities are identified, proposals submitted or contracts won, we update our probability weighted assessment of payment. Changes in this assessment will result in an expense or credit to earnings. The contingent consideration payable for any single contract signed would be based upon the population of the area served but would be capped at $1.0 million (Canadian) per sale. As the inputs required for the valuation of this liability require significant judgment, they are considered to be Level 3 inputs under the Financial Accounting Standards Board's classification of assets and liabilities subject to fair value measurement. | |||||||||||
The effect on the financial statements is summarized below (in thousands): | |||||||||||
Contingent | |||||||||||
consideration | |||||||||||
Balance at September 30, 2013 | $ | 388 | |||||||||
Foreign currency translation | (30 | ) | |||||||||
Balance at September 30, 2014 | $ | 358 | |||||||||
Concentrations_of_credit_risk_
Concentrations of credit risk and major customers | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Concentrations of credit risk and major customers | ' | ||||||||||
Concentrations of credit risk and major customers | ' | ||||||||||
5. 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. | |||||||||||
We operate predominantly in the U.S. Revenue from foreign projects and offices was 23%, 25% and 26% of total revenue for the years ended September 30, 2014, 2013 and 2012, respectively. | |||||||||||
In the year ended September 30, 2014, approximately 55% of our total revenue was derived from state government agencies whose programs received significant federal funding, 20% from foreign government agencies, 17% from U.S.-based federal government agencies, and 8% 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 2014, we had four customers who each provided more than 10% of the our annual revenue: the United States Federal Government, the States of California and Texas and the Government of Australia. Revenue from the U.S. Federal Government, California and Texas was principally within the Health Services Segment. Revenue from Australia was exclusively within the Human 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, 2014 was as follows: | |||||||||||
Year ended | |||||||||||
September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
U.S. Federal | 17 | % | 12 | % | * | ||||||
Australia | 10 | % | 12 | % | 16 | % | |||||
California | 10 | % | * | 10 | % | ||||||
Texas | 10 | % | 14 | % | 18 | % | |||||
* | Entity provided less than 10% of our consolidated revenue in this year. | ||||||||||
Billed_and_unbilled_receivable
Billed and unbilled receivables | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Billed and unbilled receivables | ' | ||||||||||
Billed and unbilled receivables | ' | ||||||||||
6. Billed and unbilled receivables | |||||||||||
Changes in the reserves against current billed, billable and unbilled accounts receivable were as follows (in thousands): | |||||||||||
Year ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Balance at beginning of year | $ | 3,828 | $ | 3,975 | $ | 3,265 | |||||
Additions to reserve | 1,767 | 2,334 | 2,061 | ||||||||
Deductions | (2,457 | ) | (2,481 | ) | (1,351 | ) | |||||
Balance at end of year | $ | 3,138 | $ | 3,828 | $ | 3,975 | |||||
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, 2014 and 2013, $8.8 million and $8.3 million of our unbilled receivables related to amounts pursuant to contractual retainage provisions. We anticipate that the majority of the fiscal 2014 balance will be collected during the 2015 fiscal year. | |||||||||||
Goodwill_and_intangible_assets
Goodwill and intangible assets | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Goodwill and intangible assets | ' | ||||||||||||||||||||
Goodwill and intangible assets | ' | ||||||||||||||||||||
7. Goodwill and intangible assets | |||||||||||||||||||||
Changes in goodwill for the years ended September 30, 2014 and 2013 are as follows (in thousands): | |||||||||||||||||||||
Health Services | Human Services | Total | |||||||||||||||||||
Balance as of September 30, 2012 | $ | 63,517 | $ | 48,515 | $ | 112,032 | |||||||||||||||
Goodwill acquired with HML | 58,316 | — | 58,316 | ||||||||||||||||||
Adjustment to goodwill acquired with PSI | 65 | 64 | 129 | ||||||||||||||||||
Foreign currency translation | 3,198 | (1,808 | ) | 1,390 | |||||||||||||||||
Balance as of September 30, 2013 | 125,096 | 46,771 | 171,867 | ||||||||||||||||||
Adjustment to goodwill acquired with HML | 31 | — | 31 | ||||||||||||||||||
Foreign currency translation | (207 | ) | (1,065 | ) | (1,272 | ) | |||||||||||||||
Balance as of September 30, 2014 | $ | 124,920 | $ | 45,706 | $ | 170,626 | |||||||||||||||
There have been no impairment charges in our goodwill. | |||||||||||||||||||||
The following table sets forth the components of intangible assets (in thousands): | |||||||||||||||||||||
As of September 30, 2014 | As of September 30, 2013 | ||||||||||||||||||||
Cost | Accumulated | Intangible | Cost | Accumulated | Intangible | ||||||||||||||||
Amortization | Assets, net | Amortization | Assets, net | ||||||||||||||||||
Customer contracts and relationships | $ | 42,403 | $ | 7,821 | $ | 34,582 | $ | 39,243 | $ | 3,953 | $ | 35,290 | |||||||||
Technology-based intangible assets | 9,295 | 6,910 | 2,385 | 9,583 | 5,974 | 3,609 | |||||||||||||||
Trademarks and trade names | 4,374 | 2,102 | 2,272 | 4,421 | 1,303 | 3,118 | |||||||||||||||
Non-compete arrangements | — | — | — | 243 | 221 | 22 | |||||||||||||||
Total | $ | 56,072 | $ | 16,833 | $ | 39,239 | $ | 53,490 | $ | 11,451 | $ | 42,039 | |||||||||
The intangible assets include $3.4 million of fully amortized technology-based assets still in use. Our intangible assets have a weighted average remaining life of 11.7 years, comprising 12.9 years for customer contracts and relationships, 3.2 years for technology-based intangible assets and 3.0 years for trademarks and trade names. Amortization expense for the years ended September 30, 2014, 2013 and 2012 was $5.9 million, $4.9 million and $2.7 million, respectively. Estimated future amortization expense is estimated as follows (in thousands): | |||||||||||||||||||||
Year ending September 30, 2015 | $ | 5,875 | |||||||||||||||||||
Year ending September 30, 2016 | 5,613 | ||||||||||||||||||||
Year ending September 30, 2017 | 5,214 | ||||||||||||||||||||
Year ending September 30, 2018 | 4,002 | ||||||||||||||||||||
Year ending September 30, 2019 | 3,042 | ||||||||||||||||||||
Property_and_equipment
Property and equipment | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property and equipment | ' | |||||||
Property and equipment | ' | |||||||
8. Property and equipment | ||||||||
Property and equipment, at cost, consists of the following (in thousands): | ||||||||
As of September 30, | ||||||||
2014 | 2013 | |||||||
Land | $ | 1,738 | $ | 1,738 | ||||
Building and improvements | 11,707 | 11,661 | ||||||
Office furniture and equipment | 177,939 | 149,796 | ||||||
Leasehold improvements | 23,124 | 17,870 | ||||||
214,508 | 181,065 | |||||||
Less: Accumulated depreciation and amortization | (134,262 | ) | (103,355 | ) | ||||
Total property and equipment, net | $ | 80,246 | $ | 77,710 | ||||
Fixed asset depreciation expense for the years ended September 30, 2014, 2013 and 2012 was $32.9 million, $26.3 million and $18.8 million, respectively. | ||||||||
Capitalized_software
Capitalized software | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Capitalized software | ' | |||||||
Capitalized software | ' | |||||||
9. Capitalized software | ||||||||
Capitalized software consists of the following (in thousands): | ||||||||
As of September 30, | ||||||||
2014 | 2013 | |||||||
Capitalized software | $ | 72,758 | $ | 64,189 | ||||
Less: Accumulated amortization | (33,024 | ) | (23,733 | ) | ||||
Total Software development costs, net | $ | 39,734 | $ | 40,456 | ||||
Capitalized software amortization expense for the years ended September 30, 2014, 2013 and 2012 was $9.9 million, $4.6 million and $4.9 million, respectively. | ||||||||
Deferred_contract_costs
Deferred contract costs | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Deferred contract costs | ' | |||||||
Deferred contract costs | ' | |||||||
10. Deferred contract costs | ||||||||
Deferred contract costs consist of contractually recoverable direct set-up costs relating to long-term service contracts. These costs include direct and incremental costs incurred prior to the commencement of us providing contracted services to our customers. These costs are expensed over the period the services are provided. Deferred contract costs consist of the following (in thousands): | ||||||||
As of September 30, | ||||||||
2014 | 2013 | |||||||
Deferred contract costs | $ | 25,489 | $ | 23,623 | ||||
Less: accumulated amortization | (13,443 | ) | (9,305 | ) | ||||
Total deferred contract costs, net | $ | 12,046 | $ | 14,318 | ||||
Credit_facilities
Credit facilities | 12 Months Ended |
Sep. 30, 2014 | |
Credit facilities | ' |
Credit facilities | ' |
11. Credit facilities | |
On March 15, 2013, we entered into an unsecured five-year revolving credit agreement (the "Credit Agreement"). The Credit Agreement amended and restated our existing revolving credit agreement entered into in January 2008. The Credit Agreement provides for a revolving line of credit up to $100 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 $30 million. The line of credit is available for general corporate purposes, including working capital, capital expenditures and acquisitions. The arrangement will terminate on March 15, 2018, at which time all outstanding borrowings must be repaid. | |
We had no borrowings under the Credit Agreement at September 30, 2014. | |
At September 30, 2014, our only indebtedness under the Credit Agreement was three letters of credit totaling $4.7 million. Each of these letters of credit may be called by customers 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. | |
The 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, 2014. Our obligations under the Credit Agreement are guaranteed by material domestic subsidiaries of the Company. The Credit Facility is currently unsecured. In the event that our total leverage ratio, as defined in the credit agreement, exceeds 2.5 to 1.0 or we incur a certain level of indebtedness outside of the Credit Agreement, the Credit Agreement will become secured by the assets of the parent company and certain of its subsidiaries. At September 30, 2014, our total leverage ratio was negligible. | |
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 0.15% and 0.3%. 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. | |
In addition to this revolving credit facility, we have a loan agreement with the Atlantic Innovation Fund of Canada. This provided a loan of $1.8 million (Canadian), the proceeds of which were required to be used for specific technology-based research and development. The loan has no interest charge. At September 30, 2014, $1.2 million ($1.4 million Canadian) was outstanding under this agreement, which is repayable in 31 remaining quarterly installments. | |
Certain contracts require us to provide a surety bond as a guarantee of performance. At September 30, 2014, we had performance bond commitments totaling $38.2 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. | |
Commitments_and_contingencies
Commitments and contingencies | 12 Months Ended |
Sep. 30, 2014 | |
Commitments and contingencies | ' |
Commitments and contingencies | ' |
12. Commitments and contingencies | |
Litigation | |
We are involved in various legal proceedings, including the matters described below, in the ordinary course of our business. | |
