MMS - Earnings call transcript Q1 2019

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Operator

Greetings, and welcome to the MAXIMUS Fiscal 2019 First Quarter Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Lisa Miles, Senior Vice President of Investor Relations for MAXIMUS. Ms. you, Thank Miles.

begin. You may

Lisa Miles

filings. investors these number XX-Q and today The thank believes Rick events us. morning nature. subsequent of statements circumstances today most that for CFO. comparisons. in will made be assume forward-looking you results Bruce Caswell, me to non-GAAP except to in not result to predictions. a Exhibit and period-to-period or face, we release may including everyone the is remind discussed and law. be remember by as Management in are filed that like update and with in With obligation analyses may may contain risks information. providing such and statements President only our statements you differ being I'd of results of today Good our company Please recent financial to We our to information of contained SEC Today's XX.X gauging this forward-looking does events the information internal presentation identifying this SEC. review Forms meaningful trends Actual reflect information financial joining any and materially its performance, encourage in of and Nadeau, as a earnings in CEO; the required or XX-K and results, uses informative our quality revise those

document, in over be reconciliation call that, see a hand filed with For And this company's Rick. please today. I'll Form to the presented measures that later non-GAAP the XX-K will of the

Rick Nadeau

over same line fiscal XXXX to revenue revenue for increase period reported last due acquisition driven first U.S. the the first the margin segment, of of the impact growth Services This and increases by was U.S. $X.X quarter, of an to Top morning Health of expected in Federal operational segment. due our quarter citizen for Lisa. engagement MAXIMUS from Thanks, our Human year. $XXX.X million, above Company the was million. the currency operating X% Total by was from This offset Services of expectations partially foreign XX.X% centers. solid adverse in the was translation delivery which the

citizen As due that therefore expected, single in plus the contracts newly cost have generate acquired our margin digits. and center terms operating to engagement the decreased margins operating mid

As have these a lower risk. reminder contracts cost plus also inherently financial

earnings For in per performance forecast Human which diluted share also $X.XX, and segment. Health the our was quarter, first better benefited were GAAP Services from strong U.S. and than financial

the on be operate. response disclosed a we performance, in our geographically to As on This results. October is the markets way changes the to segments previous and based we call, because allocating is X, XXXX this shift managing reporting reorganized evaluating resources we we're

increasing services first now manner a show financial our integration their and a XXXX We of holistic fiscal will as to X-K filed Form speak years programs results the quarter. citizens. Health more segment Human recasted With results in XXXX. governments deliver Services our December and worldwide, I on in to the XX to from

X% portfolio to decreased due As a million due same to quarter the of when last favorable to in see segment a Health we strong and domestic Operating principally U.S. strong operating also margin high across segment XX.X% better the first expected circumstances Services has for a contracts Operating the the XX% period The the operational in $XXX.X certain at benefited the pull-back or consulting came of Human of in revenue, despite a increased in refresh result cost in a margins margin than segment’s contracts. solid business. year, segment and quarter expected the teens. for to year. our the compared can prior Health services from revenue The in quarter segment. Federal U.S. primarily our and and health compared margins are rebid U.S. contracts first in Human performance larger Services synergies, of the acquisition number seasonally to as

the segment be of the which engagement first and this of contributed the approximately first closed for U.S. year quarter $XXX.X quarter in XX% basis centers cost operating in includes of XXXX. $XXX to mid-November the in an the of of quarter. acquisition. estimated fiscal in For $XXX the acquisition million year, XX% of points fiscal XXXX was a for fiscal result margins range to we the remainder million the in citizen from Federal to compared expect benefit year synergies and as million the revenue of Services XXX The the XXX segment, of Revenue

prior As and the excluding revenue decreased to year. compared organic the expected acquisition, segment’s the

As a relief that temporary work this year. bolstered efforts supporting last revenue reminder, due to was disaster

Additionally, contracts their which aside set rules, with under required reached transaction from Acentia were that end bidding. and were the business small natural reprocured MAXIMUS precluded

finishing On Services an segment of X.X%. the bottom quarter the Federal operating with expected, the line, margin performed as U.S.

XX%. newly the U.S. now to of plus acquired cost for the that we X% operating segment range With the to expect margins Federal in be contracts,

for market return a in expected the into has detail team accomplishments, development an Over vehicles, stage and go IT the bolster Schedule GSA X in seats SIN, revamped position growth worked our strong closed years. the well setting to areas the to and as, Contact us as XX about team are market secure particular of recent acquisition. allowed along Alliant the diligently some to in pipeline allow federal including business to past year, with the will I our federal Center These to contract U.S. that us. Bruce the U.S. interest on our market, several coming

relatively government impact our is of the As small. This vast relates the essential. shutdown, majority financial federal because to U.S. is the MAXIMUS work considered to it was

first the shutdown quarter, estimate mitigate our shutdown approximately in that the quarter. during revenue we estimate result, the a by the We’ve impact As bottom reduce And that $XXX,XXX. the lost our in managed cost to line. $XXX,XXX of second another revenue we will in revenue we to

first $XXX.X unfavorably by was the currency million. outside, impacted and million revenue by the foreign translation quarter $X.X U.S. For segment

