Maximus (MMS) 10-Q9 May 142014 Q2 Quarterly reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
Document and Entity Information	Mar. 31, 2014	Apr. 30, 2014
Document and Entity Information	'	'
Entity Registrant Name	'MAXIMUS INC	'
Entity Central Index Key	'0001032220	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--09-30	'
Entity Current Reporting Status	'Yes	'
Entity Filer Category	'Large Accelerated Filer	'
Entity Common Stock, Shares Outstanding	'	67,697,400
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q2	'

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
CONSOLIDATED STATEMENTS OF OPERATIONS	'	'	'	'
Revenue	$439,015	$326,351	$845,607	$612,617
Cost of revenue	318,343	228,907	619,019	438,643
Gross profit	120,672	97,444	226,588	173,974
Selling, general and administrative expenses	55,129	46,693	107,732	88,915
Acquisition-related expenses	'	16	'	164
Legal and settlement expenses	600	'	600	142
Operating income from continuing operations	64,943	50,735	118,256	84,753
Interest and other income, net	183	637	904	1,743
Income from continuing operations before income taxes	65,126	51,372	119,160	86,496
Provision for income taxes	23,964	19,658	44,198	32,999
Income from continuing operations	41,162	31,714	74,962	53,497
Discontinued operations, net of income taxes:	'	'	'	'
Income/(loss) from discontinued operations	22	-91	12	-594
Gain on disposal	23	66	92	102
Income (loss) from discontinued operations	45	-25	104	-492
Net income	$41,207	$31,689	$75,066	$53,005
Basic earnings/(loss) per share:	'	'	'	'
Income from continuing operations (in dollars per share)	$0.61	$0.47	$1.10	$0.78
Income/(loss) from discontinued operations (in dollars per share)	'	($0.01)	'	'
Basic earnings per share (in dollars per share)	$0.61	$0.46	$1.10	$0.78
Diluted earnings/(loss) per share:	'	'	'	'
Income from continuing operations (in dollars per share)	$0.59	$0.45	$1.08	$0.77
Income/(loss) from discontinued operations (in dollars per share)	'	'	'	($0.01)
Diluted earnings per share (in dollars per share)	$0.59	$0.45	$1.08	$0.76
Dividends paid per share (in dollars per share)	$0.05	$0.05	$0.09	$0.09
Weighted average shares outstanding:	'	'	'	'
Basic (in shares)	67,884	68,179	68,143	68,171
Diluted (in shares)	69,307	69,909	69,538	69,835

CONSOLIDATED_STATEMENTS_OF_COM

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	'	'	'	'
Net income	$41,207	$31,689	$75,066	$53,005
Foreign currency translation adjustments	1,638	-965	-1,447	-1,568
Comprehensive income	$42,845	$30,724	$73,619	$51,437

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Sep. 30, 2013
In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Current assets:	'	'
Cash and cash equivalents	$131,323	$125,617
Restricted cash	12,073	12,176
Accounts receivable - billed, net of reserves of $5,430 and $3,828	309,784	272,636
Accounts receivable - unbilled	20,303	20,320
Prepaid income taxes	75	358
Deferred income taxes	29,928	26,443
Prepaid expenses and other current assets	31,966	32,049
Total current assets	535,452	489,599
Property and equipment, net	70,982	77,710
Capitalized software, net	41,542	40,456
Goodwill	173,191	171,867
Intangible assets, net	42,974	42,039
Deferred contract costs, net	12,321	14,318
Deferred income taxes	590	1,179
Deferred compensation plan assets	10,977	10,314
Other assets, net	8,950	10,496
Total assets	896,979	857,978
Current liabilities:	'	'
Accounts payable and accrued liabilities	109,654	109,020
Accrued compensation and benefits	64,651	83,280
Deferred revenue	53,042	53,137
Current portion of long-term debt	158	170
Income taxes payable	18,379	8,327
Other liabilities	10,115	8,373
Total current liabilities	255,999	262,307
Deferred revenue, less current portion	27,065	32,953
Long-term debt	1,149	1,319
Deferred compensation plan liabilities, less current portion	16,161	13,953
Other liabilities	24,969	17,938
Total liabilities	325,343	328,470
Shareholders' equity:	'	'
Common stock, no par value; 100,000 shares authorized; 67,889 and 68,525 shares issued and outstanding at March 31, 2014 and September 30, 2013, at stated amount, respectively	425,648	415,271
Accumulated other comprehensive income	6,540	7,987
Retained earnings	139,448	106,250
Total shareholders' equity	571,636	529,508
Total liabilities and shareholders' equity	$896,979	$857,978

