DLH (DLHC) 10-K 9 Dec 16 2016 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Sep. 30, 2016	Nov. 30, 2016	Mar. 31, 2016
Document and Entity Information
Entity Registrant Name	DLH Holdings Corp.
Entity Central Index Key	785,557
Document Type	10-K
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		11,241,614
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	Yes
Entity Public Float			$ 8,610,075

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Document Fiscal Year Focus	2,016
Revenue	$ 85,602	$ 65,346
Direct expenses	67,776	53,658
Gross margin	17,826	11,688
General and administrative expenses	12,518	9,137
Depreciation and amortization	1,244	55
Income from operations	4,064	2,496
Other income (expense), net	(1,618)	744
Income before income taxes	2,446	3,240
Income tax expense (benefit), net	938	5,488
Net income	$ 3,384	$ 8,728
Earnings Per Share [Abstract]
Net income (loss) per share - basic (dollars per share)	$ 0.34	$ 0.91
Net income (loss) per share - diluted (dollars per share)	$ 0.30	$ 0.87
Weighted average common shares outstanding
Basic (in shares)	9,966	9,573
Diluted (in shares)	11,220	10,039

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015
Current assets:
Cash and cash equivalents	$ 3,427	$ 5,558
Accounts receivable, net	6,637	3,286
Deferred taxes, net	0	982
Other current assets	542	429
Total current assets	10,606	10,255
Equipment and improvements, net	644	336
Deferred taxes, net	11,415	9,325
Goodwill and other intangible assets, net	42,304	8,595
Other long-term assets	105	113
Total assets	65,074	28,624
CURRENT LIABILITIES
Debt obligations - current	3,560	0
Derivative financial instruments, at fair value	204	0
Accrued payroll	3,616	2,795
Accounts payable, accrued expenses, and other current liabilities	7,136	2,851
Total current liabilities	14,516	5,646
LONG TERM LIABILITIES
Other long term liability	18,782	109
Total liabilities	33,298	5,755
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 and outstanding 11,148 at September 30, 2016 and 9,551 at September 30, 2015	11	10
Additional paid-in capital	81,897	76,375
Accumulated deficit	(50,132)	(53,516)
Total shareholders’ equity	31,776	22,869
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 65,074	$ 28,624

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2016	Sep. 30, 2015
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)	$ 0.001	$ 0.001
Common stock, authorized shares	40,000,000	40,000,000
Common stock, issued shares	11,148,000	9,551,000
Common stock, outstanding shares	11,148,000	9,551,000

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Operating activities
Net income	$ 3,384	$ 8,728
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,244	55
Amortization of debt financing	289	0
Change in FMV of financial instruments	27	0
Stock based compensation expense	465	479
Loss on retirement of equipment	3	0
Deferred taxes, net	(1,108)	(5,710)
Settlement of retroactive payment claim, net	0	629
Settlement of legacy payroll tax issue, net	0	(1,477)
Changes in operating assets and liabilities
Accounts receivable	(3,351)	(220)
Prepaid expenses and other current assets	(113)	83
Other assets	0	0
Accounts payable, accrued payroll, accrued expenses and other current liabilities	5,106	(506)
Other long term assets/liabilities	94	(78)
Net cash provided by operating activities	6,040	1,983
Investing activities
Acquisition of Danya, net of cash acquired	(32,241)	0
Purchase of equipment and improvements	(498)	(142)
Net cash used in investing activities	(32,739)	(142)
Financing activities
Net borrowing on senior debt	23,437	0
Repayments of capital lease obligations	(94)	(8)
Payment of deferred financing costs	(1,333)	0
Proceeds from issuance of stock	2,521	0
Proceeds from stock option expense	37	0
Repurchased shares of common stock subsequently canceled	0	183
Net cash provided by (used in) financing activities	24,568	(191)
Net change in cash and cash equivalents	(2,131)	1,650
Cash and cash equivalents at beginning of period	5,558	3,908
Cash and cash equivalents at end of period	3,427	5,558
Supplemental disclosures of cash flow information
Cash paid during the period for interest	454	36
Equipment purchases with capital leases	0	187
Cash paid during the period for income taxes	124	0
Reduction of accounts receivable related to retroactive payment claim	0	(9,306)
Reduction of accrued payroll related to retroactive wage and benefit payments	0	8,677
Reduction of accrued payroll taxes related to legacy payroll tax issue		(1,477)
Non-cash equity consideration for acquisition of Danya	$ 2,500	$ 0
Warrants issued in connection with subordinated debt	177	0

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock
Beginning Balance, Shares at Sep. 30, 2014		9,566,000			2,000
Beginning Balance at Sep. 30, 2014	$ 13,846	$ 10	$ 76,083	$ (62,244)	$ (3)
Director restricted stock grants (shares)		66,000
Director restricted stock grants	177		177
Expense related to employee stock option grants	302		302
Purchase of common stock (shares)		(81,000)			(2,000)
Purchase of common stock	(183)		(186)		$ 3
Net income	$ 8,728			8,728
Ending Balance, Shares at Sep. 30, 2015	9,551,000	9,551,000			0
Ending Balance at Sep. 30, 2015	$ 22,869	$ 10	76,375	(53,516)	$ 0
Director restricted stock grants (shares)		117,000
Director restricted stock grants	376		376
Expense related to employee stock option grants	90		90
Issuance of stock for acquisition (in shares)		670,000
Issuance of stock for acquisition	2,500	$ 1	2,499
Exercise of stock options (in shares)		89,000
Exercise of stock options	37		37
Exercise of warrants (shares)		11,000
Exercise of warrants	0
Rights offering net of expense offsets (in shares)		710,000
Rights offering net of expense offsets	2,520		2,520
Net income	$ 3,384			3,384
Ending Balance, Shares at Sep. 30, 2016	11,148,000	11,148,000			0
Ending Balance at Sep. 30, 2016	$ 31,776	$ 11	$ 81,897	$ (50,132)	$ 0

Basis of Presentation

Basis of Presentation	12 Months Ended
	Sep. 30, 2016
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 and with the instructions to Form 10-K, Regulation S-X, and Regulation S-K.

Business Overview

Business Overview	12 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business Overview	Business Overview DLH is a full-service provider of professional healthcare and social services to government agencies including the Department of Veteran Affairs ("VA"), Department of Health and Human Services ("HHS"), Department of Defense ("DoD"), and other government agencies. 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 3565 Piedmont Road NE, Building 3 Suite 700, Atlanta Georgia 30305. We employ over 1,400 skilled employees working in more than 30 locations throughout the United States. On May 3, 2016, DLH acquired Danya International, LLC (“Danya”) which provides technology-enabled program management, consulting, and digital communications solutions to federal government customers. We acquired Danya to expand our ability to provide complementary business services and offerings across government markets. This acquisition is in line with our strategic growth initiatives, and we intend to continue to review and position ourselves for other potential joint venture or strategic acquisition opportunities in the future. See Note 11 of these financial statements for further discussion. Presently, the Company derives 100% of its revenue from agencies of the Federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors. A major customer is defined as a customer from whom the Company derives at least 10% of its revenues. Our largest customer continues to be the VA, which comprised approximately 72% and 95% of revenue for the twelve months ended September 30, 2016 and 2015, respectively. Additionally, HHS represents a major customer, comprising 13% of revenue for the twelve months ended September 30, 2016 following the Danya acquisition. In addition, substantially all accounts receivable, including unbilled accounts receivable, are from agencies of the U.S. Government as of September 30, 2016 and 2015. We believe that the credit risk associated with our receivables is limited due to the creditworthiness of these customers. See Note 4, Supporting Financial Information-Accounts Receivable. As of September 30, 2016 , awards from VA and HHS have anticipated periods of performance ranging from approximately one 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 VA and HHS under its current contracts, we believe that our strong working relationships 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 relationship with VA and HHS.

New Accounting Pronouncements

New Accounting Pronouncements	12 Months Ended
	Sep. 30, 2016
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 FASB has continued to issue periodic updates to this guidance, to further define the application of the changes. Public business entities should apply the guidance to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. 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. In March 2016, the FASB issued updated guidance intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. The amendments in this update affect all entities that issue share-based payment awards to their employees. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has adopted this guidance and concluded that it will not affect the Company. In August 2014 the FASB issued guidance related to an entity’s ability to continue as a going concern and required management to assess the company’s ability to continue as a going concern. Companies should assess any conditions known in order to determine any probability that the entity will not be able to function as a going concern. The Company has adopted this guidance and continues to assess its ability to continue as a going concern. In April 2015 the FASB issued guidance related to debt issuance costs and treatment as a direct deduction from the carrying value or related debt, consistent with debt discounts. Amortization of debt issuance costs should be reported as interest expense. The standard should be applied retrospectively. Based on this guidance, adjustments to financial statements consist with moving the debt issuance costs from assets to the liabilities section to offset the related debt costs. The resulting debt issuance costs are recorded as a component of interest expense. The Company has adopted this guidance for the current year end period. In September 2015, the FASB issued guidance regarding business combinations for which the accounting is incomplete by the end of the reporting period in which the combination occurs, and during the measurement period have an adjustment to provisional amounts recognized. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the amendments in this update eliminate the requirement to retrospectively account for those adjustments. The amendments in this update are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this update, with earlier application permitted for financial statements that have not been issued. This standard is not expected to have a material impact on the Company’s consolidated financial statements. In November 2015, the FASB issued guidance to simplify the presentation of deferred income taxes, and requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. Current guidance requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. For public business entities, the amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company has applied this guidance prospectively during the current reporting period. Refer to Note 13 of these consolidated financial statements for additional disclosures regarding deferred tax assets and liabilities. In February 2016, the FASB issued guidance intended to improve financial reporting for leasing transactions with a lease term of more than 12 months. The new guidance will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The recognition, measurement, and presentation of expenses and cash flow arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP - which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. The Company is evaluating the impact of this guidance.

