Group 1: Earnings Performance - DLH Holdings Corp. reported quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $0.07 per share, and down from $0.12 per share a year ago, representing an earnings surprise of -14.29% [1] - The company posted revenues of $89.21 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.88%, and down from $101.01 million year-over-year [2] - Over the last four quarters, DLH has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates during the same period [2] Group 2: Stock Performance and Outlook - DLH shares have declined approximately 49.4% since the beginning of the year, compared to a decline of -4.7% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$0.11 on revenues of $74 million, and -$0.13 on revenues of $320.78 million for the current fiscal year [7] - The estimate revisions trend for DLH is mixed, resulting in a Zacks Rank 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Group 3: Industry Context - The Staffing Firms industry, to which DLH belongs, is currently ranked in the bottom 15% of over 250 Zacks industries, suggesting that the outlook for the industry can significantly impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Performance - Second quarter revenue was $89.2 million in fiscal 2025, down from $101.0 million in fiscal 2024, reflecting a decrease of approximately 11.8% due to small business conversions[6] - Revenue for the six months ended March 31, 2025, was $179,994 million, down from $198,857 million in the same period of 2024, a decrease of 9.5%[29] Earnings and Profitability - Earnings for the second quarter were $0.9 million, or $0.06 per diluted share, compared to $1.8 million, or $0.12 per diluted share in the same quarter of fiscal 2024, representing a decline of 50%[10] - EBITDA for the second quarter was $9.4 million, down from $10.2 million in the prior-year period, reflecting a decrease of approximately 7.8%[11] - EBITDA for the six months ended March 31, 2025, was $19,324 million, compared to $21,257 million for the same period in 2024, a decline of 9.1%[29] - The company reported an operating margin of 5.7% for the second quarter of fiscal 2025, slightly down from 5.9% in the prior-year period[8] - EBITDA as a percentage of revenue remained stable at 10.7% for the six months ended March 31, 2025, compared to 10.7% for the same period in 2024[29] Cash Flow and Liquidity - The company generated $14.5 million of operating cash during the quarter, driven by strong accounts receivable collections[4] - Cash at the end of the period decreased to $196 million from $238 million, reflecting a decline of 17.6%[24] - Net cash provided by operating activities for the six months ended March 31, 2025, was $2,965 million, down from $10,301 million in the same period of 2024, a decrease of 71.2%[24] - The company reported a net change in cash of $(146) million for the six months ended March 31, 2025, compared to an increase of $23 million in the same period of 2024[24] Debt and Liabilities - Total debt was reduced by $15.3 million during the quarter, bringing it to $151.7 million as of March 31, 2025, compared to $167.0 million at the end of December 2024[4] - Total current liabilities decreased from $53,242 million on September 30, 2024, to $49,917 million on March 31, 2025, a reduction of approximately 6.2%[22] Assets and Equity - Total assets decreased from $314,381 million on September 30, 2024, to $306,607 million on March 31, 2025, a decline of approximately 2.5%[22] - Total shareholders' equity increased from $110,132 million on September 30, 2024, to $112,849 million on March 31, 2025, an increase of 2.5%[22] Contract and Business Outlook - Contract backlog as of March 31, 2025, was approximately $646.9 million, down from $690.3 million as of September 30, 2024[6] - The company has a robust pipeline with over $1.0 billion in new business proposals currently being evaluated[5] - The company anticipates converting 50-55% of EBITDA to debt reduction over the fiscal year[12] General and Administrative Expenses - General and administrative expenses decreased by $3.1 million year-over-year, from $11.7 million in fiscal 2024 to $8.6 million in fiscal 2025[8]