In March 2009, a state Medicaid agency asserted a claim against us, related to a discontinued business line, in the amount of $2.3 million in connection with a contract we had through February 1, 2009 to provide Medicaid administrative claiming services to school districts in the state. We entered into separate agreements with the school districts under which we helped the districts prepare and submit claims to the state Medicaid agency which, in turn, submitted claims for reimbursement to the United States Federal Government. No legal action has been initiated. The state has asserted that its agreement with us requires the Company to reimburse the state for the amounts owed to the Federal Government. However, the Company's agreements with the school districts require them to reimburse us for such payments and therefore we believe the school districts are responsible for any amounts disallowed by the state Medicaid agency or the Federal Government. We believe our exposure in this matter is limited to our fees associated with this work and that the school districts will be responsible for the remainder. We have exited the federal health care claiming business and no longer provide the services at issue in this matter. | |
In 2008, we sold the SchoolMAX student information system business line as part of the divestiture of the MAXIMUS Education Systems division. In 2012, a school district ("District") which was a SchoolMAX client initiated arbitration alleging that we and the buyer failed to (i) use best practices in developing the software and (ii) deliver and test product releases as required by the contract, resulting in damages of at least $10 million. In December 2012, the arbitration panel denied the District's claims in their entirety, and the District filed a motion in court seeking to vacate that decision. Separately, in late 2012, the District claimed that we had defrauded the District in 2007 or 2008 by misrepresenting our intentions regarding the sale of the Education Systems division. That allegation was not part of the arbitration, and no formal claim or lawsuit was filed. The parties settled all claims among them at no cost to us in September 2014. | |
In January 2014, we were named a defendant in Norton et al. v. MAXIMUS in the U.S. District Court for Idaho. The plaintiffs in this purported class action are current and former trainers and supervisors at the MAXIMUS federal health care projects in Boise, Idaho and Brownsville, Texas. They allege we willfully misclassified them as exempt employees under the Fair Labor Standards Act and failed to pay them overtime, and they seek to establish a nationwide class covering the company's federal health care operations. The plaintiffs allege compensatory and punitive damages of at least $5.0 million. We have since reclassified the trainers as non-exempt employees and are seeking an expedited resolution of their wage claims. We deny liability as to the supervisors and will contest the matter vigorously. As of September 30, 2014, the Company reserved $0.6 million to cover the estimated legal costs of defending this lawsuit, in addition to estimated liabilities to employees. | |
Acquired loss-making contract | |
As part of the acquisition of PSI in April 2012, we acquired a systems-integration contract that was anticipated to record significant future losses. The fair value of the obligation to provide these services at a loss was calculated and recorded on our balance sheet at acquisition as deferred revenue of $15.1 million. | |
The contract was an arrangement that included both significant production and customization of software as well as postcontract customer support for these services. As we were unable to estimate the costs of providing these services, management deferred all revenue and costs related to service in anticipation of recognizing revenue at the commencement of the postcontract customer support services. | |
In February 2013, we received a formal notice of termination for convenience for this contract. The work was terminated as part of a broad, state-wide initiative to focus resources on a select number of projects. At the termination of this agreement, we reimbursed the client for certain funds received and undertook to provide future services. All other obligations to provide services have been extinguished and no material future costs will be incurred. Accordingly, revenue of $16.0 million was recognized in the year ended September 30, 2013. In addition, costs of $5.1 million, including costs which had been deferred, were recognized in the same period for an operating profit of $10.9 million. | |
Employment agreements | |
We have an employment agreement with our chief executive officer with a term ending in April 2018. | |
Collective bargaining agreements | |
Approximately 14% of our employees are covered by collective bargaining agreements or similar arrangements. | |
Leases
Leases | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Leases | ' | ||||||||||
Leases | ' | ||||||||||
13. Leases | |||||||||||
We lease office space and equipment under various operating leases. Lease expense for the years ended September 30, 2014, 2013 and 2012 was $61.8 million, $49.0 million and $37.6 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, 2014 are as follows (in thousands): | |||||||||||
Office space | Equipment | Total | |||||||||
Year ended September 30, | |||||||||||
2015 | $ | 52,906 | $ | 3,358 | $ | 56,264 | |||||
2016 | 35,007 | 1,394 | 36,401 | ||||||||
2017 | 27,241 | 763 | 28,004 | ||||||||
2018 | 14,751 | 648 | 15,399 | ||||||||
2019 | 8,439 | 259 | 8,698 | ||||||||
Thereafter | 9,275 | — | 9,275 | ||||||||
Total minimum lease payments | $ | 147,619 | $ | 6,422 | $ | 154,041 | |||||
Employee_benefit_plans_and_def
Employee benefit plans and deferred compensation | 12 Months Ended |
Sep. 30, 2014 | |
Employee benefit plans and deferred compensation | ' |
Employee benefit plans and deferred compensation | ' |
14. 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, 2014, 2013 and 2012, we contributed $4.3 million, $3.8 million and $3.0 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 within the rabbi trust include $6.2 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 statement of operations. | |
Stock_compensation
Stock compensation | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Stock compensation | ' | ||||||||||
Stock compensation | ' | ||||||||||
15. Stock compensation | |||||||||||
At September 30, 2014, 2.4 million shares remained available for grants under our 2011 Equity Incentive Plan. We typically issue new shares in satisfying our obligations under our stock plans. | |||||||||||
In recent years, we have granted equity awards to officers, employees and directors in the form of restricted stock units (RSUs). RSUs issued generally vest ratably over 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, 2014, 2013 and 2012, compensation expense recognized related to RSUs was $17.3 million, $14.6 million and $12.1 million, respectively. Employees 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 employees may not buy or sell these RSUs. 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, 2014, is as follows: | |||||||||||
Shares | Weighted-Average | ||||||||||
Grant-Date | |||||||||||
Fair Value | |||||||||||
Non-vested shares outstanding at September 30, 2013 | 2,418,954 | $ | 17.47 | ||||||||
Granted | 451,741 | 46.49 | |||||||||
Vested | (946,478 | ) | 17.46 | ||||||||
Forfeited | (39,316 | ) | 22.9 | ||||||||
Non-vested shares outstanding at September 30, 2014 | 1,884,901 | 24.32 | |||||||||
The weighted-average grant-date fair value of RSUs granted in the years ended September 30, 2013 and 2012 was $30.66 and $21.00, respectively. The total fair value of RSUs which vested during the years ended September 30, 2014, 2013 and 2012 was $38.7 million, $40.8 million and $25.0 million, respectively. As of September 30, 2014, the total remaining unrecognized compensation cost related to unvested RSUs was $31.8 million. This charge is expected to be realized over the next four years, with a weighted average life of 1.6 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. | |||||||||||
A summary of our stock option activity for the year ended September 30, 2014, is as follows: | |||||||||||
Options | Weighted Average | ||||||||||
Exercise Price | |||||||||||
Outstanding at September 30, 2013 | 421,464 | $ | 8.85 | ||||||||
Exercised | (161,020 | ) | 8.6 | ||||||||
Expired | (444 | ) | 10.22 | ||||||||
Outstanding and exercisable at September 30, 2014 | 260,000 | 9 | |||||||||
The intrinsic value of outstanding and exercisable stock options at September 30, 2014 was $8.1 million with a weighted average remaining life of 1.9 years. | |||||||||||
The following table summarizes information pertaining to the stock options vested and exercised for the years presented (in thousands): | |||||||||||
Year ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Aggregate intrinsic value of all stock options exercised | $ | 5,698 | $ | 7,081 | $ | 10,920 | |||||
Net cash proceeds from exercise of stock options | 1,362 | 2,168 | 6,441 | ||||||||
The total income tax benefit recognized in the income statement for share-based compensation arrangements was $7.0 million, $5.2 million and $4.3 million for the fiscal years ended September 30, 2014, 2013 and 2012, respectively. | |||||||||||
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 statements of cash flows as financing cash flows. During the year ended September 30, 2014, our employees forfeited 349,353 shares in this manner, resulting in a liability of $14.2 million. | |||||||||||
Cash flows resulting from the tax benefits generated from tax deductions in excess of the compensation costs recognized for those options and RSUs (excess tax benefits) are classified as financing cash flows. | |||||||||||
Stock_repurchase_programs
Stock repurchase programs | 12 Months Ended |
Sep. 30, 2014 | |
Stock repurchase programs | ' |
Stock Repurchase Programs | ' |
16. Stock repurchase programs | |
Under a resolution adopted in November 2011, the Board of Directors authorized the repurchase, at management's discretion, of up to an aggregate of $125 million of our common stock. Under a resolution adopted in June 2014, the Company increased this balance by $150 million. The resolutions also authorized the use of option exercise proceeds for the repurchase of our common stock. During the years ended September 30, 2014, 2013 and 2012, we repurchased 2.7 million, 1.0 million and 0.6 million common shares at a cost of $113.1 million, $32.5 million and $12.8 million, respectively. At September 30, 2014, $135.2 million remained available for future stock repurchases. | |
We acquired an additional 0.8 million common shares at a cost of $30.6 million between October 1, 2014 and November 17, 2014. | |
Income_taxes
Income taxes | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Income taxes | ' | ||||||||||
Income taxes | ' | ||||||||||
17. 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, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Income before income taxes: | |||||||||||
United States | $ | 180,820 | $ | 139,716 | $ | 93,475 | |||||
Foreign | 46,549 | 49,306 | 38,031 | ||||||||
Income before income taxes | $ | 227,369 | $ | 189,022 | $ | 131,506 | |||||
Year ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current provision: | |||||||||||
Federal | 55,656 | $ | 43,199 | $ | 36,371 | ||||||
State and local | 12,003 | 11,257 | 9,006 | ||||||||
Foreign | 11,416 | 14,821 | 13,572 | ||||||||
Total current provision | 79,075 | 69,277 | 58,949 | ||||||||
Deferred tax expense (benefit): | |||||||||||
Federal | 1,750 | 2,741 | (1,272 | ) | |||||||
State and local | 181 | 851 | (471 | ) | |||||||