Supporting Financial Informatio

Supporting Financial Information Supporting Financial Information	12 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Supporting Financial Information	Supporting Financial Information Accounts receivable (in thousands) September 30, September 30, Ref 2016 2015 Billed receivables $ 5,265 $ 2,498 Unbilled receivables 1,372 788 Total accounts receivable 6,637 3,286 Less: Allowance for doubtful accounts (a) — — Accounts receivable, net $ 6,637 $ 3,286 Ref (a): 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 September 30, 2016 and September 30, 2015 . Our allowance for doubtful accounts is assessed based on Company policy of specific identification for aged items. The Company generally does not have delinquent receivables due to the nature of its business. Other current assets (in thousands) September 30, September 30, Ref 2016 2015 Prepaid insurance and benefits $ 168 $ 156 Other receivables and prepaid expenses 374 273 Other current assets $ 542 $ 429 Equipment and improvements, net (in thousands) September 30, September 30, Ref 2016 2015 Furniture and equipment $ 638 $ 197 Computer equipment 202 162 Computer software 309 297 Leasehold improvements 38 63 Total fixed assets 1,187 719 Less accumulated depreciation and amortization (543 ) (383 ) Equipment and improvements, net (a) $ 644 $ 336 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 7 ) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are expensed as incurred. Depreciation of equipment was $188 thousand as of September 30, 2016 and $55 thousand as of September 30, 2015. Goodwill and Intangibles (in thousands) September 30, 2016 Ref Goodwill Customer Relationships Non Compete Total Gross Balance $ 34,745 $ 7,247 $ 1,370 $ 43,362 Accumulated amortization — (993 ) (65 ) (1,058 ) Net balance (a) $ 34,745 $ 6,254 $ 1,305 $ 42,304 Ref (a): Estimated amortization expense for future years: (in thousands) Year 1 $ 2,375 Year 2 2,142 Year 3 1,519 Year 4 825 Year 5 152 Thereafter 546 $ 7,559 Ref (a): Intangibles acquired during the acquisition of Danya included customer relationships and a covenant not to compete. The intangibles are amortized on a straight-line basis over the estimated useful lives ( 4 - 9 years). Total amount of amortization expense for the year ended September 30, 2016 was $1 million . Accrued payroll (in thousands) September 30, September 30, Ref 2016 2015 Accrued payroll related to billed receivables $ 3,616 $ 2,259 Accrued payroll related to unbilled accounts receivable — 536 Total accrued payroll $ 3,616 $ 2,795 Accounts payable, accrued expenses and other current liabilities (in thousands) September 30, September 30, Ref 2016 2015 Accounts payable $ 4,324 $ 87 Accrued benefits 1,197 267 Accrued bonus and incentive compensation 508 858 Accrued workers compensation insurance 981 945 Other accrued expenses 126 694 Accounts payable, accrued expenses, and other current liabilities $ 7,136 $ 2,851 Debt obligations (in thousands) September 30, September 30, Ref 2016 2015 Bank term loan (a) $ 23,438 $ — Less unamortized debt issuance costs (1,222 ) — Net bank debt obligation 22,216 — Less current portion of bank debt obligations (3,560 ) — Long term portion of bank debt obligation $ 18,656 $ — Ref (a): Maturity of the net bank debt obligation as follows, in thousands: Year 1 $ 3,750 Year 2 3,750 Year 3 3,750 Year 4 3,750 Year 5 8,438 Total net bank debt obligation $ 23,438 Other Income (Expense) (in thousands) Twelve Months Ended September 30, Ref 2016 2015 Interest income (expense), net (a) $ (454 ) $ (80 ) Amortization of deferred financing costs (b) (289 ) — Other income (expense), net (c) (80 ) 824 Acquisition expense (d) (795 ) — Other income (expense), net $ (1,618 ) $ 744 Ref (a): Interest expense on borrowing related to the acquisition of Danya Ref (b): Amortizations of expenses related to securing financing to acquire Danya Ref (c): Prior year miscellaneous other income includes $1.5 million from resolution of the legacy payroll tax issue in fourth quarter 2015, partially offset by the $0.6 million , net, March 2015 non-cash settlement of the retroactive payment issue. Ref (d): Reflects non-operational expenses related to the acquisition Danya.

Cash and Credit Facilities

Cash and Credit Facilities	12 Months Ended
	Sep. 30, 2016
Cash and Cash Equivalents [Abstract]
Cash and Credit Facilities	Cash and Credit Facilities On May 3, 2016, the Company acquired 100% of the equity interests of Dayna International, LLC. We financed the acquisition, in part, through a combination of borrowings of $30.0 million under our new credit facility with Fifth Third Bank, and $2.5 million from a subordinated loan arrangement with Wynnefield Capital. Concurrent with these new lending arrangements, we terminated any existing credit facilities that DLH or its acquired subsidiary had in place. A summary of our loan facilities and subordinated debt financing for the period ended September 30, 2016 is as follows: ($ in Millions) As of September 30, 2016 Lender Arrangement Loan Balance Interest * Maturity Date Fifth Third Bank Secured term loan $25 million ceiling (a) $ 23.4 LIBOR + 3.0% 05/01/21 Fifth Third Bank Secured revolving line of credit $10 million ceiling (b) $ — LIBOR + 3.0% 05/01/18 Wynnefield Capital Subordinated notes (c) $ — 09/30/16 * Interest rate as of September 30, 2016 was 3.5% (a) Represents the principal amounts payable on our Term Loan with Fifth Third Bank that partially funded our acquisition of Danya on May 3, 2016. The $25.0 million term loan from Fifth Third Bank was funded at closing and is secured by liens on substantially all of the assets of DLH and Danya. The principal of the Term Loan is payable in fifty-nine consecutive monthly installments of $312,500 beginning on June 1, 2016 with the remaining balance due on May 1, 2021. The Term Loan agreement requires compliance with a number of financial covenants and contains restrictions on our ability to engage in certain transactions. Among other matters, we must comply with limitations on: granting liens; incurring other indebtedness; maintenance of assets; investments in other entities and extensions of credit; mergers and consolidations; and changes in nature of business. The loan agreement also requires us to comply with certain financial covenants including: (i) a minimum fixed charge coverage ratio of at least 1.35 to 1.0 commencing with the quarter ending June 30, 2016, and for all subsequent periods, and (ii) a Funded Indebtedness to Adjusted EBITDA ratio not exceeding the ratio of 2.99 to 1.0 at closing and thereafter a ratio ranging from 3.5 to 1.0 for the period through September 30, 2016 to 2.5 to 1.0 for the period ending September 30, 2018. In addition to monthly payments of the outstanding indebtedness, the loan agreement also requires prepayments of a percentage of excess cash flow, as defined in the loan agreement. Accordingly, a portion of our cash flow from operations will be dedicated to the repayment of our indebtedness. DLH is fully compliant with all covenants under the Loan Agreement with Fifth Third Bank. (b) The secured revolving line of credit from Fifth Third Bank has a ceiling of up to $10.0 million , of which $5.0 million was drawn at closing to cover partial financing of the Danya purchase. Borrowing on the line of credit is secured by liens on substantially all of the assets of DLH and Danya. At September 30, 2016 , DLH had repaid all draws on our revolving line of credit with no remaining balance. The Company's total borrowing availability, based on eligible accounts receivables at September 30, 2016, was $5.0 million . This capacity was comprised of $0.9 million in a stand-by letter of credit and unused borrowing capacity of $4.1 million . The revolving line of credit is subject to loan covenants as described above in the Term Loan, and DLH is fully compliant with those covenants. (c)The Company issued subordinated notes to Wynnefield Capital in the aggregate principal amount of $2.5 million . The notes were retired on September 30, 2016 upon completion of a rights offering that resulted in $2.5 million of proceeds used to payoff the notes, in accordance with the promissory note term loan agreement and the subordinated agreement between the senior lender and Wynnefield Capital.

Significant Accounting Policies

Significant Accounting Policies	12 Months Ended
	Sep. 30, 2016
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, valuation allowances established against accounts receivable and deferred tax assets, and measurement of loss development on workers’ compensation claims. We evaluate these estimates and judgments on an ongoing basis and base our estimates on historical experience, current and expected future outcomes, third-party evaluations and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. We revise material accounting estimates if changes occur, such as more experience is acquired, additional information is obtained, or there is new information on which an estimate was or can be based. Actual results could differ from those estimates. In particular, a material reduction in the fair value of goodwill could have a material adverse effect on the Company’s financial position and results of operations. We account for the effect of a change in accounting estimate during the period in which the change occurs. 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. 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 and other intangible assets We have used the acquisition method of accounting for the Danya transaction, whereby the assets acquired and liabilities assumed are recognized based upon their estimated fair values at the acquisition date. The estimated fair values of assets acquired and liabilities assumed are provisional and are based on the information that was available as of the acquisition date. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the Company is waiting for additional information necessary to finalize those fair values. Therefore, the provisional measurements of fair value reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date. Initial estimates of this allocation are shown under Note 11 Business Combinations. On the basis of the estimated assets acquired, the Company amortized $1.1 million for the five months since the acquisition and for the period ended September 30, 2016. DLH continues to review its goodwill and other intangible assets 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, 2016 we performed a goodwill impairment evaluation on the year-end carrying value of approximately million $35 million . 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, 2016. For the twelve months ended September 30, 2016, the Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill. Notwithstanding, 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. Business Combinations In accordance with Accounting Standards Codification 805, "Business Combinations" ("ASC 805") the Company records acquisitions under the purchase method of accounting, under which the acquisition purchase price is allocated to the assets acquired and liabilities assumed based upon the respective fair values. The company utilizes estimates and in some instances, may retain the services of an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities assumed, and contingent consideration granted. Such estimates and valuations require the Company to make significant assumptions. These assumption may include projections of future events and operating performance. Long Lived Assets The Company acquired certain long lived intangible assets as part of the acquisition of Danya. These assets are estimated at a fair value and amortized on a straight-line basis over their assessed useful lives. The assessed useful lives of the assets are between 4 - 9 years. 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 September 30, 2016 and 2015 . We report interest and penalties as a component of income tax expense. In the fiscal quarters ended September 30, 2016 and 2015 , we recognized no interest and no penalties related to income taxes. Stock-based Equity Compensation The Company uses the fair value-based method for stock-based equity compensation. Options issued 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. 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 common shares. All awards to employees and non-employees are recorded at fair value on the date of the grant and expensed over the period of vesting. The Company uses a binomial option pricing model to estimate the fair value of each stock option at the date of grant. Any consideration paid by the option holders to purchase shares is credited to capital stock. 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. Earnings per Share Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common stock outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income (loss) available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per is calculated using the treasury stock method. Reclassifications Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. These reclassifications had no effect on previously reported results of operations or accumulated deficit.

