[November 15, 2012]

MAXIMUS Reports Results for Fiscal 2012 Fourth Quarter and Full Year

MAXIMUS (NYSE: MMS), a leading provider of government services worldwide, today reported financial results for its fourth quarter and fiscal year ended September 30, 2012.

Key highlights include:

• Revenue grew 20% to $300.7 million for the fourth quarter and 13% to $1.05 billion for the full fiscal year compared to the same periods last year, driven by growth on existing contracts, new work, and the PSI acquisition.
• Adjusted diluted earnings per share from continuing operations increased 16% to $0.74 for the fourth quarter and increased 5% to $2.36 for the full fiscal year compared to the same periods last year.
• Cash and cash equivalents totaled $189.3 million at September 30, 2012.
• Year-to-date new signed contract awards totaled $1.44 billion at September 30, 2012.

Revenue for the fiscal 2012 fourth quarter increased 20% (21% on a constant currency basis) to $300.7 million versus $250.1 million reported for the same period last year. Revenue for fiscal year 2012 increased 13% (13% on a constant currency basis) to $1.05 billion compared to $929.6 million reported for fiscal 2011. Revenue increases were driven by growth on existing contracts, new work, and the acquisition of PSI. Fiscal 2012 organic revenue increased 7% compared to last year.

Fourth quarter GAAP income from continuing operations, net of taxes, totaled $23.8 million, or $0.68 per diluted share, and included approximately $0.06 of net legal and acquisition-related expenses, and tax adjustments. Excluding these costs, fourth quarter adjusted diluted earnings per share from continuing operations increased 16% to $0.74 compared to $0.64 reported for the same period last year. For the full year, GAAP income from continuing operations, net of taxes, totaled $76.1 million, or $2.19 per diluted share, and included approximately $0.17 per diluted share related to net legal and acquisition-related expenses, and tax adjustments. Excluding these expenses, adjusted diluted earnings per share from continuing operations increased 5% to $2.36 compared to fiscal 2011. A normalization table is included in the accompanying financial schedules.

"We are proud of our achievements in fiscal 2012 as we continue to grow the business and maximize shareholder value. We won our first health insurance exchange contract, expanded our domestic footprint through the acquisition of PSI, and achieved breakeven on our UK Work Programme contract. Our year-to-date signed awards of $1.44 billion were strong, contributing to our healthy backlog of $2.9 billion at September 30, 2012," commented Richard A. Montoni, Chief Executive Officer of MAXIMUS.

Health Services Segment

Health Services Segment revenue for the fourth quarter of fiscal 2012 increased 16% to $181.6 million compared to $156.3 million for the same period last year, principally due to new work and the acquisition of PSI. For fiscal 2012, revenue increased 19% to $671.2 million compared to $565.9 million for the prior year, driven by new work, expansion on existing contracts, and the acquisition of PSI. Excluding revenue from PSI, year-over-year Segment organic revenue grew 15%.

Health Services Segment operating income for the fourth quarter totaled $20.0 million (11.0% operating margin) compared to $20.6 million (13.2% operating margin) in the same period last year. For the full fiscal year, Segment operating income was $80.6 million (12.0% operating margin) compared to $74.7 million (13.2% operating margin) in fiscal 2011. Operating margins for fiscal 2012 decreased due to: the managed care expansion in Texas; the timing of work, including contract rebids and start-ups; and lower-margin pass through revenue on a new health insurance exchange contract.

Human Services Segment

Human Services Segment revenue for the fourth quarter increased 27% to $119.2 million compared to $93.8 million in the prior-year period. For fiscal 2012, revenue increased 4% to $379.0 million compared to $363.8 million last year. Segment revenue growth was driven by the acquisition of PSI, which offset expected revenue decreases in the Company's international operations related to the completion of short-term programs and lower caseloads in Australia and the transition to the Work Programme in the UK. As a result, excluding revenue from PSI, year-over-year Segment organic revenue decreased 6%.

Human Services Segment operating income for the fourth quarter increased 64% to $21.8 million (18.3% operating margin) and benefited from planned improvements on the UK Work Programme, as well as expected short-term work that was highly accretive. This compared to operating income of $13.3 million (14.2% operating margin) in the same period last year. For the full fiscal year, operating income grew 7% to $49.9 million (13.2% operating margin) compared to $46.8 million (12.9% operating margin) in fiscal 2011.

Backlog, Sales and Pipeline

The Company reported backlog totaling $2.9 billion at September 30, 2012, which is consistent with backlog of $2.9 billion at September 30, 2011.

Year-to-date signed contract wins at September 30, 2012 totaled $1.44 billion compared to $1.61 billion for fiscal 2011. Last year's year-to-date signed awards included nearly $1 billion of awards from existing work. At September 30, 2012, new contracts pending (awarded but unsigned) totaled $128 million compared to $691 million last year.

Sales opportunities (pipeline) at November 7, 2012 totaled $2.6 billion (consisting of $1.2 billion in proposals pending, $145 million in proposals in preparation, and $1.3 billion in proposals tracking) compared to $1.8 billion in fiscal 2011.

Balance Sheet and Cash Flows

Cash and cash equivalents at September 30, 2012 totaled $189.3 million, of which 66% is held overseas. For the full fiscal year, cash provided by operating activities from continuing operations totaled $115.2 million with free cash flow of $92.0 million. For the fourth quarter of fiscal 2012, cash provided by operating activities from continuing operations totaled $30.1 million with free cash flow of $21.7 million.

