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DLH Meets Its Goals

DLH Meets Its Goals

Quarterly revenues increased 6.7% year over year 

Gross profit grew 24.2% versus the prior year  

Company delivered positive net income for the quarter ended June 30, 2013  

Company reported third consecutive quarter of revenue growth 

Management to conduct conference call/webcast today, August 14, 2013, at 11:00 a.m. EST 

DLH Holdings Corp. a technical services provider to Federal government agencies specializing in healthcare, logistics, and contingency response announced today financial results for its third quarter ended June 30, 2013.  The company reported quarterly revenue at $13.5 million and achieved positive net income.

Table 1 - Financial Highlights

 

For the Three Months Ended

For the Nine Months Ended

 

June 30,

June 30,

($ in thousands, except per share amounts)

2013

2012

2013

2012

Operating revenues

$

13,460

 

$

12,618

 

$

39,462

 

$

36,732

Gross profit

$

1,975

 

$

1,590

 

$

5,535

 

$

4,455

Gross profit %

14.7

%

12.6

%

14.0

%

12.1

%

Income (loss) from operations

$

158

 

$

(625

)

$

74

 

$

(1,399

)

Net income (loss)

$

68

 

$

(568

)

$

(169

)

$

(1,672

)

Income (loss) per share - basic and diluted

$

0.01

 

$

(0.09

)

$

(0.02

)

$

(0.27

)

Other Data

 

 

 

 

Adjusted EBITDA (1)

$

228

 

$

(498

)

$

337

 

$

(1,003

)

Management Discussion

Commenting on the Company's results, President and Chief Executive Officer of DLH, Zach Parker stated:  "Our third quarter met our overall goals and expectations, and we are pleased to report that the Company has posted positive net income for the quarter in addition to continued revenue growth. We believe that our third consecutive quarter of positive adjusted EBITDA is indicative of a sustainable trend.  We further believe that the markets we have targeted will enhance our ability to weather the government sequestration issues. As always, we remain focused on long-term growth and improving shareholder value."

The Company's FY13 Q3 results reflect that quarterly revenues increased 6.7% over the third quarter of FY12.

Kathryn JohnBull, DLH CFO, added: "Our third quarter results reflect our successful efforts to control costs while delivering world-class support to our customers and partners. While there are many risk factors that we continue to manage through, we believe we have refined our business model to support our ability to consistently deliver positive adjusted EBITDA.  This quarter notably marks three consecutive quarters of revenue growth.  Additionally, the Company's gross profit has increased 24.2% over the previous year, based on improved contract performance and cost management."

Results for Three Months Ended June 30, 2013

 
Revenues for the three months ended June 30, 2013 and 2012 were $13.5 million and $12.6 million, respectively, which represents an increase of $0.9 million or 6.7%, despite extended government delays in major awards. The increase in revenue is due primarily to expansion on current programs.

Gross profit for the three months ended June 30, 2013 and 2012 was $2.0 million and $1.6 million, respectively, which represents an increase of $0.4 million or 24.2%. As a percentage of revenue, gross profit was 14.7% and 12.6%, for the three months ended June 30, 2013 and 2012, respectively. The gross profit rate benefited from improved contract performance and cost management.

Total G&A expenses for the three months ended June 30, 2013 and 2012 were $1.8 million and $2.2 million, respectively, a decrease of $0.4 million or 18.0%.  As a percent of revenue, G&A expenses were 13.5% and 17.6% for the three months ended June 30, 2013 and 2012, respectively. This improvement was due principally to CFO transition costs of $0.2 million in the prior year period.   Additionally, cost reduction initiatives helped to improve operating margins as revenue grew.

Income from operations for the three months ended June 30, 2013 was approximately $158,000 as compared to loss from operations for the three months ended June 30, 2012 of approximately $625,000.  The improvement in income from operations results from improved gross margin and decreased general and administrative expenses described above.

Net income for the three months ended June 30, 2013 was $68,000, or $0.01 per basic and diluted share, as compared to loss from continuing operations of ($568,000) or ($0.09) per basic and diluted share for the three months ended June 30, 2012. This improvement is due to increased gross profit and constraints on spending as described in the preceding paragraphs.

Earnings (Loss) Before Interest Tax Depreciation and Amortization ("EBITDA") adjusted for other non-cash charges ("Adjusted EBITDA"(1)) for the three months ended June 30, 2013 was $228,000 as compared to ($498,000) for the three months ended June 30, 2012, due principally to the increased gross profit and reduced expenses described above.

Results for Nine Months Ended June 30, 2013

Revenues for the nine months ended June 30, 2013 and 2012 were $39.5 million and $36.7 million respectively, which represents an increase of $2.8 million or 7.4% over the prior fiscal period.  The increase in revenue is due primarily to expansion on current programs as well as having the full nine month impact of new business awards received during the prior year period.

Gross profit for the nine months ended June 30, 2013 and 2012 was $5.5 million and $4.5 million, respectively, which represents an increase of $1.0 million or 24.2% over the prior fiscal year period. As a percentage of revenue, gross profit was 14.0% and 12.1% for the nine months ended June 30, 2013 and 2012, respectively. The gross profit rate benefited from improved contract performance and cost management.

Total G&A expenses for the nine months ended June 30, 2013 and 2012 were $5.5 million and $5.9 million respectively, a decrease of $0.4 million or 6.7%.  As a percent of revenue, G&A expenses were 13.8% and 15.9% for the nine months ended June 30, 2013 and 2012, respectively. The year-over-year reduction in G&A expenses is due to CFO transition expenses of $0.2 million in the prior year period.  Additionally, cost reduction initiatives helped to improve operating margins as revenue grew.

Income from operations for nine months ended June 30, 2013 was approximately $74,000 as compared to loss from operations for the nine months ended June 30, 2012 of approximately $1,399,000.   The improvement in income from operations results from the same factors as discussed for the three-month period ended June 30, 2013.

Net loss for the nine months ended June 30, 2013 was ($0.17 million), or ($0.02) per basic and diluted share, as compared to net loss of ($1.67 million), or ($0.27) per basic and diluted share for the nine months ended June 30, 2012.  This improvement is due to increased gross profit, constraints on spending, and reduced other expenses as described in the preceding paragraphs.

Earnings (Loss) Before Interest Tax Depreciation and Amortization ("EBITDA") adjusted for other non-cash charges ("Adjusted EBITDA"(1)) for the nine months ended June 30, 2013 was $337,000 as compared to ($1,003,000) for the nine months ended June 30, 2012, due principally to the increased gross profit and reduced expenses described above.

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