Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Dec. 31, 2014 | Jan. 31, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | DLH Holdings Corp. | |
Entity Central Index Key | 785557 | |
Document Type | 10-Q | |
Document Period End Date | 31-Dec-14 | |
Amendment Flag | FALSE | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | -21 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 9,631,043 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Income Statement [Abstract] | ||
Revenue | $15,682 | $14,477 |
Direct expenses | 13,149 | 12,365 |
Gross margin | 2,533 | 2,112 |
General and administrative expenses | 2,251 | 2,020 |
Depreciation and amortization | 23 | 26 |
Income from operations | 259 | 66 |
Other income (expense) net | -36 | 67 |
Income before income taxes | 223 | 133 |
Income tax expense | -89 | 0 |
Net income | $134 | $133 |
Net income per share, basic and diluted (in dollars per share) | $0.01 | $0.01 |
Weighted average common shares outstanding | ||
Basic (in shares) | 9,601 | 9,494 |
Diluted (in shares) | 10,048 | 9,549 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $3,758 | $3,908 |
Accounts receivable, net | 12,277 | 12,372 |
Deferred taxes, net | 84 | 84 |
Other current assets | 610 | 510 |
Total current assets | 16,729 | 16,874 |
Equipment and improvements, net | 134 | 63 |
Deferred taxes, net | 4,424 | 4,513 |
Goodwill | 8,595 | 8,595 |
Other long-term assets | 17 | 27 |
Total assets | 29,899 | 30,072 |
CURRENT LIABILITIES | ||
Accrued payroll | 11,066 | 11,465 |
Accounts payable, accrued expenses, and other current liabilities | 4,570 | 4,746 |
Total current liabilities | 15,636 | 16,211 |
LONG TERM LIABILITIES | ||
Other long term liability | 13 | 15 |
Total liabilities | 15,649 | 16,226 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS’ EQUITY | ||
Preferred stock, $.10 par value; authorized 5,000 shares, none issued and outstanding | 0 | 0 |
Common stock, $.001 par value; authorized 40,000 shares; issued 9,634 at December 31, 2014 and 9,568 at September 30, 2014, outstanding 9,631 at December 31, 2014 and 9,566 at September 30, 2014 | 10 | 10 |
Additional paid-in capital | 76,356 | 76,083 |
Accumulated deficit | -62,110 | -62,244 |
Treasury stock, 3 shares at cost at December 31, 2014 and 2 shares at cost at September 30, 2014 | -6 | -3 |
Total shareholders’ equity | 14,250 | 13,846 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $29,899 | $30,072 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $0.10 | $0.10 |
Preferred stock, authorized shares | 5,000,000 | 5,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, authorized shares | 40,000,000 | 40,000,000 |
Common stock, issued shares | 9,634,000 | 9,568,000 |
Common stock, outstanding shares | 9,631,000 | 9,566,000 |
Treasury stock, shares | 3,000 | 2,000 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Cash Flows [Abstract] | ||
Income Tax Expense (Benefit) | $89 | $0 |
Operating activities | ||
Net income | 134 | 133 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization including financing costs | 23 | 36 |
Change in fair value of derivative financial instruments | 0 | -99 |
Stock based compensation expense | 273 | 217 |
Changes in operating assets and liabilities, net of divested business: | ||
Accounts receivable | 95 | -1,258 |
Other current assets | -100 | -62 |
Other assets | 0 | 1,030 |
Accounts payable, accrued payroll, accrued expenses and other current liabilities | -575 | -697 |
Other long term assets/(liabilities) | 8 | -2 |
Net cash used in operating activities | -53 | -702 |
Investing activities | ||
Purchase of equipment and improvements | -94 | -6 |
Net cash used in investing activities | -94 | -6 |
Financing activities | ||
Net (payments)/borrowing on bank loan payable | 0 | -11 |
Proceeds from exercise of warrants | 0 | 52 |
Repayments of capital lease obligations | 0 | -14 |
Net repayment on convertible debentures | 0 | -140 |
Repurchased shares of common stock held as treasury stock | -3 | -21 |
Net cash used in financing activities | -3 | -134 |
Net increase in cash and cash equivalents | -150 | -842 |
Cash and cash equivalents at beginning of period | 3,908 | 3,408 |
Cash and cash equivalents at end of period | 3,758 | 2,566 |
Supplemental disclosures of cash flow information | ||
Cash paid during the period for interest | 10 | 92 |
Cash paid during the period for income taxes | $0 | $0 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation |
The accompanying unaudited consolidated financial statements include the accounts of DLH and its subsidiaries, all of which are wholly owned. All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the quarter ended December 31, 2014 are not necessarily indicative of the results that may be expected for the year ending September 30, 2015. 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, 2014 filed on December 10, 2014. |
Business_Overview
Business Overview | 3 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Overview | Business Overview |
For more than 25 years, DLH Holdings Corp. ("DLH"), has provided professional services to the U.S. Government. Headquartered in Atlanta, Georgia, DLH employs over 1,200 skilled technicians, logisticians, engineers, healthcare and support personnel at more than 25 locations around the United States. DLH’s operating subsidiary, DLH Solutions, Inc., is organized into two broad integrated revenue streams: Healthcare Delivery Solutions and Logistics & Technical Services. Our customers, a majority of whom are within the Departments of Defense ("DoD") and Veterans Affairs ("DVA"), benefit from proven business process management processes, technical excellence and differentiation, and cost management. The remaining portion of DLH's business is comprised of customers within the Center for Disease Control and Prevention, Departments of Justice, Agriculture, Interior and Federal Emergency Management Agency, at locations throughout the United States. | |
DLH Holdings Corp. (together with its subsidiaries, "DLH" or the "Company" and also referred to as "we," "us" and "our") manages its operations from its principal executive offices at 1776 Peachtree Street, Atlanta, Georgia 30309. | |
Presently, the Company derives all of its revenue from agencies of the Federal government. A major customer is defined as a customer from whom the Company derives at least 10% of its revenues. In each of the fiscal quarters ended December 31, 2014 and 2013, revenue from the U.S. Government accounted, either directly or indirectly, for 100% of the Company’s total revenue. Within the U.S. Government, our largest customer continues to be the Department of Veterans Affairs (DVA), at 97% of revenue for the three months ended December 31, 2014 and 2013. In addition, substantially all accounts receivable, including unbilled accounts receivable, are from agencies of the U.S. Government as of December 31, 2014 and 2013. We believe that the credit risk associated with our receivables is limited due to the creditworthiness of these customers. See Note 5, Supporting Financial Information-Accounts Receivable. | |