Days Sales Outstanding (DSO) from continuing operations were favorable at 56 days and driven by the timing of collections.

On August 31, 2012, MAXIMUS paid a quarterly cash dividend of $0.09 per share, and on October 10, 2012, the Company announced a $0.09 per share cash dividend, payable on November 30, 2012 to shareholders of record on November 15, 2012.

During the fourth quarter of fiscal 2012, MAXIMUS used $3.9 million to purchase 65,800 shares of MAXIMUS common stock under its Board-authorized share repurchase program. For fiscal 2012, MAXIMUS repurchased a total of 306,000 shares and used cash of $13.0 million for buyback activity. At September 30, 2012, the Company had $127.4 million available for future repurchases. Subsequent to quarter close, MAXIMUS purchased another 168,500 shares of MAXIMUS common stock for $9.7 million through November 9, 2012.

Outlook

MAXIMUS is introducing fiscal 2013 guidance. MAXIMUS expects fiscal 2013 revenue to range between $1.225 billion and $1.275 billion, a 17% to 21% increase compared to fiscal 2012. At September 30, 2012, approximately 90% of forecasted 2013 revenue was in the form of backlog or outstanding option period renewals.

The Company expects fiscal 2013 adjusted diluted earnings per share from continuing operations to range between $2.85 and $3.05, a 21% to 29% increase compared to fiscal 2012. These ranges assume a lower contribution from mature contracts in Texas and California due to expected scope reductions in fiscal 2013, as previously disclosed. Revenue from these two contracts is expected to be lower in fiscal 2013 compared to fiscal 2012 by approximately $40 million to $45 million, with an estimated earnings impact of approximately $0.15 per diluted share.

"As we launch fiscal 2013, we foresee an exceptional year of top- and bottom-line growth. We remain focused on winning our fair share of health care reform work, growing our global operations, expanding our federal book of business, and strategically deploying cash. The management team remains committed to delivering outcomes that matter to our government clients, while at the same time adding new, profitable growth," Montoni concluded.

Website Presentation, Conference Call and Webcast Information

MAXIMUS will host a conference call this morning, November 15, 2012, at 9:00 a.m. (ET). The call is open to the public and can be accessed under the Investor Relations page of the Company's website at www.maximus.com or by calling:

877.407.8289 (Domestic)/201.689.8341 (International)

For those unable to listen to the live call, a replay will be available through November 30, 2012. Callers can access the replay by calling:

877.660.6853 (Domestic)/201.612.7415 (International)
Replay conference ID number: 403280

About MAXIMUS

MAXIMUS is a leading operator of government health and human services programs in the United States, United Kingdom, Canada, Australia and Saudi Arabia. The Company delivers business process services to improve the cost effectiveness, efficiency and quality of government-sponsored benefit programs, such as Medicaid, Medicare, Children's Health Insurance Program (CHIP), Health Insurance BC (British Columbia), as well as welfare-to-work and child support programs around the globe. The Company's primary customer base includes federal, provincial, state, county and municipal governments. Operating under its founding mission of Helping Government Serve the People^®, MAXIMUS has approximately 8,800 employees worldwide. For more information, visit www.maximus.com.

Non-GAAP Measures

This release refers to non-GAAP financial measures, including free cash flows from operating activities, adjusted diluted earnings per share from continuing operations, constant currency revenue growth, organic growth, and operating income excluding legal, settlement and acquisition-related expenses.

To provide constant currency information, revenue from foreign operations is converted into United States dollars using average exchange rates from the previous fiscal year. We believe constant currency revenue growth provides a useful basis for assessing the performance of the Company excluding foreign exchange fluctuations. To provide organic growth information, revenue in the prior year is compared to the current year without PSI revenues. We believe organic growth provides a useful basis for assessing the performance of the business excluding PSI. We have provided a reconciliation of free cash flows to operating cash flows from continuing operations. We believe that free cash flows from operations is a useful basis for investors to compare our performance across periods or across our competitors. Free cash flows show the effects of the Company's operations and routine capital expenditure and exclude the cash flow effects of acquisitions, share repurchases, dividend payments and other financing transactions. We have provided a reconciliation to adjusted diluted earnings per share and operating income excluding legal, settlement and acquisition-related expenses. We believe that these measures are a useful basis for assessing the Company's performance excluding the effect of the costs of acquiring PSI and the recovery of insurance claims in the periods shown.

The presentation of these non-GAAP numbers is not meant to be considered in isolation, nor as alternatives to net income, cash flows from operating activities, diluted earnings per share, revenue growth and operating income as measures of performance.

Statements that are not historical facts, including statements about the Company's confidence and strategies and the Company's expectations about revenues, results of operations, profitability, future contracts, market opportunities, market demand or acceptance of the Company's products are forward-looking statements that involve risks and uncertainties. These uncertainties could cause the Company's actual results to differ materially from those indicated by such forward-looking statements and include reliance on government clients; risks associated with government contracting; risks involved in managing government projects; legislative changes and political developments; opposition from government unions; challenges resulting from growth; adverse publicity; and legal, economic, and other risks detailed in Exhibit 99.1 to the Company's most recent Annual Report filed with the Securities and Exchange Commission, found on www.maximus.com.

(1) % of respective segment revenue. Changes not considered meaningful are marked "NM."

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