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2014	Sep. 30, 2013
In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
CONSOLIDATED BALANCE SHEETS	'	'
Accounts receivable - billed, reserves (in dollars)	$5,430	$3,828
Common stock, no par value (in dollars per share)	'	'
Common stock, shares authorized	100,000	100,000
Common stock, shares issued	67,889	68,525
Common stock, shares outstanding	67,889	68,525

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:	'	'
Net income	$75,066	$53,005
Adjustments to reconcile net income to net cash provided by operating activities:	'	'
(Income) loss from discontinued operations	-104	492
Depreciation and amortization	23,759	17,934
Deferred income taxes	-1,387	6,757
Non-cash equity based compensation	8,561	7,062
Change in assets and liabilities:	'	'
Accounts receivable - billed	-37,516	-33,311
Accounts receivable - unbilled	-50	-8,152
Prepaid expenses and other current assets	2,539	-2,521
Deferred contract costs	1,979	-1,413
Accounts payable and accrued liabilities	3,835	8,728
Accrued compensation and benefits	-7,450	-1,877
Deferred revenue	-6,211	-2,934
Income taxes	10,153	-6,561
Other assets and liabilities	3,390	2,285
Cash provided by operating activities - continuing operations	76,564	39,494
Cash used in operating activities - discontinued operations	-104	-554
Cash provided by operating activities	76,460	38,940
Cash flows from investing activities:	'	'
Purchases of property and equipment	-9,516	-13,351
Capitalized software costs	-7,317	-8,240
Proceeds from settlement of final PSI price	'	3,380
Acquisition of business, net of cash acquired	-2,670	'
Proceeds from note receivable	154	172
Cash used in investing activities	-19,349	-18,039
Cash flows from financing activities:	'	'
Repurchases of common stock	-34,696	-15,403
Employee tax withholding on restricted stock unit vesting	-12,905	-6,677
Tax benefit due to option exercises and restricted stock units vesting	2,925	4,680
Cash dividends paid	-6,138	-6,131
Stock option exercises	518	1,752
Issuance of long-term debt	15,000	'
Repayment of long-term debt	-15,082	-87
Cash used in financing activities	-50,378	-21,866
Effect of exchange rate changes on cash and cash equivalents	-1,027	-1,004
Net increase/(decrease) in cash and cash equivalents	5,706	-1,969
Cash and cash equivalents, beginning of period	125,617	189,312
Cash and cash equivalents, end of period	$131,323	$187,343

Organization_and_Basis_of_Pres

Organization and Basis of Presentation	6 Months Ended
Organization and Basis of Presentation	Mar. 31, 2014
Organization and Basis of Presentation	'
Organization and Basis of Presentation	'
	1. Organization and Basis of Presentation

	General

	The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles (GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the three and six month periods ended March 31, 2014 are not necessarily indicative of the results that may be expected for the full fiscal year. The balance sheet at September 30, 2013 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by generally accepted accounting principles for complete financial statements.

	The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenue and expenses. On an ongoing basis, we evaluate our estimates including those related to revenue recognition and cost estimation on certain contracts, the realizability of goodwill, and amounts related to income taxes, certain accrued liabilities and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates.

	These financial statements should be read in conjunction with the consolidated audited financial statements and the notes thereto at September 30, 2013 and 2012 and for each of the three years ended September 30, 2013, included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2013 which was filed with the Securities and Exchange Commission on November 19, 2013. Certain comparative balances have been reclassified to conform to the current year presentation.

Segment_Information

Segment Information	6 Months Ended
Segment Information	Mar. 31, 2014
Segment Information	'
Segment Information	'
	2. Segment Information

	The following table provides certain financial information for each of the Company’s business segments (in thousands):

		Three Months Ended March 31,									Six Months Ended March 31,
		2014		% (1)		2013			% (1)		2014		% (1)		2013			% (1)

	Revenue:
	Health Services	$	324,060	100	%	$	197,948		100	%	$	623,218	100	%	$	373,946		100	%
	Human Services	114,955		100	%	128,403			100	%	222,389		100	%	238,671			100	%
	Total	439,015		100	%	326,351			100	%	845,607		100	%	612,617			100	%

	Gross Profit:
	Health services	85,061		26.2	%	54,651			27.6	%	161,879		26	%	99,910			26.7	%
	Human Services	35,611		31	%	42,793			33.3	%	64,709		29.1	%	74,064			31	%
	Total	120,672		27.5	%	97,444			29.9	%	226,588		26.8	%	173,974			28.4	%

	Selling, general, and administrative expense:
	Health Services	36,285		11.2	%	25,742			13	%	71,550		11.5	%	50,375			13.5	%
	Human Services	18,844		16.4	%	21,334			16.6	%	36,182		16.3	%	38,923			16.3	%
	Corporate/Other	—		NM		(383		)	NM		—		NM		(383		)	NM
	Total	55,129		12.6	%	46,693			14.3	%	107,732		12.7	%	88,915			14.5	%