Stock-based Compensatin, Equity

Stock-based Compensatin, Equity Grants, and Warrants	12 Months Ended
	Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based Compensation, Equity Grants, and Warrants	Stock-based compensation and equity grants Stock-based compensation expense All grants of equity represented in these financial statements for the period ended September 30, 2016 were made under the 2006 Long Term Incentive Plan. The 2006 plan expired on February 25, 2016, upon shareholders' approval of the 2016 Omnibus Equity Incentive Plan. Future grants of equity will be made under the 2016 Long Term Incentive Plan. As of September 30, 2016 , 1.0 million shares remained available for grant under the 2016 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. 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 common 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) Year Ended Ref September 30, 2016 2015 DLH employees $ 90 $ 302 Non-employee directors (a) 376 177 Total stock option expense $ 466 $ 479 Ref (a): Equity grants of restricted stock to non-employee directors, in accordance with DLH compensation policy for non-employee directors. Unrecognized stock-based compensation expense (in thousands) Period Ended September 30, Ref 2016 2015 Unrecognized expense for DLH employees (a) $ 18 $ 44 Unrecognized expense for non-employee directors (b) 24 96 Total unrecognized expense $ 42 $ 140 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. For options that vest based on the Company’s common stock achieving and maintaining defined market prices, the Company values the awards with a binomial model that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation expense is recognized over the derived service period determined in the valuation. This expense is expected to be recognized within the next twelve months. 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 within the next twelve months. Stock option activity for the year ended September 30, 2016 : 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 Canceled (56 ) $1.40 Options outstanding, September 30 , 2015 2,324 $1.40 6.8 $ 3,649 Granted (a) 25 $2.80 Exercised (123 ) $1.40 Options outstanding, September 30, 2016 2,226 $1.43 5.8 $ 7,581 Ref (a): Option grants to DLH employees were valued using a binomial model, under the following criteria: Risk free interest rate 1.01 % Contractual term 10 years Dividend yield — % Expected lives 10 years Expected volatility 106 % Fair value per option $2.55 Stock options shares outstanding, vested and unvested for the period ended: (in thousands) Number of Shares September 30, Ref 2016 2015 Vested and exercisable (a) 1,909 1,093 Unvested (b) 317 1,231 Options outstanding 2,226 2,324 Ref (a): Weighted average exercise price of vested and exercisable shares was $1.48 and $1.40 at September 30, 2016 and 2015 , respectively. Aggregate intrinsic value was $6.4 million and $1.6 million at September 30, 2016 and 2015 , respectively. Weighted average contractual term was 6.0 years and 7.3 years at September 30, 2016 and 2015 , respectively. Ref (b): Certain awards vest upon satisfaction of certain performance criteria.

Fair Value of Financial Instrum

Fair Value of Financial Instruments Fair Value of Financial Instruments	12 Months Ended
	Sep. 30, 2016
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Fair Value of Financial Instruments In partial consideration for the subordinated debt provided by Wynnefield Capital (referred to in Note 5), we issued warrants to purchase 53,619 shares of common stock. As of September 30, 2016 , the warrants are outstanding and their fair value was determined to be $204 thousand . The fair value is estimated using the binomial pricing model. The fair value is subjective and is affected by the changes in inputs to the valuation model including the fair value per share of the underlying stock, the expected term of each warrant, volatility of the Company's stock, and risk free rate based on the U.S. Treasury yield curves. Key assumptions used in the valuation of the warrants at issuance include the following: Risk free interest rate 1.01 % Contractual term 5 years Dividend yield — % Expected lives 5 years Expected volatility 74 % Fair value per warrant $3.31 The Company recorded a loss on the revaluation of the warrant liability of $27 thousand for the year ended September 30, 2016. The loss is recorded and classified in other income (expense) in the accompanying consolidated financial statement of operations. Given the provisions that may reduce the exercise price of these warrants in the event that other convertible securities or options have a lower price, these warrants are classified as a liability. This topic is further discussed in Note 12. Related Party Transactions. The Company measures certain financial assets and liabilities at fair value on a recurring basis. The Company determines fair value based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three level hierarchy. These levels are: Level 1 – Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2 – Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3 – Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. Observable inputs are based on market data obtained from independent sources. The Company has issued warrants to purchase stock as described above. The fair value of the warrants was estimated by management in the absence of a readily ascertainable market value as follows: September 30, 2016 Level 1 Level 2 Level 3 Warrant issued to acquire common stock $ — $ — $ 204 Change in Level 3 liabilities for the year ended September 30, 2016 : Beginning Balance Realized/Unrealized Purchases and Ending Balance Change in Unrealized (gains) losses for liabilities held at October 1, 2015 (Gains) Losses Settlements September 30, 2016 September 30, 2015 Warrant issued to acquire common stock $ — $ 27 $ 177 $ 204 $ 27 The Company has other 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 September 30, 2016 and September 30, 2015 does not differ materially from the aggregate carrying values of these financial instruments recorded in the accompanying consolidated balance sheets.

Earnings (Loss) Per Share

Earnings (Loss) Per Share	12 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
Earnings (Loss) 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 (loss) 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) Year Ended September 30, 2016 2015 Numerator: Net income $ 3,384 $ 8,728 Denominator: Denominator for basic net income per share - weighted-average outstanding shares 9,966 9,573 Effect of dilutive securities: Stock options and restricted stock 1,254 466 Denominator for diluted net income per share - weighted-average outstanding shares 11,220 10,039 Net income per share - basic (a) $ 0.34 $ 0.91 Net income per share - diluted (a) $ 0.30 $ 0.87 Ref (a): For fiscal years ended September 30, 2016 and September 30, 2015 , we realized a $0.9 million and $5.5 million tax benefit, net, respectively, related to the release of a portion of our valuation allowance to reflect the amount of our deferred tax asset that we expect to realize in future years. This resulted in an improvement of net income per share basic and diluted for both fiscal years, with a significantly higher benefit in the prior year period.

Commitment and Contingencies

Commitment and Contingencies	12 Months Ended
	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Contractual Obligations Payments Due By Period Contractual obligations Next 12 2-3 4-5 More than 5 (Amounts in thousands) Ref Total Months Years Years Years Debt obligations (a) $ 23,438 $ 3,750 $ 7,500 $ 12,188 $ — Facility leases (b) $ 4,584 $ 874 $ 1,846 $ 988 $ 876 Equipment capital leases (c) 70 70 — — — Equipment operating leases (d) 510 102 204 204 — Total Contractual Obligations $ 28,602 $ 4,796 $ 9,550 $ 13,380 $ 876 Ref (a): Amounts due under a term loan agreement related to the acquisition of Danya International on May 3, 2016 Ref (b): Represents amounts committed on facility lease agreements as of September 30, 2016 . Ref (c): Represents remaining amounts committed as of September 30, 2016 on a capital lease arrangement. Ref (d): Represents remaining amounts committed as of September 30, 2016 on operating lease arrangements. 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 September 30, 2016 and September 30, 2015 was $0.98 million and $0.95 million , respectively. Legal Proceedings 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.

Business Combinations

Business Combinations	12 Months Ended
	Sep. 30, 2016
Business Combinations [Abstract]
Business Combinations	Business Combinations In accordance with Accounting Standards Codification 805, "Business Combinations" ("ASC 805") the Company records acquisitions under the purchase method of accounting, under which the acquisition purchase price is allocated to the assets acquired and liabilities assumed based upon the respective fair values. The company utilizes estimates and in some instances, may retain the services of an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities assumed, and contingent consideration granted. Such estimates and valuations require the Company to make significant assumptions. These assumption may include projections of future events and operating performance. Acquisition of Danya International, LLC On May 3, 2016, the Company acquired 100% of the equity interests of Dayna International, LLC for a purchase price of $38.75 million . The acquisition was financed through a combination of: • borrowings of $30.0 million under the Company’s senior credit facility, • cash on hand of approximately $3.75 million , • 670,242 restricted shares of DLH common stock, valued at $2.5 million based on the 20 day volume-weighted average price (VWAP) of DLH stock, or $3.73 per share, and • $2.5 million pursuant to a subordinated loan arrangement with the Company’s largest stockholder. The subordinated loan was paid off on September 30, 2016 with proceeds from an equity Rights Offering that closed on September 29, 2016. After giving effect to the issuance of the shares of common stock issued to Seller at closing, Seller beneficially owns approximately 6.5% of the Company’s outstanding shares. The acquisition of Danya International is consistent with the Company’s growth strategy, which calls for the development of new customers and service offerings both organically and through mergers and acquisitions. The preliminary base purchase price for Danya was $38.75 million , with adjustments as necessary based on an estimated working capital excess compared to the threshold prescribed in the acquisition agreement. The estimated allocation of the purchase price is shown below, based on our assessment of the acquisition date balance sheet of Danya on May 3, 2016. The Company is in the process of completing a third-party valuation of the acquired intangible assets. Once the valuation is complete, we will make any adjustments as needed. Consideration paid for Danya acquisition included: (Amounts in thousands) Cash $ 36,470 Common stock, fair value 2,500 Total Consideration $ 38,970 (Amounts in thousands) Net assets acquired Cash and cash equivalents $ 4,009 Accounts receivable 5,712 Other current assets 444 Total current assets 10,165 Accounts payable and accrued expenses (5,013 ) Payroll liabilities (1,432 ) Net working capital surplus 3,720 Property and equipment, net 403 Intangible assets: Customer relationships 7,247 Covenant not to compete 1,369 Other long term assets 81 Net identifiable assets acquired 12,820 Goodwill 26,150 Net assets acquired $ 38,970 During the twelve months ended September 30, 2016, Danya contributed approximately $16.7 million of revenue and $3.0 million income from operations. The following table presents certain results for the twelve months ended September 30, 2016 and 2015 as though the acquisition of Danya had occurred on October 1, 2014. The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of our results if the acquisition had taken place on that date. The pro forma results presented below include amortization charges for acquired intangible assets and adjustments to interest expense incurred and exclude related acquisition expenses. The diluted earnings per share calculation takes into account as though the acquisition took place on October 1, 2014. The pro forma results also include the recognition of tax benefits from release of the valuation allowance of $1.8 million and $6.8 million for the twelve months ended September 30, 2016 and 2015 , respectively. See Note 13 for further discussion. (in thousands) Twelve Months Ended September 30, Pro forma results 2016 2015 Revenue $ 119,245 $ 114,510 Net income $ 5,322 $ 9,498 Weighted shares outstanding - basic 11,347 10,954 Weighted shares outstanding - diluted 12,601 11,420 Basic earnings per share $0.47 $0.87 Diluted earnings per share $0.42 $0.83

Related Party Transactions

Related Party Transactions	12 Months Ended
	Sep. 30, 2016
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions On May 3, 2016, the Company entered into a Consulting Services Agreement with Jeffrey Hoffman, the former owner of Danya International, LLC. Under this agreement, the Company agreed to retain the services of Mr. Hoffman as an independent contractor. The services to be provided by Mr. Hoffman consist of supporting the efficient transition of Danya’s business following the Acquisition, providing advice to ensure continuity of current operations, providing strategic advice and promoting the interests of the Company. The monthly consulting fee paid to Mr. Hoffman is $10,000 per month. The initial term of this agreement is for twelve months, which may be extended for subsequent six-month terms up to an additional twelve months. On May 2, 2016, the Company entered into a Note Purchase Agreement (the “Subordinated Loan”) with Wynnefield Partners Small Cap Value L.P., Wynnefield Partners Small Cap Value I L.P., and Wynnefield Small Cap Value Offshore Fund, Ltd. (collectively, the “Subordinated Lenders”) pursuant to which the Company obtained financing in an aggregate amount of $2.5 million and used such funds towards the purchase price of the acquisition of Danya. The Subordinated Lenders are entities affiliated with Wynnefield Capital, Inc., which beneficially owned, immediately prior to such agreement, through various related entities and funds, approximately 42% of the Company’s Common Stock. The Subordinated Loan was repaid in full on September 30, 2016, upon completion by the Company of a rights offering which resulted in $2.5 million of proceeds to cover the loan. The notes were retired on September 30, 2016 upon completion of a rights offering, in accordance with the promissory note term loan agreement and the subordinated agreement between the senior lender and Wynnefield Capital. In partial consideration for the Subordinated Loan, the Company issued the Subordinated Lenders warrants to purchase an aggregate of 53,619 shares of common stock , representing 8% of the principal amount of the Subordinated Loan. The Warrants are exercisable for five years at an initial exercise price equal to $3.73 . The initial exercise price of the Warrants is subject to adjustment for certain customary events and includes weighted average anti-dilution protection for future issuances by the Company, subject to certain exclusions. The notes related to this transaction are discussed further in Note 8 of these financial statements.