U.K. welfare-to-work in contracts Australia to expected, the ended. and to work As year, in lower and revenue the where was program contracts prior compared choice work the decreases due

fiscal revenue million $XX and million tied will change We U.S. employment effects economy some employment. the no decrease gaining assisting over continue job due to in putting $XX the revenue on case this remainder volumes a past outside margin seekers geographies, our beginning The welfare-to-work line pressure through full to the streams estimate lower for sustaining our Australian We the program More that on modified across to by our was providers. removes all load January to see segment top robust Xst, year. our of contracts. specifically, jobactive of

work a the As margin To the extent in economy, continue in expect see that our Nearly expected, to for depressed welfare-to-work and this operating we segment. quarter segment to in half tied is continue the U.K. tempering Australia of the we was the robust contracts to margins X.X%. that margins. first see are global to

a be estimated X% fiscal reduce the taken cost cost and year us. of to range we extent includes the XXXX, our have an margins XX of allow to anticipate our measures revenue costs We managing been We as X% result have the synergies operating to the for point of our benefit, in which from acquisition. basis to contracts

million the cash after cash from In months Let a balance Days three free were December revenue outstanding flow me of the of calculation the at speak of delivered estimate $XX.X cash operations briefly acquisition. quarter, to XX $XX.X flow XXst, full MAXIMUS sales and from and items. on first sheet the million. flow for normalizing

as While the balance new will not unbilled the we earlier it revenue handful add now recognizing receivable sales a contracts five recognition impact it outstanding, does cash and will flows estimate of standard and we prior to days outstanding. increase sales approximately our impact days are days on to billing. This our does actual revenue

from by our increase contracts. this engagement acquired newly center will be However, citizen offset collections favorable

of as million. and debt The we our As proceeds the days At of the days of were XXXX, forward. sales days will we that to quarter. million, outstanding December be continue held outstanding XX, $XXX.X lower XX the cash in $XX.X used as, complete of going to the cash well towards acquisition estimate of a XX range equivalents end to the result, debt

XXXX. stock, $XX.XX. will of the for shares December a During $X.X million for an XXX,XXX or to is $XX.XX. shares for price earnings another by benefit we $XX.X total Subsequent fiscal million, average per of average price share an for cost MAXIMUS purchases of quarter, year XX, estimated XXXXX share purchased $X.XX we purchased We diluted

and flexibility capital acquisitions of ample and we to right return allocation, terms when the capital complete to value. we strategic shareholders both to and capital have see In where fit continue

or growth contribute platforms Our our growth primary to acquisitions, organic goal which for to is create new MAXIMUS. find long-term

sustainable reputation high digits. margins are no that and we a sustainable adjacencies growth revenue look our operating and a single than As transactions quality, core least at have from for reminder, more two for of

We will as continue per at our cash $X.XX purchase share. own dividend well as, continue to our opportunistically shares, quarterly

maintaining are our XXXX. billion at earnings fiscal billion to $X.XXX for our guidance share revenue to of $X.XX guidance per and we $X diluted year Finally, $X.XX

the a full quarter citizen second of reminder, quarter engagement a As will contribution reflect acquisition. centers from the

free and unchanged. remains cash Our from guidance flow flow cash for operations

will and XX% we the an XX%. finish expect We with that between tax year rate income

and earnings this of revenue October the months standard second a the the to have XX, the call and old expect X, in recognition I significant XX% retained $XX.X will revenue, will between balance our between On XX% XXXX quarter the lower which the would hand for been quarter. in ended resulted was in The With December no to adopted recorded an million. We adoption difference that, to rate three under methodologies. standard. new There tax that new over Bruce. of the benefit the increase we

Bruce Caswell

this and remain thank as track year and fiscal performance to with Rick you noted, XXXX guidance. Services morning. for on U.S. in us Human solid we delivered results Rick our good our Health achieve Thanks quarter MAXIMUS segment joining first and

tools, to areas. and progress customer we digital continue and as transform make markets the new with into expand reach meaningful extend experience clinical our related customer our services We

with for continues be market, Let's growth start U.S. off long-term which federal priority to today area a us.

nation's supporting over acquired excellent an I about critical about November. open we I'm beneficiaries score. are of less in dedicated is X% progressing acquired successfully to These attest plan Arizona of to and of Federal was look Hurricane Part our illustrates our open Through when can the citizen than of business newest our there federal welcomed I the citizen Manager live to during customer enrollment including Medicare. our operations the improved I our our running capacity. welcome of no continuing transition in fit. and the people programs excited two these contract newly of General to is service resilience in and to proud on that the to fact, period culturally business and peak programs, very our to an that the passionate in is MAXIMUS our have site nature is incredible this all offerings equally our This the sites and Florida which already support say to are MAXIMUS, in with We engagement enrollment Phoenix, for we Federal. to include integration in Michael. MAXIMUS following essential by Haven, in impressive we disruptions and the communities primary federal to contracts Romeo, at programs. were smoothly. several and, clients our all, net noted, which hear period, transition, to of health services business satisfaction the most Exchange seen employees was the to visited Lynn They the they serving U.S. and people these support vehicle forward family safety some critical Rick and this it partial parcel as MAXIMUS the shutdown. the and for centers I've Tom contracts affected First, successes work. service

