MAXIMUS reported revenues for the second quarter of $120.6 million, compared to $93.5 million for the same period in fiscal year 2000, an increase of 29%. Net income for the second quarter was $9.9 million, or $0.45 per diluted share, compared to $8.6 million, or $0.40 per diluted share, for the second quarter of the prior year. Gross profit for the second quarter was $38.6 million, up 31.8% from $29.3 million for the same quarter of last year.
MAXIMUS continued its solid track record of delivering strong financial results in the second quarter, stated Dr. David Mastran, MAXIMUS CEO. The Company’s contract opportunities stand at $933 million, versus $701 million at the end of the first quarter indicating that our sales and business prospects are stronger than ever. In addition, we were quite pleased to see that submitted contract proposals under evaluation by the government total $399 million, up from $195 million in the previous quarter. Contract wins year to date totaled $245 million, versus $185 million in the prior year. Given all these factors, we are comfortable with current consensus estimates for the third quarter of fiscal 2001.
As we mentioned on our first quarter earnings conference call last February, we have implemented a cross-division plan to reduce the DSOs. Our efforts, which have included an incentive plan for each division, weekly conference calls to address the status of DSOs, and the assignment of a full-time accounting professional devoted to shortening the billing cycle, have proven effective. DSOs for the quarter are down to 99 days, a drop from 119 the previous quarter. As a result, cash flow from operations increased to $18 million in the quarter. Going forward, we expect DSOs to be in the range of 100 to 105 days.
Within the MAXIMUS’ organization, continued Dr. Mastran, we embarked on a key initiative that we believe will contribute to the long-term success of the Company and build shareholder value. In an effort to transition to a more outsider dominated Board of Directors, we have developed a strong list of candidates that we are in the process of interviewing. We are very pleased to announce that former Illinois Governor Jim Thompson, a nationally respected public figure, has joined our Board. Mr. Thompson served as the Governor of Illinois for 16 years and is currently the Chairman of the law firm of Winston & Strawn as well as serving on a number of corporate and civic boards. This appointment is the first in what we anticipate to be a string of appointments aimed at creating a more diversified board.
We are also excited to report that all Company subsidiaries now carry the MAXIMUS name, and a full-scale re-branding campaign is underway. We have launched our new website, which better informs our customers, investors, and the citizens we serve about MAXIMUS. The new website and our branding effort will better enable each of our operating units to leverage the power and reach of MAXIMUS.
Looking ahead, given the recession resistant characteristics of our business model, we do not expect to experience any material impact from the apparent economic weakness in the overall economy. This is due to our revenue mix and client base of state and local governments whose outsourcing budgets are not likely to decrease despite any decreases in government revenue. Overall, we continue to see strong demand for our services, and are prepared to capitalize on future opportunities in the growing government outsourcing market, concluded Dr. Mastran.
SOURCE: COMPANY PRESS RELEASE