Income Taxes

Income Taxes	12 Months Ended
	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes DLH accounts for income taxes in accordance with the liability method. Under this method, 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 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. DLH recorded $0.9 million and $5.5 million benefits for income tax, net, for fiscal year ended September 30, 2016 and 2015 , respectively. The benefits related principally to the release of our valuation allowance, to reflect the amount of our deferred tax asset that we expect to realize in future years. For each fiscal year, that release was based upon our estimate of future taxable earnings based on results generated. To project taxable income in the future periods, we first estimated revenue for the carryforward period based on the expected performance under current contracts, plus expected changes in the contract base. Using these estimates of revenue, we assumed a proportional level of book income as was generated from the revenues recorded in each fiscal year. We further assumed that tax goodwill amortization would continue through its 15 year life and that amortization of intangibles would continue through their respective lives. Using the taxable income projections, we calculated the amount of net operating loss (NOL) utilization that would be achieved within each loss year’s carryforward period. Due to the acquisition of Danya during the current fiscal year, our projections of future taxable income were revised to include the expected results from the new consolidated filing group. Our estimate of future taxable income will be revised at least annually or more frequently upon the occurrence of an event which warrants a new estimate. At September 30, 2016 the Company had net operating losses of approximately $36 million and $3.6 million for U.S. and state tax return purposes, respectively. The NOLs begin to expire in 2021 and continue to expire through 2033. We analyzed our deferred tax asset related to stock based compensation and determined that the deferred tax asset should be reduced due to various factors including the future deductibility of stock option exercises. Accordingly, we reduced our deferred tax assets in the fiscal year ended September 30, 2016 to reflect the expected realization of benefit from these tax attributes. DLH has implemented the updated guidance for classification of deferred tax assets and liabilities, prospectively as of September 30, 2016 . Accordingly, all deferred taxes are considered as noncurrent as of that date. An analysis of DLH's deferred tax asset and liability is as follows: Year Ended September 30, (amounts in thousands) 2016 2015 Current deferred income tax asset: Net operating loss carryforwards and tax credits $ — $ 391 Accrued liabilities — 753 Valuation allowance — (162 ) Net current deferred tax asset $ — $ 982 Year Ended September 30, (amounts in thousands) 2016 2015 Deferred income tax asset (liability): Net operating loss carry forwards and tax credits $ 12,387 $ 12,341 AMT credit carryforward 231 183 Stock based compensation 172 767 Fixed and intangible assets (2,580 ) (2,379 ) Accrued expenses 918 — Other items, net 287 5 Valuation allowance — (1,592 ) Net deferred tax asset $ 11,415 $ 9,325 The significant components of the expense (benefit) for income taxes from continuing operations are summarized as follows: Year Ended September 30, (amounts in thousands) 2016 2015 Current expense (benefit) $ 170 $ 220 Deferred expense (benefit) (1,108 ) (5,708 ) Total expense (benefit) $ (938 ) $ (5,488 ) The following table indicates the significant differences between the federal statutory rate and DLH's effective tax rate for continuing operations: Year Ended September 30, (amounts in thousands) 2016 2015 Federal statutory rate $ 831 $ 1,134 State taxes, net 71 155 Other permanent items (86 ) 7 Change in valuation allowance (1,754 ) (6,784 ) $ (938 ) $ (5,488 ) We file income tax returns in the U.S. federal jurisdiction and in various state jurisdictions. We are no longer subject to federal income tax examinations for years before 2013 and to state and local income tax examinations by tax authorities for years before 2012.

Quarterly Financial Data (Unaud

Quarterly Financial Data (Unaudited)	12 Months Ended
	Sep. 30, 2015
Quarterly Financial Information Disclosure [Abstract]
Quarterly Financial Data (Unaudited)	Quarterly Financial Data (Unaudited) A summary of quarterly information is as follows (in thousands, except per share data) 2016 Quarters (1) First Second Third Fourth Revenue $ 16,559 $ 16,934 $ 24,989 $ 27,120 Gross margin 2,917 3,224 5,456 6,229 Income from operations 382 689 1,668 1,325 Other income (expense), net (575 ) (127 ) (374 ) (542 ) Income (loss) before income taxes (193 ) $ 562 1,294 783 Income tax expense(benefit) (2) (77 ) $ 225 518 (1,604 ) Net income (loss) $ (116 ) $ 337 $ 776 $ 2,387 Earnings (loss) per share: (3) Basic $ (0.01 ) $ 0.03 $ 0.08 $ 0.23 Diluted $ (0.01 ) $ 0.03 $ 0.07 $ 0.20 2015 Quarters (1) First Second Third Fourth Revenue $ 15,682 $ 15,893 $ 16,781 $ 16,990 Gross margin 2,533 2,730 3,038 3,387 Income from operations 259 515 763 958 Other income (expense), net (2) (36 ) (651 ) (34 ) 1,466 Income before income taxes 223 (136 ) 729 2,424 Income tax expense(benefit) (2) 89 (54 ) 292 (5,814 ) Net income $ 134 $ (82 ) $ 437 $ 8,238 Earnings per share: (3) Basic $ 0.01 $ (0.01 ) $ 0.05 $ 0.86 Diluted $ 0.01 $ (0.01 ) $ 0.04 $ 0.82 _______________________________________________________________________________ (1) Sum of the quarterly amounts may not equal the full fiscal year due to the effect of rounding. (2) Refer to Note 4, Supporting Financial Information, for detailed explanation of the settlement of the retroactive payment claim in second quarter 2015, favorable closure of the legacy payroll tax payable in fourth quarter 2015, and income tax benefit recorded in fourth quarter 2016 and fourth quarter 2015. (3) Sum of the quarterly net income (loss) per share amounts may not equal the full fiscal year net income per share amount due to the effect of changes during the year in the number of shares outstanding.

Employee Benefit Plans

Employee Benefit Plans	12 Months Ended
	Sep. 30, 2015
Compensation and Retirement Disclosure [Abstract]
Employee Benefits Plans	Employee Benefit Plans As of September 30, 2016 , DLH and its subsidiaries maintain the DLH 401(k) Plan (the "401(k) Plan") , a defined contribution and supplemental pension plan for the benefit of its eligible employees. DLH may provide a discretionary matching contribution of of a participant's elective contributions under the 401 (k) Plan. DLH recorded related expense of $142.0 thousand in fiscal 2016 and $24.0 thousand in fiscal year 2015 . A participant is always fully vested in his or her elective contributions and vests in Company matching contributions over a 4 year period.

Subsequent Events

Subsequent Events	12 Months Ended
	Sep. 30, 2015
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On November 10, 2016, an aggregate of 93,750 shares of Common Stock of the Company were issued to the non-employee members of the Company's Board of Directors, in accordance with DLH's compensation policy for non-employee directors. The shares vested immediately, and stock expense of approximately $456 thousand was recognized accordingly. This transaction will be reflected in DLH first quarter results for fiscal year 2017. 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 further subsequent events have occurred which require disclosure through the date that these financial statements were issued.

Significant Accounting Polici23

Significant Accounting Policies (Policies)	12 Months Ended
	Sep. 30, 2016
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, valuation allowances established against accounts receivable and deferred tax assets, and measurement of loss development on workers’ compensation claims. We evaluate these estimates and judgments on an ongoing basis and base our estimates on historical experience, current and expected future outcomes, third-party evaluations and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. We revise material accounting estimates if changes occur, such as more experience is acquired, additional information is obtained, or there is new information on which an estimate was or can be based. Actual results could differ from those estimates. In particular, a material reduction in the fair value of goodwill could have a material adverse effect on the Company’s financial position and results of operations. We account for the effect of a change in accounting estimate during the period in which the change occurs.
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. 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 and other intangible assets	Goodwill and other intangible assets We have used the acquisition method of accounting for the Danya transaction, whereby the assets acquired and liabilities assumed are recognized based upon their estimated fair values at the acquisition date. The estimated fair values of assets acquired and liabilities assumed are provisional and are based on the information that was available as of the acquisition date. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the Company is waiting for additional information necessary to finalize those fair values. Therefore, the provisional measurements of fair value reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date. Initial estimates of this allocation are shown under Note 11 Business Combinations. On the basis of the estimated assets acquired, the Company amortized $1.1 million for the five months since the acquisition and for the period ended September 30, 2016. DLH continues to review its goodwill and other intangible assets 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, 2016 we performed a goodwill impairment evaluation on the year-end carrying value of approximately million $35 million . 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, 2016. For the twelve months ended September 30, 2016, the Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill. Notwithstanding, 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.
Business Combinations	Business Combinations In accordance with Accounting Standards Codification 805, "Business Combinations" ("ASC 805") the Company records acquisitions under the purchase method of accounting, under which the acquisition purchase price is allocated to the assets acquired and liabilities assumed based upon the respective fair values. The company utilizes estimates and in some instances, may retain the services of an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities assumed, and contingent consideration granted. Such estimates and valuations require the Company to make significant assumptions. These assumption may include projections of future events and operating performance.
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 September 30, 2016 and 2015 . We report interest and penalties as a component of income tax expense. In the fiscal quarters ended September 30, 2016 and 2015 , we recognized no interest and no penalties related to income taxes.
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.
Reclassifications	Reclassifications Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. These reclassifications had no effect on previously reported results of operations or accumulated deficit.

