DLH Holdings Corp. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>DLH Holdings Corp. filed its Q2 2024 10-Q, detailing financial performance and risks, including significant revenue from the Department of Health and Human Services.</b>

AI Summary

DLH Holdings Corp. (DLHC) filed a Quarterly Report (10-Q) with the SEC on May 1, 2024. DLH Holdings Corp. reported financial results for the quarter and six months ended March 31, 2024. The company's fiscal year ends on September 30. The filing covers the period from October 1, 2023, to March 31, 2024. Key financial statement information, including common stock, additional paid-in capital, and retained earnings, is detailed for various periods. Customer concentration risk related to the Department of Health and Human Services is noted for revenue from contracts.

Why It Matters

For investors and stakeholders tracking DLH Holdings Corp., this filing contains several important signals. This filing provides investors with the latest financial performance data for DLH Holdings Corp., crucial for assessing the company's health and investment potential. The mention of customer concentration risk with the Department of Health and Human Services highlights a key dependency and potential vulnerability for the company's revenue stream.

Risk Assessment

Risk Level: medium — DLH Holdings Corp. shows moderate risk based on this filing. The company's reliance on the Department of Health and Human Services for a significant portion of its revenue presents a medium risk, as changes in government contracts or funding could materially impact financial results.

Analyst Insight

Investors should monitor DLH Holdings Corp.'s relationship with the Department of Health and Human Services and any potential diversification strategies to mitigate concentration risk.

Key Numbers

• 2024-03-31 — Reporting Period End Date (Conformed period of report)
• 2024-05-01 — Filing Date (Filed as of date)
• 7363 — Standard Industrial Classification (SIC code for Services-Help Supply Services)

Key Players & Entities

• DLH Holdings Corp. (company) — Filer name
• Department of Health and Human Services (company) — Customer concentration risk

FAQ

Risk Factors

• Customer Concentration Risk [medium — market]: The company's revenue is significantly dependent on contracts with the Department of Health and Human Services, making it vulnerable to changes in government funding or contract awards.

Industry Context

DLH Holdings Corp. operates within the Services-Help Supply Services industry (SIC 7363), which involves providing staffing and related services.

Regulatory Implications

The company's significant revenue from government contracts, particularly with the Department of Health and Human Services, subjects it to federal procurement regulations and potential changes in government spending.

What Investors Should Do

1. Analyze the specific revenue figures and growth trends for DLH Holdings Corp. in the Q2 2024 filing.
2. Assess the impact of customer concentration risk with the Department of Health and Human Services on the company's future outlook.
3. Review the company's balance sheet and cash flow statements for the period ending March 31, 2024, to understand its financial stability.

Key Dates

• 2024-03-31: Quarterly Period End — Financial results for the period ending March 31, 2024, are reported.
• 2024-05-01: Filing Date — The 10-Q report was officially filed on this date.

Year-Over-Year Comparison

This 10-Q filing provides updated financial information for the quarter and six months ended March 31, 2024, compared to previous periods.

Key Financial Figures

• $0.001 — 2,891 shares of Common Stock, par value $0.001 per share, were outstanding as of April

Filing Documents

• dlhc-20240331.htm (10-Q) — 1111KB
• exhibit311.htm (EX-31.1) — 4KB
• exhitbit312.htm (EX-31.2) — 4KB
• exhitbit32.htm (EX-32) — 2KB
• exhibit311001.jpg (GRAPHIC) — 199KB
• exhitbit312001.jpg (GRAPHIC) — 199KB
• exhitbit32001.jpg (GRAPHIC) — 99KB
• 0000785557-24-000037.txt (&nbsp;) — 7071KB
• dlhc-20240331.xsd (EX-101.SCH) — 43KB
• dlhc-20240331_cal.xml (EX-101.CAL) — 97KB
• dlhc-20240331_def.xml (EX-101.DEF) — 157KB
• dlhc-20240331_lab.xml (EX-101.LAB) — 557KB
• dlhc-20240331_pre.xml (EX-101.PRE) — 393KB
• dlhc-20240331_htm.xml (XML) — 971KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION 3 ITEM I: FINANCIAL STATEMENTS 3 CONSOLIDATED STATEMENTS OF OPERATIONS 3 CONSOLIDATED BALANCE SHEETS 4 CONSOLIDATED STATEMENTS OF CASH FLOWS 5 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY 6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7

