First Quarter Highlights
- First quarter revenue was
$97.9 million in fiscal 2024 versus$72.7 million in fiscal 2023, reflecting the impact from the Company'sDecember 2022 acquisition. - Earnings were
$2.2 million , or$0.15 per diluted share, for the fiscal 2024 first quarter versus$1.5 million , or$0.11 per diluted share, for the first quarter of fiscal 2023, reflecting higher income from operations offset by increased interest expense - Earnings before interest, taxes, depreciation and amortization ("EBITDA") were
$11.1 million for the fiscal 2024 first quarter as compared to$6.3 million in the fiscal 2023 first quarter. - Total debt at the end of the first quarter was
$174.4 million compared to$179.4 million at the end of the fiscal 2023 fourth quarter, reflecting$5 million of voluntary prepayments during the quarter. - Contract backlog was
$653.5 million as ofDecember 31, 2023 , versus$704.8 million at the end of the fiscal 2023 fourth quarter.
Management Discussion
"Even with the government operating under a Continuing Resolution for a prolonged period of time, DLH has successfully navigated this period of uncertainty with a high degree of customer satisfaction and solid underlying results," said
Results for the Three Months Ended
Revenue for the first quarter of fiscal 2024 was
Income from operations was
Interest expense was
For the three months ended
On a non-GAAP basis, EBITDA for the three months ended
Key Financial Indicators
During the first quarter of fiscal 2024, DLH generated
As of
Conference Call and Webcast Details
DLH management will discuss first quarter results and provide a general business update, including current competitive conditions and strategies, during a conference call beginning at
A digital recording of the conference call will be available for replay two hours after the completion of the call and can be accessed on the DLH Investor Relations website or by dialing 877-344-7529 and entering the conference ID 1843140.
About DLH
DLH (NASDAQ: DLHC) enhances technology, public health, and cyber security readiness missions through science, technology, cyber, and engineering solutions and services. Our experts solve some of the most complex and critical missions faced by federal customers, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 3,200 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to innovative solutions to improve the lives of millions. For more information, visit www.DLHcorp.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or DLH`s future financial performance. Any statements that refer to expectations, projections or other characterizations of future events or circumstances or that are not statements of historical fact (including without limitation statements to the effect that the Company or its management “believes”, “expects”, “anticipates”, “plans”, “intends” and similar expressions) should be considered forward looking statements that involve risks and uncertainties which could cause actual events or DLH’s actual results to differ materially from those indicated by the forward-looking statements. Forward-looking statements in this release include, among others, statements regarding estimates of future revenues, operating income, earnings and cash flow. These statements reflect our belief and assumptions as to future events that may not prove to be accurate. Our actual results may differ materially from such forward-looking statements made in this release due to a variety of factors, including: the risk that we will not realize the anticipated benefits of acquisitions (including anticipated future financial performance and results); the diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations; the inability to retain employees and customers; contract awards in connection with re-competes for present business and/or competition for new business; our ability to manage our debt obligations; compliance with bank financial and other covenants; changes in client budgetary priorities; government contract procurement (such as bid and award protests, small business set asides, loss of work due to organizational conflicts of interest, etc.) and termination risks; the impact of inflation and higher interest rates; and other risks described in our
Such forward-looking statements are made as of the date hereof and may become outdated over time. The Company does not assume any responsibility for updating forward-looking statements, except as may be required by law.
CONTACTS:
INVESTOR RELATIONS |
Contact: |
Phone: 646-438-9385 |
Email: cwitty@darrowir.com |
TABLES TO FOLLOW
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands except per share amounts)
Three Months Ended | ||||||
2023 | 2022 | |||||
Revenue | $ | 97,850 | $ | 72,738 | ||
Cost of operations: | ||||||
Contract costs | 79,081 | 57,256 | ||||
General and administrative costs | 7,697 | 7,424 | ||||
Corporate development costs | — | 1,735 | ||||
Depreciation and amortization | 4,253 | 2,402 | ||||
Total operating costs | 91,031 | 68,817 | ||||
Income from operations | 6,819 | 3,921 | ||||
Interest expense | 4,658 | 1,830 | ||||
Income before provision for income taxes | 2,161 | 2,091 | ||||
Provision for income tax expense | 10 | 544 | ||||
Net income | $ | 2,151 | $ | 1,547 | ||
Net income per share - basic | $ | 0.15 | $ | 0.12 | ||
Net income per share - diluted | $ | 0.15 | $ | 0.11 | ||
Weighted average common stock outstanding | ||||||
Basic | 14,032 | 13,306 | ||||
Diluted | 14,796 | 14,276 | ||||