DLH remains dependent upon the continuation of its relationship with the DVA. As of December 31, 2014, awards from the DVA have anticipated periods of performance ranging from approximately two to up to four years. These agreements are subject to the Federal Acquisition Regulations. While there can be no assurance as to the actual amount of services that the Company will ultimately provide to the DVA under its current contract, we believe that our strong working relationship and our effective service delivery support ongoing performance for the contract term. The Company's results of operations, cash flows and financial condition would be materially adversely affected in the event that we were unable to continue our relationships with the DVA. |
New_Accounting_Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Dec. 31, 2014 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements |
In May 2014, the Financial Accounting Standards Board ("FASB") issued guidance outlining a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers that supersedes most current revenue recognition guidance. This guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, this guidance expands related disclosure requirements. The effective date of these revisions is for reporting periods beginning after December 15, 2016, with early application not permitted. The Company is evaluating the impact of this guidance. | |
In June 2014, the FASB issued guidance related to accounting for share-based payments for certain performance stock awards. The effective date of this guidance is for reporting periods beginning after December 15, 2015, with early adoption permitted. The Company is evaluating the impact of this guidance. | |
In August 2014, the Financial Accounting Standards Board (FASB) issued guidance regarding management's going concern evaluations. The guidance requires management to evaluate, at each interim and annual reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued, and provide related disclosures. The guidance is effective for all entities for annual periods ending after December 15, 2016, and for annual and interim periods thereafter, and early adoption is permitted. We do not believe the standard will have a material impact on our financial statement disclosures. |
Reclassifications
Reclassifications | 3 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reclassifications | Reclassifications |
Certain reclassifications may be made to the prior period financial statements to conform to the current period presentation. Such reclassifications have no effect on previously reported results of operations or accumulated deficit. |
Supporting_Financial_Informati
Supporting Financial Information Supporting Financial Information | 3 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||
Supporting Financial Information | Supporting Financial Information | |||||||||||||||
Accounts Receivable | ||||||||||||||||
(in thousands) | ||||||||||||||||
December 31, | September 30, | |||||||||||||||
Ref | 2014 | 2014 | ||||||||||||||
Billed receivables | $ | 2,189 | $ | 2,569 | ||||||||||||
Unbilled receivables | (a) | 10,088 | 9,803 | |||||||||||||
Total accounts receivable | 12,277 | 12,372 | ||||||||||||||
Less: Allowance for doubtful accounts | (b) | — | — | |||||||||||||
Accounts receivable, net | $ | 12,277 | $ | 12,372 | ||||||||||||
Ref (a): Includes $9.3 million related to retroactive billings submitted to incorporate the impact of relevant wage determinations on certain contracts. Revenues related to these retroactive billings were recognized in fiscal 2008 in accordance with GAAP, as follows: (1) the Company developed and calculated an amount for such prior period services and had a contractual right to bill for such amounts under its arrangements, which was formalized in a contract modification (2) there were no remaining unfulfilled conditions for approval of such billings and (3) collectibility was reasonably assured based on historical practices with, and contractual requirements of, the DVA. The related direct costs, principally comprised of salaries and benefits, were accrued to match the recognized reimbursements from the Federal agency; upon approval, wages will be processed for payment to the employees. During the year ended September 30, 2008, DLH recognized revenues of $10.8 million revenue related to these non-recurring adjustments, of which $1.5 million was subsequently billed and collected. DLH had ongoing interactions with the customer during fiscal 2014, and we submitted a claim to the DVA in September 2014 seeking a final determination by the DVA’s contracting officer of the amount due to DLH and immediate payment of such amount. Although the timing cannot be guaranteed, at present, the Company expects to bill and collect such amounts within the next twelve months. The remaining $0.8 million and $0.5 million of unbilled accounts receivable at December 31, 2014 and September 30, 2014, respectively, relates to current operations. | ||||||||||||||||
Ref (b): Accounts receivable are non-interest bearing, unsecured and carried at fair value, which is net of an allowance for doubtful accounts. We evaluate our receivables on a quarterly basis and determine whether an allowance is appropriate based on specific collection issues. Our allowance for doubtful accounts was zero at both December 31, 2014 and September 30, 2014. | ||||||||||||||||
Other Current Assets | ||||||||||||||||
(in thousands) | ||||||||||||||||
December 31, | September 30, | |||||||||||||||
Ref | 2014 | 2014 | ||||||||||||||
Workers' compensation receivable | (a) | $ | 197 | $ | 199 | |||||||||||
Prepaid insurance expense | 105 | 176 | ||||||||||||||
Other prepaid expenses | 308 | 135 | ||||||||||||||
Total other current assets | $ | 610 | $ | 510 | ||||||||||||
Ref (a): As part of the Company’s discontinued PEO operations, DLH had a workers’ compensation program with Zurich American Insurance Company (“Zurich”) which covered the period from March 22, 2002 through November 16, 2003, inclusive. DLH estimates that the remaining workers compensation receivable of approximately $0.2 million will be received within the next twelve months. | ||||||||||||||||
Accrued Payroll | ||||||||||||||||
(in thousands) | ||||||||||||||||
December 31, | September 30, | |||||||||||||||
Ref | 2014 | 2014 | ||||||||||||||
Accrued current payroll | $ | 1,890 | $ | 2,440 | ||||||||||||
Accrued payroll related to unbilled accounts receivable | (a) | 9,176 | 9,025 | |||||||||||||
Total accrued payroll | $ | 11,066 | $ | 11,465 | ||||||||||||
Ref (a): Includes $8.7 million related to retroactive billings submitted to incorporate the impact of relevant wage determinations on certain contracts. The remaining $0.5 million and $0.3 million of accrued payroll for unbilled accounts receivable at December 31, 2014 and September 30, 2014, respectively, relates to current operations. | ||||||||||||||||
Equipment and Improvements, net | ||||||||||||||||
(in thousands) | ||||||||||||||||
December 31, | September 30, | |||||||||||||||
Ref | 2014 | 2014 | ||||||||||||||
Furniture and equipment | $ | 139 | $ | 139 | ||||||||||||
Computer equipment | 220 | 126 | ||||||||||||||
Computer software | 430 | 430 | ||||||||||||||
Leasehold improvements | 24 | 24 | ||||||||||||||
813 | 719 | |||||||||||||||
Less accumulated depreciation and amortization | (679 | ) | (656 | ) | ||||||||||||
Equipment and improvements, net | (a) | $ | 134 | $ | 63 | |||||||||||
Ref (a): Equipment and improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives (3 to 5) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are expensed as incurred. | ||||||||||||||||