Foreign | 967 | (1,196 | ) | (1,531 | ) | ||||||
Total deferred tax expense (benefit) | 2,898 | 2,396 | (3,274 | ) | |||||||
Provision for income taxes | $ | 81,973 | $ | 71,673 | $ | 55,675 | |||||
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, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Federal income tax provision at statutory rate of 35% | $ | 79,579 | $ | 66,158 | $ | 46,027 | |||||
State income taxes, net of federal benefit | 7,920 | 8,151 | 5,561 | ||||||||
Foreign taxation | (3,909 | ) | (3,715 | ) | (1,844 | ) | |||||
Permanent items | 1,286 | 708 | 2,808 | ||||||||
Tax credits | (1,623 | ) | (217 | ) | (109 | ) | |||||
True up to prior year | — | — | 2,715 | ||||||||
Valuation allowances on net operating loss carryforwards | (962 | ) | — | 305 | |||||||
Other | (318 | ) | 588 | 212 | |||||||
Income tax expense | $ | 81,973 | $ | 71,673 | $ | 55,675 | |||||
The significant items comprising our deferred tax assets and liabilities as of September 30, 2014 and 2013 are as follows (in thousands): | |||||||||||
As of September 30, | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets—current: | |||||||||||
Deferred revenue | $ | 19,815 | $ | 10,930 | |||||||
Costs deductible in future periods | 14,944 | 21,186 | |||||||||
Net operating loss carryforwards | 207 | — | |||||||||
Other | — | 544 | |||||||||
Total deferred tax assets—current | 34,966 | 32,660 | |||||||||
Deferred tax liabilities—current: | |||||||||||
Accounts receivable—unbilled | 6,858 | 6,217 | |||||||||
Net deferred tax asset—current | $ | 28,108 | $ | 26,443 | |||||||
Deferred tax assets—non-current: | |||||||||||
Net operating loss carryforwards | $ | 2,355 | $ | 4,080 | |||||||
Valuation allowance on net operating loss carryforwards | — | (968 | ) | ||||||||
Net operating loss carryforwards net of valuation reserve | 2,355 | 3,112 | |||||||||
Deferred revenue | 7,089 | 10,340 | |||||||||
Stock compensation | 4,100 | 4,601 | |||||||||
Costs deductible in future periods | 1,662 | 1,528 | |||||||||
Other | 7,828 | 5,360 | |||||||||
Total deferred tax assets—non-current | 23,034 | 24,941 | |||||||||
Deferred tax liabilities—non-current | |||||||||||
Amortization of goodwill and intangible assets | 20,261 | 19,383 | |||||||||
Capitalized software | 12,057 | 9,045 | |||||||||
Property and equipment | 10,045 | 10,127 | |||||||||
Deferred contract costs | 1,762 | 2,059 | |||||||||
Other | 292 | 686 | |||||||||
Total deferred tax liability—non-current | $ | 44,417 | $ | 41,300 | |||||||
Net deferred tax liability—non-current | $ | 21,383 | $ | 16,359 | |||||||
At September 30, 2014, our foreign subsidiaries held approximately $173 million of cumulative earnings. We consider undistributed earnings of our foreign subsidiaries to be indefinitely reinvested outside of the United States 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. As of September 30, 2014, our foreign subsidiaries held approximately $95 million of cash and cash equivalents. In November 2014, we remitted $32 million from an international subsidiary to the U.S. as a return of capital on a tax-free basis. | |||||||||||
We had $4.5 million and $6.9 million of net operating loss carryforwards in the U.S. at September 30, 2014 and 2013, respectively. These balances resulted in deferred tax assets of $2.4 million and $3.1 million, respectively, and relate exclusively to the losses held by PSI prior to the acquisition in 2012. Although our ability to use these loss carryforwards will be restricted to an annual allowance, we have sufficient profits and time within the jurisdictions where losses have arisen to ensure that these losses will be utilized in full through fiscal year 2017. Accordingly, no reserve has been recorded against these balances. These net operating loss carryforwards expire between 2027 and 2031. | |||||||||||
We had $0.8 million and $3.9 million of net operating loss carryforwards in Canada at September 30, 2014 and 2013, respectively, resulting in deferred tax assets of $0.2 million and $1.0 million. The balance at September 30, 2013 was fully reserved. During fiscal year 2014, $3.1 million of these net operating losses were utilized and the balance of the existing reserve was reversed. These net operating loss carryforwards expire through 2027 to 2031. | |||||||||||
Cash paid for income taxes during the years ended September 30, 2014, 2013, and 2012 was $79.4 million, $58.2 million and $44.3 million, respectively. | |||||||||||
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. Our net unrecognized tax benefits totaled $1.1 million and $1.0 million at September 30, 2014 and 2013, respectively. The total amount of unrecognized tax benefits that, if recognized, would affect our annual effective income tax rate was $1.1 million at September 30, 2014. | |||||||||||
We report interest and penalties as a component of income tax expense. In the fiscal years ending September 30, 2014, 2013 and 2012, 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, 2014 and 2013 includes approximately $0.5 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, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Balance at beginning of year | $ | 812 | $ | 1,059 | $ | 1,172 | |||||
Lapse of statute of limitation | — | (230 | ) | (113 | ) | ||||||
Reductions for tax positions of prior years | — | (17 | ) | — | |||||||
Balance at end of year | $ | 812 | $ | 812 | $ | 1,059 | |||||
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 2011 and to state and local income tax examinations by tax authorities for years before 2009. 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 2009. | |||||||||||
Quarterly_information_unaudite
Quarterly information (unaudited) | 12 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Quarterly information (unaudited) | ' | |||||||||||||
Quarterly information (unaudited) | ' | |||||||||||||
18. Quarterly information (unaudited) | ||||||||||||||
Set forth below are selected quarterly statement of operations data for the fiscal years ended September 30, 2014 and 2013. 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. | ||||||||||||||
As disclosed in Note 1, we have made certain reclassifications in our presentation of the statements of operations. These reclassifications have been made below and, accordingly, these results will be different from those previously reported. | ||||||||||||||
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, | |||||||||||
2013 | 2014 | 2014 | 2014 | |||||||||||
(In thousands, except per share data) | ||||||||||||||
Revenue | $ | 406,592 | $ | 439,015 | $ | 419,899 | $ | 435,406 | ||||||
Gross profit | 105,916 | 120,672 | 112,603 | 112,932 | ||||||||||
Net income | 33,355 | 41,461 | 34,428 | 36,152 | ||||||||||
Net income attributable to MAXIMUS | 33,859 | 41,207 | 34,138 | 36,236 | ||||||||||
Basic earnings per share | $ | 0.50 | $ | 0.61 | $ | 0.50 | $ | 0.54 | ||||||
Diluted earnings per share | $ | 0.49 | $ | 0.59 | $ | 0.49 | $ | 0.53 | ||||||
Quarter Ended | ||||||||||||||
Dec. 31, | March 31, | June 30, | Sept. 30, | |||||||||||
2012 | 2013 | 2013 | 2013 | |||||||||||
(In thousands, except per share data) | ||||||||||||||
Revenue | $ | 286,266 | $ | 326,351 | $ | 334,323 | $ | 384,339 | ||||||
Gross profit | 76,530 | 97,444 | 94,560 | 117,499 | ||||||||||
Net income | 21,299 | 32,049 | 28,581 | 35,420 | ||||||||||
Net income attributable to MAXIMUS | 21,316 | 31,689 | 28,100 | 35,626 | ||||||||||
Basic earnings per share | $ | 0.31 | $ | 0.46 | $ | 0.41 | $ | 0.52 | ||||||
Diluted earnings per share | $ | 0.31 | $ | 0.45 | $ | 0.40 | $ | 0.51 | ||||||
Dividend
Dividend | 12 Months Ended |
Sep. 30, 2014 | |
Dividend | ' |
Dividend | ' |
19. Dividend | |
On October 3, 2014, our Board of Directors declared a quarterly cash dividend of $0.045 for each share of the Company's common stock outstanding. The dividend will be paid on November 28, 2014 to shareholders of record on November 14, 2014. Based on the number of shares outstanding, the payment will be approximately $3.0 million. | |
Business_and_summary_of_signif1
Business and summary of significant accounting policies (Policies) | 12 Months Ended | |
Sep. 30, 2014 | ||
Business and summary of significant accounting policies | ' | |
Principles of consolidation | ' | |
(b) 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 | ' | |
(c) 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 estimates of the fair value of assets acquired and liabilities assumed in business combinations, estimates of the collectability of receivables, estimates of future discounts in performance-based contracts, evaluation of asset impairment, accrual of estimated liabilities and valuation of acquisition-related contingent consideration liabilities. | ||
Revenue recognition | ' | |
(d) Revenue recognition | ||
Revenue is generated from contracts with various pricing arrangements, including: | ||
• | performance-based criteria, constituting approximately 49% of total revenue in fiscal year 2014; | |
• | costs incurred plus a negotiated fee ("cost-plus") (25%); | |
• | fixed-price (23%); and | |
• | time-and-materials (3%). | |
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 goal. This revenue generally occurs when amounts are billable to customers and may result in revenue being recognized in irregular increments. | ||
Revenue on cost-plus contracts is recognized based on costs incurred plus an estimate of the negotiated fee 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. | ||
For certain fixed-price contracts, primarily systems design, development and implementation, we generally recognize revenue based upon costs incurred to date and our anticipated gross profit. The cumulative impact of any revisions in estimated revenue and costs is recognized in the period in which the facts that give rise to the revision become known. Provisions for estimated losses on incomplete contracts are provided for in full in the period in which such losses become known. This policy may result in revenue being recognized at different points from amounts being billable. Where we enter into contracts where significant uncertainty exists over the ability of management to estimate the future costs, we will typically defer all revenue until such time as future costs are estimable or the system implementation is complete. | ||
Revenue on time-and-materials contracts is recognized 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. | ||
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. 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 2018 fiscal year. The standard permits a retrospective or cumulative effect transition method. At present, we are continuing to evaluate the effect of this standard and have not yet determined a transition method or the likely effects on the business. | ||
Cash and cash equivalents | ' | |
(e) 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. The balance was $10.6 million and $12.2 million at September 30, 2014 and 2013, respectively. | ||
Accounts receivable and allowance for doubtful accounts | ' | |
(f) Accounts receivable and allowance for doubtful accounts | ||
Accounts receivable are recorded at their face amount less an allowance for doubtful accounts. We maintain an allowance for doubtful accounts at an amount we estimate to be sufficient to cover the risk of collecting less than full payment on our receivables. 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. | ||
Business combinations and goodwill | ' | |
(g) Business combinations and goodwill | ||
The purchase price of an acquired business is allocated to tangible assets and separately identifiable intangible assets acquired less liabilities assumed based upon their respective fair values. The excess balance is recorded as goodwill. Costs incurred directly related to an acquisition, including legal, accounting and valuation services, are expensed as incurred. | ||