Core Insights - DLH Holdings Corp. reported a revenue of $89.2 million for the second quarter of fiscal 2025, down from $101.0 million in the same period of fiscal 2024, primarily due to the impact of small business set-aside transitions [6][7] - The company reduced its debt by approximately $15.3 million during the quarter, bringing total debt to $151.7 million, supported by $14.5 million in operating cash generated [4][12] - A significant increase in bid activity was noted following the enactment of a Continuing Resolution in March, with over $1.0 billion in new business proposals currently under evaluation [5] Financial Performance - Revenue for the second quarter of fiscal 2025 was $89.2 million, a decrease of $11.8 million compared to $101.0 million in fiscal 2024 [6][30] - Operating income was reported at $5.1 million, with an operating margin of 5.7%, slightly down from 5.9% in the prior year [7][30] - Net income for the quarter was approximately $0.9 million, or $0.06 per diluted share, compared to $1.8 million, or $0.12 per diluted share, in the same quarter of fiscal 2024 [10][30] Debt Management - The company utilized $14.5 million of operating cash to reduce debt, achieving a total debt reduction of $15.3 million during the quarter [4][12] - As of March 31, 2025, DLH's total debt stood at $151.7 million, down from $167.0 million at the end of December 2024 [12][6] - The company anticipates converting 50-55% of EBITDA to debt reduction throughout the fiscal year [12] Business Outlook - The company expects a higher volume of decision-making in the third and fourth quarters, which could lead to growth opportunities into fiscal 2026 [5] - DLH is well-positioned to benefit from the President's fiscal year 2026 discretionary funding request, particularly in advanced engineering, digital transformation, data analytics, and cybersecurity [5] - The contract backlog as of March 31, 2025, was approximately $646.9 million, down from $690.3 million as of September 30, 2024 [6][13]

Core Viewpoint - DLH Holdings Corp. is set to release its financial results for the fiscal second quarter ended March 31, 2025, on May 7, 2025, after market close, followed by a conference call on May 8, 2025, to discuss these results and operational trends [1]. Company Overview - DLH Holdings Corp. (NASDAQ: DLHC) is a Russell 2000 company that provides science research and development, systems engineering and integration, and digital transformation and cyber security solutions to federal agencies [3]. - The company employs over 2,800 individuals and focuses on enhancing technology, public health, and cyber security readiness missions through various advanced solutions, including artificial intelligence and cloud-based applications [3].

Financial Data and Key Metrics Changes - The company reported first quarter revenue of $90.8 million, down from $97.9 million in the prior year period, reflecting a revenue contraction of approximately $5 million due to small business set-aside conversions and service delivery timing [19][21] - EBITDA for the first quarter was $9.9 million, compared to $11.1 million in the previous year, primarily due to lower overall revenue levels [21] - Operating cash usage was approximately $11.5 million during the quarter, contrasting with cash generation of $5.1 million in the same period last year [22][23] - Total debt increased to $167 million from $154.6 million at the start of the fiscal year, with current debt slightly under $161 million [23] Business Line Data and Key Metrics Changes - The revenue decline was attributed to several factors, including the unbundling of contracts, small business set-aside transitions, and timing of service deliveries [19][20][21] - The company anticipates that small business set-aside conversion headwinds will continue to impact results in upcoming quarters [20] Market Data and Key Metrics Changes - The company has a qualified pipeline of new business opportunities valued at approximately $4 billion, which includes a diverse mix of existing and new customers [25] - The company expects to win several contracts with values exceeding $100 million, which should help offset the impact of small business set-aside erosion [14][25] Company Strategy and Development Direction - The company is focused on accelerating organic growth and leveraging its digital transformation, cybersecurity, and systems engineering capabilities [13][16] - The management emphasized the importance of differentiating technology and innovation to drive future growth [14][16] - The company remains optimistic about its long-term vision and the potential for growth in the federal marketplace [12][16] Management's Comments on Operating Environment and Future Outlook - Management's initial assessment of the new administration's impact on the company's business remains neutral to slightly positive, with no material impact from recent executive orders [11] - The company is confident in its ability to navigate through the changing business climate and expects strong cash flow in upcoming quarters [12][24] Other Important Information - The company is investing in organic growth and enhancing its capabilities in cybersecurity and systems engineering [56] - The InfiniBite cloud product is being developed to expand its capabilities for secure federal government projects [48][51] Q&A Session Summary Question: Can you rank the items impacting revenue decline? - The most significant impact was from the unbundling of a DoD program, followed by small business revenue transitions, winding down of international work, and timing of services [30][34][41] Question: Are task orders from large IDIQs starting to come out? - The company is beginning to see opportunities from large IDIQs and is excited about the recent award of the Oasis contract [42][46] Question: Update on InfiniBite cloud product? - The company is enhancing the InfiniBite platform for large-scale data analytics services, focusing on secure programs required by the federal government [48][51] Question: Impact of continuing resolution on business? - The company anticipates minimal impact from the continuing resolution, as most programs are already appropriated [67][71]