Accounts Payable, Accrued Expenses, and Other Current Liabilities | ||||||||||||||||
(in thousands) | ||||||||||||||||
December 31, | September 30, | |||||||||||||||
Ref | 2014 | 2014 | ||||||||||||||
Accounts payable | $ | 599 | $ | 779 | ||||||||||||
Accrued benefits | 816 | 720 | ||||||||||||||
Accrued bonus and incentive compensation | 97 | 693 | ||||||||||||||
Accrued workers compensation insurance | 1,106 | 767 | ||||||||||||||
Other accrued expenses | 489 | 339 | ||||||||||||||
Payroll tax accrual | (a) | 1,463 | 1,448 | |||||||||||||
Total accrued expenses and other current liabilities | $ | 4,570 | $ | 4,746 | ||||||||||||
Ref (a): From 2006 through 2009, DLH received notices from the Internal Revenue Service (“IRS”) claiming taxes, interest and penalties due related to payroll taxes. These notices are predominantly related to the former PEO operations which were sold in fiscal 2003. The liability includes estimated accrued penalties and interest totaling approximately $644 thousand. | ||||||||||||||||
Other Income (Expense) | ||||||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended | ||||||||||||||||
December 31, | ||||||||||||||||
Ref | 2014 | 2014 | ||||||||||||||
Interest expense, net | $ | (24 | ) | $ | (22 | ) | ||||||||||
Amortization of deferred financing costs | — | (10 | ) | |||||||||||||
Change in value of financial instruments | (a) | — | 99 | |||||||||||||
Miscellaneous other expense, net | (12 | ) | — | |||||||||||||
Total other income (expense), net | (36 | ) | 67 | |||||||||||||
Ref (a): Represents the adjustment to fair value of embedded conversion feature and warrants related to the Company's convertible debentures. Such instruments did not meet the requirements for qualified hedge accounting under GAAP. See Note 12 regarding maturity and closure of the convertible debentures. |
Liquidity
Liquidity | 3 Months Ended |
Dec. 31, 2014 | |
Cash and Cash Equivalents [Abstract] | |
Liquidity | Liquidity |
At December 31, 2014, the Company had cash and cash equivalents of approximately $3.8 million, net working capital of approximately $1.1 million, and an accumulated deficit of approximately $(62.1) million. For the three months ended December 31, 2014, the Company realized operating income of approximately $259 thousand and net income of approximately $134 thousand, as compared to operating income and net income of $66 thousand and $133 thousand respectively for the three months ended December 31, 2013. | |
The Company has a credit facility with a lending institution which provides a maximum amount of $6 million and includes a maximum amount available under the unbilled facility of $1 million. The current term of the credit facility expires on July 29, 2015 and thereafter shall automatically renew on each anniversary date thereof for subsequent twelve month terms unless terminated by either party. Presently, the maximum availability under this loan facility is $3 million, subject to eligible accounts receivable, excluding retroactive billings. The interest rate on the Accounts Receivable portion of the loan was 4.0% at December 31, 2014, and September 30, 2014. The interest rate on the Unbilled Accounts portion was 4.0% at December 31, 2014, and September 30, 2014. At December 31, 2014, our unused loan availability was approximately $2.6 million, comprised of a $1.4 million letter of credit reserve and $1.2 million of unused loan capacity. DLH required no borrowing on the credit facility during first quarter ended December 31, 2014. | |
Management believes, at present, that: (a) cash and cash equivalents of approximately $3.8 million as of December 31, 2014; (b) the amount available under its line of credit (which is limited to the amount of eligible assets); and (c) planned operating cash flow should be sufficient to support the Company's operations for twelve months from the date of these financial statements. |
Significant_Accounting_Policie
Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation of goodwill, expected settlement amounts of accounts receivable, valuation allowances established against accounts receivable and deferred tax assets, and measurement of loss development on workers’ compensation claims. Actual results could differ from those estimates. In particular, a material reduction in the fair value of goodwill would have a material adverse effect on the Company’s financial position and results of operations. | |
Revenue Recognition | |
DLH’s revenue is derived from professional and other specialized service offerings to US Government agencies through a variety of contracts, some of which are fixed-price in nature and/or sourced through Federal Supply Schedules administered by the General Services Administration (“GSA”) at fixed unit rates or hourly arrangements. We generally operate as a prime contractor, but have also entered into contracts as a subcontractor. The recognition of revenue from fixed rates is based upon objective criteria that generally do not require significant estimates that may change over time. DLH recognizes and records revenue on government contracts when it is realized, or realizable, and earned. DLH considers these requirements met when: (a) persuasive evidence of an arrangement exists; (b) the services have been delivered to the customer; (c) the sales price is fixed or determinable and free of contingencies or significant uncertainties; and (d) collectibility is reasonably assured. | |
Goodwill | |
DLH continues to review its goodwill for possible impairment or loss of value at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. At September 30, 2014, we performed a goodwill impairment evaluation. We performed both a qualitative and quantitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted at September 30, 2014. Factors including non-renewal of a major contract or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to future periods’ results of operations. For the three months ended December 31, 2014, the Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill. If an impairment write off of all the goodwill became necessary in future periods, a charge of up to $8.6 million would be expensed in the Consolidated Statement of Operations. All remaining goodwill is attributable to the DLH Solutions operating subsidiary. | |
Income Taxes | |
DLH accounts for income taxes in accordance with the liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance sheet when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is "more-likely-than-not" that the position will be sustained upon examination. We had no uncertain tax positions at either December 31, 2014 and 2013. We report interest and penalties as a component of income tax expense. In the fiscal quarters ending December 31, 2014 and 2013, we recognized no interest and no penalties related to income taxes. | |
The Company has adequate net operating loss carryforwards to offset against any taxable income in the current period. The Company has deferred tax assets before valuation allowance of $15.6 million and $15.7 million as of December 31, 2014 and September 30, 2014, respectively,. We have recorded a valuation allowance of $11.1 million as of December 31, 2014 and September 30, 2014. Tax years open for examination are 2011 and forward. | |
Cash and Cash Equivalents | |
We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. We maintain cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Deposits held with financial institutions may exceed the $250,000 limit. |