Supporting Financial Informat24

Supporting Financial Information (Tables)	12 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of Accounts Receivable	(in thousands) September 30, September 30, Ref 2016 2015 Billed receivables $ 5,265 $ 2,498 Unbilled receivables 1,372 788 Total accounts receivable 6,637 3,286 Less: Allowance for doubtful accounts (a) — — Accounts receivable, net $ 6,637 $ 3,286 Ref (a): 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 September 30, 2016 and September 30, 2015 . Our allowance for doubtful accounts is assessed based on Company policy of specific identification for aged items. The Company generally does not have delinquent receivables due to the nature of its business.
Schedule of Other Current Assets	(in thousands) September 30, September 30, Ref 2016 2015 Prepaid insurance and benefits $ 168 $ 156 Other receivables and prepaid expenses 374 273 Other current assets $ 542 $ 429
Equipment and Improvemnts, Net	(in thousands) September 30, September 30, Ref 2016 2015 Furniture and equipment $ 638 $ 197 Computer equipment 202 162 Computer software 309 297 Leasehold improvements 38 63 Total fixed assets 1,187 719 Less accumulated depreciation and amortization (543 ) (383 ) Equipment and improvements, net (a) $ 644 $ 336 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 7 ) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are expensed as incurred. Depreciation of equipment was $188 thousand as of September 30, 2016 and $55 thousand as of September 30, 2015.
Schedule of Intangible Assets and Goodwill	(in thousands) September 30, 2016 Ref Goodwill Customer Relationships Non Compete Total Gross Balance $ 34,745 $ 7,247 $ 1,370 $ 43,362 Accumulated amortization — (993 ) (65 ) (1,058 ) Net balance (a) $ 34,745 $ 6,254 $ 1,305 $ 42,304 Ref (a): Estimated amortization expense for future years: (in thousands) Year 1 $ 2,375 Year 2 2,142 Year 3 1,519 Year 4 825 Year 5 152 Thereafter 546 $ 7,559 Ref (a): Intangibles acquired during the acquisition of Danya included customer relationships and a covenant not to compete. The intangibles are amortized on a straight-line basis over the estimated useful lives ( 4 - 9 years). Total amount of amortization expense for the year ended September 30, 2016 was $1 million .
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense	Ref (a): Estimated amortization expense for future years: (in thousands) Year 1 $ 2,375 Year 2 2,142 Year 3 1,519 Year 4 825 Year 5 152 Thereafter 546 $ 7,559
Schedule of Accrued Payroll	(in thousands) September 30, September 30, Ref 2016 2015 Accrued payroll related to billed receivables $ 3,616 $ 2,259 Accrued payroll related to unbilled accounts receivable — 536 Total accrued payroll $ 3,616 $ 2,795
Accounts Payable, Accrued Expenses, and Other Current Liabilities	(in thousands) September 30, September 30, Ref 2016 2015 Accounts payable $ 4,324 $ 87 Accrued benefits 1,197 267 Accrued bonus and incentive compensation 508 858 Accrued workers compensation insurance 981 945 Other accrued expenses 126 694 Accounts payable, accrued expenses, and other current liabilities $ 7,136 $ 2,851
Schedule of Debt Obligations	(in thousands) September 30, September 30, Ref 2016 2015 Bank term loan (a) $ 23,438 $ — Less unamortized debt issuance costs (1,222 ) — Net bank debt obligation 22,216 — Less current portion of bank debt obligations (3,560 ) — Long term portion of bank debt obligation $ 18,656 $ — Ref (a): Maturity of the net bank debt obligation as follows, in thousands: Year 1 $ 3,750 Year 2 3,750 Year 3 3,750 Year 4 3,750 Year 5 8,438 Total net bank debt obligation $ 23,438
Other Income (Expense)	(in thousands) Twelve Months Ended September 30, Ref 2016 2015 Interest income (expense), net (a) $ (454 ) $ (80 ) Amortization of deferred financing costs (b) (289 ) — Other income (expense), net (c) (80 ) 824 Acquisition expense (d) (795 ) — Other income (expense), net $ (1,618 ) $ 744 Ref (a): Interest expense on borrowing related to the acquisition of Danya Ref (b): Amortizations of expenses related to securing financing to acquire Danya Ref (c): Prior year miscellaneous other income includes $1.5 million from resolution of the legacy payroll tax issue in fourth quarter 2015, partially offset by the $0.6 million , net, March 2015 non-cash settlement of the retroactive payment issue. Ref (d): Reflects non-operational expenses related to the acquisition Danya.

Cash and Credit Facilities (Tab

Cash and Credit Facilities (Tables)	12 Months Ended
	Sep. 30, 2016
Cash and Cash Equivalents [Abstract]
Schedule of Loan Facilities and Subordinated Debt Financing	A summary of our loan facilities and subordinated debt financing for the period ended September 30, 2016 is as follows: ($ in Millions) As of September 30, 2016 Lender Arrangement Loan Balance Interest * Maturity Date Fifth Third Bank Secured term loan $25 million ceiling (a) $ 23.4 LIBOR + 3.0% 05/01/21 Fifth Third Bank Secured revolving line of credit $10 million ceiling (b) $ — LIBOR + 3.0% 05/01/18 Wynnefield Capital Subordinated notes (c) $ — 09/30/16 * Interest rate as of September 30, 2016 was 3.5% (a) Represents the principal amounts payable on our Term Loan with Fifth Third Bank that partially funded our acquisition of Danya on May 3, 2016. The $25.0 million term loan from Fifth Third Bank was funded at closing and is secured by liens on substantially all of the assets of DLH and Danya. The principal of the Term Loan is payable in fifty-nine consecutive monthly installments of $312,500 beginning on June 1, 2016 with the remaining balance due on May 1, 2021. The Term Loan agreement requires compliance with a number of financial covenants and contains restrictions on our ability to engage in certain transactions. Among other matters, we must comply with limitations on: granting liens; incurring other indebtedness; maintenance of assets; investments in other entities and extensions of credit; mergers and consolidations; and changes in nature of business. The loan agreement also requires us to comply with certain financial covenants including: (i) a minimum fixed charge coverage ratio of at least 1.35 to 1.0 commencing with the quarter ending June 30, 2016, and for all subsequent periods, and (ii) a Funded Indebtedness to Adjusted EBITDA ratio not exceeding the ratio of 2.99 to 1.0 at closing and thereafter a ratio ranging from 3.5 to 1.0 for the period through September 30, 2016 to 2.5 to 1.0 for the period ending September 30, 2018. In addition to monthly payments of the outstanding indebtedness, the loan agreement also requires prepayments of a percentage of excess cash flow, as defined in the loan agreement. Accordingly, a portion of our cash flow from operations will be dedicated to the repayment of our indebtedness. DLH is fully compliant with all covenants under the Loan Agreement with Fifth Third Bank. (b) The secured revolving line of credit from Fifth Third Bank has a ceiling of up to $10.0 million , of which $5.0 million was drawn at closing to cover partial financing of the Danya purchase. Borrowing on the line of credit is secured by liens on substantially all of the assets of DLH and Danya. At September 30, 2016 , DLH had repaid all draws on our revolving line of credit with no remaining balance. The Company's total borrowing availability, based on eligible accounts receivables at September 30, 2016, was $5.0 million . This capacity was comprised of $0.9 million in a stand-by letter of credit and unused borrowing capacity of $4.1 million . The revolving line of credit is subject to loan covenants as described above in the Term Loan, and DLH is fully compliant with those covenants. (c)The Company issued subordinated notes to Wynnefield Capital in the aggregate principal amount of $2.5 million . The notes were retired on September 30, 2016 upon completion of a rights offering that resulted in $2.5 million of proceeds used to payoff the notes, in accordance with the promissory note term loan agreement and the subordinated agreement between the senior lender and Wynnefield Capital.

Stock-based Compensation, Equit

Stock-based Compensation, Equity Grants, and Warrants (Tables)	12 Months Ended
	Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based Compensation Expense	Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our statement of operations: (in thousands) Year Ended Ref September 30, 2016 2015 DLH employees $ 90 $ 302 Non-employee directors (a) 376 177 Total stock option expense $ 466 $ 479 Ref (a): Equity grants of restricted stock to non-employee directors, in accordance with DLH compensation policy for non-employee directors. Unrecognized stock-based compensation expense (in thousands) Period Ended September 30, Ref 2016 2015 Unrecognized expense for DLH employees (a) $ 18 $ 44 Unrecognized expense for non-employee directors (b) 24 96 Total unrecognized expense $ 42 $ 140 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. For options that vest based on the Company’s common stock achieving and maintaining defined market prices, the Company values the awards with a binomial model that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation expense is recognized over the derived service period determined in the valuation. This expense is expected to be recognized within the next twelve months. 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 within the next twelve months.
Stock Option Activity	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 Canceled (56 ) $1.40 Options outstanding, September 30 , 2015 2,324 $1.40 6.8 $ 3,649 Granted (a) 25 $2.80 Exercised (123 ) $1.40 Options outstanding, September 30, 2016 2,226 $1.43 5.8 $ 7,581 Ref (a): Option grants to DLH employees were valued using a binomial model, under the following criteria: Risk free interest rate 1.01 % Contractual term 10 years Dividend yield — % Expected lives 10 years Expected volatility 106 % Fair value per option $2.55
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]	Ref (a): Option grants to DLH employees were valued using a binomial model, under the following criteria: Risk free interest rate 1.01 % Contractual term 10 years Dividend yield — % Expected lives 10 years Expected volatility 106 % Fair value per option $2.55
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 September 30, Ref 2016 2015 Vested and exercisable (a) 1,909 1,093 Unvested (b) 317 1,231 Options outstanding 2,226 2,324 Ref (a): Weighted average exercise price of vested and exercisable shares was $1.48 and $1.40 at September 30, 2016 and 2015 , respectively. Aggregate intrinsic value was $6.4 million and $1.6 million at September 30, 2016 and 2015 , respectively. Weighted average contractual term was 6.0 years and 7.3 years at September 30, 2016 and 2015 , respectively. Ref (b): Certain awards vest upon satisfaction of certain performance criteria.

