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DLH Holdings Corp. announced today financial results for its third quarter ended June 30, 2012.

DLH Holdings Corp. (NASDAQ: DLHC), a leading healthcare and logistics services provider to the Federal Government, including the Departments of Defense and Veterans Affairs, announced today financial results for its third quarter ended June 30, 2012.

Commenting on the Company’s results, President and Chief Executive Officer of DLH, Mr. Zachary Parker stated, “Third quarter results continue to reflect the impact of the renewed and enhanced CMOPs contract. Quarterly revenues increased 19.3% over last year and our gross profit margin was 12.6%, up sequentially from the second quarter’s 10.3%. While we are pleased with these improvements, we do understand that we still have a lot of work to do as we incurred losses in the quarter. The loss for the quarter reflects expenses related to staff adjustments and higher than usual bid and proposal expenses due to strong new business development activity.”

Mr. Parker added, “The third quarter enabled us to accomplish several in-house actions necessary to

bolster our growth plans, including a successful rights offering of $4.2 million, expansion of the Company’s credit facility with its lender Presidential Financial and rebranding efforts including our

Company name change. We continue to attract talent with deep industry experience, including our new CFO, Kathryn JohnBull. We believe that all of these items will improve our competitive footprint and enable us to pursue bids for contracts that are in our business development pipeline.”

Mr. Parker concluded, “While we believe that we are positioned well for future growth opportunities,

various funding uncertainties at the Federal government level continues to lurk, which at times creates delays in new awards. In the interim, we continue to keep tight expense controls, and consistently evaluate potential bid opportunities to assure their strategic fit in our business pipeline. We are confident in our ability to receive additional government contracts, thanks in part to our impeccable track record and we are excited about our prospects, which are of utmost importance in our long term goal of improving shareholder value.”

Three Month Results

Revenues from DLH’s continuing operations for the three months ended June 30, 2012 and 2011 were

$12.6 million and $10.6 million, respectively, which represents an increase of $2.0 million or 19.3%

despite extended government delays in major awards. The increase in operating revenues is due primarily to new business awards.

Gross profit for the three months ended June 30, 2012 and 2011 was $1.6 million and $1.5 million,

respectively, which represents an increase of $0.1 million or 5.1%. Gross profit from continuing

operations, as a percentage of revenue, was 12.6% and 14.3%, for the three months ended June 30, 2012 and 2011, respectively. While gross profit benefited from the additional volume of revenue, the average unit price of hours delivered decreased year over year, reflecting the competitive marketplace, yielding lower gross margins overall, as a percent of revenue. Average cost of performance per hour decreased year over year.

General and administrative (“G&A”) expenses primarily relates to functions such as operations overhead, corporate management, legal, finance, accounting, contracts, administration, human resources, management information systems, and business development. G&A expenses for the three months ended June 30, 2012 and 2011 were $2.2 million and $1.8 million, respectively, which represent an increase of $0.4 million, or 23.9%. The key contributors to the year over year growth in G&A expenses were the severance expenses of $0.2 million related to staff adjustments in the three months ended June 30, 2012 as well expanded new business development activity related to proposals delivered.

Loss from operations for the three months ended June 30, 2012 was $0.6 million as compared to loss

from operations for the three months ended June 30, 2011 of $0.3 million.

Loss from continuing operations for the three months ended June 30, 2012 was $0.6 million, or ($0.09) per basic and diluted share, as compared to loss from continuing operations of $0.4 million, or ($0.07) per basic and diluted share for the three months ended June 30, 2011.

Earning (Loss) Before Interest Tax Depreciation and Amortization (“EBITDA”) adjusted for other noncash charges (“Adjusted EBITDA”(1)) for the three months ended June 30, 2012 was ($498,000) as

compared to ($225,000) for the three months ended June 30, 2011. The additional loss is primarily

attributable to the increased G&A expense described above.

Nine Month Results

Revenues from DLH’s operations from the nine months ended June 30, 2012 and 2011 were $36.7

million and $31.6 million respectively, which represents an increase of $5.1 million or 16.2% over the

prior fiscal period. The increase in revenues from continuing operations is due primarily to the impact of new business awards.

Gross profit for the nine months ended June 30, 2012 and 2011 were $4.4 million and $4.3 million,

respectively which represents an increase $0.1 million or 2.7% over the prior fiscal year period. Gross

profit from continuing operations, as a percentage of revenue, was 12.1% and 13.7%, for the nine months ended June 30, 2012 and 2011, respectively. As discussed above, the competitive pressures on contract price contributed most significantly to the reduction in gross margins as a percent of revenue.

G&A expenses for the nine months ended June 30, 2012 and 2011 were $5.8 million and $4.9 million,

respectively, which represent an increase of $0.9 million, or 18.1%. The key contributors to the year over year growth in G&A expenses were the severance expenses of $0.2 million related to staff adjustments in the nine months ended June 30, 2012, costs associated with start up of new contracts during the year, noncash expense associated with stock grants and expanded new business development activity related to proposals delivered.

Loss from operations for nine months ended June 30, 2012 was $1.4 million as compared to loss from

operations for the nine months ended June 30, 2011 of $0.6 million. The additional loss is principally

related to increased G&A expenses in the three and nine months ended June 30, 2012, as described above.

Loss from continuing operations for the nine months ended June 30, 2012 was $1.7 million, or ($0.27) per basic and diluted share, as compared to loss from continuing operations of $0.9 million, or ($0.17) per basic and diluted share for the nine months ended June 30, 2011. The increase in loss from continuing operations reflect the same factors resulting in the increased loss from operations.

Earnings (Loss) Before Interest Tax Depreciation and Amortization (“EBITDA”) adjusted for other noncash charges (“Adjusted EBITDA”(1)) for the nine months ended June 30, 2012 was ($1,003,000) as compared to ($439,000) for the nine months ended June 30, 2011, largely due to the increased G&A expenses described above.

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