Stockbased_Compensatin_Equity_
Stock-based Compensatin, Equity Grants, and Warrants | 3 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock-based Compensation, Equity Grants, and Warrants | Stock-based compensation, equity grants, and warrants | ||||||||||||
Stock-based compensation expense | |||||||||||||
All grants of equity are presently made under the 2006 Long Term Incentive Plan. As of December 31, 2014, 0.9 million shares remained available for grant under the Plan. Options issued under the Plan are designated as either an incentive stock or a non-statutory stock option. No option may be granted with a term of more than 10 years from the date of grant. Exercisability of | |||||||||||||
option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued shares. | |||||||||||||
Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our statement of operations: | |||||||||||||
(in thousands) | |||||||||||||
Three Months Ended | |||||||||||||
Ref | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
DLH employees | $ | 96 | $ | 108 | |||||||||
Non-employee directors | (a) | 177 | 109 | ||||||||||
Total compensation expense | $ | 273 | $ | 217 | |||||||||
Ref (a): Equity grants of restricted stock, in accordance with DLH compensation policy for non-employee directors. The shares vested immediately and stock expense was recognized accordingly. | |||||||||||||
Unrecognized stock-based compensation expense | |||||||||||||
(in thousands) | |||||||||||||
Three Months Ended | |||||||||||||
December 31, | |||||||||||||
Ref | 2014 | 2013 | |||||||||||
Unrecognized expense for DLH employees | (a) | $ | 249 | $ | 201 | ||||||||
Unrecognized expense for non-employee directors | (b) | 125 | 150 | ||||||||||
Total unrecognized expense | $ | 374 | $ | 351 | |||||||||
Ref (a): Compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The compensation expense for that portion of awards has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. | |||||||||||||
Ref (b): Unrecognized stock expense related to prior years equity grants of restricted stock to non-employee directors, based on performance criteria, in accordance with DLH compensation policy for non-employee directors. The shares will vest and expense will be recorded upon future satisfaction of specified performance. | |||||||||||||
Stock option activity for the three months ended December 31, 2014 | |||||||||||||
The aggregate intrinsic value in the table below represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in the money options on those dates. This amount will change based on the fair market value of the Company’s stock. | |||||||||||||
(in years) | |||||||||||||
Weighted | |||||||||||||
Weighted | Average | (in thousands) | |||||||||||
(in thousands) | Average | Remaining | Aggregate | ||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||
Ref | Shares | Price | Term | Value | |||||||||
Options outstanding, September 30, 2014 | 2,380 | $1.40 | 7.8 | $ | 1,589 | ||||||||
Granted | — | ||||||||||||
Cancelled | (a) | (44 | ) | $1.40 | |||||||||
Options outstanding, December 31, 2014 | 2,336 | $1.40 | 7.5 | $ | 1,727 | ||||||||
Ref (a): Shares canceled upon termination of employment or expiration of period to complete performance conditions. | |||||||||||||
Stock options shares outstanding, vested and unvested for the period ended | |||||||||||||
(in thousands) | |||||||||||||
Number of Shares | |||||||||||||
December 31, | |||||||||||||
Ref | 2014 | 2013 | |||||||||||
Vested and exercisable | 968 | 463 | |||||||||||
Unvested | (a) | 1,368 | 1,755 | ||||||||||
Options outstanding | 2,336 | 2,218 | |||||||||||
Ref (a): Certain awards vest upon satisfaction of certain performance criteria. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended |
Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
The Company has financial instruments, including accounts receivable, accounts payable, loan payable, notes payable, and accrued expense. Due to the short term nature of these instruments, DLH estimates that the fair value of all financial instruments at December 31, 2014 and September 30, 2014 does not differ materially from the aggregate carrying values of these financial instruments recorded in the accompanying consolidated balance sheets. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Earnings Per Share | Earnings Per Share | ||||||||
Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common shares outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method. | |||||||||
(in thousands) | |||||||||
Three Months Ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Numerator: | |||||||||
Net income | $ | 134 | $ | 133 | |||||
Denominator: | |||||||||
Denominator for basic net income per share - weighted-average outstanding shares | 9,601 | 9,494 | |||||||
Effect of dilutive securities: | |||||||||
Stock options and restricted stock | 447 | 55 | |||||||
Denominator for diluted net income per share - weighted-average outstanding shares | 10,048 | 9,549 | |||||||
Net income per share - basic | $ | 0.01 | $ | 0.01 | |||||
Net income per share - diluted | $ | 0.01 | $ | 0.01 | |||||
Commitment_and_Contingencies
Commitment and Contingencies | 3 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||
COMMITMENTS AND CONTINGENCIES: | Commitments and Contingencies | ||||||||||||
Contractual Obligations | |||||||||||||
Payments Due By Period | |||||||||||||
Obligations | Less than | 3-Jan | |||||||||||
(Amounts in thousands) | Total | 1 Year | Years | ||||||||||
Loan Payable (1) | $ | — | $ | — | $ | — | |||||||
Operating Leases | 260 | 122 | 138 | ||||||||||
Total Obligations | $ | 260 | $ | 122 | $ | 138 | |||||||
(1) Represents the amounts recorded in respect of the loan payable due to Presidential Financial Corporation in accordance with the loan agreement. As of December 31, 2014 there were no outstanding amounts. | |||||||||||||
Retroactive Billing Adjustments | |||||||||||||
The Company continues to support the Government’s review of the detailed supporting calculations for the retroactive billings described in Note 5 and to negotiate an incremental final amount related to indirect costs and fees applied to these retroactive billings. The additional indirect costs and fees are estimated to be between $0.4 million and $0.6 million. The Company has developed these estimates under the same contractual provisions applied to the sites that were settled in 2008. However, because these amounts remain subject to government review, no assurances can be given that any amounts the Company may receive will be within the range specified above. Refer to Note 5, Accounts Receivable for further information. | |||||||||||||
Workers Compensation | |||||||||||||
We accrue workers compensation expense based on claims submitted, applying actuarial loss development factors to estimate the costs incurred but not yet recorded. Our accrued liability for claims development for the periods ended December 31, 2014 and September 30, 2014 was $1.1 million and $0.8 million, respectively. | |||||||||||||
Legal Proceedings | |||||||||||||