The separately identifiable intangible 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. | ||
We perform our annual impairment test as of July 1 of each year. At July 1, 2014, we performed the annual impairment test 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) | ' | |
(h) Long-lived assets (excluding goodwill) | ||
Property and equipment is recorded at cost. Depreciation is recorded over the assets' respective useful economic lives, which are not to exceed 39.5 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 amortized 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 us providing service to enable us to provide the contracted services to our customer. These costs are expensed over the period the services are provided on a straight-line basis. | ||
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, 2014. | ||
Income taxes | ' | |
(i) 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 | ' | |
(j) 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 interest and other income and are typically immaterial. | ||
Contingencies | ' | |
(k) 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 of Financial Instruments | ' | |
(l) Fair Value of Financial Instruments | ||
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. | ||
Reclassifications | ' | |
(m) Reclassifications | ||
Certain financial results have been reclassified to conform to the current year presentation. | ||
The statements of operations have been reclassified to exclude immaterial discontinued operations. We recorded a loss of $0.4 million and a profit of less than $0.1 million for the years ended September 30, 2013 and 2012, respectively. These balances are now included in "Selling, general and administrative expense" and in "Interest and other income, net." | ||
The statements of operations, balance sheet and statements of cash flows have been reclassified to show noncontrolling interests that were previously considered to be immaterial. | ||
The balance sheet and statements of cash flows have been reclassified to show retainage balances as unbilled receivables. | ||
Certain immaterial items have been consolidated on the balance sheet. | ||
Business_segments_Tables
Business segments (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Business segments | ' | ||||||||||
Schedule of results for each of the Company's business segments | ' | ||||||||||
The results of these segments for the three years ended September 30, 2014 are shown below (in thousands): | |||||||||||
Year ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenue: | |||||||||||
Health Services | $ | 1,250,565 | $ | 862,879 | $ | 671,181 | |||||
Human Services | 450,347 | 468,400 | 378,964 | ||||||||
Total | $ | 1,700,912 | $ | 1,331,279 | $ | 1,050,145 | |||||
Gross Profit: | |||||||||||
Health services | $ | 325,559 | $ | 248,100 | $ | 172,456 | |||||
Human Services | 126,564 | 137,933 | 115,487 | ||||||||
Total | $ | 452,123 | $ | 386,033 | $ | 287,943 | |||||
Selling, general and administrative expense: | |||||||||||
Health Services | $ | 150,181 | $ | 118,266 | $ | 91,837 | |||||
Human Services | 76,022 | 79,842 | 65,565 | ||||||||
Acquisition-related expenses | — | 2,168 | 2,876 | ||||||||
Legal and settlement expenses /(recoveries), net | 596 | (202 | ) | 90 | |||||||
Other | 16 | 804 | 241 | ||||||||
Total | $ | 226,815 | $ | 200,878 | $ | 160,609 | |||||
Operating income | |||||||||||
Health Services | $ | 175,378 | $ | 129,834 | $ | 80,619 | |||||
Human Services | 50,542 | 58,091 | 49,922 | ||||||||
Acquisition-related expenses | — | (2,168 | ) | (2,876 | ) | ||||||
Legal and settlement recoveries / (expenses), net | (596 | ) | 202 | (90 | ) | ||||||
Other | (16 | ) | (804 | ) | (241 | ) | |||||
Total | $ | 225,308 | $ | 185,155 | $ | 127,334 | |||||
Depreciation and amortization: | |||||||||||
Health Services | $ | 36,740 | $ | 20,846 | $ | 16,908 | |||||
Human Services | 11,928 | 14,970 | 9,552 | ||||||||
Total | $ | 48,668 | $ | 35,816 | $ | 26,460 | |||||
Schedule of distribution of revenues | ' | ||||||||||
Our revenue was distributed as follows (in thousands): | |||||||||||
Year ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
United States | $ | 1,306,026 | $ | 999,419 | $ | 775,871 | |||||
Australia | 170,727 | 157,383 | 163,482 | ||||||||
Rest of World | 224,159 | 174,477 | 110,792 | ||||||||
Total | $ | 1,700,912 | $ | 1,331,279 | $ | 1,050,145 | |||||
Schedule of identifiable assets by segment | ' | ||||||||||
Identifiable assets for the segments are shown below (in thousands): | |||||||||||
Year Ended | |||||||||||
September 30, | |||||||||||
2014 | 2013 | ||||||||||
Health Services | $ | 511,188 | $ | 518,914 | |||||||
Human Services | 152,243 | 221,604 | |||||||||
Corporate / Other | 237,565 | 117,460 | |||||||||
Total | $ | 900,996 | $ | 857,978 | |||||||
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 | |||||||||||
September 30, | |||||||||||
2014 | 2013 | ||||||||||
United States | $ | 93,500 | $ | 88,812 | |||||||
Canada | 27,043 | 24,135 | |||||||||
Australia | 8,769 | 9,459 | |||||||||
Rest of World | 7,794 | 6,074 | |||||||||
Total | $ | 137,106 | $ | 128,480 | |||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Earnings Per Share | ' | ||||||||||
Schedule of the components of basic and diluted earnings per share | ' | ||||||||||
The following table sets forth the components of basic and diluted earnings per share (in thousands): | |||||||||||
Year ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||
Net income | $ | 145,396 | $ | 117,349 | $ | 75,831 | |||||
Loss/(income) attributable to noncontrolling interests | 44 | (618 | ) | 302 | |||||||
Net income attributable to MAXIMUS | $ | 145,440 | $ | 116,731 | $ | 76,133 | |||||
Denominator: | |||||||||||
Weighted average shares outstanding | 67,680 | 68,165 | 67,734 | ||||||||
Effect of employee stock options and unvested restricted stock awards | 1,407 | 1,728 | 1,877 | ||||||||
Denominator for diluted earnings per share | 69,087 | 69,893 | 69,611 | ||||||||
Business_combinations_Tables
Business combinations (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
HML | ' | ||||||||||
Business combinations | ' | ||||||||||
Schedule of assets and liabilities recorded in the Company's financial statements at their fair values at the acquisition date | ' | ||||||||||
The assets and liabilities of HML recorded in our financial statements at the acquisition date are summarized below (in thousands): | |||||||||||
Updated through | Adjustments | Updated through | |||||||||
September 30, 2013 | September 30, 2014 | ||||||||||
Cash consideration, net of cash acquired | $ | 71,435 | $ | — | $ | 71,435 | |||||
Stock consideration | 6,425 | — | 6,425 | ||||||||
Purchase consideration, net of cash acquired | $ | 77,860 | $ | — | $ | 77,860 | |||||
Accounts receivable and unbilled receivables | $ | 7,671 | $ | — | $ | 7,671 | |||||
Other current assets | 1,382 | — | 1,382 | ||||||||
Property and equipment | 2,752 | — | 2,752 | ||||||||
Intangible assets | 20,542 | — | 20,542 | ||||||||
Total identifiable assets acquired | 32,347 | — | 32,347 | ||||||||
Accounts payable and other liabilities | 6,228 | — | 6,228 | ||||||||
Deferred revenue | 1,149 | — | 1,149 | ||||||||
Current income tax liability | 612 | 144 | 756 | ||||||||
Deferred tax liability | 4,814 | (113 | ) | 4,701 | |||||||
Total liabilities assumed | 12,803 | 31 | 12,834 | ||||||||
Net identifiable assets acquired | 19,544 | (31 | ) | 19,513 | |||||||
Goodwill | 58,316 | 31 | 58,347 | ||||||||
Net assets acquired | $ | 77,860 | $ | — | $ | 77,860 | |||||
Summary of valuation of the intangible assets acquired | ' | ||||||||||
The valuation of the intangible assets acquired is summarized below (in thousands). | |||||||||||
Useful life | Fair value | ||||||||||
Customer relationships | 20 years | $ | 19,933 | ||||||||
Technology-based intangible assets | 2 years | 609 | |||||||||
Total intangible assets | $ | 20,542 | |||||||||
Policy Studies, Inc | ' | ||||||||||
Business combinations | ' | ||||||||||
Schedule of assets and liabilities recorded in the Company's financial statements at their fair values at the acquisition date | ' | ||||||||||
The final valuation of the assets and liabilities acquired was as follows (in thousands): | |||||||||||
Accounts receivable and unbilled receivables | $ | 23,017 | |||||||||
Other current assets | 9,527 | ||||||||||
Deferred income taxes | 2,129 | ||||||||||
Property and equipment | 6,411 | ||||||||||
Other assets | 1,332 | ||||||||||
Intangible assets | 22,183 | ||||||||||
Total identifiable assets acquired | 64,599 | ||||||||||
Accounts payable and other liabilities | 20,666 | ||||||||||
Deferred revenue | 19,775 | ||||||||||
Total liabilities assumed | 40,441 | ||||||||||
Net identifiable assets acquired | 24,158 | ||||||||||
Goodwill—Health Services Segment | 19,963 | ||||||||||
Goodwill—Human Services Segment | 19,327 | ||||||||||
Net assets acquired | $ | 63,448 | |||||||||
DeltaWare | ' | ||||||||||
Business combinations | ' | ||||||||||
Summary of effect on the financial statements | ' | ||||||||||
The effect on the financial statements is summarized below (in thousands): | |||||||||||
Contingent | |||||||||||
consideration | |||||||||||
Balance at September 30, 2013 | $ | 388 | |||||||||
Foreign currency translation | (30 | ) | |||||||||
Balance at September 30, 2014 | $ | 358 | |||||||||
Concentrations_of_credit_risk_1
Concentrations of credit risk and major customers (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Concentrations of credit risk and major customers | ' | ||||||||||
Schedule of revenue recognized from customers | ' | ||||||||||
Year ended | |||||||||||
September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
U.S. Federal | 17 | % | 12 | % | * | ||||||
Australia | 10 | % | 12 | % | 16 | % | |||||
California | 10 | % | * | 10 | % | ||||||
Texas | 10 | % | 14 | % | 18 | % | |||||
* | Entity provided less than 10% of our consolidated revenue in this year. | ||||||||||
Billed_and_unbilled_receivable1
Billed and unbilled receivables (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Billed and unbilled receivables | ' | ||||||||||
Schedule of accounts receivable reserve | ' | ||||||||||
Changes in the reserves against current billed, billable and unbilled accounts receivable were as follows (in thousands): | |||||||||||
Year ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Balance at beginning of year | $ | 3,828 | $ | 3,975 | $ | 3,265 | |||||
Additions to reserve | 1,767 | 2,334 | 2,061 | ||||||||
Deductions | (2,457 | ) | (2,481 | ) | (1,351 | ) | |||||
Balance at end of year | $ | 3,138 | $ | 3,828 | $ | 3,975 | |||||
Goodwill_and_intangible_assets1
Goodwill and intangible assets (Tables) | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
Goodwill and intangible assets | ' | |||||||||||||||||||
Schedule of changes in the carrying amount of goodwill | ' | |||||||||||||||||||
Changes in goodwill for the years ended September 30, 2014 and 2013 are as follows (in thousands): | ||||||||||||||||||||
Health Services | Human Services | Total | ||||||||||||||||||
Balance as of September 30, 2012 | $ | 63,517 | $ | 48,515 | $ | 112,032 | ||||||||||||||
Goodwill acquired with HML | 58,316 | — | 58,316 | |||||||||||||||||
Adjustment to goodwill acquired with PSI | 65 | 64 | 129 | |||||||||||||||||
Foreign currency translation | 3,198 | (1,808 | ) | 1,390 | ||||||||||||||||
Balance as of September 30, 2013 | 125,096 | 46,771 | 171,867 | |||||||||||||||||
Adjustment to goodwill acquired with HML | 31 | — | 31 | |||||||||||||||||
Foreign currency translation | (207 | ) | (1,065 | ) | (1,272 | ) | ||||||||||||||
