Maximus (MMS)

Risks

• If we fail to satisfy our contractual obligations or meet performance standards, our contracts may be terminated, and we may incur significant costs or liabilities, including actual or liquidated damages and penalties, which could adversely impact our operating results, financial condition, cash flows, and our ability to compete for future contracts.
• If we fail to accurately estimate the factors upon which we base our contract pricing, we may generate less profit than expected or incur losses on those contracts.
• Our growth initiatives could adversely affect our profitability.
• We may incur significant costs before receiving related contract payments, which could result in an increased use of cash and risk of impairment charges.
• Our business could be materially and adversely impacted by the recent COVID-19 outbreak or other similar outbreaks.
• A number of factors may cause our cash flows and results of operations to vary from quarter to quarter.
• We face competition from a variety of organizations, many of which have substantially greater financial resources than we do; we may be unable to compete successfully with these organizations.
• We may rely on subcontractors and partners to provide clients with a single-source solution.
• We obtain most of our business through competitive bidding in response to government RFPs. We may not be awarded contracts through this process at the same level in the future as in the past, and contracts we are awarded may not be profitable.
• Our business could be adversely affected by future legislative or government budgetary and spending changes.
• Government entities have in the past terminated, and may in the future terminate their contracts with us earlier than we expect, which may result in revenue shortfalls and unrecovered costs.
• If we fail to establish and maintain important relationships with government entities and agencies, our ability to successfully bid under RFPs may be adversely affected.
• Our customers may limit or prohibit the outsourcing of certain programs or may refuse to grant consents and/or waivers necessary to permit contractors, such as us, to perform certain elements of government programs.
• We rely on key contracts with state, local and federal governments for a significant portion of our revenue. A substantial reduction in those contracts would materially adversely affect our operating results.
• Within our U.S. Federal business, our ability to participate in many competitive bids in response to government RFPs may be managed through Government-Wide Acquisition Contracts ("GWACs") or the process by which agencies of the federal government purchase goods and services. Eligibility to remain on a GWAC changes over time. We may not be invited to bid, and therefore be unable to be awarded contracts through this process at the same level in the future as in the past if we do not maintain full eligibility requirements over time.
• Our indebtedness following the completion of the VES acquisition is significant and could adversely affect our business and our ability to meet our obligations.
• We may experience difficulties in integrating our operations with those of Attain and VES and realizing the expected benefits of these acquisitions.
• VES currently derives all its revenue from contracts with the VA. If one or more of these contracts with the VA are terminated or are not renewed on favorable terms or at all, if the VA reduces the number of medical examinations allocated to VES under the contracts, or if VES receives an adverse finding or review resulting from an audit or investigation, the benefits of the VES acquisition may be adversely affected.
• In connection with the acquisitions, we may be required to take write-downs or write-offs, restructuring and impairment, or other charges that could negatively affect our business, assets, liabilities, prospects, outlook, financial condition, and results of operations.
• We are subject to review and audit by governments at their sole discretion and, if any improprieties are found, we may be required to refund revenue we have received or forego anticipated revenue, which could have a material adverse impact on our revenue and our ability to bid in response to RFPs.
• We may be subject to fines, penalties, and other sanctions if we fail to comply with laws governing our business.
• Adverse judgments or settlements in legal disputes could harm our operating results, cash flows, and financial condition.
• Our systems and networks may be subject to cybersecurity breaches.
• Many of our projects handle protected health information or other forms of confidential personal information, the loss or disclosure of which could adversely affect our business, results of operations, and reputation.
• We may be precluded from bidding and performing certain work due to other work we currently perform.
• We may face liabilities arising from divested or discontinued businesses.
• We may lose executive officers and senior managers on whom we rely to generate business and execute projects successfully.
• We may be unable to attract and retain sufficient qualified personnel to sustain our business.
• Government unions may oppose outsourcing of government programs to outside vendors such as us, which could limit our market opportunities and could impact us adversely. In addition, our unionized workers outside the United States could disrupt our operations and our non-unionized workers could attempt to unionize which could disrupt our operations and impose higher costs on us.
• If we do not successfully integrate the businesses that we acquire, our results of operations could be adversely affected.
• We are subject to the risks of doing business internationally.
• Inaccurate, misleading, or negative media coverage could adversely affect our reputation and our ability to bid for government contracts.
• Our Articles of Incorporation and bylaws include provisions that may have anti-takeover effects.