Part I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) DLH provides technology-enabled health solutions to federal agencies, facing recompete risks for key VA contracts - DLH delivers health and readiness solutions to federal government customers, focusing on digital transformation, cybersecurity, R&D, and systems engineering[11](index=11&type=chunk) Revenue by Major Customer (FY 2024 vs. FY 2023) | Customer | Revenue (FY 2024, in thousands) | Percent of Total (FY 2024) | Revenue (FY 2023, in thousands) | Percent of Total (FY 2023) | | :--- | :--- | :--- | :--- | :--- | | Dept. of Health and Human Services | $184,544 | **46.6%** | $161,311 | **42.9%** | | Dept. of Veterans Affairs | $139,945 | **35.3%** | $138,862 | **37.0%** | | Dept. of Defense | $64,128 | **16.2%** | $70,325 | **18.7%** | | Other Customers | $7,320 | **1.9%** | $5,374 | **1.4%** | | **Total Revenue** | **$395,937** | **100.0%** | **$375,872** | **100.0%** | - The company's major contracts with the VA for the Consolidated Mail Outpatient Pharmacy (CMOP) program, which generated approximately **$139.9 million** in FY2024, are being re-procured as set-asides for Service-Disabled Veteran-Owned Small Businesses (SDVOSB), posing a significant recompete risk[27](index=27&type=chunk)[28](index=28&type=chunk)[30](index=30&type=chunk) Backlog Summary (as of Sep 30) | Backlog Type | 2024 | 2023 | | :--- | :--- | :--- | | Total Backlog | $690.3 million | $704.8 million | | Funded Backlog | $155.1 million | $169.9 million | - As of September 30, 2024, the company employed approximately **2,800 people**[47](index=47&type=chunk) [Item 1A. Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) Reliance on federal contracts, especially VA CMOP, and cybersecurity threats pose significant risks - The company derives **98%** of its revenue from federal government agencies, making it highly dependent on government contracts and spending priorities[59](index=59&type=chunk) - A significant risk is the concentration of revenue in contracts with the VA and HHS. The VA's CMOP contracts are currently subject to renewal solicitations set aside for SDVOSBs, which could materially impact future revenue if the company is not successful in the recompete[61](index=61&type=chunk) - The business is subject to risks from the U.S. government's annual budget and appropriations process, including potential delays, shutdowns, or funding cuts that could adversely affect revenue and cash flows[67](index=67&type=chunk)[70](index=70&type=chunk) - Cybersecurity incidents, including data breaches or system shutdowns, pose a significant risk that could lead to reputational damage, loss of clients, and financial liability[102](index=102&type=chunk)[104](index=104&type=chunk) - The company has substantial debt incurred from acquisitions, which requires adherence to strict financial covenants and dedicates a significant portion of cash flow to debt service[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) [Item 1B. Unresolved Staff Comments](index=22&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved comments from the SEC staff - There are no unresolved staff comments[157](index=157&type=chunk) [Item 1C. Cybersecurity](index=23&type=section&id=Item%201C.%20CYBERSECURITY) DLH's cybersecurity program, aligned with NIST and government standards, is overseen by the Board - The cybersecurity program is designed to align with the NIST Cybersecurity Framework and comply with regulations including FedRAMP, FISMA, and CMMC[159](index=159&type=chunk) - Oversight is provided by the Board's Cybersecurity, Technology, and Biomedical Research (CTBR) Committee, which receives regular briefings from management[161](index=161&type=chunk) - To date, the company has not identified any cybersecurity threats that have materially affected or are reasonably likely to materially affect its business[162](index=162&type=chunk) [Item 2. Properties](index=24&type=section&id=Item%202.%20Properties) DLH leases all its facilities, totaling **93.7 thousand** square feet, with **$4.0 million** in FY2024 lease expense - The company leases all its facilities, occupying a total of approximately **93.7 thousand** square feet across seven U.S. locations and one in Uganda[164](index=164&type=chunk) - Total lease expense for the fiscal year ended September 30, 2024, was approximately **$4.0 million**[164](index=164&type=chunk) [Item 3. Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) The company is unaware of any pending litigation likely to materially affect its financial results - The Company is not aware of any pending or threatened litigation that it believes is reasonably likely to have a material adverse effect on its results of operations, financial position or cash flows[165](index=165&type=chunk) [Item 4. Mine Safety Disclosure](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to the company's business - Not applicable[166](index=166&type=chunk) Part II [Item 5. Market For the Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%205.