	Operating income from continuing operations:
	Health services	48,776		15.1	%	28,909			14.6	%	90,329		14.5	%	49,535			13.2	%
	Human Services	16,767		14.6	%	21,459			16.7	%	28,527		12.8	%	35,141			14.7	%
	Corporate/Other	—		NM		383			NM		—		NM		383			NM
	Subtotal:
	Segment Operating Income	65,543		14.9	%	50,751			15.6	%	118,856		14.1	%	85,059			13.9	%
	Acquisition-related expenses	—		NM		16			NM		—		NM		164			NM
	Legal and settlement expenses	600		NM		—			NM		600		NM		142			NM
	Total	$	64,943	14.8	%	$	50,735		15.5	%	$	118,256	14	%	$	84,753		13.8	%

	(1) Percentage of respective segment revenue. Changes not considered meaningful are marked “NM”.

Earnings_Per_Share

Earnings Per Share	6 Months Ended
	Mar. 31, 2014
Earnings Per Share	'
Earnings Per Share	'
	3. Earnings Per Share

	The following table sets forth the components of basic and diluted earnings (loss) per share (in thousands):

		Three Months					Six Months
		Ended March 31,					Ended March 31,
		2014		2013			2014		2013
	Numerator:
	Income from continuing operations	$	41,162	$	31,714		$	74,962	$	53,497
	Income (loss) from discontinued operations	45		(25		)	104		(492		)
	Net income	$	41,207	$	31,689		$	75,066	$	53,005

	Denominator:
	Basic weighted average shares outstanding	67,884		68,179			68,143		68,171

	Effect of dilutive securities:
	Employee stock options and unvested restricted stock units	1,423		1,730			1,395		1,664
	Denominator for diluted earnings (loss) per share	69,307		69,909			69,538		69,835

	No shares were excluded from the computation in calculating the earnings per share for the three or six months ended March 31, 2014 or 2013.

Business_Combinations

Business Combinations	6 Months Ended
	Mar. 31, 2014
Business Combinations	'
Business Combinations	'
	4. Business Combinations

	Health Management Limited

	On July 1, 2013 (the acquisition date), the Company 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 United Kingdom. MAXIMUS acquired HML, among other reasons, to expand the Company’s independent medical assessment business and to establish a strong presence in the United Kingdom health services market. The acquired assets and business have been integrated into the Company’s Health Services Segment.

	The assets and liabilities of HML were recorded in the Company’s financial statements at their fair values at the acquisition date as follows (in thousands):

		Purchase Price Allocation
		Updated through			Adjustments			Updated through
		September 30, 2013						March 31, 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 Company considers 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 expected to be 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.

	Centacare

	On January 31, 2014, the Company acquired certain businesses trading as Centacare for $2.7 million (3.1 million Australian Dollars) in cash. The operations of these businesses are consistent with the services provided by MAXIMUS in Australia. The Company acquired these businesses in order to expand our operations in Australia.

	Of the purchase price, MAXIMUS 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 the existing MAXIMUS business. Accordingly, we are unable to accurately estimate the revenue from this acquisition. However, we believe the acquired revenue from this acquisition would not be material.

Goodwill_and_Intangible_Assets

Goodwill and Intangible Assets	6 Months Ended
Goodwill and Intangible Assets	Mar. 31, 2014
Goodwill and Intangible Assets	'
Goodwill and Intangible Assets	'
	5. Goodwill and Intangible Assets

	The changes in goodwill for the six months ended March 31, 2014 are as follows (in thousands):

		Health Services		Human Services			Total
	Balance as of September 30, 2013	$	125,096	$	46,771		$	171,867
	Changes to allocation of HML purchase price	31		—			31
	Foreign currency translation	1,393		(100		)	1,293
	Balance as of March 31, 2014	$	126,520	$	46,671		$	173,191

	The following table sets forth the components of intangible assets (in thousands):

		As of March 31, 2014							As of September 30, 2013
		Cost		Accumulated			Intangible		Cost		Accumulated		Intangible
		Cost		Amortization			Assets, net		Cost		Amortization		Assets, net

	Customer contracts and relationships	$	43,130	$	5,766		$	37,364	$	39,243	$	3,953	$	35,290
	Technology based intangible assets	9,343		6,415			2,928		9,583		5,974		3,609
	Trademarks and trade names	4,378		1,696			2,682		4,421		1,303		3,118
	Non-compete arrangements	—		—			—		243		221		22
	Total	$	56,851	$	13,877		$	42,974	$	53,490	$	11,451	$	42,039