FY2025 First Quarter Earnings Three Months Ended 12.31.24 February 6, 2025 CONFIDENTIAL & PROPRIETARY © Copyright 2025 DLH Holdings Corp. All Rights Reserved. 1 Call Participants Zach Parker President and Chief Executive Officer Kathryn JohnBull Chief Financial Officer CONFIDENTIAL & PROPRIETARY © Copyright 2025 DLH Holdings Corp. All Rights Reserved. 2 Forward-Looking Statements "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: CONFIDENTIAL & PROPRIETARY © Copyright 2025 D ...

DLH Reports Fiscal 2025 First Quarter Results Navigating Challenges in Company's Transformation Journey; Delivering Recent Wins and Growing Bid Pipeline to Improve Outlook for Organic Growth Atlanta, Georgia – February 5, 2025 - DLH Holdings Corp. (NASDAQ: DLHC) ("DLH" or the "Company"), a leading provider of science research and development, systems engineering and integration, and digital transformation and cyber security solutions to federal agencies, today announced financial results for its fiscal firs ...

Revenue Performance - Revenue for the three months ended December 31, 2024, was $90.782 million, a decrease of 7.1% from $97.850 million in the same period of 2023[9]. - Total revenue for the three months ended December 31, 2024, was $90,782,000, down from $97,850,000 in the same period of 2023, representing a decrease of approximately 7%[56]. - Revenue from the Department of Health and Human Services for the three months ended December 31, 2024, was $41,948,000, compared to $44,297,000 in 2023, a decline of about 5%[56]. - The Company recognized $49,400,000 in revenue from time and materials contracts for the three months ended December 31, 2024, down from $54,789,000 in 2023, a decrease of approximately 10%[56]. - As of December 31, 2024, the Company reported total revenue of $90,782,000, a decrease of 7.2% compared to $97,850,000 for the same period in 2023[56]. Net Income and Earnings Per Share - Net income for the three months ended December 31, 2024, was $1.115 million, down 48.2% from $2.151 million in the prior year[9]. - The company reported a basic net income per share of $0.08 for the three months ended December 31, 2024, down from $0.15 in the prior year, a decline of 46.7%[9]. - Basic earnings per share for the three months ended December 31, 2024, was $0.08, compared to $0.15 for the same period in 2023[89]. - Net income for the three months ended December 31, 2024, was $1,115,000, compared to $2,151,000 for the same period in 2023, reflecting a decrease of approximately 48%[89]. - Basic earnings per share decreased to $0.08 for Q4 2024 from $0.15 in Q4 2023, indicating a decline of about 47%[89]. Assets and Liabilities - Total current assets increased to $67.574 million as of December 31, 2024, compared to $52.957 million at September 30, 2024, reflecting a growth of 27.7%[12]. - Total liabilities rose to $213.569 million as of December 31, 2024, compared to $204.249 million at September 30, 2024, an increase of 4.4%[12]. - Total current liabilities increased to $64,688 thousand from $53,242 thousand, an increase of 21.5%[12]. - Total shareholders' equity increased to $111.440 million as of December 31, 2024, compared to $110.132 million at September 30, 2024, a rise of 1.2%[12]. - Total assets increased to $325,009 thousand as of December 31, 2024, up from $314,381 thousand on September 30, 2024, representing a growth of 3.1%[12]. Cash Flow and Debt - Operating cash flow for the three months ended December 31, 2024, was negative at $(11.538) million, compared to positive cash flow of $5.071 million in the same period of 2023[15]. - Cash at the end of the period increased to $451,000 from $342,000 at the beginning of the period, representing a growth