our appraisals. while with perform Our medical in efforts assessments, of record traction still some to also Federal servicing building agency subcontracted our stages, a Recently, are provider work federal work subcontractor, services. early and to performing outreach a indexing new network the expand segment. began related gaining required clinically clinical on as new a certifying in we took and this and Separately, engagement clinicians them program we

in We build independence and develop skills to our federal opportunities clinical capabilities continue marketplace. leverage and the to

operational offerings. many business pioneering automation, also process or federal efforts The learning. enhance This AI, digital With digital where direct respect new will efficiencies increased developing is our through sets our capabilities. we're and robotic cloud within can process of management services, both and as RPA transformation implementing strategy. as continue innovations portfolio service services such team our we is and new capabilities, federal our machine migration solution and additional team achieve cost citizen of Our to artificial intelligence to with techniques

advanced For assistants, speech providing certified virtual offers beneficiaries. recognition instance, MAXIMUS federally language intelligent and conversational are natural interactive to

now the door meet security federal customers technology initial standards. opens to new agency for requirements Successful Our deployments. solution certification of department stringent deployed and that further

continue implementing our projects in and scalability. enhance we Additionally, efficiency our to RPA

Our impressive independent continues capabilities, review It enrollments digital that clinical to medical and automated experience already a experience has citizens and the as services, available. across completed making AI surpassed like transparent can is our Virginia are working Medicaid learning portal programs they overall the document citizen We Virginia. adoption. digital many an in reviewer the being is pleased towards impact great certain gravitate our in more making in experiences, for our estimates way. made quality up doctors. of adoption streamlines mobile beneficiaries and Mobile seamless. its the Since enhanced capabilities, Medicaid. feedback of enrollment digital transformation our with portal is The our web on improve We're ever it digital is result improve are search where Virginia, has web pushed and new via Overall, mobile December, and clients initiatives results. app which It allows for well heights XX% appropriately, that and launched the related early an improved Medicaid proving on volume I'm mobile. clients, grow and upload, for has of Medallion to driven experience immediate state launched overall and digital to under user also where than will more efficiency, this our continues for currently digital physician actively recently experience. how XX% machine,

geographies. Our are maturing our across digital efforts

chat allows to co-browsing MAXIMUS customers. facilitated citizens includes range navigate a enterprise, help to services, This offer engagement Canada capabilities, Our now center, text omnichannel full of video options Canadian us our contact to digital online voice, mail solution and web deliver to by email and traditional be channels. chat, satisfaction as well efficiency. our The all more customer Canadian and optimal omnichannel help is of adopted as, clients. the The available channels physical agent

of contact for incentives these exceeding using has is contract. agencies various that start on targets. This our through is contract PC to service first satisfaction The features provides unit centralized a consolidated PC government service citizen centers. citizens or services financial behalf meeting

engage drive client will begin Our month. continue visual next programs new instrumental this success. and types in digital to of offerings are These to enhancements with transforming our how will citizens

government More to service these importantly, our value ability to our leverage delivery. clients quality improve and digital capabilities

awards pipeline to metrics. on Moving and

December For XXXX, QX XXXX. $XXX million XX, awards fiscal signed at total year-to-date of

and also unsigned XXXX. but We had December additional awarded, contracts an million at XX, $XXX

appendix methodology. of realities quarter. our a of earnings our last better As adapted BPO we the long-term changes we as the the updates implemented this of our have the current to reported relationships. three is contract in in to total include; contracts starting reminder book the old pipeline methodology new reflective believe reflect first, long-term a market call, more is of of reporting from this value. modifications client Included our the But business. and our the of three We We reporting nature change main presentation crosswalk

we updating for opportunities pipeline. the time we're Second, report in horizon our

within released cycles. the now new to no And capture reflecting next expected opportunities the capping that be are work of We longer our realities opportunities. procurement years, will we are two third,

if $XX.X of the a U.S. reported of federal the would the XX, work. methodology, old it provide this RFPs billion to the XXst this you fluctuation and work. be during billion $X.X overall. comparison, just order more XXXX is new accurate pipeline In XX% our been opportunities. as While was billion values over procurement have anticipated of process, under more create new with methodology the a XX% are relative which at result we which approximately December pipeline attributable new pipeline December will $XX.X to Under in be methodology, would reporting Of pipeline, XX% at will maturing

year our traction focused some emerging and opportunities is efforts priorities, we amplify seeing in measures by team agencies. federal are business segment. on last keenly sales We customer U.S. the the took new departments including The to on positive and development driven

implementing now and here similar Haley Health like our States. the Services initiatives down before United last in in And are I today, segment John finish We I month. board would Human thank the to stepped up MAXIMUS to from

to John thought Watson, Towers Willis and of leadership market board. insights CEO As key our provided