	The Company’s intangible assets have a weighted average remaining life of 11.9 years, comprising 13.2 years for customer contracts and relationships, 3.6 years for technology-based intangible assets and 3.4 years for the trademarks and trade names. Amortization expense for the six months ended March 31, 2014 and 2013 was $2.8 million and $2.3 million, respectively. Estimated future amortization expense is as follows (in thousands):

	Six months ended September 30, 2014	$	3,046
	Year ended September 30, 2015	5,968
	Year ended September 30, 2016	5,692
	Year ended September 30, 2017	5,293
	Year ended September 30, 2018	4,052
	Year ended September 30, 2019	3,070

Credit_facilities

Credit facilities	6 Months Ended
Credit facilities	Mar. 31, 2014
Credit facilities	'
Credit facilities	'
	6. Credit facilities

	On March 15, 2013, the Company entered into an unsecured five-year revolving credit agreement (the “Credit Agreement”). The Credit Agreement amends and restates the Company’s 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 expenses, capital expenditures and acquisitions. The arrangement terminates on March 15, 2018, at which time all outstanding borrowings must be repaid.

	At March 31, 2014, the Company’s only borrowings under the Credit Agreement were four letters of credit totaling $6.7 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 are held with another financial institution to cover similar obligations. During the three month period ended March 31, 2014, the Company borrowed $15 million, which was repaid within the period.

	The Credit Agreement requires the Company to comply with certain financial covenants and other covenants including a maximum total leverage ratio and a minimum fixed charge coverage ratio. The Company was in compliance with all covenants as of March 31, 2014. The obligations of the Company under the Credit Agreement are guaranteed by material domestic subsidiaries of the Company. The Credit Facility is currently unsecured. In the event that the Company’s total leverage ratio, as defined in the credit agreement, exceeds 2.5 to 1.0 or the Company incurs a certain level of indebtedness outside of the Credit Agreement, the Credit Agreement will become secured by the assets of the Company and certain of its subsidiaries. At March 31, 2014, our total leverage ratio was less than 0.1 to 1.0.

	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 the Company’s 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 and the applicable percentages are based upon the Company’s leverage rate at the time of the borrowing. At March 31, 2014, the Company utilized the lowest available applicable margins listed above.

	In addition to this revolving credit facility, the Company has a loan agreement with the Atlantic Innovation Fund of Canada. This provided a loan of 1.8 million Canadian Dollars, the proceeds of which were required to be used for specific technology-based research and development. The loan has no interest charge. At March 31, 2014, $1.3 million (1.4 million Canadian Dollars) was outstanding under this agreement, which is repayable in 33 remaining quarterly installments.

	Certain contracts require us to provide a surety bond as a guarantee of performance. At March 31, 2014 and September 30, 2013, the Company had performance bond commitments totaling $50.5 million and $50.8 million, respectively. 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	6 Months Ended
Commitments and Contingencies	Mar. 31, 2014
Commitments and Contingencies	'
Commitments and Contingencies	'
	7. Commitments and Contingencies

	The Company is involved in various legal proceedings, including the matters described below, in the ordinary course of its business.

	In March 2009, a state Medicaid agency asserted a claim against MAXIMUS, related to a discontinued business line, in the amount of $2.3 million in connection with a contract MAXIMUS had through February 1, 2009 to provide Medicaid administrative claiming services to school districts in the state. MAXIMUS entered into separate agreements with the school districts under which MAXIMUS 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 MAXIMUS 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 MAXIMUS for such payments and therefore MAXIMUS believes the school districts are responsible for any amounts disallowed by the state Medicaid agency or the Federal Government. Accordingly, the Company believes its exposure in this matter is limited to its fees associated with this work and that the school districts will be responsible for the remainder. MAXIMUS has exited the federal health care claiming business and no longer provides the services at issue in this matter.

	In 2008, MAXIMUS 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 filed a formal arbitration notice alleging that MAXIMUS 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. The District contended that those failures resulted in damages of at least $10 million. In December 2012, the arbitration panel denied the District’s claims in their entirety. Costs related to the arbitration proceeding have been included within discontinued operations. The District subsequently filed a motion to vacate the decision of the arbitration panel which was denied by the court in July 2013. The District has appealed that ruling. Separately, in late 2012, the District asserted that MAXIMUS had defrauded the District in 2007 or 2008 by misrepresenting its intentions regarding the sale of the Education Systems division. That allegation was not part of the arbitration, and no formal claim or lawsuit has been filed. The company believes it has a number of defenses to that allegation and would contest it vigorously if it were asserted.