%20Market%20For%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) DLH common stock trades on Nasdaq under DLHC, with no history or intent to pay cash dividends - The company's common stock trades on The Nasdaq Capital Market under the symbol "**DLHC**"[169](index=169&type=chunk) - DLH has not declared or paid any cash dividends on its common stock and does not intend to in the foreseeable future[170](index=170&type=chunk) [Item 6. Selected Financial Data](index=25&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is reserved, indicating no financial data is presented - This item is marked as "RESERVED", indicating no data is presented[175](index=175&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY2024 revenue grew **5.3%** to **$395.9 million**, net income significantly higher from non-recurring charges Consolidated Statements of Operations Summary (in thousands) | Metric | FY 2024 | FY 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $395,937 | $375,872 | $20,065 | **5.3%** | | Income from operations | $24,900 | $17,091 | $7,809 | **45.7%** | | Net income | $7,397 | $1,461 | $5,936 | **406.3%** | | Diluted EPS | $0.51 | $0.10 | $0.41 | **410.0%** | - The significant increase in net income was primarily due to the non-recurrence of a **$7.7 million** impairment loss and **$1.7 million** in corporate development costs that were recorded in fiscal 2023[193](index=193&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net income | $7,397 | $1,461 | | Interest expense, net | $17,153 | $16,271 | | Provision for income tax | $350 | $(641) | | Depreciation and amortization | $17,052 | $15,562 | | **EBITDA** | **$41,952** | **$32,653** | | Impairment loss of long-lived asset | — | $7,673 | | Corporate development costs | — | $1,735 | | **Adjusted EBITDA** | **$41,952** | **$42,061** | Summary of Cash Flows (in thousands) | Cash Flow Activity | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $27,366 | $31,033 | | Net cash used in investing activities | $(836) | $(181,197) | | Net cash (used in) provided by financing activities | $(26,403) | $150,151 | - As of September 30, 2024, the company had **$0.3 million** in cash and approximately **$32.5 million** in credit facility availability[205](index=205&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Interest rate risk on variable debt is partially mitigated by an **$80.0 million** floating-to-fixed swap - The main market risk is interest rate changes on variable-rate debt. The company uses an **$80.0 million** floating-to-fixed interest rate swap to mitigate this risk, fixing the rate at **4.10%** for that portion[233](index=233&type=chunk) - A hypothetical **1.0%** increase in the SOFR interest rate would result in an approximate **$0.7 million** increase in annual interest expense[234](index=234&type=chunk) [Item 8. Financial Statements and Supplemental Data](index=34&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplemental%20Data) Audited financial statements received an unqualified opinion, with revenue recognition noted as a critical audit matter - The independent auditor, WithumSmith+Brown, PC, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of September 30, 2024[238](index=238&type=chunk) - The auditor identified Revenue Recognition as a critical audit matter due to the high degree of auditor effort required in performing procedures, including the testing of contract assets[246](index=246&type=chunk)[247](index=247&type=chunk) Key Balance Sheet Data (as of Sep 30, in thousands) | Account | 2024 | 2023 | | :--- | :--- | :--- | | Total Current Assets | $52,957 | $62,401 | | Goodwill | $138,161 | $138,161 | | Total Assets | $314,381 | $339,841 | | Total Current Liabilities | $53,242 | $64,787 | | Total Debt Obligations (net) | $149,374 | $172,335 | | Total Liabilities | $204,249 | $237,402 | | Total Shareholders' Equity | $110,132 | $102,439 | [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=56&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no disagreements with its accountants on accounting or financial disclosure matters - None[346](index=346&type=chunk) [Item 9A. Controls and Procedures](index=56&type=section&id=Item%209A.%20Controls%20and%20Procedures) Disclosure controls and internal control over financial reporting were effective as of September 30, 2024 - Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2024[347](index=347&type=chunk) - Management's assessment, based on the COSO framework, concluded that internal control over financial reporting was effective as of September 30, 2024[351](index=351&type=chunk) - No changes in internal control over financial reporting occurred during the fourth quarter that materially affected, or are reasonably likely to materially affect, internal controls[354](index=354&type=chunk) [Item 9B. Other Information](index=57&type=section&id=Item%209B.%20Other%20Information) The company reports no other information required to be disclosed - None[355](index=355&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=57&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[357](index=357&type=chunk) Part III [Items 10-14](index=58&type=section&id=Items%2010-14) Information for these items is incorporated by reference from the company's definitive proxy statement - Information for Items 10 (Directors, Executive Officers and Corporate Governance), 11 (Executive Compensation), 12 (Security Ownership), 13 (Certain Relationships and Related Transactions), and 14 (Principal Accountant Fees and Services) is incorporated by reference from the company's definitive proxy statement[358](index=358&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=58&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This item lists financial statements and provides an index of exhibits - This item contains the list of financial statements filed with the report and an index of exhibits, such as material contracts and certifications[364](index=364&type=chunk)[367](index=367&type=chunk) [Item 16. Form 10-K Summary](index=60&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary of the Form 10-K - None[371](index=371&type=chunk)