Balance as of September 30, 2014 | $ | 124,920 | $ | 45,706 | $ | 170,626 | ||||||||||||||
Schedule of components of intangible assets | ' | |||||||||||||||||||
The following table sets forth the components of intangible assets (in thousands): | ||||||||||||||||||||
As of September 30, 2014 | As of September 30, 2013 | |||||||||||||||||||
Cost | Accumulated | Intangible | Cost | Accumulated | Intangible | |||||||||||||||
Amortization | Assets, net | Amortization | Assets, net | |||||||||||||||||
Customer contracts and relationships | $ | 42,403 | $ | 7,821 | $ | 34,582 | $ | 39,243 | $ | 3,953 | $ | 35,290 | ||||||||
Technology-based intangible assets | 9,295 | 6,910 | 2,385 | 9,583 | 5,974 | 3,609 | ||||||||||||||
Trademarks and trade names | 4,374 | 2,102 | 2,272 | 4,421 | 1,303 | 3,118 | ||||||||||||||
Non-compete arrangements | — | — | — | 243 | 221 | 22 | ||||||||||||||
Total | $ | 56,072 | $ | 16,833 | $ | 39,239 | $ | 53,490 | $ | 11,451 | $ | 42,039 | ||||||||
Schedule of estimated future amortization expense | ' | |||||||||||||||||||
Estimated future amortization expense is estimated as follows (in thousands): | ||||||||||||||||||||
Year ending September 30, 2015 | $ | 5,875 | ||||||||||||||||||
Year ending September 30, 2016 | 5,613 | |||||||||||||||||||
Year ending September 30, 2017 | 5,214 | |||||||||||||||||||
Year ending September 30, 2018 | 4,002 | |||||||||||||||||||
Year ending September 30, 2019 | 3,042 | |||||||||||||||||||
Property_and_equipment_Tables
Property and equipment (Tables) | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property and equipment | ' | |||||||
Schedule of property, plant and equipment | ' | |||||||
Property and equipment, at cost, consists of the following (in thousands): | ||||||||
As of September 30, | ||||||||
2014 | 2013 | |||||||
Land | $ | 1,738 | $ | 1,738 | ||||
Building and improvements | 11,707 | 11,661 | ||||||
Office furniture and equipment | 177,939 | 149,796 | ||||||
Leasehold improvements | 23,124 | 17,870 | ||||||
214,508 | 181,065 | |||||||
Less: Accumulated depreciation and amortization | (134,262 | ) | (103,355 | ) | ||||
Total property and equipment, net | $ | 80,246 | $ | 77,710 | ||||
Capitalized_software_Tables
Capitalized software (Tables) | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Capitalized software | ' | |||||||
Components of capitalized software | ' | |||||||
Capitalized software consists of the following (in thousands): | ||||||||
As of September 30, | ||||||||
2014 | 2013 | |||||||
Capitalized software | $ | 72,758 | $ | 64,189 | ||||
Less: Accumulated amortization | (33,024 | ) | (23,733 | ) | ||||
Total Software development costs, net | $ | 39,734 | $ | 40,456 | ||||
Deferred_contract_costs_Tables
Deferred contract costs (Tables) | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Deferred contract costs | ' | |||||||
Deferred contract costs | ' | |||||||
These costs are expensed over the period the services are provided. Deferred contract costs consist of the following (in thousands): | ||||||||
As of September 30, | ||||||||
2014 | 2013 | |||||||
Deferred contract costs | $ | 25,489 | $ | 23,623 | ||||
Less: accumulated amortization | (13,443 | ) | (9,305 | ) | ||||
Total deferred contract costs, net | $ | 12,046 | $ | 14,318 | ||||
Leases_Tables
Leases (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Leases | ' | ||||||||||
Schedule of minimum future lease commitments under leases | ' | ||||||||||
Minimum future lease commitments under leases in effect as of September 30, 2014 are as follows (in thousands): | |||||||||||
Office space | Equipment | Total | |||||||||
Year ended September 30, | |||||||||||
2015 | $ | 52,906 | $ | 3,358 | $ | 56,264 | |||||
2016 | 35,007 | 1,394 | 36,401 | ||||||||
2017 | 27,241 | 763 | 28,004 | ||||||||
2018 | 14,751 | 648 | 15,399 | ||||||||
2019 | 8,439 | 259 | 8,698 | ||||||||
Thereafter | 9,275 | — | 9,275 | ||||||||
Total minimum lease payments | $ | 147,619 | $ | 6,422 | $ | 154,041 | |||||
Stock_compensation_Tables
Stock compensation (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Stock compensation | ' | ||||||||||
Summary of the Company's RSU activity | ' | ||||||||||
Shares | Weighted-Average | ||||||||||
Grant-Date | |||||||||||
Fair Value | |||||||||||
Non-vested shares outstanding at September 30, 2013 | 2,418,954 | $ | 17.47 | ||||||||
Granted | 451,741 | 46.49 | |||||||||
Vested | (946,478 | ) | 17.46 | ||||||||
Forfeited | (39,316 | ) | 22.9 | ||||||||
Non-vested shares outstanding at September 30, 2014 | 1,884,901 | 24.32 | |||||||||
Summary of the Company's stock option activity | ' | ||||||||||
Options | Weighted Average | ||||||||||
Exercise Price | |||||||||||
Outstanding at September 30, 2013 | 421,464 | $ | 8.85 | ||||||||
Exercised | (161,020 | ) | 8.6 | ||||||||
Expired | (444 | ) | 10.22 | ||||||||
Outstanding and exercisable at September 30, 2014 | 260,000 | 9 | |||||||||
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, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Aggregate intrinsic value of all stock options exercised | $ | 5,698 | $ | 7,081 | $ | 10,920 | |||||
Net cash proceeds from exercise of stock options | 1,362 | 2,168 | 6,441 | ||||||||
Income_taxes_Tables
Income taxes (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Income taxes | ' | ||||||||||
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, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Income before income taxes: | |||||||||||
United States | $ | 180,820 | $ | 139,716 | $ | 93,475 | |||||
Foreign | 46,549 | 49,306 | 38,031 | ||||||||
Income before income taxes | $ | 227,369 | $ | 189,022 | $ | 131,506 | |||||
Year ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current provision: | |||||||||||
Federal | 55,656 | $ | 43,199 | $ | 36,371 | ||||||
State and local | 12,003 | 11,257 | 9,006 | ||||||||
Foreign | 11,416 | 14,821 | 13,572 | ||||||||
Total current provision | 79,075 | 69,277 | 58,949 | ||||||||
Deferred tax expense (benefit): | |||||||||||
Federal | 1,750 | 2,741 | (1,272 | ) | |||||||
State and local | 181 | 851 | (471 | ) | |||||||
Foreign | 967 | (1,196 | ) | (1,531 | ) | ||||||
Total deferred tax expense (benefit) | 2,898 | 2,396 | (3,274 | ) | |||||||
Provision for income taxes | $ | 81,973 | $ | 71,673 | $ | 55,675 | |||||
Provision for income taxes | ' | ||||||||||
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, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Federal income tax provision at statutory rate of 35% | $ | 79,579 | $ | 66,158 | $ | 46,027 | |||||
State income taxes, net of federal benefit | 7,920 | 8,151 | 5,561 | ||||||||
Foreign taxation | (3,909 | ) | (3,715 | ) | (1,844 | ) | |||||
Permanent items | 1,286 | 708 | 2,808 | ||||||||
Tax credits | (1,623 | ) | (217 | ) | (109 | ) | |||||
True up to prior year | — | — | 2,715 | ||||||||
Valuation allowances on net operating loss carryforwards | (962 | ) | — | 305 | |||||||
Other | (318 | ) | 588 | 212 | |||||||
Income tax expense | $ | 81,973 | $ | 71,673 | $ | 55,675 | |||||
Significant items comprising the Company's deferred tax assets and liabilities | ' | ||||||||||
The significant items comprising our deferred tax assets and liabilities as of September 30, 2014 and 2013 are as follows (in thousands): | |||||||||||
As of September 30, | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets—current: | |||||||||||
Deferred revenue | $ | 19,815 | $ | 10,930 | |||||||
Costs deductible in future periods | 14,944 | 21,186 | |||||||||
Net operating loss carryforwards | 207 | — | |||||||||
Other | — | 544 | |||||||||
Total deferred tax assets—current | 34,966 | 32,660 | |||||||||
Deferred tax liabilities—current: | |||||||||||
Accounts receivable—unbilled | 6,858 | 6,217 | |||||||||
Net deferred tax asset—current | $ | 28,108 | $ | 26,443 | |||||||
Deferred tax assets—non-current: | |||||||||||
Net operating loss carryforwards | $ | 2,355 | $ | 4,080 | |||||||
Valuation allowance on net operating loss carryforwards | — | (968 | ) | ||||||||
Net operating loss carryforwards net of valuation reserve | 2,355 | 3,112 | |||||||||
Deferred revenue | 7,089 | 10,340 | |||||||||
Stock compensation | 4,100 | 4,601 | |||||||||
Costs deductible in future periods | 1,662 | 1,528 | |||||||||
Other | 7,828 | 5,360 | |||||||||
Total deferred tax assets—non-current | 23,034 | 24,941 | |||||||||
Deferred tax liabilities—non-current | |||||||||||
Amortization of goodwill and intangible assets | 20,261 | 19,383 | |||||||||
Capitalized software | 12,057 | 9,045 | |||||||||
Property and equipment | 10,045 | 10,127 | |||||||||
Deferred contract costs | 1,762 | 2,059 | |||||||||
Other | 292 | 686 | |||||||||
Total deferred tax liability—non-current | $ | 44,417 | $ | 41,300 | |||||||
Net deferred tax liability—non-current | $ | 21,383 | $ | 16,359 | |||||||
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, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Balance at beginning of year | $ | 812 | $ | 1,059 | $ | 1,172 | |||||
Lapse of statute of limitation | — | (230 | ) | (113 | ) | ||||||
Reductions for tax positions of prior years | — | (17 | ) | — | |||||||
Balance at end of year | $ | 812 | $ | 812 | $ | 1,059 | |||||
Quarterly_information_unaudite1
Quarterly information (unaudited) (Tables) | 12 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Quarterly information (unaudited) | ' | |||||||||||||
Schedule of selected quarterly income statement data | ' | |||||||||||||
Quarter Ended | ||||||||||||||
Dec. 31, | March 31, | June 30, | Sept. 30, | |||||||||||
2013 | 2014 | 2014 | 2014 | |||||||||||
(In thousands, except per share data) | ||||||||||||||
Revenue | $ | 406,592 | $ | 439,015 | $ | 419,899 | $ | 435,406 | ||||||
Gross profit | 105,916 | 120,672 | 112,603 | 112,932 | ||||||||||
Net income | 33,355 | 41,461 | 34,428 | 36,152 | ||||||||||
Net income attributable to MAXIMUS | 33,859 | 41,207 | 34,138 | 36,236 | ||||||||||
Basic earnings per share | $ | 0.50 | $ | 0.61 | $ | 0.50 | $ | 0.54 | ||||||
Diluted earnings per share | $ | 0.49 | $ | 0.59 | $ | 0.49 | $ | 0.53 | ||||||
Quarter Ended | ||||||||||||||
Dec. 31, | March 31, | June 30, | Sept. 30, | |||||||||||
2012 | 2013 | 2013 | 2013 | |||||||||||
(In thousands, except per share data) | ||||||||||||||
Revenue | $ | 286,266 | $ | 326,351 | $ | 334,323 | $ | 384,339 | ||||||
Gross profit | 76,530 | 97,444 | 94,560 | 117,499 | ||||||||||
Net income | 21,299 | 32,049 | 28,581 | 35,420 | ||||||||||
Net income attributable to MAXIMUS | 21,316 | 31,689 | 28,100 | 35,626 | ||||||||||
Basic earnings per share | $ | 0.31 | $ | 0.46 | $ | 0.41 | $ | 0.52 | ||||||
Diluted earnings per share | $ | 0.31 | $ | 0.45 | $ | 0.40 | $ | 0.51 | ||||||
Business_and_summary_of_signif2
Business and summary of significant accounting policies (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
segment | ||
Description of Business | ' | ' |
Number of business segments | 2 | ' |
Cash and cash equivalents | ' | ' |
Restricted cash | $10.60 | $12.20 |
Business_and_summary_of_signif3
Business and summary of significant accounting policies (Details 2) (Total Revenue) | 12 Months Ended |
Sep. 30, 2014 | |
Performance-based contracts | ' |
Revenue Recognition | ' |
Percentage of total revenue | 49.00% |
Cost-plus contracts | ' |
Revenue Recognition | ' |
Percentage of total revenue | 25.00% |
Fixed-price contracts | ' |
Revenue Recognition | ' |
Percentage of total revenue | 23.00% |
Time and materials contracts | ' |
Revenue Recognition | ' |
Percentage of total revenue | 3.00% |
Business_and_summary_of_signif4
Business and summary of significant accounting policies (Details 3) (USD $) | 0 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Jul. 01, 2014 | Sep. 30, 2014 | Sep. 30, 2013 |
Business and summary of significant accounting policies | ' | ' | ' |