	In January 2014, MAXIMUS was 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 project in Boise. They allege the Company 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 million. MAXIMUS has since reclassified the trainers as non-exempt employees and is seeking an expedited resolution of their wage claims. MAXIMUS denies liability as to the supervisors and will contest the matter vigorously. As of March 31, 2014, the Company has reserved $0.6 million to cover the estimated legal costs of defending this lawsuit, in addition to estimated liabilities to employees.

Stock_Repurchase_Programs

Stock Repurchase Programs	6 Months Ended
Stock Repurchase Programs	Mar. 31, 2014
Stock Repurchase Programs	'
Stock Repurchase Programs	'
	8. 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 $125.0 million of the Company’s common stock. The resolution also authorized the use of option exercise proceeds for the repurchase of the Company’s common stock. During the six months ended March 31, 2014 and 2013, the Company repurchased 807,138 and 499,098 common shares at a cost of $35.5 million and $14.6 million, respectively. The amount available for future repurchases was $62.1 million at March 31, 2014.

	The Company has acquired an additional 241,500 shares at a cost of $10.3 million between April 1, 2014 and May 9, 2014.

Subsequent_Events

Subsequent Events	6 Months Ended
Subsequent Events	Mar. 31, 2014
Subsequent Events	'
Subsequent Events	'
	9. Subsequent Events

	Dividend

	On April 4, 2014, the Company’s Board of Directors declared a quarterly cash dividend of $0.045 for each share of the Company’s common stock outstanding. The dividend is payable on May 30, 2014 to shareholders of record on May 15, 2014.

Segment_Information_Tables

Segment Information (Tables)	6 Months Ended
Segment Information (Tables)	Mar. 31, 2014
Segment Information	'
Schedule of financial information for each of the Company's business segments	'
	The following table provides certain financial information for each of the Company’s business segments (in thousands):

		Three Months Ended March 31,									Six Months Ended March 31,
		2014		% (1)		2013			% (1)		2014		% (1)		2013			% (1)

	Revenue:
	Health Services	$	324,060	100	%	$	197,948		100	%	$	623,218	100	%	$	373,946		100	%
	Human Services	114,955		100	%	128,403			100	%	222,389		100	%	238,671			100	%
	Total	439,015		100	%	326,351			100	%	845,607		100	%	612,617			100	%

	Gross Profit:
	Health services	85,061		26.2	%	54,651			27.6	%	161,879		26	%	99,910			26.7	%
	Human Services	35,611		31	%	42,793			33.3	%	64,709		29.1	%	74,064			31	%
	Total	120,672		27.5	%	97,444			29.9	%	226,588		26.8	%	173,974			28.4	%

	Selling, general, and administrative expense:
	Health Services	36,285		11.2	%	25,742			13	%	71,550		11.5	%	50,375			13.5	%
	Human Services	18,844		16.4	%	21,334			16.6	%	36,182		16.3	%	38,923			16.3	%
	Corporate/Other	—		NM		(383		)	NM		—		NM		(383		)	NM
	Total	55,129		12.6	%	46,693			14.3	%	107,732		12.7	%	88,915			14.5	%

	Operating income from continuing operations:
	Health services	48,776		15.1	%	28,909			14.6	%	90,329		14.5	%	49,535			13.2	%
	Human Services	16,767		14.6	%	21,459			16.7	%	28,527		12.8	%	35,141			14.7	%
	Corporate/Other	—		NM		383			NM		—		NM		383			NM
	Subtotal:
	Segment Operating Income	65,543		14.9	%	50,751			15.6	%	118,856		14.1	%	85,059			13.9	%
	Acquisition-related expenses	—		NM		16			NM		—		NM		164			NM
	Legal and settlement expenses	600		NM		—			NM		600		NM		142			NM
	Total	$	64,943	14.8	%	$	50,735		15.5	%	$	118,256	14	%	$	84,753		13.8	%

	(1) Percentage of respective segment revenue. Changes not considered meaningful are marked “NM”.

Earnings_Per_Share_Tables

Earnings Per Share (Tables)	6 Months Ended
	Mar. 31, 2014
Earnings Per Share	'
Schedule of the components of basic and diluted earnings (loss) per share	'
	The following table sets forth the components of basic and diluted earnings (loss) per share (in thousands):

		Three Months					Six Months
		Ended March 31,					Ended March 31,
		2014		2013			2014		2013
	Numerator:
	Income from continuing operations	$	41,162	$	31,714		$	74,962	$	53,497
	Income (loss) from discontinued operations	45		(25		)	104		(492		)
	Net income	$	41,207	$	31,689		$	75,066	$	53,005

	Denominator:
	Basic weighted average shares outstanding	67,884		68,179			68,143		68,171

	Effect of dilutive securities:
	Employee stock options and unvested restricted stock units	1,423		1,730			1,395		1,664
	Denominator for diluted earnings (loss) per share	69,307		69,909			69,538		69,835