Fair Value of Financial Instr27

Fair Value of Financial Instruments (Tables)	12 Months Ended
	Sep. 30, 2016
Fair Value Disclosures [Abstract]
Key Assumptions Used in Valuation of Warrants	Key assumptions used in the valuation of the warrants at issuance include the following: Risk free interest rate 1.01 % Contractual term 5 years Dividend yield — % Expected lives 5 years Expected volatility 74 % Fair value per warrant $3.31
Fair Value of Warrants	The fair value of the warrants was estimated by management in the absence of a readily ascertainable market value as follows: September 30, 2016 Level 1 Level 2 Level 3 Warrant issued to acquire common stock $ — $ — $ 204
Change in Level 3 Liabilities	Change in Level 3 liabilities for the year ended September 30, 2016 : Beginning Balance Realized/Unrealized Purchases and Ending Balance Change in Unrealized (gains) losses for liabilities held at October 1, 2015 (Gains) Losses Settlements September 30, 2016 September 30, 2015 Warrant issued to acquire common stock $ — $ 27 $ 177 $ 204 $ 27

Earnings (Loss) Per Share (Tabl

Earnings (Loss) Per Share (Tables)	12 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
Diluted earnings per share	Diluted earnings per share is calculated using the treasury stock method. (in thousands) Year Ended September 30, 2016 2015 Numerator: Net income $ 3,384 $ 8,728 Denominator: Denominator for basic net income per share - weighted-average outstanding shares 9,966 9,573 Effect of dilutive securities: Stock options and restricted stock 1,254 466 Denominator for diluted net income per share - weighted-average outstanding shares 11,220 10,039 Net income per share - basic (a) $ 0.34 $ 0.91 Net income per share - diluted (a) $ 0.30 $ 0.87 Ref (a): For fiscal years ended September 30, 2016 and September 30, 2015 , we realized a $0.9 million and $5.5 million tax benefit, net, respectively, related to the release of a portion of our valuation allowance to reflect the amount of our deferred tax asset that we expect to realize in future years. This resulted in an improvement of net income per share basic and diluted for both fiscal years, with a significantly higher benefit in the prior year period.

Commitment and Contingencies (T

Commitment and Contingencies (Tables)	12 Months Ended
	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Contractual Obligations	Contractual Obligations Payments Due By Period Contractual obligations Next 12 2-3 4-5 More than 5 (Amounts in thousands) Ref Total Months Years Years Years Debt obligations (a) $ 23,438 $ 3,750 $ 7,500 $ 12,188 $ — Facility leases (b) $ 4,584 $ 874 $ 1,846 $ 988 $ 876 Equipment capital leases (c) 70 70 — — — Equipment operating leases (d) 510 102 204 204 — Total Contractual Obligations $ 28,602 $ 4,796 $ 9,550 $ 13,380 $ 876 Ref (a): Amounts due under a term loan agreement related to the acquisition of Danya International on May 3, 2016 Ref (b): Represents amounts committed on facility lease agreements as of September 30, 2016 . Ref (c): Represents remaining amounts committed as of September 30, 2016 on a capital lease arrangement. Ref (d): Represents remaining amounts committed as of September 30, 2016 on operating lease arrangements.

Business Combinations (Tables)

Business Combinations (Tables)	12 Months Ended
	Sep. 30, 2016
Business Combinations [Abstract]
Schedule of Consideration Transfered	Consideration paid for Danya acquisition included: (Amounts in thousands) Cash $ 36,470 Common stock, fair value 2,500 Total Consideration $ 38,970
Schedule of Recognized Identified Assets Acquired	(Amounts in thousands) Net assets acquired Cash and cash equivalents $ 4,009 Accounts receivable 5,712 Other current assets 444 Total current assets 10,165 Accounts payable and accrued expenses (5,013 ) Payroll liabilities (1,432 ) Net working capital surplus 3,720 Property and equipment, net 403 Intangible assets: Customer relationships 7,247 Covenant not to compete 1,369 Other long term assets 81 Net identifiable assets acquired 12,820 Goodwill 26,150 Net assets acquired $ 38,970
Pro Forma Results	The following table presents certain results for the twelve months ended September 30, 2016 and 2015 as though the acquisition of Danya had occurred on October 1, 2014. The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of our results if the acquisition had taken place on that date. The pro forma results presented below include amortization charges for acquired intangible assets and adjustments to interest expense incurred and exclude related acquisition expenses. The diluted earnings per share calculation takes into account as though the acquisition took place on October 1, 2014. The pro forma results also include the recognition of tax benefits from release of the valuation allowance of $1.8 million and $6.8 million for the twelve months ended September 30, 2016 and 2015 , respectively. See Note 13 for further discussion. (in thousands) Twelve Months Ended September 30, Pro forma results 2016 2015 Revenue $ 119,245 $ 114,510 Net income $ 5,322 $ 9,498 Weighted shares outstanding - basic 11,347 10,954 Weighted shares outstanding - diluted 12,601 11,420 Basic earnings per share $0.47 $0.87 Diluted earnings per share $0.42 $0.83

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Schedule of analysis of deferred tax asset and liability	Year Ended September 30, (amounts in thousands) 2016 2015 Current deferred income tax asset: Net operating loss carryforwards and tax credits $ — $ 391 Accrued liabilities — 753 Valuation allowance — (162 ) Net current deferred tax asset $ — $ 982 Year Ended September 30, (amounts in thousands) 2016 2015 Deferred income tax asset (liability): Net operating loss carry forwards and tax credits $ 12,387 $ 12,341 AMT credit carryforward 231 183 Stock based compensation 172 767 Fixed and intangible assets (2,580 ) (2,379 ) Accrued expenses 918 — Other items, net 287 5 Valuation allowance — (1,592 ) Net deferred tax asset $ 11,415 $ 9,325
Summary of significant components of the expense (benefit) for income taxes from continuing operations	The significant components of the expense (benefit) for income taxes from continuing operations are summarized as follows: Year Ended September 30, (amounts in thousands) 2016 2015 Current expense (benefit) $ 170 $ 220 Deferred expense (benefit) (1,108 ) (5,708 ) Total expense (benefit) $ (938 ) $ (5,488 )
Schedule of significant differences between the Federal statutory rate and the entity's effective tax rate for continuing operations	The following table indicates the significant differences between the federal statutory rate and DLH's effective tax rate for continuing operations: Year Ended September 30, (amounts in thousands) 2016 2015 Federal statutory rate $ 831 $ 1,134 State taxes, net 71 155 Other permanent items (86 ) 7 Change in valuation allowance (1,754 ) (6,784 ) $ (938 ) $ (5,488 )

Quarterly Financial Data (Una32

Quarterly Financial Data (Unaudited) (Tables)	12 Months Ended
	Sep. 30, 2015
Quarterly Financial Information Disclosure [Abstract]
Schedule of Quarterly Financial Information	A summary of quarterly information is as follows (in thousands, except per share data) 2016 Quarters (1) First Second Third Fourth Revenue $ 16,559 $ 16,934 $ 24,989 $ 27,120 Gross margin 2,917 3,224 5,456 6,229 Income from operations 382 689 1,668 1,325 Other income (expense), net (575 ) (127 ) (374 ) (542 ) Income (loss) before income taxes (193 ) $ 562 1,294 783 Income tax expense(benefit) (2) (77 ) $ 225 518 (1,604 ) Net income (loss) $ (116 ) $ 337 $ 776 $ 2,387 Earnings (loss) per share: (3) Basic $ (0.01 ) $ 0.03 $ 0.08 $ 0.23 Diluted $ (0.01 ) $ 0.03 $ 0.07 $ 0.20 2015 Quarters (1) First Second Third Fourth Revenue $ 15,682 $ 15,893 $ 16,781 $ 16,990 Gross margin 2,533 2,730 3,038 3,387 Income from operations 259 515 763 958 Other income (expense), net (2) (36 ) (651 ) (34 ) 1,466 Income before income taxes 223 (136 ) 729 2,424 Income tax expense(benefit) (2) 89 (54 ) 292 (5,814 ) Net income $ 134 $ (82 ) $ 437 $ 8,238 Earnings per share: (3) Basic $ 0.01 $ (0.01 ) $ 0.05 $ 0.86 Diluted $ 0.01 $ (0.01 ) $ 0.04 $ 0.82 _______________________________________________________________________________ (1) Sum of the quarterly amounts may not equal the full fiscal year due to the effect of rounding. (2) Refer to Note 4, Supporting Financial Information, for detailed explanation of the settlement of the retroactive payment claim in second quarter 2015, favorable closure of the legacy payroll tax payable in fourth quarter 2015, and income tax benefit recorded in fourth quarter 2016 and fourth quarter 2015. (3) Sum of the quarterly net income (loss) per share amounts may not equal the full fiscal year net income per share amount due to the effect of changes during the year in the number of shares outstanding.

Business Overview (Details)

Business Overview (Details)	12 Months Ended
	Sep. 30, 2016employeelocation	Sep. 30, 2015
Concentration Risk [Line Items]
Number of employees (employee) | employee	1,400
Minimum number of locations in which entity operates (location) | location	30
Human Services and Solutions | Revenue concentration | Customer concentration
Concentration Risk [Line Items]
Concentration risk percentage (percent)	13.00%
US Government | Revenue concentration | Customer concentration
Concentration Risk [Line Items]
Concentration risk percentage (percent)	100.00%
DVA | Minimum
Concentration Risk [Line Items]
Term of government contract	1 year
DVA | Maximum
Concentration Risk [Line Items]
Term of government contract	4 years
DVA | Revenue concentration | Customer concentration
Concentration Risk [Line Items]
Concentration risk percentage (percent)	72.00%	95.00%

Supporting Financial Informat34

Supporting Financial Information - Accounts Receivable (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2,016
Total accounts receivable	$ 6,637	$ 3,286
Less: Allowance for doubtful accounts	0	0
Accounts receivable, net	6,637	3,286
Billed Receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	5,265	2,498
Unbilled Receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	$ 1,372	$ 788

Supporting Financial Informat35

Supporting Financial Information - Other Current Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Document Fiscal Year Focus	2,016
Prepaid insurance and benefits	$ 168	$ 156
Other receivables and prepaid expenses	374	273
Other current assets	$ 542	$ 429

Supporting Financial Informat36

Supporting Financial Information - Equipment and Improvements, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Property, Plant and Equipment [Line Items]
Furniture and equipment	$ 638	$ 197
Computer equipment	202	162
Computer software	309	297
Leasehold improvements	38	63
Total fixed assets	1,187	719
Less accumulated depreciation and amortization	(543)	(383)
Equipment and improvements, net	$ 644	$ 336
Leasehold Improvements | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years	3 years
Leasehold Improvements | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives	7 years	7 years
Equipment
Property, Plant and Equipment [Line Items]
Depreciation, Depletion and Amortization	$ 188	$ 55

Supporting Financial Informat37

Supporting Financial Information - Goodwill and Intangibles (Details) $ in Thousands	5 Months Ended	12 Months Ended
	Sep. 30, 2016USD ($)	Sep. 30, 2016USD ($)
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 1,100	$ 1,000
Document Period End Date		Sep. 30, 2016
Goodwill
Goodwill, Gross	34,745	$ 34,745
Goodwill	34,745	34,745
Intangible Assets
Gross Balance, Total	43,362	43,362
Accumulated amortization	(1,058)	(1,058)
Net balance	7,559	7,559
Net Balance, Total	42,304	42,304
Estimated amortization expense for future years
Year 1	2,375	2,375
Year 2	2,142	2,142
Year 3	1,519	1,519
Year 4	825	825
Year 5	152	152
Thereafter	546	546
Net balance	7,559	7,559
Customer Relationships
Intangible Assets
Gross Balance	7,247	7,247
Accumulated amortization	(993)	(993)
Net balance	6,254	6,254
Estimated amortization expense for future years
Net balance	6,254	6,254
Non Compete
Intangible Assets
Gross Balance	1,370	1,370
Accumulated amortization	(65)	(65)
Net balance	1,305	1,305
Estimated amortization expense for future years
Net balance	$ 1,305	$ 1,305
Maximum
Intangible Assets
Amortization period		9 years
Minimum
Intangible Assets
Amortization period		4 years