: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 21

: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 30

: CONTROLS AND PROCEDURES

ITEM 4: CONTROLS AND PROCEDURES 30

OTHER INFORMATION

PART II OTHER INFORMATION 31

: LEGAL PROCEEDINGS

ITEM 1: LEGAL PROCEEDINGS 31

: RISK FACTORS

ITEM 1A: RISK FACTORS 31

: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 31

: DEFAULTS UPON SENIOR SECURITIES

ITEM 3: DEFAULTS UPON SENIOR SECURITIES 31

: MINE SAFETY DISCLOSURES

ITEM 4: MINE SAFETY DISCLOSURES 31

: OTHER INFORMATION

ITEM 5: OTHER INFORMATION 31

: EXHIBITS

ITEM 6: EXHIBITS 33 SIGNATURE 34 2

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION ITEM I: FINANCIAL STATEMENTS DLH HOLDINGS CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except per share amounts) Three Months Ended Six Months Ended March 31, March 31, 2024 2023 2024 2023 Revenue $ 101,007 $ 99,417 $ 198,857 $ 172,155 Cost of operations: Contract costs 79,112 78,238 158,193 135,494 General and administrative costs 11,710 10,693 19,407 18,117 Corporate development costs — — — 1,735 Depreciation and amortization 4,243 4,535 8,496 6,937 Total operating costs 95,065 93,466 186,096 162,283 Income from operations 5,942 5,951 12,761 9,872 Interest expenses 4,190 4,765 8,848 6,595 Income before provision for income tax 1,752 1,186 3,913 3,277 Provision for income tax (benefit) expense ( 60 ) 381 ( 50 ) 925 Net income $ 1,812 $ 805 $ 3,963 $ 2,352 Net income per share - basic $ 0.13 $ 0.06 $ 0.28 $ 0.17 Net income per share - diluted $ 0.12 $ 0.06 $ 0.27 $ 0.16 Weighted average common stock outstanding Basic 14,205 13,759 14,118 13,530 Diluted 14,946 14,600 14,823 14,447 The accompanying notes are an integral part of these consolidated financial statements. 3 DLH HOLDINGS CORP. CONSOLIDATED BALANCE SHEETS (in thousands, except par value of shares) March 31, 2024 September 30, 2023 (unaudited) ASSETS Current assets: Cash $ 238 $ 215 Accounts receivable 55,457 59,119 Other current assets 2,221 3,067 Total current assets 57,916 62,401 Goodwill 138,161 138,161 Intangible assets, net 116,549 124,777 Operating lease right-of-use assets 8,315 9,656 Deferred taxes, net 3,028 3,070 Equipment and improvements, net 1,787 1,590 Other long-term assets 186 186 Total assets $ 325,942 $ 339,841 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 23,035 $ 29,704 Debt obligations - current, net of deferred financing costs 17,178 17,188 Accrued payroll 11,756 13,794 Operating lease liabilities - current 3,242 3,463

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) March 31, 2024 1. Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of DLH Holdings Corp. and its wholly-owned subsidiaries (together with its subsidiaries, "DLH" or the "Company" and also referred to as "we," "us" and "our"). All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by GAAP for complete financial statements. Operating results for the six months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending September 30, 2024 or any future period. Amounts as of March 31, 2024 and for the six and three months ended March 31, 2024 are unaudited. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2023 filed with the Securities and Exchange Commission on December 6, 2023. 2. Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The most significant of these estimates and assumptions relate to estimating costs including overhead and its allocation, valuing and determining the amortization periods for long-lived intangible assets, interest rate swaps

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View this 10-Q filing on SEC EDGAR