Impairment of goodwill | $0 | $0 | $0 |
Buildings | Maximum | ' | ' | ' |
Property and Equipment | ' | ' | ' |
Estimated useful lives | ' | '39 years 6 months | ' |
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_signif5
Business and summary of significant accounting policies (Details 4) (USD $) | 12 Months Ended | 36 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2012 |
Maximum | |||
Long Lived Assets Excluding Goodwill [Abstract] | ' | ' | ' |
Impairment of Long-Lived Assets Held-for-use | ' | $0 | ' |
Reclassification | ' | ' | ' |
Profit (loss) on immaterial discontinued operations excluded from statement of operations | ($0.40) | ' | $0.10 |
Business_segments_Details
Business segments (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
segment | |||||||||||
Business segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of business segments | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' |
Financial information for each of the Company's business segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | $435,406 | $419,899 | $439,015 | $406,592 | $384,339 | $334,323 | $326,351 | $286,266 | $1,700,912 | $1,331,279 | $1,050,145 |
Gross profit | 112,932 | 112,603 | 120,672 | 105,916 | 117,499 | 94,560 | 97,444 | 76,530 | 452,123 | 386,033 | 287,943 |
Selling, general and administrative expense | ' | ' | ' | ' | ' | ' | ' | ' | 226,815 | 200,878 | 160,609 |
Operating income from continuing operations | ' | ' | ' | ' | ' | ' | ' | ' | 225,308 | 185,155 | 127,334 |
Acquisition-related expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,168 | 2,876 |
Legal and settlement expenses/(recoveries), net | ' | ' | ' | ' | ' | ' | ' | ' | 596 | -202 | 90 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 48,668 | 35,816 | 26,460 |
Other | ' | ' | ' | ' | ' | ' | ' | ' | 16 | 804 | 241 |
Identifiable assets | 900,996 | ' | ' | ' | 857,978 | ' | ' | ' | 900,996 | 857,978 | ' |
Corporate/Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financial information for each of the Company's business segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Identifiable assets | 237,565 | ' | ' | ' | 117,460 | ' | ' | ' | 237,565 | 117,460 | ' |
Health Services | Operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financial information for each of the Company's business segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 1,250,565 | 862,879 | 671,181 |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 325,559 | 248,100 | 172,456 |
Selling, general and administrative expense | ' | ' | ' | ' | ' | ' | ' | ' | 150,181 | 118,266 | 91,837 |
Operating income from continuing operations | ' | ' | ' | ' | ' | ' | ' | ' | 175,378 | 129,834 | 80,619 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 36,740 | 20,846 | 16,908 |
Identifiable assets | 511,188 | ' | ' | ' | 518,914 | ' | ' | ' | 511,188 | 518,914 | ' |
Human Services | Operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financial information for each of the Company's business segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 450,347 | 468,400 | 378,964 |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 126,564 | 137,933 | 115,487 |
Selling, general and administrative expense | ' | ' | ' | ' | ' | ' | ' | ' | 76,022 | 79,842 | 65,565 |
Operating income from continuing operations | ' | ' | ' | ' | ' | ' | ' | ' | 50,542 | 58,091 | 49,922 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 11,928 | 14,970 | 9,552 |
Identifiable assets | $152,243 | ' | ' | ' | $221,604 | ' | ' | ' | $152,243 | $221,604 | ' |
Business_segments_Details_2
Business segments (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues and total long-lived assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | $435,406 | $419,899 | $439,015 | $406,592 | $384,339 | $334,323 | $326,351 | $286,266 | $1,700,912 | $1,331,279 | $1,050,145 |
Total long-lived assets | 137,106 | ' | ' | ' | 128,480 | ' | ' | ' | 137,106 | 128,480 | ' |
United States | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues and total long-lived assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 1,306,026 | 999,419 | 775,871 |
Total long-lived assets | 93,500 | ' | ' | ' | 88,812 | ' | ' | ' | 93,500 | 88,812 | ' |
Canada | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues and total long-lived assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total long-lived assets | 27,043 | ' | ' | ' | 24,135 | ' | ' | ' | 27,043 | 24,135 | ' |
Australia | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues and total long-lived assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 170,727 | 157,383 | 163,482 |
Total long-lived assets | 8,769 | ' | ' | ' | 9,459 | ' | ' | ' | 8,769 | 9,459 | ' |
Rest of World | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues and total long-lived assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 224,159 | 174,477 | 110,792 |
Total long-lived assets | $7,794 | ' | ' | ' | $6,074 | ' | ' | ' | $7,794 | $6,074 | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Numerator: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $36,152 | $34,428 | $41,461 | $33,355 | $35,420 | $28,581 | $32,049 | $21,299 | $145,396 | $117,349 | $75,831 |
Loss/(income) attributable to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | 44 | -618 | 302 |
Net income attributable to MAXIMUS | $36,236 | $34,138 | $41,207 | $33,859 | $35,626 | $28,100 | $31,689 | $21,316 | $145,440 | $116,731 | $76,133 |
Denominator: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic weighted average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 67,680,000 | 68,165,000 | 67,734,000 |
Effect of employee stock options and unvested restricted stock awards (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 1,407,000 | 1,728,000 | 1,877,000 |
Denominator for diluted earnings per share | ' | ' | ' | ' | ' | ' | ' | ' | 69,087,000 | 69,893,000 | 69,611,000 |
Unvested restricted stock units | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards excluded from the calculation of diluted earnings per share (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards excluded from the calculation of diluted earnings per share (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 286,000 | ' | ' |
Business_combinations_Details
Business combinations (Details) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Jul. 02, 2013 | Sep. 30, 2014 | Jul. 02, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Apr. 30, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
USD ($) | USD ($) | USD ($) | Health Services | Health Services | Health Services | Human Services | Human Services | Human Services | HML | HML | HML | HML | HML | Australian business | Australian business | Australian business | Australian business | Australian business | Policy Studies, Inc | Policy Studies, Inc | Policy Studies, Inc | Policy Studies, Inc | |
segment | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | GBP (£) | USD ($) | Customer relationships | Previously reported | Adjustments | USD ($) | AUD | USD ($) | Customer relationships | Customer relationships | USD ($) | Previously reported | Previously reported | Previously reported | |||
USD ($) | USD ($) | USD ($) | USD ($) | Health Services | Human Services | ||||||||||||||||||
USD ($) | USD ($) | ||||||||||||||||||||||
Business combinations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share capital acquired (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' |
Preliminary Purchase Price Accounting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash consideration, net of cash acquired | $2,670,000 | $71,435,000 | $66,003,000 | ' | ' | ' | ' | ' | ' | £ 46,900,000 | $71,435,000 | ' | $71,435,000 | ' | ' | ' | ' | ' | ' | $63,400,000 | ' | ' | ' |
Stock consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,200,000 | 6,425,000 | ' | 6,425,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock consideration (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 202,972 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase consideration, net of cash acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | 51,100,000 | 77,860,000 | ' | 77,860,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts receivable and unbilled receivables | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,671,000 | ' | 7,671,000 | ' | ' | ' | ' | ' | ' | ' | 23,017,000 | ' | ' |
Other current assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,382,000 | ' | 1,382,000 | ' | ' | ' | ' | ' | ' | ' | 9,527,000 | ' | ' |
Deferred income taxes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,129,000 | ' | ' |
Property and equipment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,752,000 | ' | 2,752,000 | ' | ' | ' | ' | ' | ' | ' | 6,411,000 | ' | ' |
Other assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,332,000 | ' | ' |
Intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,542,000 | ' | 20,542,000 | ' | ' | ' | ' | ' | 3,200,000 | ' | 22,183,000 | ' | ' |
Total identifiable assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32,347,000 | ' | 32,347,000 | ' | ' | ' | ' | ' | ' | ' | 64,599,000 | ' | ' |
Accounts payable and other liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,228,000 | ' | 6,228,000 | ' | ' | ' | ' | ' | ' | ' | 20,666,000 | ' | ' |
Deferred revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,149,000 | ' | 1,149,000 | ' | ' | ' | 500,000 | ' | ' | ' | 19,775,000 | ' | ' |
Current income tax liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 756,000 | ' | 612,000 | 144,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,701,000 | ' | 4,814,000 | -113,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,834,000 | ' | 12,803,000 | 31,000 | ' | ' | ' | ' | ' | ' | 40,441,000 | ' | ' |
Net identifiable assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,513,000 | ' | 19,544,000 | -31,000 | ' | ' | ' | ' | ' | ' | 24,158,000 | ' | ' |
Goodwill | 170,626,000 | 171,867,000 | 112,032,000 | 124,920,000 | 125,096,000 | 63,517,000 | 45,706,000 | 46,771,000 | 48,515,000 | ' | 58,347,000 | ' | 58,316,000 | 31,000 | ' | ' | ' | ' | ' | ' | ' | 19,963,000 | 19,327,000 |
Net assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 77,860,000 | ' | 77,860,000 | ' | ' | ' | ' | ' | ' | ' | 63,448,000 | ' | ' |
Cash consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,700,000 | 3,100,000 | ' | ' | ' | ' | ' | ' | ' |
Amortization period of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '19 years 6 months | '20 years | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' |
Number of business segments | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business_combinations_Details_
Business combinations (Details 2) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | |
In Thousands, unless otherwise specified | Jul. 02, 2013 | Sep. 30, 2014 | Jul. 02, 2013 | Jul. 02, 2013 |
HML | HML | HML | ||
Customer relationships | Technology-based intangible assets | |||
Intangible assets acquired | ' | ' | ' | ' |
Useful life | ' | '19 years 6 months | '20 years | '2 years |
Fair value | $20,542 | ' | $19,933 | $609 |
Business_combinations_Details_1
Business combinations (Details 3) (DeltaWare) | 12 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2014 | Feb. 10, 2010 | Sep. 30, 2014 | Sep. 30, 2014 | |
USD ($) | CAD | Sales targets | Sales targets | ||
USD ($) | CAD | ||||
Business combinations | ' | ' | ' | ' | ' |
Share capital acquired (as a percent) | ' | ' | 100.00% | ' | ' |
Contingent consideration payable, based upon sales of acquiree products | ' | 1,000,000 | ' | ' | 4,000,000 |
Sales of acquiree products | ' | ' | ' | 0 | ' |
Contingent consideration | ' | ' | ' | ' | ' |
Balance at the beginning of the period | 388,000 | ' | ' | ' | ' |