Supporting Financial Informat38

Supporting Financial Information - Accrued Payroll (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Document Fiscal Year Focus	2,016
Accrued payroll related to billed receivables	$ 3,616	$ 2,259
Accrued payroll related to unbilled accounts receivable	0	536
Total accrued payroll	$ 3,616	$ 2,795

Supporting Financial Informat39

Supporting Financial Information - Accounts Payable, Accrued Expense and Other Current Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Document Fiscal Year Focus	2,016
Accounts payable	$ 4,324	$ 87
Accrued benefits	1,197	267
Accrued bonus and incentive compensation	508	858
Accrued workers compensation insurance	981	945
Other accrued expenses	126	694
Accounts payable, accrued expenses, and other current liabilities	$ 7,136	$ 2,851

Supporting Financial Informat40

Supporting Financial Information - Debt Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015
Debt Instrument [Line Items]
Net bank debt obligation	$ 23,438
Maturity of Debt Obligations
Year 1	3,750
Notes Payable to Banks
Debt Instrument [Line Items]
Bank term loan	23,438
Less unamortized debt issuance costs	(1,222)	$ 0
Net bank debt obligation	22,216	0
Less current portion of bank debt obligations	3,560	0
Long term portion of bank debt obligation	18,656	0
Maturity of Debt Obligations
Year 1	3,750
Year 2	3,750
Year 3	3,750
Year 4	3,750
Year 5	8,438
Total net bank debt obligation	23,438
Bank revolving line of credit | Notes Payable to Banks
Debt Instrument [Line Items]
Bank term loan	0
Maturity of Debt Obligations
Total net bank debt obligation	0
Bank term loan | Notes Payable to Banks
Debt Instrument [Line Items]
Bank term loan	23,438	0
Maturity of Debt Obligations
Total net bank debt obligation	$ 23,438	$ 0

Supporting Financial Informat41

Supporting Financial Information - Other Income (Expense) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2013	Sep. 30, 2016	Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Document Fiscal Year Focus									2,016
Interest income (expense), net									$ (454)	$ (80)
Amortization of deferred financing costs									(289)	0
Other income (expense), net									(80)	824
Acquisition expense									795	0
Other income (expense), net	$ (542)	$ (374)	$ (127)	$ (575)	$ 1,466	$ (34)	$ (651)	$ (36)	$ (1,618)	744
Reduction of accrued payroll taxes related to legacy payroll tax issue					$ 1,500					$ (1,477)
Accrued interest and penalties							$ 600

Cash and Credit Facilities - Na

Cash and Credit Facilities - Narrative (Details) - USD ($)	Sep. 30, 2016	May 03, 2016
Dayna International, LLC
Line of Credit Facility [Line Items]
Percentage of interest acquired		100.00%
Subordinated Debt | Dayna International, LLC
Line of Credit Facility [Line Items]
Debt face amount		$ 2,500,000
Revolving Line of Credit | Notes Payable to Banks | Dayna International, LLC
Line of Credit Facility [Line Items]
Maximum availability		30,000,000
Wynnefiled Capital, Bank Term Loan | Subordinated Debt
Line of Credit Facility [Line Items]
Debt face amount	$ 0	2,500,000
Wynnefiled Capital, Bank Term Loan | Subordinated Debt | Dayna International, LLC
Line of Credit Facility [Line Items]
Debt face amount		$ 2,500,000

Cash and Credit Facilities - Sc

Cash and Credit Facilities - Schedule of Long Term Line of Credit (Details)	May 03, 2016USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)
Debt Instrument [Line Items]
Fixed Charge Coverage Ratio	1.35
Ratio of Debt to Earnings Before Interest, Taxes, Depreciations, and Amortization	2.99
Ratio of Debt to Earnings Before Interest, Taxes, Depreciations, and Amortization, Period Two	3.5
Ratio of Debt to Earnings Before Interest, Taxes, Depreciations, and Amortization, Period Three	2.5
Line of Credit Facility, Current Borrowing Capacity		$ 5,000,000
Debt Instrument, Interest Rate, Effective Percentage		3.50%
Bank term loan
Debt Instrument [Line Items]
Maximum availability		$ 25,000,000
Bank term loan | Term Loan with Fifth Third Bank [Member]
Debt Instrument [Line Items]
Maximum availability	$ 25,000,000
Line of Credit Facility, Periodic Payment, Principal	312,500
Bank revolving line of credit
Debt Instrument [Line Items]
Maximum availability	10,000,000	10,000,000
Long-term Line of Credit	5,000,000
Debt Instrument, Unused Borrowing Capacity, Amount		4,100,000
Standby Letters of Credit [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Current Borrowing Capacity		900,000
Subordinated Debt
Debt Instrument [Line Items]
Proceeds from Issuance of Long-term Debt		2,500,000
Notes Payable to Banks
Debt Instrument [Line Items]
Bank term loan		23,438,000
Notes Payable to Banks | Bank term loan
Debt Instrument [Line Items]
Bank term loan		23,438,000	$ 0
Notes Payable to Banks | Bank revolving line of credit
Debt Instrument [Line Items]
Bank term loan		0
Subordinated Debt | Wynnefiled Capital, Bank Term Loan
Debt Instrument [Line Items]
Debt face amount	$ 2,500,000	$ 0
London Interbank Offered Rate (LIBOR) [Member] | Bank term loan
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		3.00%
London Interbank Offered Rate (LIBOR) [Member] | Bank revolving line of credit
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		3.00%

Significant Accounting Polici44

Significant Accounting Policies (Details) - USD ($)	5 Months Ended	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2015
Goodwill [Line Items]
Cash, FDIC Insured Amount	$ 250,000	$ 250,000
Deferred Tax Assets, Net	11,415,000	11,415,000	$ 9,325,000
Amortization of Intangible Assets	1,100,000	1,000,000
Goodwill and other intangible assets, net	$ 34,700,000	$ 34,700,000

Stock-based Compensation, Equ45

Stock-based Compensation, Equity Grants, and Warrants - Additional Information (Details) - Employee Stock Option shares in Millions	12 Months Ended
	Sep. 30, 2016shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk free interest rate	1.01%
Expected volatility	106.00%
2006 Long Term Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant	1
Expiration term of options	10 years

Stock-based Compensation, Equ46

Stock-based Compensation, Equity Grants, and Warrants - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense	$ 466	$ 479
Total unrecognized expense	42	140
DLH Employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total unrecognized expense	18	44
Non-employee Directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total unrecognized expense	24	96
Selling, General and Administrative Expenses | DLH Employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense	90	302
Selling, General and Administrative Expenses | Non-employee Directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense	$ 376	$ 177

Stock-based Compensation, Equ47

Stock-based Compensation, Equity Grants, and Warrants - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Number of Shares
Outstanding at beginning of period (in shares)	2,324	2,380
Granted (in shares)	25
Cancelled (in shares)	(123)	(56)
Outstanding at end of period (in shares)	2,226	2,324	2,380
Weighted Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 1.40	$ 1.40
Granted (in dollars per share)	2.80
Cancelled (in dollars per share)	1.40	1.40
Outstanding at end of period (in dollars per share)	$ 1.43	$ 1.40	$ 1.40
Share Based Compensation Arrangement by Share Based Payment, Award, Options Weighted Average Remaining Contractual Term [Abstract]
Outstanding	5 years 9 months 8 days	6 years 9 months 22 days	7 years 10 months
Share Based Compensation Arrangement by Share Based Payment, Award, Options Aggregate Intrinsic Value [Abstract]
Outstanding at the end of period (in dollars)	$ 7,581	$ 3,649	$ 1,589

Stock-based Compensation, Equ48

Stock-based Compensation, Equity Grants, and Warrants - Fair Value Assumptions (Details) - Employee Stock Option	12 Months Ended
	Sep. 30, 2016$ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk free interest rate	1.01%
Contractual term	10 years
Dividend yield	0.00%
Expected lives	10 years
Expected volatility	106.00%
Fair value per option	$ 2.55

Stock-based Compensation, Equ49

Stock-based Compensation, Equity Grants, and Warrants - Stock Options Outstanding, Vested and Unvested (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Vested and exercisable	1,909	1,093
Unvested	317	1,231
Option outstanding	2,226	2,324	2,380
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 1.48	$ 1.40
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested	$ 6.4	$ 1.6
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award	6 years 8 days	7 years 3 months 11 days

Fair Value of Financial Instr50

Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2016	Sep. 30, 2016	Sep. 30, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Adjustment of Warrants		$ 27
Warrants issued in connection with subordinated debt		177,000	0
Derivative financial instruments, at fair value		$ 204	$ 0
Wynnefiled Capital, Bank Term Loan
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrants issued in connection with subordinated debt	53,619

Fair Value of Financial Instr51

Fair Value of Financial Instruments - Key Assumptions (Details)	12 Months Ended
	Sep. 30, 2016$ / shares
Fair Value Disclosures [Abstract]
Risk free interest rate	1.01%
Contractual term	5 years
Dividend yield	0.00%
Expected volatility	74.00%
Fair value per warrant	$ 3.31

Fair Value of Financial Instr52

Fair Value of Financial Instruments - Fair Value of Warrant Liability (Details) $ in Thousands	12 Months Ended
	Sep. 30, 2016USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Document Period End Date	Sep. 30, 2016
Fair Value, Measurements, Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant issued to acquire common stock	$ 0
Fair Value, Measurements, Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant issued to acquire common stock	0
Fair Value, Measurements, Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant issued to acquire common stock	$ 204

Fair Value of Financial Instr53

Fair Value of Financial Instruments - Change in Level 3 Liabilities (Details) - Warrant [Member] $ in Thousands	12 Months Ended
	Sep. 30, 2016USD ($)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	$ 0
Realized/Unrealized (Gains) Losses	27
Purchases and Settlements	177
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	204
Change in Unrealized (gains) losses for liabilities held at	$ 27