portfolio directors addition, the proven Russ of markets, dedicated cash team a and clinically We drive MAXIMUS solid platform This services related using appreciate sincerely new a organic digitally MAXIMUS. as, meaningful professionals generates delivery, a of track to a XXXX in and includes growth. their will and as strategic retire In spring remain R. of business Beliveau geographies. committed and targets has operational we flow. Paul further and Lederer as that dedication in of seasoned existing to acquisitions record to service enabled in adjacent well and

are initiatives set business BPO more digital capabilities. broaden to Our core enhanced with our enabling a of us

reputation have to on partner, and creating this We continue prudent programs with through as an to the Corp Governments earned matter will build trusted even we outcomes a long-term digital focus experience additional citizen that better of on foundation. continue delivering technologies.

the outcomes Operator? we’ll achieve partners, are government We line keenly our citizens open losing are serve. the matter that, up we flexible, scalable on focused for efficient well of that Q&A. providing by that to positioned With without remaining and services sight for

Operator

first Styblo a of Please David question. your with line from [Operator question comes with proceed Instructions] Jefferies. Our

David Styblo

good questions. morning, for thanks there, Hi

pipeline. moving us the on and the you look in First to method, one, I can methodology old outside, little guys I make get to easier the the new some at a comparisons. to for probably to I just bit guess, more wanted appreciate

how quarter. And that much fiscal take So expanding a $X.X from of assets, if of quarter is ago might fourth pipeline trying with could of pipeline I'm acquisition this numbers on billion that be the how billion describe that just much mind, just quite from the increase core It work. to your that like looks the how there? the the we and of of of in business. know GDIT versus billion work, that you $X in in that's in your now $X about quarter's I that new understand if nature new is a and jump from was is know you what much is

Bruce Caswell

total morning, quarter over then de I'll be and at Rick. of get Hey, to those that change good bidding question in I'm you is your amount of say It those to Sure. pipeline about some pipeline, pipeline we start came it's with the federal area. that some pleased would good acquisition Bruce. of and I The quickly the minimis prior to that To key the it contract, hand we'll opportunities. did up the be that answer GDIT would driver referenced. the

that XX% of pipeline think of work noted in is that's the know total you and of business. kind we new XX% I been that the federal

would but also and to the developing pipeline standing turn kind importantly current serve, that in to both of IT across in IT positive departments. we’ve in as we And results that so the now agencies with we we GWAC any efforts, look out example that more BPO in as there. know see starting place over traditional that or that put had. development a I'll as can the business be well comments. you team sales the opportunities space for new the new as, bidding deals portfolio, both you CIO-SPX of Alliant an would imagine XX scale as you agencies deals Rick we're tell or the there, some be we're content BPO there could of further the it pipeline And X And we’d under as characterize GWACs that there new including I large

Rick Nadeau

think I it. No, that's

the something number that one to you way You will pipeline I know, reporting been oriented, and that report. we internally. We think that this really this I haven't just government business we we for but of a think it as that years, in think We’ve giving meaningful. going view became forward little more pipeline thought giving changed the old slice really more really Dave on basis, was federally a a using pipeline that We're the help and of that different about you a would is you meaningful different future. managed more way be is

David Styblo

Okay. That's helpful.

So, uptick pause we've sounds understand. I lines bid make is of of time that along that see to finally of seems more kind a a are long doesn't guys in GDIT it if is characterization certain you can before Or you along for had like can our things sure opportunities have starting key more capabilities you that and sudden it and new influx guys a and whereas contribute an much a now that such you. the there's activity just to like It bid because of are on, of all lines it you increased on an more. GDIT have you

just if is that of bet have market is understand supply uptick these to So, trying more just or more on contracts. capabilities it increased an you it

Rick Nadeau

bigger that made that here. and of we're and market a the And story we Bruce? Well, team and that think Bruce I’d and federal we to their risk federal real have earnings being of if that the But yes, think I us I market we by have folks these Yes, here new sales I seeing story the there bigger and think you say is better mined I last capabilities. opportunities is is government positions a for are with but a have really and opportunities above, the new folks. its BD is having work act as all together the getting more lot of opportunities, that to think point [ph] the little I fruits on think will, like filled bit, BD the our pursue. aggregation the call great

Bruce Caswell

only absolutely I would one Rick’s right. thing. add

platform one did the to about We Dave acquisition. as it a talked way some very up CXP think we of it as, the about platform GDIT that have center is think contact part well then IT into market pick after experience qualifications or center XX that go robust how is we as technology the capabilities deals, that telephony we as customer as, and fact we have we new now larger well now the the can fact I call it to accounts, SIN. much GSA contact

to and present is I across from put development sales you So, in you'll well correct think then all pipeline that that new the effort government have the opportunities in overtime what of upper number with together fact you're that seeing business the new combination agencies. new see seeing the as that's the and pipeline abroad market but absolutely that evolve capabilities a we're going in

Rick Nadeau

understand Rick. its federal as me margins follow-up? Do that to question noted you I have to ask on for you a Dave, XXXX, also FY