Business_Combinations_Tables

Business Combinations (Tables) (HML)	6 Months Ended
Business Combinations (Tables) (HML)	Mar. 31, 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 were recorded in the Company’s financial statements at their fair values at the acquisition date as follows (in thousands):

		Purchase Price Allocation
		Updated through			Adjustments			Updated through
		September 30, 2013			Adjustments			March 31, 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

Goodwill_and_Intangible_Assets1

Goodwill and Intangible Assets (Tables)	6 Months Ended
Goodwill and Intangible Assets (Tables)	Mar. 31, 2014
Goodwill and Intangible Assets	'
Schedule of changes in the carrying amount of goodwill	'
	The changes in goodwill for the six months ended March 31, 2014 are as follows (in thousands):

		Health Services		Human Services			Total
	Balance as of September 30, 2013	$	125,096	$	46,771		$	171,867
	Changes to allocation of HML purchase price	31		—			31
	Foreign currency translation	1,393		(100		)	1,293
	Balance as of March 31, 2014	$	126,520	$	46,671		$	173,191
Schedule of components of intangible assets	'
	The following table sets forth the components of intangible assets (in thousands):

		As of March 31, 2014							As of September 30, 2013
		Cost		Accumulated			Intangible		Cost		Accumulated		Intangible
		Cost		Amortization			Assets, net		Cost		Amortization		Assets, net

	Customer contracts and relationships	$	43,130	$	5,766		$	37,364	$	39,243	$	3,953	$	35,290
	Technology based intangible assets	9,343		6,415			2,928		9,583		5,974		3,609
	Trademarks and trade names	4,378		1,696			2,682		4,421		1,303		3,118
	Non-compete arrangements	—		—			—		243		221		22
	Total	$	56,851	$	13,877		$	42,974	$	53,490	$	11,451	$	42,039
Schedule of estimated future amortization expense	'
	Estimated future amortization expense is as follows (in thousands):

	Six months ended September 30, 2014	$	3,046
	Year ended September 30, 2015	5,968
	Year ended September 30, 2016	5,692
	Year ended September 30, 2017	5,293
	Year ended September 30, 2018	4,052
	Year ended September 30, 2019	3,070

Segment_Information_Details

Segment Information (Details) (USD $)	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Revenue:	'	'	'	'
Revenue	$439,015	$326,351	$845,607	$612,617
Revenue (as a percent)	100.00%	100.00%	100.00%	100.00%
Gross Profit:	'	'	'	'
Gross Profit	120,672	97,444	226,588	173,974
Gross Profit (as a percent)	27.50%	29.90%	26.80%	28.40%
Selling, general, and administrative expense:	'	'	'	'
Selling, general, and administrative expense	55,129	46,693	107,732	88,915
Selling, general, and administrative expense (as a percent)	12.60%	14.30%	12.70%	14.50%
Operating income from continuing operations:	'	'	'	'
Operating income from continuing operations	64,943	50,735	118,256	84,753
Operating income from continuing operations (as a percent)	14.90%	15.60%	14.10%	13.90%
Acquisition-related expenses	'	16	'	164
Legal and settlement expenses	600	'	600	142
Operating segments	'	'	'	'
Operating income from continuing operations:	'	'	'	'
Operating income from continuing operations	65,543	50,751	118,856	85,059
Operating income from continuing operations (as a percent)	14.80%	15.50%	14.00%	13.80%
Corporate/Other	'	'	'	'
Selling, general, and administrative expense:	'	'	'	'
Selling, general, and administrative expense	'	-383	'	-383
Operating income from continuing operations:	'	'	'	'
Operating income from continuing operations	'	383	'	383
Health Services \| Operating segments	'	'	'	'
Revenue:	'	'	'	'
Revenue	324,060	197,948	623,218	373,946
Revenue (as a percent)	100.00%	100.00%	100.00%	100.00%
Gross Profit:	'	'	'	'
Gross Profit	85,061	54,651	161,879	99,910
Gross Profit (as a percent)	26.20%	27.60%	26.00%	26.70%
Selling, general, and administrative expense:	'	'	'	'
Selling, general, and administrative expense	36,285	25,742	71,550	50,375
Selling, general, and administrative expense (as a percent)	11.20%	13.00%	11.50%	13.50%
Operating income from continuing operations:	'	'	'	'
Operating income from continuing operations	48,776	28,909	90,329	49,535
Operating income from continuing operations (as a percent)	15.10%	14.60%	14.50%	13.20%
Human Services \| Operating segments	'	'	'	'
Revenue:	'	'	'	'
Revenue	114,955	128,403	222,389	238,671
Revenue (as a percent)	100.00%	100.00%	100.00%	100.00%
Gross Profit:	'	'	'	'
Gross Profit	35,611	42,793	64,709	74,064
Gross Profit (as a percent)	31.00%	33.30%	29.10%	31.00%
Selling, general, and administrative expense:	'	'	'	'
Selling, general, and administrative expense	18,844	21,334	36,182	38,923
Selling, general, and administrative expense (as a percent)	16.40%	16.60%	16.30%	16.30%
Operating income from continuing operations:	'	'	'	'
Operating income from continuing operations	$16,767	$21,459	$28,527	$35,141
Operating income from continuing operations (as a percent)	14.60%	16.70%	12.80%	14.70%