ATLANTA, Dec. 04, 2024 (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 health IT and readiness agencies, today announced financial results for its fiscal fourth quarter and fiscal year ended September 30, 2024. Recent Highlights Reduced debt to $154.6 million as of September 30, 2024 versus $179.4 million as of Septemb ...

ATLANTA, Nov. 20, 2024 (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 fourth quarter ended September 30, 2024 on December 4, 2024 after the market closes. DLH will then host a conference call for the investment community at 10:00 a.m. Eastern Time the following d ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): November 13, 2024 DLH Holdings Corp. | --- | --- | --- | --- | |--------------------------------------------------|-------------------------------------------------------------------------------------|------------------------|-------------------------------------------------------| | (Exact \nN ...

Group 1 - The stock of DLH Holdings Corp. (DLHC) is experiencing significant attention due to high implied volatility in the options market, particularly for the Nov 15, 2024 $7.50 Put option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in DLH's stock price, potentially due to an upcoming event [2] - DLH currently holds a Zacks Rank 4 (Sell) in the Staffing Firms industry, which is in the bottom 27% of the Zacks Industry Rank, indicating a negative outlook from analysts [3] Group 2 - Over the past 60 days, no analysts have raised their earnings estimates for DLH for the current quarter, while one analyst has lowered their estimate, resulting in a decrease in the Zacks Consensus Estimate from 17 cents per share to 11 cents [3] - The high implied volatility may present a trading opportunity, as options traders often seek to sell premium on options with high implied volatility, hoping the stock does not move as much as expected by expiration [4]

Financial Data and Key Metrics Changes - The company reported third quarter revenue of $100.7 million, down from $102.2 million in the prior year period, reflecting a decrease due to the transition of some programs to small business set-aside contracts [12][5] - EBITDA for the third quarter was $10 million, compared to $11.4 million in the previous year, primarily due to a higher-than-normal contribution from lower-margin non-labor pass-through revenue [12][5] - Operating cash flow for the period was $4.6 million, contributing to a year-to-date cash flow of $14.9 million [5] Business Line Data and Key Metrics Changes - The company experienced growth in public health and enterprise IT management sectors, which helped offset the revenue decline from small business transitions [12][7] - The transition of small business set-aside work negatively impacted third quarter sales, but demand for services in core markets remained strong [7][8] Market Data and Key Metrics Changes - The company anticipates several new business opportunities from core markets, with potential award decisions expected in the near term [6][8] - The government’s commitment to small business set-asides is expected to impact legacy contracts, with some contracts anticipated to run out in the coming quarters [17][34] Company Strategy and Development Direction - The company is focused on deleveraging its balance sheet and investing in new business development activities [6][5] - Enhancing the workforce's presence as thought leaders is a significant element of the growth strategy, with experts publishing research in relevant fields [10][11] - The company aims to maintain strong agency relationships and leverage advanced solutions and digital transformation capabilities to support growth [8][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current award environment and the potential for new program wins, which could bolster top-line growth [6][8] - The company is aware of the challenges posed by the transition to small business set-asides but remains confident in its ability to adapt and compete effectively [17][34] - Management highlighted the importance of upcoming contract awards and the potential impact on revenue and margins [38][39] Other Important Information - The company paid off approximately $4.3 million of higher interest floating rate debt during the quarter, ending with $166.5 million in total debt [13] - The anticipated debt reduction at the end of Q4 is projected to be between $157 million and $160 million, maintaining a debt leverage ratio below 3.5x [13] Q&A Session Summary Question: Revenue came in lower than expected, can you provide more color on the soft business award runoff? - Management acknowledged the impact of small business set-aside transitions on revenue and indicated that some contracts are expected to run off in the coming quarters [15][17] Question: Can you provide an update on the CMOP contracts and confidence in recompeting? - Management noted that the VA has reopened competition for CMOP contracts, and while there are challenges, they believe they have a good probability of winning some contracts [20][22] Question: What is driving the decrease in gross margin? - The decrease in gross margin is attributed to a higher contribution of lower-margin pass-through costs compared to the prior period [25] Question: How much of the $100 million revenue is related to small business contracts? - Management indicated that small business contracts represent a negligible portion of total revenue, estimated to be less than 5% [31][32] Question: Can you quantify total proposals outstanding that are pending adjudication? - Management mentioned that there are over two dozen opportunities that could materially affect growth by mid-FY'25 [36][38] Question: What progress is being made on increasing proposal submissions? - Management expressed excitement about improvements in business development capabilities and the ability to pursue larger contracts with higher win probabilities [40][42]

DLH Holdings Corp. (DLHC) came out with quarterly earnings of $0.08 per share, missing the Zacks Consensus Estimate of $0.14 per share. This compares to earnings of $0.12 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -42.86%. A quarter ago, it was expected that this company would post earnings of $0.13 per share when it actually produced earnings of $0.12, delivering a surprise of -7.69%. Over the last four quarters, the co ...

DLH Reports Fiscal 2024 Third Quarter Results Debt Reduction Continues as Company Sees Increased Bid Activity to Close Out Fiscal 2024 Atlanta, Georgia – July 31, 2024 - 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 health IT and readiness agencies, today announced financial results for its fiscal third quarter ended June 30, 2024. Thir ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 0-18492 | --- | --- | |-----------------------------------------------------------------------------------------------|------------------------------- ...

ATLANTA, July 31, 2024 (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 health IT and readiness agencies, today announced financial results for its fiscal third quarter ended June 30, 2024. Third Quarter Highlights Third quarter revenue was $100.7 million in fiscal 2024 versus $102.2 million in fiscal 2023, reflecting g ...