As a commercial enterprise and employer, the Company is subject to various claims and legal actions in the ordinary course of business. These matters can include professional liability, employment-relations issues, workers’ compensation, tax, payroll and employee-related matters, other commercial disputes arising in the course of its business, and inquiries and investigations by governmental agencies regarding our employment practices or other matters. 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. |
Equity_and_Convertible_Debentu
Equity and Convertible Debentures Financing | 3 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Equity and Convertible Debentures Financing | Equity and Convertible Debentures Financing |
As has been previously disclosed, certain entities affiliated with Wynnefield Capital, Inc., the Company’s largest stockholder, owned convertible debentures in an aggregate principal amount of $350,000 and warrants to purchase an aggregate of 53,846 shares of common stock. These instruments were issued pursuant to a debenture purchase agreement in June 2011. The warrants were exercisable at a price of $0.96 until June 2016 and the conversion rate of the convertible debentures was $1.25. | |
Upon maturity on October 28, 2013, the principal amount of $210,000 of convertible debentures was converted into 168,000 shares of common stock and the principal amount of $140,000 on the remaining debenture was repaid in full. In addition, in October 2013, the holders of the Warrants exercised such Warrants in full for 53,846 shares of common stock. A gain of $119 thousand was recognized, which represented the change in the fair value of the derivative immediately prior to conversion. Additionally, expense of $20 thousand was recorded in the three months ended December 31, 2013, related to fair valuation of the warrants. The accrued liability of $61 thousand with respect to the fair value of the warrants was reflected as additional paid in capital upon their exercise. The shares of the Company’s common stock issued upon conversion of the debentures were issued in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended. The shares of the Company’s common stock issued upon exercise of the warrants were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events: |
Management has evaluated subsequent events through the date that the Company's financial statements were issued. Based on this evaluation, the Company has determined that no subsequent events have occurred which require disclosure through the date that these financial statements were issued. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation of goodwill, expected settlement amounts of accounts receivable, valuation allowances established against accounts receivable and deferred tax assets, and measurement of loss development on workers’ compensation claims. Actual results could differ from those estimates. In particular, a material reduction in the fair value of goodwill would have a material adverse effect on the Company’s financial position and results of operations. | |
Revenue Recognition | Revenue Recognition |
DLH’s revenue is derived from professional and other specialized service offerings to US Government agencies through a variety of contracts, some of which are fixed-price in nature and/or sourced through Federal Supply Schedules administered by the General Services Administration (“GSA”) at fixed unit rates or hourly arrangements. We generally operate as a prime contractor, but have also entered into contracts as a subcontractor. The recognition of revenue from fixed rates is based upon objective criteria that generally do not require significant estimates that may change over time. DLH recognizes and records revenue on government contracts when it is realized, or realizable, and earned. DLH considers these requirements met when: (a) persuasive evidence of an arrangement exists; (b) the services have been delivered to the customer; (c) the sales price is fixed or determinable and free of contingencies or significant uncertainties; and (d) collectibility is reasonably assured. | |
Goodwill | Goodwill |
DLH continues to review its goodwill for possible impairment or loss of value at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. At September 30, 2014, we performed a goodwill impairment evaluation. We performed both a qualitative and quantitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted at September 30, 2014. Factors including non-renewal of a major contract or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to future periods’ results of operations. For the three months ended December 31, 2014, the Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill. If an impairment write off of all the goodwill became necessary in future periods, a charge of up to $8.6 million would be expensed in the Consolidated Statement of Operations. All remaining goodwill is attributable to the DLH Solutions operating subsidiary. | |
Income Taxes | Income Taxes |
DLH accounts for income taxes in accordance with the liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance sheet when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is "more-likely-than-not" that the position will be sustained upon examination. We had no uncertain tax positions at either December 31, 2014 and 2013. We report interest and penalties as a component of income tax expense. In the fiscal quarters ending December 31, 2014 and 2013, we recognized no interest and no penalties related to income taxes. | |
The Company has adequate net operating loss carryforwards to offset against any taxable income in the current period. The Company has deferred tax assets before valuation allowance of $15.6 million and $15.7 million as of December 31, 2014 and September 30, 2014, respectively,. We have recorded a valuation allowance of $11.1 million as of December 31, 2014 and September 30, 2014. Tax years open for examination are 2011 and forward. | |
Cash and Cash Equivalents | Cash and Cash Equivalents |
We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. We maintain cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Deposits held with financial institutions may exceed the $250,000 limit. |
Supporting_Financial_Informati1
Supporting Financial Information (Tables) | 3 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||
Schedule of Accounts Receivable | Accounts Receivable | |||||||||||||||
(in thousands) | ||||||||||||||||
December 31, | September 30, | |||||||||||||||
Ref | 2014 | 2014 | ||||||||||||||
Billed receivables | $ | 2,189 | $ | 2,569 | ||||||||||||
Unbilled receivables | (a) | 10,088 | 9,803 | |||||||||||||
Total accounts receivable | 12,277 | 12,372 | ||||||||||||||
Less: Allowance for doubtful accounts | (b) | — | — | |||||||||||||
Accounts receivable, net | $ | 12,277 | $ | 12,372 | ||||||||||||