Earnings_Per_Share_Details

Earnings Per Share (Details) (USD $)	3 Months Ended		6 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Numerator:	'	'	'	'
Income from continuing operations	$41,162	$31,714	$74,962	$53,497
Income (loss) from discontinued operations	45	-25	104	-492
Net income	$41,207	$31,689	$75,066	$53,005
Denominator:	'	'	'	'
Basic weighted average shares outstanding	67,884,000	68,179,000	68,143,000	68,171,000
Effect of dilutive securities:	'	'	'	'
Employee stock options and unvested restricted stock units (in shares)	1,423,000	1,730,000	1,395,000	1,664,000
Denominator for diluted earnings (loss) per share	69,307,000	69,909,000	69,538,000	69,835,000
Awards excluded from the calculation of diluted earnings per share (in shares)	'	'	'	'
Shares excluded from the calculation of earnings per share	0	0	0	0

Business_Combinations_Details

Business Combinations (Details)

6 Months Ended

0 Months Ended

6 Months Ended

0 Months Ended

3 Months Ended

0 Months Ended

6 Months Ended

Mar. 31, 2014

Sep. 30, 2013

Jul. 01, 2013

Mar. 31, 2014

Jul. 01, 2013

Sep. 30, 2013

Mar. 31, 2014

Jan. 31, 2014

Mar. 31, 2014

Jan. 31, 2014

USD ($)

HML

Australian business trading as Centacare

USD ($)

GBP (£)

USD ($)

Customer relationships

Previously reported

Adjustments

USD ($)

AUD

Customer relationships

USD ($)

Business combinations

Share capital acquired (as a percent)

100.00%

Preliminary Purchase Price Accounting

Cash consideration, net of cash acquired

$2,670,000

$71,435,000

£ 46,900,000

$71,435,000

Stock consideration

6,425,000

4,200,000

6,425,000

Stock consideration (in shares)

202,972

Purchase consideration, net of cash acquired

77,860,000

51,100,000

77,860,000

Accounts receivable and unbilled receivables

7,671,000

Other current assets

1,382,000

Property and equipment

2,752,000

Intangible assets

20,542,000

3,200,000

Total identifiable assets acquired

32,347,000

Accounts payable and other liabilities

6,228,000

Deferred revenue

1,149,000

500,000

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

Net identifiable assets acquired

19,513,000

19,544,000

-31,000

Goodwill

173,191,000

171,867,000

58,347,000

58,316,000

31,000

Net assets acquired

77,860,000

Cash consideration

$2,700,000

3,100,000

Amortization period of intangible assets

'19 years 6 months

'20 years

'4 years

Business_Combinations_Details_

Business Combinations (Details 2) (HML, USD $)	0 Months Ended	1 Months Ended
In Thousands, unless otherwise specified	Jul. 01, 2013	Mar. 31, 2014
Intangible assets acquired	'	'
Useful life	'19 years 6 months	'
Fair value	'	$20,542
Customer relationships	'	'
Intangible assets acquired	'	'
Useful life	'20 years	'
Fair value	19,933	'
Technology based intangible assets	'	'
Intangible assets acquired	'	'
Useful life	'2 years	'
Fair value	609	'

Goodwill_and_Intangible_Assets2

Goodwill and Intangible Assets (Details) (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014
Changes in goodwill	'
Balance at the beginning of the period	$171,867
Changes to allocation of HML purchase price	31
Foreign currency translation	1,293
Balance at the end of the period	173,191
Health Services	'
Changes in goodwill	'
Balance at the beginning of the period	125,096
Changes to allocation of HML purchase price	31
Foreign currency translation	1,393
Balance at the end of the period	126,520
Human Services	'
Changes in goodwill	'
Balance at the beginning of the period	46,771
Foreign currency translation	-100
Balance at the end of the period	$46,671