Earnings (Loss) Per Share (Deta

Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2013	Sep. 30, 2016	Sep. 30, 2015
Numerator:
Net income	$ 2,387	$ 776	$ 337	$ (116)	$ 8,238	$ 437	$ (82)	$ 134	$ 3,384	$ 8,728
Denominator:
Denominator for basic net income per share - weighted-average outstanding shares									9,966	9,573
Effect of dilutive securities:
Stock options and restricted stock									1,254	466
Denominator for diluted net income per share - weighted-average outstanding shares									11,220	10,039
Net income (loss) per share - basic (dollars per share)	$ 0.23	$ 0.08	$ 0.03	$ (0.01)	$ 0.86	$ 0.05	$ (0.01)	$ 0.01	$ 0.34	$ 0.91
Net income (loss) per share - diluted (dollars per share)	$ 0.20	$ 0.07	$ 0.03	$ (0.01)	$ 0.82	$ 0.04	$ (0.01)	$ 0.01	$ 0.30	$ 0.87
Income tax expense (benefit), net	$ 1,604	$ (518)	$ (225)	$ 77	$ 5,814	$ (292)	$ 54	$ (89)	$ 938	$ 5,488

Commitment and Contingencies -

Commitment and Contingencies - Contractual Obligations (Details) $ in Thousands	Sep. 30, 2016USD ($)
Maturity of Debt Obligations
Year 1	$ 3,750
Loan Payable, 1-3 Years	7,500
Loan Payable, 4-5 Years	12,188
Net bank debt obligation	23,438
Less than 1 Year	4,796
Total Obligations, 1-3 Years	9,550
Total Obligations, 4-5 Years	13,380
Total Obligations, More than 5 Years	876
Total	28,602
Facility leases
Maturity of Debt Obligations
Operating Leases, Less than 1 Year	874
Operating Leases, 1-3 Years	1,846
Operating Leases, 4-5 Years	988
Operating Leases,More than 5 Years	876
Total	4,584
Equipment capital leases
Maturity of Debt Obligations
Operating Leases, Less than 1 Year	102
Operating Leases, 1-3 Years	204
Operating Leases, 4-5 Years	204
Operating Leases,More than 5 Years	0
Total	510
Less than 1 Year	70
Total Obligations, 1-3 Years	0
Total	$ 70

Commitment and Contingencies 56

Commitment and Contingencies - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Document Period End Date	Sep. 30, 2016
Accrued workers compensation insurance	$ 981	$ 945

Business Combinations - Narrati

Business Combinations - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	May 03, 2016	Sep. 30, 2016	Sep. 30, 2015
Business Acquisition [Line Items]
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual		$ 16,700
Non-cash equity consideration for acquisition of Danya		2,500	$ 0
Business Acquisition, Pro Forma Income (Loss) from Continuing Operations, Net of Tax		3,000
Change in valuation allowance		$ 1,800	$ 6,800
Dayna International, LLC
Business Acquisition [Line Items]
Business Combination, Consideration Transferred, Net of Debt Issuance Cost	$ 38,750
Weighted Average Price Volume, Number of Days	20 days
Business Acquisition, Share Price	$ 3.73
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	6.50%
Payments to Acquire Businesses, Gross	$ 3,750
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Shares Issued	670,242
Non-cash equity consideration for acquisition of Danya	$ 2,500
Dayna International, LLC | Bank revolving line of credit
Business Acquisition [Line Items]
Debt face amount	30,000
Dayna International, LLC | Subordinated Debt
Business Acquisition [Line Items]
Debt face amount	$ 2,500

Business Combinations - Conside

Business Combinations - Consideration Transferred (Details) - USD ($) $ in Thousands	May 03, 2016	Sep. 30, 2016	Sep. 30, 2015
Business Acquisition [Line Items]
Non-cash equity consideration for acquisition of Danya		$ 2,500	$ 0
Dayna International, LLC
Business Acquisition [Line Items]
Payments to Acquire Businesses, Gross	$ 36,470
Non-cash equity consideration for acquisition of Danya	2,500
Business Combination, Consideration Transferred	38,970
Dayna International, LLC | Common Stock
Business Acquisition [Line Items]
Non-cash equity consideration for acquisition of Danya	$ 2,500

Business Combinations - Net Ass

Business Combinations - Net Assets Acquired (Details) - USD ($) $ in Thousands	Sep. 30, 2016	May 03, 2016
Business Acquisition [Line Items]
Goodwill and other intangible assets, net	$ 34,745
Dayna International, LLC
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents		$ 4,009
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables		5,712
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other		444
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets		10,165
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable		(5,013)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Payroll Liabilities		(1,432)
Business Combination, Estimated Net Working Class Surplus		3,720
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment		403
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets		81
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net		12,820
Goodwill and other intangible assets, net		26,150
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net		38,970
Customer Relationships [Member] | Dayna International, LLC
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill		7,247
Non Compete | Dayna International, LLC
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill		$ 1,369

Business Combinations - Pro For

Business Combinations - Pro Forma Results (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Business Acquisition [Line Items]
Document Fiscal Year Focus	2,016
Dayna International, LLC
Business Acquisition [Line Items]
Business Acquisition, Pro Forma Revenue	$ 119,245	$ 114,510
Business Acquisition, Pro Forma Net Income (Loss)	$ 5,322	$ 9,498
Business Combination, Pro Forma Results, Weighted Average Basic Shares Outstanding	$ 11,347,000	$ 10,954,000
Business Combination, Pro Forma Results, Weighted Average Diluted Shares Outstanding	12,601,000	11,420,000
Business Acquisition, Pro Forma Earnings Per Share, Basic	0.47	0.87
Business Acquisition, Pro Forma Earnings Per Share, Diluted	$ 0.42	$ 0.83

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	May 02, 2016	Jun. 30, 2016	Sep. 30, 2016	Sep. 30, 2015	May 03, 2016
Related Party Transaction [Line Items]
Warrants issued in connection with subordinated debt			177,000	0
Note Purchase Agreement with Wynnefield Partners [Member]
Related Party Transaction [Line Items]
Warrants Issued in Consideration for Subordinated Loan, Percentage or Principal Amount	8.00%
Affiliated Entity [Member] | Note Purchase Agreement with Wynnefield Partners [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Due to Related Party, Monthly Consulting Fee Paid					$ 10,000
Wynnefiled Capital, Bank Term Loan
Related Party Transaction [Line Items]
Warrants issued in connection with subordinated debt		53,619
Wynnefiled Capital, Bank Term Loan | Note Purchase Agreement with Wynnefield Partners [Member]
Related Party Transaction [Line Items]
Subordinated Lenders, Ownership Percentage of Equity	42.00%
Warrants issued in connection with subordinated debt	53,619
Class of Warrant or Right, Exercise Period	5 years
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 3.73
Subordinated Debt | Wynnefiled Capital, Bank Term Loan
Related Party Transaction [Line Items]
Debt face amount			$ 0		$ 2,500,000
Subordinated Debt | Wynnefiled Capital, Bank Term Loan | Note Purchase Agreement with Wynnefield Partners [Member]
Related Party Transaction [Line Items]
Debt face amount	$ 2,500,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2013	Sep. 30, 2016	Sep. 30, 2015
Income Tax Examination [Line Items]
Deferred taxes, net	$ (1,604)	$ 518	$ 225	$ (77)	$ (5,814)	$ 292	$ (54)	$ 89	$ (938)	$ (5,488)
Document Period End Date									Sep. 30, 2016
U.S.
Income Tax Examination [Line Items]
Net operating losses	36,000								$ 36,000
State
Income Tax Examination [Line Items]
Net operating losses	$ 3,600								$ 3,600

Income Taxes (Details 1)

Income Taxes (Details 1) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015
Current deferred income tax asset:
Net operating loss carryforwards and tax credits	$ 0	$ 391
Accrued liabilities	0	753
Valuation allowance	0	(162)
Net current deferred tax asset	0	982
Deferred income tax asset (liability):
Net operating loss carry forwards and tax credits	12,387	12,341
AMT credit carryforward	231	183
Stock based compensation	172	767
Fixed and intangible assets	(2,580)	(2,379)
Accrued expenses	918	0
Other items, net	287	5
Valuation allowance	0	(1,592)
Net deferred tax asset	$ 11,415	$ 9,325

Income Taxes (Details 2)

Income Taxes (Details 2) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2013	Sep. 30, 2016	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Current expense (benefit)									$ 170	$ 220
Deferred expense (benefit)									(1,108)	(5,708)
Total expense (benefit)	$ (1,604)	$ 518	$ 225	$ (77)	$ (5,814)	$ 292	$ (54)	$ 89	$ (938)	$ (5,488)

Income Taxes (Details 3)

Income Taxes (Details 3) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2013	Sep. 30, 2016	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Federal statutory rate									$ 831	$ 1,134
State taxes, net									71	155
Other permanent items									(86)	7
Change in valuation allowance									(1,754)	(6,784)
Total expense (benefit)	$ (1,604)	$ 518	$ 225	$ (77)	$ (5,814)	$ 292	$ (54)	$ 89	$ (938)	$ (5,488)

Quarterly Financial Data (Una66

Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2013	Sep. 30, 2016	Sep. 30, 2015
Quarterly Financial Information Disclosure [Abstract]
Revenue	$ 27,120	$ 24,989	$ 16,934	$ 16,559	$ 16,990	$ 16,781	$ 15,893	$ 15,682	$ 85,602	$ 65,346
Gross Profit	6,229	5,456	3,224	2,917	3,387	3,038	2,730	2,533	17,826	11,688
Operating income	1,325	1,668	689	382	958	763	515	259	4,064	2,496
Other income (expense), net	(542)	(374)	(127)	(575)	1,466	(34)	(651)	(36)	(1,618)	744
Income before income taxes	783	1,294	562	(193)	2,424	729	(136)	223	2,446	3,240
Income Tax Expense (Benefit)	1,604	(518)	(225)	77	5,814	(292)	54	(89)	938	5,488
Net income	$ 2,387	$ 776	$ 337	$ (116)	$ 8,238	$ 437	$ (82)	$ 134	$ 3,384	$ 8,728
Net income (loss) per share - basic (dollars per share)	$ 0.23	$ 0.08	$ 0.03	$ (0.01)	$ 0.86	$ 0.05	$ (0.01)	$ 0.01	$ 0.34	$ 0.91
Net income (loss) per share - diluted (dollars per share)	$ 0.20	$ 0.07	$ 0.03	$ (0.01)	$ 0.82	$ 0.04	$ (0.01)	$ 0.01	$ 0.30	$ 0.87

Employee Benefit Plans (Details

Employee Benefit Plans (Details) - USD ($)	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Compensation and Retirement Disclosure [Abstract]
Defined Contribution Plan, Cost Recognized	$ 142,000	$ 24,000
Defined Contribution Plan Employers Matching, Contribution Vesting Period		4 years

Subsequent Events (Details)

Subsequent Events (Details) - Board of Directors - Subsequent Event $ in Thousands	Nov. 10, 2016USD ($)shares
Subsequent Event [Line Items]
Shares issued (in shares) | shares	93,750
Compensation expense | $	$ 456