Foreign currency translation | -30,000 | ' | ' | ' | ' |
Balance at the end of the period | $358,000 | ' | ' | ' | ' |
Concentrations_of_credit_risk_2
Concentrations of credit risk and major customers (Details) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenue Recognition | ' | ' | ' |
Number of major customers | 4 | ' | ' |
Total Revenue | Foreign customers | ' | ' | ' |
Revenue Recognition | ' | ' | ' |
Revenue from major customers (as a percent) | 23.00% | 25.00% | 26.00% |
Total Revenue | State government agencies | ' | ' | ' |
Revenue Recognition | ' | ' | ' |
Revenue from major customers (as a percent) | 55.00% | ' | ' |
Total Revenue | Foreign government agencies | ' | ' | ' |
Revenue Recognition | ' | ' | ' |
Revenue from major customers (as a percent) | 20.00% | ' | ' |
Total Revenue | U.S.-based federal government agencies | ' | ' | ' |
Revenue Recognition | ' | ' | ' |
Revenue from major customers (as a percent) | 17.00% | ' | ' |
Total Revenue | Other sources including local municipalities and commercial customers | ' | ' | ' |
Revenue Recognition | ' | ' | ' |
Revenue from major customers (as a percent) | 8.00% | ' | ' |
Total Revenue | State of Texas | ' | ' | ' |
Revenue Recognition | ' | ' | ' |
Revenue from major customers (as a percent) | 10.00% | 14.00% | 18.00% |
Total Revenue | Australia | ' | ' | ' |
Revenue Recognition | ' | ' | ' |
Revenue from major customers (as a percent) | 10.00% | 12.00% | 16.00% |
Total Revenue | U.S. Federal | ' | ' | ' |
Revenue Recognition | ' | ' | ' |
Revenue from major customers (as a percent) | 17.00% | 12.00% | ' |
Total Revenue | U.S. Federal | Maximum | ' | ' | ' |
Revenue Recognition | ' | ' | ' |
Revenue from major customers (as a percent) | ' | ' | 10.00% |
Total Revenue | State of California | ' | ' | ' |
Revenue Recognition | ' | ' | ' |
Revenue from major customers (as a percent) | 10.00% | ' | 10.00% |
Total Revenue | State of California | Maximum | ' | ' | ' |
Revenue Recognition | ' | ' | ' |
Revenue from major customers (as a percent) | ' | 10.00% | ' |
Billed_and_unbilled_receivable2
Billed and unbilled receivables (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Changes in the reserves against current billed accounts receivable | ' | ' | ' |
Contractual retainage provisions | $8,800,000 | $8,300,000 | ' |
Accounts receivable, billed and unbilled | ' | ' | ' |
Changes in the reserves against current billed accounts receivable | ' | ' | ' |
Balance at beginning of year | 3,828,000 | 3,975,000 | 3,265,000 |
Additions to reserve | 1,767,000 | 2,334,000 | 2,061,000 |
Deductions | -2,457,000 | -2,481,000 | -1,351,000 |
Balance at end of year | $3,138,000 | $3,828,000 | $3,975,000 |
Recovered_Sheet1
Goodwill and Intangible Assets (Detail) (USD $) | 0 Months Ended | 12 Months Ended | |
Jul. 01, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | |
Changes in goodwill | ' | ' | ' |
Balance at the beginning of the period | ' | $171,867,000 | $112,032,000 |
Foreign currency translation | ' | -1,272,000 | 1,390,000 |
Balance at the end of the period | ' | 170,626,000 | 171,867,000 |
Impairment of goodwill related to continuing operations | 0 | 0 | 0 |
HML | ' | ' | ' |
Changes in goodwill | ' | ' | ' |
Goodwill acquired | ' | 31,000 | 58,316,000 |
Balance at the end of the period | ' | 58,347,000 | ' |
Policy Studies, Inc | ' | ' | ' |
Changes in goodwill | ' | ' | ' |
Adjustment to goodwill acquired | ' | ' | 129,000 |
Health Services | ' | ' | ' |
Changes in goodwill | ' | ' | ' |
Balance at the beginning of the period | ' | 125,096,000 | 63,517,000 |
Foreign currency translation | ' | -207,000 | 3,198,000 |
Balance at the end of the period | ' | 124,920,000 | 125,096,000 |
Health Services | HML | ' | ' | ' |
Changes in goodwill | ' | ' | ' |
Goodwill acquired | ' | ' | 58,316,000 |
Adjustment to goodwill acquired | ' | 31,000 | ' |
Health Services | Policy Studies, Inc | ' | ' | ' |
Changes in goodwill | ' | ' | ' |
Adjustment to goodwill acquired | ' | ' | 65,000 |
Human Services | ' | ' | ' |
Changes in goodwill | ' | ' | ' |
Balance at the beginning of the period | ' | 46,771,000 | 48,515,000 |
Foreign currency translation | ' | -1,065,000 | -1,808,000 |
Balance at the end of the period | ' | 45,706,000 | 46,771,000 |
Human Services | Policy Studies, Inc | ' | ' | ' |
Changes in goodwill | ' | ' | ' |
Adjustment to goodwill acquired | ' | ' | $64,000 |
Recovered_Sheet2
Goodwill and Intangible Assets (Detail 2) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Components of intangible assets | ' | ' | ' |
Cost | $56,072,000 | $53,490,000 | ' |
Accumulated Amortization | 16,833,000 | 11,451,000 | ' |
Intangible Assets, net | 39,239,000 | 42,039,000 | ' |
Weighted average remaining life of assets not fully amortized | '11 years 8 months 12 days | ' | ' |
Amortization expense | 5,890,000 | 4,883,000 | 2,730,000 |
Estimated future amortization expense | ' | ' | ' |
Year ending September 30, 2015 | 5,875,000 | ' | ' |
Year ending September 30, 2016 | 5,613,000 | ' | ' |
Year ending September 30, 2017 | 5,214,000 | ' | ' |
Year ending September 30, 2018 | 4,002,000 | ' | ' |
Year ending September 30, 2019 | 3,042,000 | ' | ' |
Customer contracts and relationships | ' | ' | ' |
Components of intangible assets | ' | ' | ' |
Cost | 42,403,000 | 39,243,000 | ' |
Accumulated Amortization | 7,821,000 | 3,953,000 | ' |
Intangible Assets, net | 34,582,000 | 35,290,000 | ' |
Weighted average remaining life of assets not fully amortized | '12 years 10 months 24 days | ' | ' |
Technology-based intangible assets | ' | ' | ' |
Components of intangible assets | ' | ' | ' |
Cost | 9,295,000 | 9,583,000 | ' |
Accumulated Amortization | 6,910,000 | 5,974,000 | ' |
Intangible Assets, net | 2,385,000 | 3,609,000 | ' |
Weighted average remaining life of assets not fully amortized | '3 years 2 months 12 days | ' | ' |
Fully-amortized but still in use intangible assets | 3,400,000 | ' | ' |
Trademarks and trade names | ' | ' | ' |
Components of intangible assets | ' | ' | ' |
Cost | 4,374,000 | 4,421,000 | ' |
Accumulated Amortization | 2,102,000 | 1,303,000 | ' |
Intangible Assets, net | 2,272,000 | 3,118,000 | ' |
Weighted average remaining life of assets not fully amortized | '3 years | ' | ' |
Non-compete arrangements | ' | ' | ' |
Components of intangible assets | ' | ' | ' |
Cost | ' | 243,000 | ' |
Accumulated Amortization | ' | 221,000 | ' |
Intangible Assets, net | ' | $22,000 | ' |
Property_and_equipment_Details
Property and equipment (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Property and equipment, at cost | ' | ' | ' |
Property and equipment, gross | $214,508,000 | $181,065,000 | ' |
Less: Accumulated depreciation and amortization | -134,262,000 | -103,355,000 | ' |
Total property and equipment, net | 80,246,000 | 77,710,000 | ' |
Fixed asset depreciation expense | 32,900,000 | 26,300,000 | 18,800,000 |
Land | ' | ' | ' |
Property and equipment, at cost | ' | ' | ' |
Property and equipment, gross | 1,738,000 | 1,738,000 | ' |
Building and improvements | ' | ' | ' |
Property and equipment, at cost | ' | ' | ' |
Property and equipment, gross | 11,707,000 | 11,661,000 | ' |
Office furniture and equipment | ' | ' | ' |
Property and equipment, at cost | ' | ' | ' |
Property and equipment, gross | 177,939,000 | 149,796,000 | ' |
Leasehold improvements | ' | ' | ' |
Property and equipment, at cost | ' | ' | ' |
Property and equipment, gross | $23,124,000 | $17,870,000 | ' |
Capitalized_software_Details
Capitalized software (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Capitalized software | ' | ' | ' |
Capitalized software | $72,758,000 | $64,189,000 | ' |
Less: Accumulated amortization | -33,024,000 | -23,733,000 | ' |
Total Software development costs, net | 39,734,000 | 40,456,000 | ' |
Capitalized software amortization expense | $9,900,000 | $4,600,000 | $4,900,000 |
Deferred_contract_costs_Detail
Deferred contract costs (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Deferred contract costs | ' | ' |
Deferred contract costs | $25,489 | $23,623 |
Less: accumulated amortization | -13,443 | -9,305 |
Total deferred contract costs, net | $12,046 | $14,318 |
Credit_facilities_Details
Credit facilities (Details) | 0 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||
In Millions, unless otherwise specified | Mar. 15, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Mar. 15, 2013 | Sep. 30, 2014 | Mar. 15, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Swingline loans | Letters of credit | Letters of credit | Letters of credit | Letters of credit | Letter of credit (Other than Revolving Credit Agreement) | Atlantic Innovation Fund of Canada | Atlantic Innovation Fund of Canada | Performance Bonds | |
USD ($) | item | Base Rate | Euro currency Rate | Index Rate | Minimum | Minimum | Minimum | Minimum | Maximum | Maximum | Maximum | USD ($) | USD ($) | USD ($) | Minimum | Maximum | USD ($) | USD ($) | CAD | USD ($) | |
Base Rate | Euro currency Rate | Index Rate | Base Rate | Euro currency Rate | Index Rate | item | item | ||||||||||||||
Credit facilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of the credit agreement | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | $100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5 | ' | $30 | ' | ' | ' | ' | 1.8 | ' |
Number of letters of credit issued | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' |
Amount borrowed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.7 | ' | ' | ' | 3 | ' | ' | ' |
Leverage ratio | ' | ' | ' | ' | ' | 2.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Leverage ratio to calculate annual commitment fee (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.15% | 0.30% | ' | ' | ' | ' |
Variable rate basis | ' | ' | 'Base Rate | 'Eurocurrency Rate | 'Index Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Margin (as a percent) | ' | ' | ' | ' | ' | ' | 0.00% | 1.00% | 1.00% | 0.75% | 1.75% | 1.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest charges (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | 0.00% | ' |
Number of remaining quarterly installments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31 | 31 | ' |
Amount outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.2 | 1.4 | ' |
Performance bond commitments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $38.20 |
Commitments_and_contingencies_
Commitments and contingencies (Details) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Apr. 30, 2012 | Mar. 31, 2009 | Sep. 30, 2012 | Sep. 30, 2014 | Jan. 31, 2014 | |
PSI | PSI | Medicaid Agency | School MAX Customers | Norton et al | Norton et al | ||||||||||||
Loss contract | Loss contract | Minimum | Minimum | ||||||||||||||
Commitments and Contingencies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of employees covered by collective bargaining agreements | ' | ' | ' | ' | ' | ' | ' | ' | 14.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of claim | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,300,000 | $10,000,000 | ' | ' |
Reserve recorded to cover the liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | 5,000,000 |
Deferred revenue recorded | 32,257,000 | ' | ' | ' | 32,953,000 | ' | ' | ' | 32,257,000 | 32,953,000 | ' | ' | 15,100,000 | ' | ' | ' | ' |
Additional revenue recognized from significant contract | 435,406,000 | 419,899,000 | 439,015,000 | 406,592,000 | 384,339,000 | 334,323,000 | 326,351,000 | 286,266,000 | 1,700,912,000 | 1,331,279,000 | 1,050,145,000 | 16,000,000 | ' | ' | ' | ' | ' |
Additional cost recognized for significant contract | ' | ' | ' | ' | ' | ' | ' | ' | 1,248,789,000 | 945,246,000 | 762,202,000 | 5,100,000 | ' | ' | ' | ' | ' |
Operating profit | ' | ' | ' | ' | ' | ' | ' | ' | $225,308,000 | $185,155,000 | $127,334,000 | $10,900,000 | ' | ' | ' | ' | ' |