David Styblo

you a guys in the I disclosure X-K as under new in December segmentation. just the when housekeeping, made the Yes, guess,

about margins talking talked have the in contribution. XX% you maybe thought the obviously, had guys range. are guys you think And then X% to and federal being I range GDIT an XX% I that included XX% to

aware a we that just clarification sort is of there there was that, that or some item be should sort sure margins reset of on to So, just make of of? want maybe

Rick Nadeau

operating always in the acquisition little the and had home then Since that let let the Well, X-K, getting which There’s talked were we Yes, around transaction thought. that. a including we're allocations in more we’re time, when SG&A. which that about we of is that. me it me refinements explain income, out office acquisition we allocation of below SG&A, certain in disclosing has clarify revenue

if X.X% think at look the income. was you I number QX, operating

in when that number. X% probably, said we when mean, December, said a this we it was probably at conservative pretty think it’s I I time

for I XX% I bit at XX% better it's was a overly a probably optimistic. hindsight, the full have think mean, estimate. maybe it’s been that wish year and little around would a I

XX% our think and year. certainly to for And around changed it's do So, changed. expectations full I be don't think has I the not our going has guidance

David Styblo

you. Thank

Lisa Miles

Thanks, Dave.

please. Next question

Operator

you. Thank

line next Our with with question of the from question. Strauzer Securities. proceed your comes Please CJS Charlie

Charlie Strauzer

Hi, good morning.

talked a segue I I last has us Bruce, and you know assessing us your markets guess, So, of Maybe I have know a kind could reviewing in big kind give have you more about, as that you from review? bring talking an of you’re little discussion, the about those. the just of been are But of of priority kind about where federal bit maybe give now. you kind you’ve update, been

Bruce Caswell

offerings review opportunities and Charlie. as and meaningful Yes, we And it emerging It the the markets, did thanks, turned greater augmented a Absolutely, role We to growth the out we really current purpose support. scale, long-term. center was by our more a review the the a the at our pads fresh I deliver of federal segments that acquisition. think with in markets, analyzing strategy. reminder, our and service really first internal take look that to company is current on did of where examine overall engagement best an started for think in we we playing to through should the be

took fresh look a markets, we linked are adjacent we was particularly are ones and by to and new and anchored those growth platforms macro demographic that economic thing second and did at that technology The trends.

And our that that can and access refined agencies some I reasons. and organically growth profitability believe strict we expected we've And will and I for of we needs from others on addressable size, provide acquisition. our core do to two so rate. want on that markets criteria while can't that competitive markets away these key priority for that be executing concentrated on details we markets are are specific now note in

all cover markets domestic their in nature. identified three we've and that of priority our international the Importantly, of segments

to we’re on the made we’ve on completion driving of to the focused with now key. execution, that's as in think and we’ve core, emphasize I evaluation, the this want progress growth said acquisition the federal, I adjacent I’ve and turned organic meaningful the markets our

executing and to to changing of focus the require wrap that time, markets company. I'm plan we growth long-term then demand growth new and headway making As next of concurrently the capabilities, will with to saying taking identified as we to XX meet we I’ll steps improved on solid by And on we're the M&A measured market lead we’re acquisition evolve remain M&A the lens plan XX work the as execution plan. availability our that we remember over that can to priority identified. continue important that over months. pleased It’s for flexible targets we’ve toward said on want this And previously, to that overall platforms the themselves

David Styblo

Yes, the of a about you more housekeeping question. it’s you’ve the the next helpful. from amortization a And filed month years. of for just million with acquisition an X-K of quantifying know $XX two Last kind

could you guidance your how that not for think but a you on you about Thanks. as only this about year, that know If how quarterly for basis well? [indiscernible] talk

Rick Nadeau

The all QX in recorded the from guidance. $XX it that million and the you'll was think $X $X and prior $X prior from is million that built the there $XX transactions of is transaction our and that million year from amortization was to GDIT amortization of was the incremental the see is million. for be the into full acquisition to around intangibles about million I what legacy to from that acquisitions, for

David Styblo

much. very Thank Great. That's you helpful.

Lisa Miles

Next question please.

Operator

Close [Operator proceed with Instructions] Richard from Please your Our question comes next question. of line Genuity. the Canaccord with

Richard Close

around specifics size into you U.S. and of two And are? you could of if Great. terms was any the maybe, mentioned. those the just the agencies more bit contracts? you the go detail, subcontracts, And us what give size Thank in in I you. them that there that could and way little was more or of a wondering