Ref (a): Includes $9.3 million related to retroactive billings submitted to incorporate the impact of relevant wage determinations on certain contracts. Revenues related to these retroactive billings were recognized in fiscal 2008 in accordance with GAAP, as follows: (1) the Company developed and calculated an amount for such prior period services and had a contractual right to bill for such amounts under its arrangements, which was formalized in a contract modification (2) there were no remaining unfulfilled conditions for approval of such billings and (3) collectibility was reasonably assured based on historical practices with, and contractual requirements of, the DVA. The related direct costs, principally comprised of salaries and benefits, were accrued to match the recognized reimbursements from the Federal agency; upon approval, wages will be processed for payment to the employees. During the year ended September 30, 2008, DLH recognized revenues of $10.8 million revenue related to these non-recurring adjustments, of which $1.5 million was subsequently billed and collected. DLH had ongoing interactions with the customer during fiscal 2014, and we submitted a claim to the DVA in September 2014 seeking a final determination by the DVA’s contracting officer of the amount due to DLH and immediate payment of such amount. Although the timing cannot be guaranteed, at present, the Company expects to bill and collect such amounts within the next twelve months. The remaining $0.8 million and $0.5 million of unbilled accounts receivable at December 31, 2014 and September 30, 2014, respectively, relates to current operations. | ||||||||||||||||
Ref (b): Accounts receivable are non-interest bearing, unsecured and carried at fair value, which is net of an allowance for doubtful accounts. We evaluate our receivables on a quarterly basis and determine whether an allowance is appropriate based on specific collection issues. Our allowance for doubtful accounts was zero at both December 31, 2014 and September 30, 2014. | ||||||||||||||||
Schedule of Other Current Assets | Other Current Assets | |||||||||||||||
(in thousands) | ||||||||||||||||
December 31, | September 30, | |||||||||||||||
Ref | 2014 | 2014 | ||||||||||||||
Workers' compensation receivable | (a) | $ | 197 | $ | 199 | |||||||||||
Prepaid insurance expense | 105 | 176 | ||||||||||||||
Other prepaid expenses | 308 | 135 | ||||||||||||||
Total other current assets | $ | 610 | $ | 510 | ||||||||||||
Ref (a): As part of the Company’s discontinued PEO operations, DLH had a workers’ compensation program with Zurich American Insurance Company (“Zurich”) which covered the period from March 22, 2002 through November 16, 2003, inclusive. DLH estimates that the remaining workers compensation receivable of approximately $0.2 million will be received within the next twelve months. | ||||||||||||||||
Schedule of Accrued Payroll | Accrued Payroll | |||||||||||||||
(in thousands) | ||||||||||||||||
December 31, | September 30, | |||||||||||||||
Ref | 2014 | 2014 | ||||||||||||||
Accrued current payroll | $ | 1,890 | $ | 2,440 | ||||||||||||
Accrued payroll related to unbilled accounts receivable | (a) | 9,176 | 9,025 | |||||||||||||
Total accrued payroll | $ | 11,066 | $ | 11,465 | ||||||||||||
Ref (a): Includes $8.7 million related to retroactive billings submitted to incorporate the impact of relevant wage determinations on certain contracts. The remaining $0.5 million and $0.3 million of accrued payroll for unbilled accounts receivable at December 31, 2014 and September 30, 2014, respectively, relates to current operations. | ||||||||||||||||
Equipment and Improvemnts, Net | Equipment and Improvements, net | |||||||||||||||
(in thousands) | ||||||||||||||||
December 31, | September 30, | |||||||||||||||
Ref | 2014 | 2014 | ||||||||||||||
Furniture and equipment | $ | 139 | $ | 139 | ||||||||||||
Computer equipment | 220 | 126 | ||||||||||||||
Computer software | 430 | 430 | ||||||||||||||
Leasehold improvements | 24 | 24 | ||||||||||||||
813 | 719 | |||||||||||||||
Less accumulated depreciation and amortization | (679 | ) | (656 | ) | ||||||||||||
Equipment and improvements, net | (a) | $ | 134 | $ | 63 | |||||||||||
Ref (a): Equipment and improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives (3 to 5) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are expensed as incurred. | ||||||||||||||||
Accounts Payable, Accrued Expenses, and Other Current Liabilities | Accounts Payable, Accrued Expenses, and Other Current Liabilities | |||||||||||||||
(in thousands) | ||||||||||||||||
December 31, | September 30, | |||||||||||||||
Ref | 2014 | 2014 | ||||||||||||||
Accounts payable | $ | 599 | $ | 779 | ||||||||||||
Accrued benefits | 816 | 720 | ||||||||||||||
Accrued bonus and incentive compensation | 97 | 693 | ||||||||||||||
Accrued workers compensation insurance | 1,106 | 767 | ||||||||||||||
Other accrued expenses | 489 | 339 | ||||||||||||||
Payroll tax accrual | (a) | 1,463 | 1,448 | |||||||||||||
Total accrued expenses and other current liabilities | $ | 4,570 | $ | 4,746 | ||||||||||||
Ref (a): From 2006 through 2009, DLH received notices from the Internal Revenue Service (“IRS”) claiming taxes, interest and penalties due related to payroll taxes. These notices are predominantly related to the former PEO operations which were sold in fiscal 2003. The liability includes estimated accrued penalties and interest totaling approximately $644 thousand. | ||||||||||||||||
Other Income (Expense) | Other Income (Expense) | |||||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended | ||||||||||||||||
December 31, | ||||||||||||||||
Ref | 2014 | 2014 | ||||||||||||||
Interest expense, net | $ | (24 | ) | $ | (22 | ) | ||||||||||
Amortization of deferred financing costs | — | (10 | ) | |||||||||||||
Change in value of financial instruments | (a) | — | 99 | |||||||||||||
Miscellaneous other expense, net | (12 | ) | — | |||||||||||||
Total other income (expense), net | (36 | ) | 67 | |||||||||||||
Ref (a): Represents the adjustment to fair value of embedded conversion feature and warrants related to the Company's convertible debentures. Such instruments did not meet the requirements for qualified hedge accounting under GAAP. See Note 12 regarding maturity and closure of the convertible debentures. |
Stockbased_Compensation_Equity
Stock-based Compensation, Equity Grants, and Warrants (Tables) | 3 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock-based Compensation Expense | Stock-based compensation expense | ||||||||||||
All grants of equity are presently made under the 2006 Long Term Incentive Plan. As of December 31, 2014, 0.9 million shares remained available for grant under the Plan. Options issued under the Plan are designated as either an incentive stock or a non-statutory stock option. No option may be granted with a term of more than 10 years from the date of grant. Exercisability of | |||||||||||||
option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued shares. | |||||||||||||
Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our statement of operations: | |||||||||||||
(in thousands) | |||||||||||||
Three Months Ended | |||||||||||||
Ref | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
DLH employees | $ | 96 | $ | 108 | |||||||||
Non-employee directors | (a) | 177 | 109 | ||||||||||
Total compensation expense | $ | 273 | $ | 217 | |||||||||
Ref (a): Equity grants of restricted stock, in accordance with DLH compensation policy for non-employee directors. The shares vested immediately and stock expense was recognized accordingly. | |||||||||||||
Unrecognized stock-based compensation expense | |||||||||||||
(in thousands) | |||||||||||||
Three Months Ended | |||||||||||||
December 31, | |||||||||||||
Ref | 2014 | 2013 | |||||||||||
Unrecognized expense for DLH employees | (a) | $ | 249 | $ | 201 | ||||||||
Unrecognized expense for non-employee directors | (b) | 125 | 150 | ||||||||||
Total unrecognized expense | $ | 374 | $ | 351 | |||||||||
Ref (a): Compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The compensation expense for that portion of awards has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. | |||||||||||||
