The following discussion is intended to help the reader understand our business,
financial condition, results of operations, liquidity and capital resources. You
should read this discussion in conjunction with "Risk Factors," "Forward-Looking
Statements," and our financial statements and related notes included in our
Annual Report on Form 10-K for fiscal year 2021 filed with the Securities and
Exchange Commission on November 18, 2021 (the "2021 Form 10-K") and elsewhere in
this Quarterly Report on Form 10-Q, as applicable.
Business Overview
We are a leading operator of government health and human services programs
worldwide. We are a responsible and reliable contracting partner to governments
under our mission of Helping Government Serve the People®. Governments rely on
our financial stability and proven expertise in helping people connect and use
critical government programs. We use our experience, business process management
expertise, innovation, and technology solutions to help government agencies run
effective, efficient, and accountable programs.
Our primary portfolio of work is tied to business process services ("BPS") in
the health services and human services markets. Our growth over the last decade
was driven by new work, such as that from the Affordable Care Act ("ACA") in the
United States ("U.S."), an evolving digital transformation to meet the
modernization needs of our clients, and growing demand for independent and
conflict-free clinical services including assessments, appeals, and independent
medical reviews in multiple geographies. Our growth has been supplemented by
strategic acquisitions.
We experienced both favorable and unfavorable impacts as a result of the
Coronavirus ("COVID-19") global pandemic. While some of the programs we support
have experienced reduced volumes due to the pandemic, we have also been
successful in winning new contracts to meet the immediate needs of our
customers, including contract tracing and disease investigation, vaccine
information lines, and unemployment insurance administration. Proving the value
of our business model, we have converted a number of these relationships into
longer-term contract opportunities. The individuals and families served under
these programs are those considered some of the most vulnerable to COVID-19. As
a result, we believe our operations support programs that are vital for their
safety and wellbeing.
We continue to execute upon our three-fold strategy to accelerate our progress
and drive the next phase of our growth through:
•Digital transformation. We are using digital technologies to transform the
experience of our customers and our employees. We believe that these
technologies can help our government clients run their programs in a more
streamlined manner and make it easier for individuals to interact with these
programs.
•Clinical evolution. We are expanding our clinical-related services and are
experienced at delivering clinical BPS at scale. We have established an
extensive set of services that frequently requires a network of healthcare
professionals who can complete clinical assessments, provide occupational health
and independent medical review services, and adjudicate complicated benefits
appeals. With the formation of Maximus Public Health ("MPH"), we are able to
serve as a resource to governments as they respond to public health threats.
These efforts include providing health information and COVID-19 test results and
vaccination information through our citizen engagement centers in key states and
counties across the nation.
•Market expansion. We continue with our existing strategy to expand our markets
by bringing our core capabilities to new programs and clients, adding new
capabilities to access adjacent markets, and through geographic expansion. In
fiscal year 2021, we expanded our clinical assessments and public health work,
and completed two acquisitions in the United States to increase our digital and
clinical capabilities, as well as create stronger relationships in key U.S.
federal government agencies.
The macro-trends for our business remain unchanged. As the pandemic has
underscored, governments around the world need better solutions to deliver on
policy priorities that can change rapidly. Social welfare programs that reflect
long-term societal commitments and priorities increasingly face rising demand,
shifting demographics, and unsustainable program costs. We believe that Maximus
is well positioned to address these challenges and be a transformative partner
through our scalable, cost-effective, and operationally efficient services for a
wide range of government programs.
                                       21

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  Table of Contents
Financial Overview
A number of factors have affected our results for the first quarter of fiscal
year 2022, the most significant of which we have listed below. More detail on
these changes is presented below within our "Results of Operations" section.
•During fiscal year 2021, we acquired VES Group, Inc. ("VES"), the Federal
Division of Attain, LLC ("Attain") and Connect Assist Holdings Limited ("Connect
Assist"). At the start of fiscal year 2022, we acquired the student loan
servicing business from Navient, rebranded as Aidvantage. From the date of each
acquisition, we have received the benefit of additional revenue, as well as
additional operating costs. In completing these acquisitions, we have allocated
a portion of each purchase price to identifiable intangible assets, which we are
amortizing over the estimated useful lives of each asset.
•To fund the acquisition of VES, we entered into a new credit facility comprised
of fixed term debt and a new revolving credit facility. The cost of servicing
this debt, as well as the cost of the debt facilities, has resulted in an
increase in our interest expense.
•Our services in fiscal years 2022 and 2021 were affected by the COVID-19
pandemic. We have received the benefit from new, short-term work, assisting
governments with their responses to the pandemic. This has mitigated the effect
of declines in established programs where our transaction volume has been
reduced. We anticipate that our core programs will begin returning to capacity
in the latter half of this year, as our COVID related work is expected to
decline.
•As anticipated, the Census Questionnaire Assistance ("CQA") contract ended in
the first quarter of fiscal year 2021.

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