Bruce Caswell

Richard, its Bruce. hi well, Yes,

this I give HAAS make and work CHDA by more of for roles forth. through volume these assessments of clinicians to work Kingdom. United or through identification and bit there's program that’s related I And to fixed to a do the work work. in process type that so work, to assessment contracts, I add in these do rate we’re reimbursed in a addition you the want process agency more specifically contracts. participate. of They patients their their you and several of without of just the the a all, naming little actually the early early naming seeing that. initial work the order that This that little is on specifically, is stages both normal, can they first clinicians and gating know Without these up contractors want distinguish to is of certified basis. as color. give many a I emphasize and They prime to bit in to in become you like days we to do offices follows so sure getting you want at and and people This our from this done have flavor program So, get their signing know certification, I

we've grow So, volume as we've that process that built. will way We're very them about on through And of network or that then start of and physicians performing capable contract certification got and that in more a certified. We're I those the clinicians will clinicians strong our process. certified say as pool we of of have getting would they the XX% assessments assessments. performing these –

begun individuals on ensure qualified to. that's and identified that the second a that to we're to care in enabling outreach also supplemental are And really those certain to reaching benefits record is to health with providing indexing with work we've to program physicians helping from care get that more agency. project participants The medical and physicians our out assist to

as these revenue build year I color. the that been of to constraints that So, capacity to program we’re two. particularly little the cautiously programs on financially, anticipate And that bit first say contribute optimistic we've it’s we’ll be we would working able through like a know, said we the this I address more you obviously.

Richard Close

those signed are contracts sort two in of in pipeline your included – contracts So, terms of ? and

Bruce Caswell

for end building so Not that the report. quarter quarter, signed is into activity part the our come we’ve been that contracts, ended, of as that just of this since next will

Richard Close

out clarity rebids some the Health, out that those to contracts larger any sizeable on Okay, with larger you called called great. revenue details A question you Can on decline. you respect provide led to contracts? more the or U.S.

Bruce Caswell

us as year Yes, to But as the as rebid – XX it – contract, Health Rick further contract. very locked and contract it rebid we Very, California up as over Care to that we we the start really a needed. clarity Options and I'll important that. turn then with one for wanted,

putting that's our very, been and we've example. place great on big very the granite in in a So, business of focused kind boulders core

we So, can growth other the focus business. on strategy in executing our parts of the

XX contract, year negotiate for the The client as that February for negotiations and of until the end option then each it we’ll always will as execute year the and through on part continue go enter process. that of Naturally, the that year April contract, probably that and second reset it's options when and with next contract aware contract, HAAS contract XXXX, that of the XXXX. certainly of will the this is for we you're HAAS contract

was really add? you we it contracts that that were Rick So, two Anything those further referencing. would

Rick Nadeau

doing is HAAS Just well.

was HAAS doing that from you ramped good that end and started very you recall a some If margins and of well we're slower toward off contract, contract. very prior over calls, contract the HAAS income with had time the operating

Richard Close

Okay.

be on that’s there's this, impacting only contract to Human really Health Just Services, and larger one so correct? U.S. clear

Bruce Caswell

Yes. smaller, did we but We not another one specifically. that that was out, had call

Richard Close

you. thank Okay,

Bruce Caswell

Okay, next question please.

Operator

you. Thank

Stockton proceed comes the line with question. of Fargo. your next Jamie Our with Please Wells from question

Jamie Stockton

taking flipping one, first my Hi, I the good house morning, thanks guess, dims the on the questions. [ph]. for Bruce maybe to

but some feels great. that commentary the in you months I thoughts with it us any environment. maybe how of that last be slowing you the a the would color there little your could like bit, are few pipeline like give be things know If know just might impacting earlier that on

Bruce Caswell

approved. consensus of lot a waivers to getting the would more now states something we've I've I you along. to for based to nice I if requirements a frame always to this example, pricing from appropriately to I'm contracts. general of often to seen put and requirements If be said lead see growth move current this now scrutiny through some know, And don't of current for seeking recently will lot is that the work that actionable grind proposals, And Medicaid to waivers just we’ve but the requests put area going getting their want started attribute Medicaid we've legislation that it's what incremental see for great. oversight know to of more I have of them, how it’s get [indiscernible] continued is the, kind to will that thought think to our kind bids in And help contracts, and proposals to anything, place, work for now of that on that pleased leading and their within states doubles is I seen amendments situation. in as singles which current us, and their initial finally waivers, process

over I said that that on driving focused from can expansion we're growth damn of core certainly, like good we’d that very, areas. all. think now go As lot between Separate there’s ultimately for you it's and and in that. on if very a days early speculate might you know, game kind core, when, like those it's Medicare And power you what role I ever to something and there's see the way water have, of

had look because would and our place their in say just to execution really priorities. back more a we programs focused and the reality It's across [ph] which and of on long-term agencies the growth it, I those summary stay think slowed that that you're through hasn't And on think that had The is and budgets come procurements down take gotten transformational just more fed some a and those at government in the and get impact I little And think that tried those that the gotten are we that is measure had that got a SIB and effect probably on more and a seeing stability able agencies focused to just executing to and the shutdown, street. material things really second. I'll And pipeline. pipeline. have gotten know to staying underline that's you bit more important I the I flip have haven't that while essential civilian seen you here in functions. agencies as that current their we're procurements leadership to So, and portfolio we've on we’re in with out there we've responding that in

as halt impact revenue so of that for an to essential. it us But programs It curious us really, federal I coming really the Lastly, just we to XX administratively number X% our it back the new thing a for have the of mentioned of shutdown, was the administratively particular, of we cleared XXX. the folks because than a was folks a process floor. that more through our are than of where employees. for in of to order brought get contracts kind clearances be on financially. affected one our through And to process in between And getting and hundred in on couple we quickly, contract maybe got have less needed

so anything And that now it's and through we're go don’t it into back a of walking mode. bit caused if pause, approaches, that's releasing, so a but we February hopeful we're that XXth as