Ref (b): Unrecognized stock expense related to prior years equity grants of restricted stock to non-employee directors, based on performance criteria, in accordance with DLH compensation policy for non-employee directors. The shares will vest and expense will be recorded upon future satisfaction of specified performance. | |||||||||||||
Stock Option Activity | Stock option activity for the three months ended December 31, 2014 | ||||||||||||
The aggregate intrinsic value in the table below represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in the money options on those dates. This amount will change based on the fair market value of the Company’s stock. | |||||||||||||
(in years) | |||||||||||||
Weighted | |||||||||||||
Weighted | Average | (in thousands) | |||||||||||
(in thousands) | Average | Remaining | Aggregate | ||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||
Ref | Shares | Price | Term | Value | |||||||||
Options outstanding, September 30, 2014 | 2,380 | $1.40 | 7.8 | $ | 1,589 | ||||||||
Granted | — | ||||||||||||
Cancelled | (a) | (44 | ) | $1.40 | |||||||||
Options outstanding, December 31, 2014 | 2,336 | $1.40 | 7.5 | $ | 1,727 | ||||||||
Ref (a): Shares canceled upon termination of employment or expiration of period to complete performance conditions. | |||||||||||||
Stock Option Shares Outstanding, Vested and Expected to Vest | Stock options shares outstanding, vested and unvested for the period ended | ||||||||||||
(in thousands) | |||||||||||||
Number of Shares | |||||||||||||
December 31, | |||||||||||||
Ref | 2014 | 2013 | |||||||||||
Vested and exercisable | 968 | 463 | |||||||||||
Unvested | (a) | 1,368 | 1,755 | ||||||||||
Options outstanding | 2,336 | 2,218 | |||||||||||
Ref (a): Certain awards vest upon satisfaction of certain performance criteria. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Diluted earnings per share | Earnings Per Share | ||||||||
Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common shares outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method. | |||||||||
(in thousands) | |||||||||
Three Months Ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Numerator: | |||||||||
Net income | $ | 134 | $ | 133 | |||||
Denominator: | |||||||||
Denominator for basic net income per share - weighted-average outstanding shares | 9,601 | 9,494 | |||||||
Effect of dilutive securities: | |||||||||
Stock options and restricted stock | 447 | 55 | |||||||
Denominator for diluted net income per share - weighted-average outstanding shares | 10,048 | 9,549 | |||||||
Net income per share - basic | $ | 0.01 | $ | 0.01 | |||||
Net income per share - diluted | $ | 0.01 | $ | 0.01 | |||||
Commitment_and_Contingencies_T
Commitment and Contingencies (Tables) | 3 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||
Contractual Obligation, Fiscal Year Maturity Schedule [Table Text Block] | Contractual Obligations | ||||||||||||
Payments Due By Period | |||||||||||||
Obligations | Less than | 3-Jan | |||||||||||
(Amounts in thousands) | Total | 1 Year | Years | ||||||||||
Loan Payable (1) | $ | — | $ | — | $ | — | |||||||
Operating Leases | 260 | 122 | 138 | ||||||||||
Total Obligations | $ | 260 | $ | 122 | $ | 138 | |||||||
(1) Represents the amounts recorded in respect of the loan payable due to Presidential Financial Corporation in accordance with the loan agreement. As of December 31, 2014 there were no outstanding amounts. |
Business_Overview_Details
Business Overview (Details) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Concentration Risk [Line Items] | ||
Minimum period for which entity has provided professional services to the U.S. Government (years) | 25 years | |
Number of employees (employee) | 1,200 | |
Minimum number of locations in which entity operates (location) | 25 | |
Number of broad integrated revenue streams | 2 | |
US Government [Member] | Revenue concentration | Customer concentration | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage (percent) | 100.00% | 100.00% |
DVA | Revenue concentration | Customer concentration | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage (percent) | 97.00% | 97.00% |
DVA | Minimum | ||
Concentration Risk [Line Items] | ||
Term of government contract | 2 years | |
DVA | Maximum | ||
Concentration Risk [Line Items] | ||
Term of government contract | 4 years |
Supporting_Financial_Informati2
Supporting Financial Information - Accounts Receivable (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2008 | Sep. 30, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total accounts receivable | $12,277,000 | $12,372,000 | ||
Less: Allowance for doubtful accounts | 0 | 0 | ||
Accounts Receivable, Net | 12,277,000 | 12,372,000 | ||
Revenue | 15,682,000 | 14,477,000 | ||
Billed Receivables | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total accounts receivable | 2,189,000 | 2,569,000 | ||
Unbilled Receivables | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total accounts receivable | 10,088,000 | 9,803,000 | ||
Retroactive Billings | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total accounts receivable | 9,300,000 | |||
Unbilled Accounts Receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total accounts receivable | 800,000 | 500,000 | ||
DVA | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Contract revenue nonrecurring | 10,800,000 | |||
Revenue | $1,500,000 |
Supporting_Financial_Informati3
Supporting Financial Information - Other Current Assets (Details) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Workers' compensation receivable | $197 | $199 |
Prepaid insurance expense | 105 | 176 |
Other prepaid expenses | 308 | 135 |
Other current assets | $610 | $510 |
Supporting_Financial_Informati4
Supporting Financial Information - Accrued Payroll (Details) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accrued current payroll | $1,890 | $2,440 |
Accrued payroll | 11,066 | 11,465 |
Unbilled Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accrued current payroll | 9,176 | 9,025 |
Retroactive Billings | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accrued current payroll | 8,700 | |
Accrued Payroll | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accrued current payroll | $500 | $300 |
Supporting_Financial_Informati5
Supporting Financial Information - Equipment and Improvements, net (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 |
Property, Plant and Equipment [Line Items] | ||
Furniture and equipment | 139 | $139 |
Computer equipment | 220 | 126 |
Computer software | 430 | 430 |
Leasehold improvements | 24 | 24 |
Property, Plant and Equipment, Gross | 813 | 719 |
Less accumulated depreciation and amortization | -679 | -656 |
Equipment and improvements, net | 134 | $63 |
Minimum | Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Maximum | Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 5 years |
Supporting_Financial_Informati6
Supporting Financial Information - Accounts Payable, Accrued Expense and Other Current Liabilities (Details) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $599 | $779 |
Accrued benefits | 816 | 720 |
Accrued bonus and incentive compensation | 97 | 693 |
Accrued workers compensation insurance | 1,106 | 767 |
Other accrued expenses | 489 | 339 |
Payroll tax accrual | 1,463 | 1,448 |
Total accrued expenses and other current liabilities | 4,570 | 4,746 |