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except par value of shares)
ASSETS | ||||||
Current assets: | ||||||
Cash | $ | 131 | $ | 215 | ||
Accounts receivable | 55,577 | 59,119 | ||||
Other current assets | 2,916 | 3,067 | ||||
Total current assets | 58,624 | 62,401 | ||||
138,161 | 138,161 | |||||
Intangible assets, net | 120,663 | 124,777 | ||||
Operating lease right-of-use assets | 8,996 | 9,656 | ||||
Deferred taxes, net | 3,076 | 3,070 | ||||
Equipment and improvements, net | 1,625 | 1,590 | ||||
Other long-term assets | 185 | 186 | ||||
Total assets | $ | 331,330 | $ | 339,841 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable and accrued liabilities | $ | 22,307 | $ | 29,704 | ||
Debt obligations - current, net of deferred financing costs | 16,130 | 17,188 | ||||
Accrued payroll | 15,703 | 13,794 | ||||
Operating lease liabilities - current | 3,353 | 3,463 | ||||
Other current liabilities | 564 | 638 | ||||
Total current liabilities | 58,057 | 64,787 | ||||
Long-term liabilities: | ||||||
Debt obligations - long-term, net of deferred financing costs | 151,870 | 155,147 | ||||
Operating lease liabilities - long-term | 15,042 | 15,908 | ||||
Other long-term liabilities | 1,559 | 1,560 | ||||
Total long-term liabilities | 168,471 | 172,615 | ||||
Total liabilities | 226,528 | 237,402 | ||||
Shareholders' equity: | ||||||
Common stock, | 14 | 14 | ||||
Additional paid-in capital | 100,186 | 99,974 | ||||
Retained earnings | 4,602 | 2,451 | ||||
Total shareholders’ equity | 104,802 | 102,439 | ||||
Total liabilities and shareholders' equity | $ | 331,330 | $ | 339,841 | ||
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
Three Months Ended | ||||||||
2023 | 2022 | |||||||
Operating activities | ||||||||
Net income | $ | 2,151 | $ | 1,547 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 4,253 | 2,402 | ||||||
Amortization of deferred financing costs charged to interest expense | 642 | 276 | ||||||
Stock-based compensation expense | 620 | 552 | ||||||
Deferred taxes, net | (6 | ) | (13 | ) | ||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | 3,542 | 780 | ||||||
Other assets | 510 | 994 | ||||||
Accounts payable and accrued liabilities | (7,397 | ) | 1,075 | |||||
Accrued payroll | 1,909 | 347 | ||||||
Other liabilities | (1,153 | ) | 13 | |||||
Net cash provided by operating activities | 5,071 | 7,973 | ||||||
Investing activities | ||||||||
Business acquisition, net of cash acquired | — | (179,958 | ) | |||||
Purchase of equipment and improvements | (174 | ) | (384 | ) | ||||
Net cash used in investing activities | (174 | ) | (180,342 | ) | ||||
Financing activities | ||||||||
Proceeds from revolving line of credit | 69,831 | — | ||||||
Repayment of revolving line of credit | (64,026 | ) | — | |||||
Proceeds from debt obligations | — | 200,703 | ||||||
Repayments of debt obligations | (10,378 | ) | (19,327 | ) | ||||
Payments of deferred financing costs | — | (7,221 | ) | |||||
Proceeds from issuance of common stock upon exercise of options and warrants | 261 | — | ||||||
Payment of tax obligations resulting from net exercise of stock options | (669 | ) | (650 | ) | ||||
Net cash (used in) provided by financing activities | (4,981 | ) | 173,505 | |||||
Net change in cash | (84 | ) | 1,136 | |||||
Cash - beginning of year | 215 | 228 | ||||||
Cash - end of year | $ | 131 | $ | 1,364 | ||||
Supplemental disclosures of cash flow information | ||||||||
Cash paid during the year for interest | $ | 3,972 | $ | 339 | ||||
Cash paid during the year for income taxes | $ | — | $ | 5 | ||||
Supplemental disclosures of non-cash activity | ||||||||
Common stock surrendered for the exercise of stock options | $ | 244 | $ | 238 | ||||
Non-GAAP Financial Measures
The Company uses EBITDA and EBITDA as a percent of revenue as supplemental non-GAAP measures of performance. We define EBITDA as net income excluding (i) interest expense, (ii) Provision for income tax expense and (iii) depreciation and amortization. EBITDA as a percent of revenue is EBITDA for the measurement period divided by revenue for the same period.
These non-GAAP measures of performance are used by management to conduct and evaluate its business during its review of operating results for the periods presented. Management and the Company's Board utilize these non-GAAP measures to make decisions about the use of the Company's resources, analyze performance between periods, develop internal projections and measure management performance. We believe that these non-GAAP measures are useful to investors in evaluating the Company's ongoing operating and financial results and understanding how such results compare with the Company's historical performance. EBITDA is not a recognized measurement under accounting principles generally accepted in
Reconciliation of GAAP net income to EBITDA, a non-GAAP measure:
Three Months Ended | ||||||||||||
(in thousands) | 2023 | 2022 | Change | |||||||||
Net income | $ | 2,151 | $ | 1,547 | $ | 604 | ||||||
(i) Interest expense, net | 4,658 | 1,830 | 2,828 | |||||||||
(ii) Provision for income tax expense | 10 | 544 | (534 | ) | ||||||||
(iii) Depreciation and amortization | 4,253 | 2,402 | 1,851 | |||||||||
EBITDA | $ | 11,072 | $ | 6,323 | $ | 4,749 | ||||||
Net income as a % of revenue | 2.2 | % | 2.1 | % | 0.1 | % | ||||||
EBITDA as a % of revenue | 11.3 | % | 8.7 | % | 2.6 | % | ||||||
Revenue | $ | 97,850 | $ | 72,738 | $ | 25,112 |
Source:
2024 GlobeNewswire, Inc., source