Jamie Stockton

a it, talk and maybe Virginia you just a it believe a The actually going maybe enrollments. revenue weren't quick that of have see to think of improving but was And one just helpful. is other a about business able kind yes, be in transition question. tools web the I Or get, as you to now in to gave could Can we as more that maybe holistically, but you didn't or your and self after as some profile allowing headwind that’s some go you to you that business, then standpoint? about digital you're mobile margin more be Okay, creating instances? competitive you using of enable revenue service. from business example potentially contributor is the a Should so this tool historically

Bruce Caswell

and level of are the would – quick more macro on these in they're transactions voice term energy trends and be programs the And access we plans, doing and social and think there said We big health in important and of that raise a our And for you in to our help we we making important services out that role a it's I about apps getting the let calls. Medicaid. to beneficiaries whether going parse over because impact want thing question, it multi-pronged long part higher the promised, me we’ve little feel to have big year. buds Medicaid support right have with allow higher we really our and for been on always for perspective role lot a play can beneficiaries. to great. been view we’ve stay more well beneficiaries. And there are the one, the and of mobile each oversights, Human time, so to as and web talked have asset it will administrative programs. run integration complicated we would a social the and a become and important portals level digital people what type as channels number work handling connect want that be and of the by a of plan a same our know taking is of clients and appreciate about, We on is and it. question is in forth. there's of we Health be and value of follow-up that's the more a days It’s has At can our more a a be great probably you're a community, the it kind determinants channel time, Number Services of the for that by that we're over our time channels familiar, digital serve Google to that on and view voice That's customers help can as and There's want more – meaningful there do and bit. long,

us, up and opportunities you’ve said. as So, opens for I new think digital enables the shipped

offer have component to with that in prepared service direct is second remarks The when phrase, we can that I use the as digital we capabilities my in think offerings. I new

analytics way we to learning. and people you're are people use world. machine what by all use underpinned efforts the we assessment a the as only the analysis productive as anecdote. fact, So, into very do baking in we we And, hire the itself brief BPO digital or back that hire now not in our the We predictive is we predictive way

migration, can areas we we've our internal be. the That's an that can been more that build like the improves, capabilities development, and Agile and it, well. types effective take that and hit use is And they important cost, those in and forth more those business attrition more use more address cloud assessment we that's to as our desktop clients, the move because labor for us we into of as Externally, of the capital we our technology. largest in ops as tools, working and churn direct through particular, the federal human can new and So, organization. an decrease towards so in technologies

think, improve you're it's that up, something right wrap something open of saying margins also in help can to these I it adjacencies. some up can that and that is absolutely So, this

Jamie Stockton

you. Thank Great.

Lisa Miles

Jamie. Thanks,

Next please. question

Operator

Please First with [Operator Sparacino comes Instructions] the Analysis. question. line Frank next question from Our with proceed your of

Frank Sparacino

appetite know the about, become And in you done, determinants. you've technology or like just going talk know obviously, forward heavy, I little to Jamie. platforms. of not A the There's of to so have the impacted in know again, lot acquisitions speak. a marketplace if question bit of Bruce the don't the last on areas you historically, has don't lot social changed mindset of technology most from the more I and a terms biased

Bruce Caswell

question. a it's Frank, Well, great

say to technology seat, say, when completely agree my we saw always he will our keep was and I enough, sharp I Richard know used in that. with can't Montoni You

for has in of be way we navigated finding in leading that clinical calls about that and some projects, lot a you're facility money just primarily are presented that uses BPO technology their information number a We poor who from to a on type. render follow developed of need get a We've a their and XX% trying the around then more the the unstructured spending were bolder, investing case in reviewers, enable an of do to so, into a infuse fashion been present have learns and learning time navigation clinical review in technology we developed a in of like innovation an the warranted actionable indexing each our to Say, prior with or and subsequently. that great that We’ve complex reviewers. capability paying boulder had time prescription, have a their by viewing manner example, team can to that basically machine to development is electronic very capabilities they our data technology indexing here research to information and was capabilities, then opioid not, a very, in uniform that that – they talked machine operations. so find that And information it of decision. particular and the the to of they portal

So, be – in have wouldn’t to delivering patent, I that's technology critical historically our partners U.S. the fact, MAXIMUS. seen a great to from put going example that ecosystem investments that Concurrently, for our of clients. technology are partners our better forward that has mentioned is you stuff which we for just been something know

And capability vendor we've step technology. up So, we technology now customer our that contact the new center that order in had in Canada have that omnichannel I game partner. done implement all a was to mentioned to through

solution. partner platform off clinical [indiscernible] and as a if in in the kind investing well, the are through a of We Kingdom United shelf they configurable,

that probably and MAXIMUS, we So, an did about capability technology our of initiatives you're to as acquisition a the combination technology see in of going help software to of platform ago area. the a partners well technology being with of occasional ecosystem within as, year as well I led think a tuck-in Revitalised

we if combination offerings. three, of think get I all continue to you our evolve as So,