of 31.9%[15]. - The company had an unused borrowing capacity of $11.8 million as of December 31, 2024, from a secured revolving line of credit with a ceiling of $50.0 million[79]. - The secured revolving line of credit had an outstanding balance of $24.5 million as of December 31, 2024, compared to $12.1 million as of September 30, 2024, indicating an increase of approximately 102.5%[74]. - Net bank debt obligations rose to $162,218,000 as of December 31, 2024, from $149,374,000 as of September 30, 2024[70]. Stock-Based Compensation and Options - Total stock option expense for the three months ended December 31, 2024, was $193,000, a decrease of 68.9% from $620,000 in the same period of 2023[81]. - Unrecognized stock-based compensation expense as of December 31, 2024, was $5.841 million, down from $8.522 million in 2023[85]. - The company had 1,187 stock options outstanding as of December 31, 2024, down from 1,237 options at September 30, 2024, indicating a decrease of about 4%[86]. - The number of vested and exercisable stock options decreased to 1,127 as of December 31, 2024, from 1,177 at September 30, 2024[86]. - The company issued a total of 78,556 restricted stock units as of December 31, 2024, compared to 61,525 units in 2023[84]. Goodwill and Intangible Assets - Goodwill remained unchanged at approximately $138.2 million as of December 31, 2024[63]. - Intangible assets, net, decreased to $104,207,000 as of December 31, 2024, from $108,321,000 as of September 30, 2024[64]. - The Company performed a qualitative assessment of goodwill impairment and concluded no impairment loss was warranted as of December 31, 2024[38]. - As of December 31, 2024, total intangible assets, net amounted to $104.2 million, down from $108.3 million as of September 30, 2024, reflecting a decrease of approximately 3.1%[64]. - The total accumulated amortization increased from $56.2 million to $60.3 million, indicating an increase of approximately 7.1%[64]. Lease Obligations - Operating lease right-of-use assets increased to $7,255,000 as of December 31, 2024, from $6,681,000 as of September 30, 2024[57]. - Total operating lease liabilities as of December 31, 2024, were $16,107,000, up from $15,441,000 as of September 30, 2024[57]. - Future minimum lease payments total $19,314,000, with a present value of $16,107,000 after deducting imputed interest of $3,207,000[59]. - Cash paid for amounts included in the measurement of lease liabilities was $968,000 for the three months ended December 31, 2024, compared to $1,237,000 in 2023[60]. - The non-cash increase in lease liabilities from an operating lease extension was $1.4 million during the current period[57].

Navigating Challenges in Company's Transformation Journey; Delivering Recent Wins and Growing Bid Pipeline to Improve Outlook for Organic GrowthATLANTA, Feb. 05, 2025 (GLOBE NEWSWIRE) -- DLH Holdings Corp. (NASDAQ: DLHC) (“DLH” or the “Company”), a leading provider of science research and development, systems engineering and integration, and digital transformation and cyber security solutions to federal agencies, today announced financial results for its fiscal first quarter ended December 31, 2024. First Q ...

ATLANTA, Jan. 23, 2025 (GLOBE NEWSWIRE) -- DLH Holdings Corp. (NASDAQ: DLHC) (“DLH” or the “Company”), a leading provider of science research and development, systems engineering and integration, and digital transformation and cyber security solutions to federal agencies, will release financial results for the fiscal first quarter ended December 31, 2024 on February 5, 2025 after the market closes. DLH will then host a conference call for the investment community at 10:00 a.m. Eastern Time the following day ...