Leases_Details
Leases (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Leases | ' | ' | ' |
Lease expense | $61,800,000 | $49,000,000 | $37,600,000 |
Minimum future lease commitments under leases | ' | ' | ' |
2015 | 56,264,000 | ' | ' |
2016 | 36,401,000 | ' | ' |
2017 | 28,004,000 | ' | ' |
2018 | 15,399,000 | ' | ' |
2019 | 8,698,000 | ' | ' |
Thereafter | 9,275,000 | ' | ' |
Total minimum lease payments | 154,041,000 | ' | ' |
Office space | ' | ' | ' |
Minimum future lease commitments under leases | ' | ' | ' |
2015 | 52,906,000 | ' | ' |
2016 | 35,007,000 | ' | ' |
2017 | 27,241,000 | ' | ' |
2018 | 14,751,000 | ' | ' |
2019 | 8,439,000 | ' | ' |
Thereafter | 9,275,000 | ' | ' |
Total minimum lease payments | 147,619,000 | ' | ' |
Equipment | ' | ' | ' |
Minimum future lease commitments under leases | ' | ' | ' |
2015 | 3,358,000 | ' | ' |
2016 | 1,394,000 | ' | ' |
2017 | 763,000 | ' | ' |
2018 | 648,000 | ' | ' |
2019 | 259,000 | ' | ' |
Total minimum lease payments | $6,422,000 | ' | ' |
Employee_benefit_plans_and_def1
Employee benefit plans and deferred compensation (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Employee benefit plans and deferred compensation | ' | ' | ' |
Employer contribution to 401(k) plans | $4.30 | $3.80 | $3 |
Investments in mutual funds within the rabbi trust | $6.20 | ' | ' |
Stock_compensation_Details
Stock compensation (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Stock-based compensation | ' | ' | ' |
Shares available for grants | 2,400,000 | ' | ' |
Information pertaining to stock options vested and exercised | ' | ' | ' |
Total income tax benefit recognized | $7,000,000 | $5,200,000 | $4,300,000 |
Cash paid to satisfy employees personal tax liability | 14,681,000 | 8,868,000 | 4,464,000 |
Unvested restricted stock units | ' | ' | ' |
Stock-based compensation | ' | ' | ' |
Compensation expense recognized | 17,300,000 | 14,600,000 | 12,100,000 |
Summary of RSU activity | ' | ' | ' |
Non-vested shares outstanding at the beginning of the period | 2,418,954 | ' | ' |
Granted (in shares) | 451,741 | ' | ' |
Vested (in shares) | -946,478 | ' | ' |
Forfeited (in shares) | -39,316 | ' | ' |
Non-vested shares outstanding at the end of the period | 1,884,901 | 2,418,954 | ' |
Weighted-Average Grant-Date Fair value | ' | ' | ' |
Non-vested shares outstanding at the beginning of the period (in dollars per share) | $17.47 | ' | ' |
Granted (in dollars per share) | $46.49 | $30.66 | $21 |
Vested (in dollars per share) | $17.46 | ' | ' |
Forfeited (in dollars per share) | $22.90 | ' | ' |
Non-vested shares outstanding at the end of the period (in dollars per share) | $24.32 | $17.47 | ' |
Total fair value | 38,700,000 | 40,800,000 | 25,000,000 |
Total unrecognized compensation cost related to unvested RSUs | 31,800,000 | ' | ' |
Unrecognized compensation cost period expected to be realized | '4 years | ' | ' |
Weighted Average Exercise Price | ' | ' | ' |
Weighted average remaining life | '1 year 7 months 6 days | ' | ' |
RSUs awarded in 2009 and after | ' | ' | ' |
Stock-based compensation | ' | ' | ' |
Award vesting period | '5 years | ' | ' |
Stock options | ' | ' | ' |
Stock-based compensation | ' | ' | ' |
Award vesting period | '4 years | ' | ' |
Award expired period | '10 years | ' | ' |
Summary of stock option activity | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | 421,464 | ' | ' |
Exercised (in shares) | -161,020 | ' | ' |
Expired (in shares) | -444 | ' | ' |
Outstanding and exercisable at the end of the period (in shares) | 260,000 | 421,464 | ' |
Weighted Average Exercise Price | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $8.85 | ' | ' |
Exercised (in dollars per share) | $8.60 | ' | ' |
Expired (in dollars per share) | $10.22 | ' | ' |
Outstanding and exercisable at the end of the period (in dollars per share) | $9 | $8.85 | ' |
Intrinsic value of outstanding and exercisable stock options at the end of the period | 8,100,000 | ' | ' |
Weighted average remaining life | '1 year 10 months 24 days | ' | ' |
Information pertaining to stock options vested and exercised | ' | ' | ' |
Aggregate intrinsic value of all stock options exercised | 5,698,000 | 7,081,000 | 10,920,000 |
Net cash proceeds from exercise of stock options | 1,362,000 | 2,168,000 | 6,441,000 |
Stock awards utilized to satisfy employees' personal tax requirements (in shares) | 349,353 | ' | ' |
Cash paid to satisfy employees personal tax liability | $14,200,000 | ' | ' |
Stock_repurchase_program_Detai
Stock repurchase program (Details) (USD $) | 1 Months Ended | 12 Months Ended | 2 Months Ended | |||
Share data in Thousands, unless otherwise specified | Jun. 30, 2014 | Nov. 30, 2011 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Nov. 17, 2014 |
Subsequent events | ||||||
Stock repurchase programs | ' | ' | ' | ' | ' | ' |
Stock repurchase programs, authorized amount | ' | $125,000,000 | ' | ' | ' | ' |
Stock repurchase program, increase in authorized amount | 150,000,000 | ' | ' | ' | ' | ' |
Amount remaining available for future stock repurchases | ' | ' | 135,200,000 | ' | ' | ' |
Common shares repurchased | ' | ' | 2,700 | 1,000 | 600 | 800 |
Common shares repurchased, cost | ' | ' | $113,135,000 | $32,525,000 | $12,796,000 | $30,600,000 |
Income_taxes_Details
Income taxes (Details) (USD $) | 12 Months Ended | 1 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Nov. 18, 2014 | |
Subsequent events | ||||
Income before income taxes: | ' | ' | ' | ' |
United States | $180,820,000 | $139,716,000 | $93,475,000 | ' |
Foreign | 46,549,000 | 49,306,000 | 38,031,000 | ' |
Income before income taxes | 227,369,000 | 189,022,000 | 131,506,000 | ' |
Current provision: | ' | ' | ' | ' |
Federal | 55,656,000 | 43,199,000 | 36,371,000 | ' |
State and local | 12,003,000 | 11,257,000 | 9,006,000 | ' |
Foreign | 11,416,000 | 14,821,000 | 13,572,000 | ' |
Total current provision | 79,075,000 | 69,277,000 | 58,949,000 | ' |
Deferred tax expense (benefit): | ' | ' | ' | ' |
Federal | 1,750,000 | 2,741,000 | -1,272,000 | ' |
State and local | 181,000 | 851,000 | -471,000 | ' |
Foreign | 967,000 | -1,196,000 | -1,531,000 | ' |
Total deferred tax expense (benefit) | 2,898,000 | 2,396,000 | -3,274,000 | ' |
Provision for income taxes | 81,973,000 | 71,673,000 | 55,675,000 | ' |
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% | 79,579,000 | 66,158,000 | 46,027,000 | ' |
State income taxes, net of federal benefit | 7,920,000 | 8,151,000 | 5,561,000 | ' |
Foreign taxation | -3,909,000 | -3,715,000 | -1,844,000 | ' |
Permanent items | 1,286,000 | 708,000 | 2,808,000 | ' |
Tax credits | -1,623,000 | -217,000 | -109,000 | ' |
True up to prior year | ' | ' | 2,715,000 | ' |
Valuation allowance on net operating loss carryforwards | -962,000 | ' | 305,000 | ' |
Other | -318,000 | 588,000 | 212,000 | ' |
Provision for income taxes | 81,973,000 | 71,673,000 | 55,675,000 | ' |
Statutory income tax rate (as a percent) | 35.00% | 35.00% | 35.00% | ' |
Deferred tax assets-current: | ' | ' | ' | ' |
Deferred revenue | 19,815,000 | 10,930,000 | ' | ' |
Costs deductible in future periods | 14,944,000 | 21,186,000 | ' | ' |
Net operating loss carryforwards | 207,000 | ' | ' | ' |
Other | ' | 544,000 | ' | ' |
Total deferred tax assets-current | 34,966,000 | 32,660,000 | ' | ' |
Deferred tax liabilities-current: | ' | ' | ' | ' |
Accounts receivable-unbilled | 6,858,000 | 6,217,000 | ' | ' |
Net deferred tax asset-current | 28,108,000 | 26,443,000 | ' | ' |
Deferred tax assets-non-current: | ' | ' | ' | ' |
Net operating loss carryforwards | 2,355,000 | 4,080,000 | ' | ' |
Valuation allowance on net operating loss carryforwards | ' | -968,000 | ' | ' |
Net operating loss carryforwards net of valuation reserve | 2,355,000 | 3,112,000 | ' | ' |
Deferred revenue | 7,089,000 | 10,340,000 | ' | ' |
Stock compensation | 4,100,000 | 4,601,000 | ' | ' |
Costs deductible in future periods | 1,662,000 | 1,528,000 | ' | ' |
Other | 7,828,000 | 5,360,000 | ' | ' |
Total deferred tax assets-non-current | 23,034,000 | 24,941,000 | ' | ' |
Deferred tax liabilities-non-current | ' | ' | ' | ' |
Amortization of goodwill and intangible assets | 20,261,000 | 19,383,000 | ' | ' |
Capitalized software | 12,057,000 | 9,045,000 | ' | ' |
Property and equipment | 10,045,000 | 10,127,000 | ' | ' |
Deferred contract costs | 1,762,000 | 2,059,000 | ' | ' |
Other | 292,000 | 686,000 | ' | ' |
Total deferred tax liability-non-current | 44,417,000 | 41,300,000 | ' | ' |
Net deferred tax liability-non-current | 21,383,000 | 16,359,000 | ' | ' |
Net deferred tax asset (liability) | ' | ' | ' | ' |
Net deferred tax liability-non-current | 21,383,000 | 16,359,000 | ' | ' |
Cumulative earnings from foreign subsidiaries | 173,000,000 | ' | ' | ' |
Income taxes paid | 79,400,000 | 58,200,000 | 44,300,000 | ' |
Cash and cash equivalents of foreign subsidiaries | 95,000,000 | ' | ' | ' |
Remittance from an international subsidiary as a return of capital | ' | ' | ' | $32,000,000 |
Income_taxes_Details_2
Income taxes (Details 2) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Net operating loss carryforwards | ' | ' | ' |
Valuation allowance established against the deferred tax asset | ' | $968,000 | ' |
Unrecognized tax benefits | ' | ' | ' |
Net unrecognized tax benefits | 1,100,000 | 1,000,000 | ' |
Unrecognized tax benefits that, if recognized, would affect the annual effective income tax rate | 1,100,000 | ' | ' |
Interest and penalties included in net liability balance | 500,000 | 500,000 | ' |
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits | ' | ' | ' |
Balance at beginning of year | ' | 1,059,000 | 1,172,000 |
Lapse of statute of limitations | ' | -230,000 | -113,000 |
Reductions for tax positions of prior years | ' | -17,000 | ' |
Balance at end of year | 812,000 | 812,000 | 1,059,000 |
United States | ' | ' | ' |
Net operating loss carryforwards | ' | ' | ' |
Net operating loss carryforwards | 4,500,000 | 6,900,000 | ' |
Deferred tax asset, foreign | 2,400,000 | 3,100,000 | ' |
Valuation allowance established against the deferred tax asset | 0 | ' | ' |
Canada | ' | ' | ' |
Net operating loss carryforwards | ' | ' | ' |
Net operating loss carryforwards | 800,000 | 3,900,000 | ' |
Deferred tax asset, foreign | 200,000 | 1,000,000 | ' |
Net operating loss utilized | 3,100,000 | ' | ' |
Maximum | ' | ' | ' |
Unrecognized tax benefits | ' | ' | ' |
Interest expense recognized related to unrecognized tax benefits | $100,000 | $100,000 | $100,000 |
Quarterly_information_unaudite2
Quarterly information (unaudited) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Quarterly information (unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | $435,406 | $419,899 | $439,015 | $406,592 | $384,339 | $334,323 | $326,351 | $286,266 | $1,700,912 | $1,331,279 | $1,050,145 |
Gross profit | 112,932 | 112,603 | 120,672 | 105,916 | 117,499 | 94,560 | 97,444 | 76,530 | 452,123 | 386,033 | 287,943 |
Net income | 36,152 | 34,428 | 41,461 | 33,355 | 35,420 | 28,581 | 32,049 | 21,299 | 145,396 | 117,349 | 75,831 |
Net income attributable to MAXIMUS | $36,236 | $34,138 | $41,207 | $33,859 | $35,626 | $28,100 | $31,689 | $21,316 | $145,440 | $116,731 | $76,133 |
Basic earnings per share (in dollars per share) | $0.54 | $0.50 | $0.61 | $0.50 | $0.52 | $0.41 | $0.46 | $0.31 | $2.15 | $1.71 | $1.12 |
Diluted earnings per share (in dollars per share) | $0.53 | $0.49 | $0.59 | $0.49 | $0.51 | $0.40 | $0.45 | $0.31 | $2.11 | $1.67 | $1.09 |
Dividend_Details
Dividend (Details) (Subsequent events, USD $) | 0 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Oct. 03, 2014 | Oct. 03, 2014 |
Subsequent events | ' | ' |
Subsequent Events | ' | ' |
Cash dividend declared (in dollars per share) | $0.05 | ' |
Dividend payable | ' | $3 |