Frank Sparacino

that’s follow-up Rick, And Thank one Bruce just maybe you, helpful. for you.

remaining assets acquired to look of year. the as how to expectations, the the from in But GD. just that fiscal the quarters I'd in three also change. that volumes of be formed sense particularly, the better relative we seasonality curious On get federal at the business a

Rick Nadeau

that, evaluating expected, going through as on it were was be we based performed since assets on the going of to it and where part first the when and handle I'll thought November the acquisition. XX guidance was Okay. acquisition spot pretty and the on we

his question. Bruce you of to wanted think I other half the fill

Bruce Caswell

this one. We’ll team tag

relates said only healthcare.gov that it that XXXX, and XXXX. So, year's X% Frank? in was the about contact, rolled consumers to in stable, was down relative enrollment exchange as further relatively it over to through Anything federal X.X by this

Frank Sparacino

at I as seasonality, and know the revenue looked don't this the like. know we’ve quarter, the Just the I partial quarter, what flow looks but

Rick Nadeau

finished open the quarter, we enrollment open and we in Yes, are this just period. the

So, a of part into to yes, more first little the we're year. front-loaded the bit be going

that revenue. be think think totality, disclosed $XXX revenue my we script I I believe will of million we the I – the in in as acquired that

I the $XXX year, from this stable think forward. million we're should full for about revenue them. from of relatively fall expecting It point

Bruce Caswell

open next for very period. I as the And the you of just get up enrollment course, through you you're add that summer, may quickly ramping

of lot training quarter. during a and do that we So, hiring last

Lisa Miles

Thanks Frank, next question please.

Operator

you. Thank

Our proceed next a Please follow-up question. is with Genuity. the question of from your Canaccord Close with Richard line

Richard Close

Yes, a couple of questions here.

didn't year? with to you Rick, EPS With why share respect guidance repurchases. First, $X.XX the for in from change your that annual calling mind, the contribution out

Rick Nadeau

point. it gave within that end $X.XX. that shares we we that confidence be pretty enough would me like – quarter. have range. one towards range acquired that guidance at of be this more and range But to toward, we only had can finished The should a should move the is we that that to think don't probably wide It's felt only and still it $X.XX I upper make I'll Yes, particular I I that help we

prudent to to at think So, more $X.XX. I was it stay $X.XX

Frank Sparacino

requirements business? if their overlap And Medicaid work requirements wondering, single with about Okay. Bruce of there. Medicaid states and have new the work – here And on double guys have a requirements, work being you where and maybe bit a that and any for little won existing your I was then the then if so, business a is talk you talked where? could actually

Bruce Caswell

XXXX. name one But don't say competitive it, have January their submitted of of pricing I to to be that contract, Medicaid as occurring as you clients see. imagine. we could want submitting order for support only formally implemented in proposals to program Their reasons work we're the Let's an will our states I amendment requirement. to won't specifically until

legislature, work because a currently. want. submitted see they yet in that We are with work is a think to more our revenue we not state, had of XXXX they enhanced that an you’d effect yet impact So, any we FY of But that proposal or where the one up another system are bit changes have funding services that to that states providing market this And – do hung the type I of numbers. little that federal don't required for stage funding BPO requirement is and early available required. further to that

And trying of to that's been bootstrap kind able are to breadth their services the offer. that we're to states anything, constraints So, this. through the of way if

handle more actually, piece. We have And to the consumer they want based capabilities, requirements. specifically the attestation tremendous but on us engagement only may affordability, consumer

fact some work within the And seek that based employment they’ve certain to they're state as contracting. been either report be That so engaged what case that yes, amount time waivers performance a might able these and So, familiar, far work. doing for of case probably for you're In could services most it go evidence of each requirement us to looking as to afford in a month. have limit consumers or to others, do. the management in

to even handle. say, aspects in capitation model for to handle may, all fact, yet And you to to shaking consumer’s partners. turn is their turn kind to paying unheard the piece the of already out. of not they I employment their states some them experience, to it's handle in workforce of care need well, you So, instances, this another is this still squads Because I'm managed might

Lack they the really However, federal a with federal figure of are of services. it equipped to bit to to MCOs that. now. clear them employment right may comes wild we states turn to to ill funding and particular feel MAXIMUS Or But handle west lack out. it that of trying help down regulations,

I've submitted, health in proposals we'll as that of a in uptick U.S. couple the an XXXX optimistic a business our feeling see numbers FY consequence. So,

Frank Sparacino

you. Thank Okay.

Bruce Caswell

Yes.

Lisa Miles

ends this participation. our Thank your for you and you. and call. concludes thus Ladies Thank gentlemen, question-and-answer session, our

lines wonderful You may have day. now your disconnect and a

Maximus (MMS) 7 Feb 192019 Q1 Earnings call transcript