Goodwill_and_Intangible_Assets3

Goodwill and Intangible Assets (Details 2) (USD $)	6 Months Ended
Goodwill and Intangible Assets (Details 2) (USD $)	Mar. 31, 2014	Mar. 31, 2013	Sep. 30, 2013
Components of intangible assets	'	'	'
Cost	$56,851,000	'	$53,490,000
Accumulated Amortization	13,877,000	'	11,451,000
Intangible Assets, net	42,974,000	'	42,039,000
Weighted average remaining life of assets not fully amortized	'11 years 10 months 24 days	'	'
Amortization expense	2,800,000	2,300,000	'
Estimated future amortization expense	'	'	'
Six months ended September 30, 2014	3,046,000	'	'
Year ended September 30, 2015	5,968,000	'	'
Year ended September 30, 2016	5,692,000	'	'
Year ended September 30, 2017	5,293,000	'	'
Year ended September 30, 2018	4,052,000	'	'
Year ended September 30, 2019	3,070,000	'	'
Customer contracts and relationships	'	'	'
Components of intangible assets	'	'	'
Cost	43,130,000	'	39,243,000
Accumulated Amortization	5,766,000	'	3,953,000
Intangible Assets, net	37,364,000	'	35,290,000
Weighted average remaining life of assets not fully amortized	'13 years 2 months 12 days	'	'
Technology based intangible assets	'	'	'
Components of intangible assets	'	'	'
Cost	9,343,000	'	9,583,000
Accumulated Amortization	6,415,000	'	5,974,000
Intangible Assets, net	2,928,000	'	3,609,000
Weighted average remaining life of assets not fully amortized	'3 years 7 months 6 days	'	'
Trademarks and trade names	'	'	'
Components of intangible assets	'	'	'
Cost	4,378,000	'	4,421,000
Accumulated Amortization	1,696,000	'	1,303,000
Intangible Assets, net	2,682,000	'	3,118,000
Weighted average remaining life of assets not fully amortized	'3 years 4 months 24 days	'	'
Non-compete arrangements	'	'	'
Components of intangible assets	'	'	'
Cost	'	'	243,000
Accumulated Amortization	'	'	221,000
Intangible Assets, net	'	'	$22,000

Credit_facilities_Details

Credit facilities (Details)

0 Months Ended

3 Months Ended

6 Months Ended

In Millions, unless otherwise specified

Mar. 15, 2013

Mar. 31, 2014

Mar. 15, 2013

Mar. 31, 2014

Mar. 15, 2013

Mar. 31, 2014

Sep. 30, 2013

Credit Facility

Swingline loans

Letters of credit

Letter of credit (Other than Revolving Credit Agreement)

Atlantic Innovation Fund of Canada

Performance Bonds

USD ($)

Base Rate

Euro currency Rate

Index Rate

Minimum

Maximum

USD ($)

Minimum

Maximum

USD ($)

CAD

USD ($)

Base Rate

Euro currency Rate

Index Rate

Base Rate

Euro currency Rate

Index Rate

Letter

Installment

Credit facilities

Term of the credit agreement

'5 years

Maximum borrowing capacity

$100

$30

1.8

Number of letters of credit issued

Amount borrowed

6.7

Amount repaid

Leverage ratio

2.5

Leverage ratio, actual

0.1

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%

0.75%

1.75%

Interest charges (as a percent)

0.00%

Amount outstanding

1.3

1.4

Number of remaining quarterly installments

Performance bond commitments

$50.50

$50.80

Commitments_and_Contingencies_

Commitments and Contingencies (Details) (USD $)	1 Months Ended	12 Months Ended	3 Months Ended	1 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2009	Sep. 30, 2012	Mar. 31, 2014	Jan. 31, 2014
	Medicaid Agency	School MAX Customers	Norton et al	Norton et al
		Minimum		Minimum
Commitments and Contingencies	'	'	'	'
Amount of claim	$2.30	$10	'	$5
Reserve recorded to cover the liabilities	'	'	$0.60	'

Stock_Repurchase_Programs_Deta

Stock Repurchase Programs (Details) (USD $)	1 Months Ended	6 Months Ended		1 Months Ended
In Millions, except Share data, unless otherwise specified	Nov. 30, 2011	Mar. 31, 2014	Mar. 31, 2013	9-May-14
	Nov. 30, 2011	Mar. 31, 2014	Mar. 31, 2013	Subsequent events
Stock Repurchase Programs	'	'	'	'
Stock repurchase programs, authorized amount	$125	'	'	'
Common shares repurchased	'	807,138	499,098	241,500
Common shares repurchased, cost	'	35.5	14.6	10.3
Amount remaining available for future stock repurchases	'	$62.10	'	'

Subsequent_Events_Details

Subsequent Events (Details) (Subsequent events, USD $)	0 Months Ended
Subsequent Events (Details) (Subsequent events, USD $)	Apr. 04, 2014
Subsequent events	'
Subsequent Events	'
Cash dividend declared (in dollars per share)	$0.05