Accrued interest and penalties | $644 |
Supporting_Financial_Informati7
Supporting Financial Information - Other Income (Expense) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Interest expense, net | ($24) | ($22) |
Amortization of deferred financing costs | 0 | -10 |
Change in value of financial instruments | 0 | 99 |
Misc other income (expense), net | -12 | 0 |
Other income (expense) net | ($36) | $67 |
Liquidity_Details
Liquidity (Details) (USD $) | 3 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $3,758,000 | $2,566,000 | $3,908,000 | $3,408,000 |
Net working capital | 1,100,000 | |||
Accumulated deficit | -62,110,000 | -62,244,000 | ||
Operating income | 259,000 | 66,000 | ||
Net income | 134,000 | 133,000 | ||
Line of Credit Facility [Line Items] | ||||
Amount of unused availability under the line | 2,600,000 | |||
Line of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum availability | 6,000,000 | |||
Amount of unused availability under the line | 1,200,000 | |||
Accounts receivables | ||||
Line of Credit Facility [Line Items] | ||||
Maximum availability | 3,000,000 | |||
Interest rate (percent) | 4.00% | 4.00% | ||
Unbilled receivables | ||||
Line of Credit Facility [Line Items] | ||||
Maximum availability | 1,000,000 | |||
Interest rate (percent) | 4.00% | 4.00% | ||
Letter of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Amount of unused availability under the line | $1,400,000 |
Significant_Accounting_Policie2
Significant Accounting Policies - Goodwill And Income Taxes (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 |
Goodwill [Line Items] | ||
Deferred tax assets | $15.60 | $15.70 |
Valuation allowance | 11.1 | |
Maximum | ||
Goodwill [Line Items] | ||
Charge to be expensed, if an impairment of all the goodwill became necessary | $8.60 |
Stockbased_Compensation_Equity1
Stock-based Compensation, Equity Grants, and Warrants - Stock-based Compensation Expense (Details) (USD $) | 3 Months Ended | |
Share data in Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total compensation expense | $273 | $217 |
Total unrecognized expense | 374 | 351 |
DLH Employees | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total unrecognized expense | 249 | 201 |
Non-employee Directors | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total unrecognized expense | 125 | 150 |
Selling, General and Administrative Expenses | DLH Employees | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total compensation expense | 96 | 108 |
Selling, General and Administrative Expenses | Non-employee Directors | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total compensation expense | $177 | $109 |
Long Term Incentive Plan 2006 | Employee Stock Option | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Number of shares available for grant | 0.9 | |
Expiration term | 10 years |
Stockbased_Compensation_Equity2
Stock-based Compensation, Equity Grants, and Warrants - Stock Option Activity (Details) (USD $) | 3 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Number of Shares | |||
Outstanding at the beginning of the period (in shares) | 2,380 | 2,218 | |
Granted (in shares) | 0 | ||
Cancelled (in shares) | -44 | ||
Outstanding at the end of the period (in shares) | 2,336 | 2,380 | 2,218 |
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $1.40 | ||
Granted (in dollars per share) | |||
Cancelled (in dollars per share) | $1.40 | ||
Outstanding at the end of the period (in dollars per share) | $1.40 | $1.40 | |
Weighted Average Remaining Contractual Term | |||
Outstanding at the beginning of the period | 7 years 6 months 11 days | 7 years 9 months 18 days | |
Outstanding at the end of the period | 7 years 6 months 11 days | 7 years 9 months 18 days | |
Aggregate Intrinsic Value | |||
Outstanding at the beginning of the period (in dollars) | $1,589 | ||
Outstanding at the end of the period (in dollars) | $1,727 | $1,589 |
Stockbased_Compensation_Equity3
Stock-based Compensation, Equity Grants, and Warrants - Stock Options Outstanding, Vested and Unvested (Details) | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Vested and exercisable | 968 | 463 | |
Unvested | 1,368 | 1,755 | |
Option outstanding | 2,336 | 2,380 | 2,218 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Numerator [Abstract] | ||
Net income | $134 | $133 |
Denominator [Abstract] | ||
Denominator for basic net income (loss) per share - weighted-average outstanding shares (shares) | 9,601 | 9,494 |
Effect of dilutive securities: | ||
Stock options and restricted stock (shares) | 447 | 55 |
Denominator for diluted net income (loss) per share - weighted-average outstanding shares (shares) | 10,048 | 9,549 |
Net income (loss) per share - basic (dollars per share) | $0.01 | $0.01 |
Net income (loss) per share - diluted (dollars per share) | $0.01 | $0.01 |
Commitment_and_Contingencies_D
Commitment and Contingencies (Details) (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Sep. 30, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Long-term Debt | $0 | |
Long-term Debt, Less than 1 Year | 0 | |
Long-term Debt, 1-3 Years | 0 | |
Operating Leases, Future Minimum Payments Due | 260,000 | |
Operating Leases, Less than 1 Year | 122,000 | |
Operating Leases, 1-3 Years | 138,000 | |
Contractual Obligation | 260,000 | |
Contractual Obligation, Less than 1 Year | 122,000 | |
Contractual Obligation, 1-3 Years | 138,000 | |
Accrued workers compensation insurance | 1,106,000 | 767,000 |
Minimum | DVA | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Estimated additional indirect costs and fees associated with contract modification pending final approval | 400,000 | |
Maximum | DVA | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Estimated additional indirect costs and fees associated with contract modification pending final approval | $600,000 |
Equity_and_Convertible_Debentu1
Equity and Convertible Debentures Financing (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended |
Oct. 28, 2013 | Oct. 31, 2013 | Dec. 31, 2014 | Jun. 01, 2011 | |
Convertible debentures | ||||
EQUITY AND CONVERTIBLE DEBENTURES FINANCING | ||||
Repayments of Long-term Debt | $140,000 | |||
Debenture Purchase Agreement | ||||
EQUITY AND CONVERTIBLE DEBENTURES FINANCING | ||||
Gain (Loss) on Conversion of Convertible Instruments | 119,000 | |||
Income (expense) recorded related to change in the fair value of financial instruments | 20,000 | |||
Debenture Purchase Agreement | Warrant | ||||
EQUITY AND CONVERTIBLE DEBENTURES FINANCING | ||||
Warrants issued to Debenture Purchasers (in shares) | 53,846 | |||
Debenture Purchase Agreement | Convertible debentures | ||||
EQUITY AND CONVERTIBLE DEBENTURES FINANCING | ||||
Aggregate principal amount of notes issued | 350,000 | |||
Class of Warrant or Right Adjusted Exercise Price of Warrants or Rights | $1.25 | |||
Debenture Purchase Agreement | Common Stock | Convertible debentures | ||||
EQUITY AND CONVERTIBLE DEBENTURES FINANCING | ||||
Shares of common stock under conversion feature | 168,000 | |||
Debenture Purchase Agreement | Warrant | ||||
EQUITY AND CONVERTIBLE DEBENTURES FINANCING | ||||
Warrants issued to Debenture Purchasers (in shares) | 53,846 | |||
Class of Warrant or Right Adjusted Exercise Price of Warrants or Rights | $0.96 | |||
Debt Instrument, Face Amount | 210,000 | |||
Accrued liability with respect to the warrants | $61,000 |