Cover
Cover - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Dec. 03, 2021 | Mar. 31, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Sep. 30, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 0-18492 | ||
Entity Registrant Name | DLH HOLDINGS CORP. | ||
Entity Incorporation, State or Country Code | NJ | ||
Entity Tax Identification Number | 22-1899798 | ||
Entity Address, Address Line One | 3565 Piedmont Road, | ||
Entity Address, Address Line Two | Building 3, | ||
Entity Address, Address Line Three | Suite 700 | ||
Entity Address, City or Town | Atlanta, | ||
Entity Address, State or Province | GA | ||
Entity Address, Postal Zip Code | 30305 | ||
City Area Code | 770 | ||
Local Phone Number | 554-3545 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | DLHC | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 54,418,928 | ||
Entity Common Stock, Shares Outstanding | 12,714,269 | ||
Documents Incorporated by Reference | List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (e) under the Securities Act of 1933. Part III of this report incorporates information by reference from the Company's definitive proxy statement, which proxy statement is due to be filed with the Securities and Exchange Commission not later than 120 days after September 30, 2021. | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Central Index Key | 0000785557 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 246,094 | $ 209,185 |
Contract costs | 194,614 | 163,596 |
General and administrative costs | 25,054 | 24,195 |
Corporate development costs | 1,088 | 930 |
Depreciation and amortization | 8,115 | 7,003 |
Total operating costs | 228,871 | 195,724 |
Income from operations | 17,223 | 13,461 |
Interest expense, net | 3,784 | 3,441 |
Income before income taxes | 13,439 | 10,020 |
Income tax expense | 3,294 | 2,906 |
Net income | $ 10,145 | $ 7,114 |
Earnings Per Share [Abstract] | ||
Net income per share - basic (in dollars per share) | $ 0.81 | $ 0.58 |
Net income per share - diluted (in dollars per share) | $ 0.75 | $ 0.54 |
Weighted average common shares outstanding | ||
Basic (in shares) | 12,549 | 12,282 |
Diluted (in shares) | 13,597 | 13,105 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Sep. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 24,051 | $ 1,357 |
Accounts receivable | 33,447 | 32,541 |
Other current assets | 4,265 | 3,499 |
Total current assets | 61,763 | 37,397 |
Equipment and improvements, net | 1,912 | 3,339 |
Operating lease right-of-use assets | 19,919 | 22,427 |
Deferred taxes, net | 0 | 37 |
Goodwill | 65,643 | 67,144 |
Intangible assets, net | 47,469 | 52,612 |
Other long-term assets | 464 | 606 |
Total assets | 197,170 | 183,562 |
Current liabilities: | ||
Debt obligations - current, net of deferred financing costs | 0 | 6,727 |
Operating lease liabilities - current | 2,261 | 2,045 |
Accrued payroll | 9,125 | 10,611 |
Deferred revenue | 22,273 | 0 |
Accounts payable, accrued expenses, and other current liabilities | 32,717 | 28,578 |
Total current liabilities | 66,376 | 47,961 |
Deferred taxes, net | 1,176 | 0 |
Operating lease liabilities - long-term | 19,374 | 21,620 |
Long-term portion of bank debt obligations, net of deferred financing costs | 44,636 | 60,544 |
Total long-term liabilities | 65,186 | 82,164 |
Total liabilities | 131,562 | 130,125 |
SHAREHOLDERS’ EQUITY | ||
Common stock, $0.001 par value; authorized 40,000 shares; issued and outstanding 12,714 and 12,404 at September 30, 2021 and 2020, respectively | 13 | 12 |
Additional paid-in capital | 87,893 | 85,868 |
Accumulated deficit | (22,298) | (32,443) |
Total shareholders’ equity | 65,608 | 53,437 |
Total liabilities and shareholders' equity | $ 197,170 | $ 183,562 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2021 | Sep. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized shares (in shares) | 40,000 | 40,000 |
Common stock, issued shares (in shares) | 12,714 | 12,714 |
Common stock, outstanding shares (in shares) | 12,404 | 12,404 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities | ||
Net income | $ 10,145 | $ 7,114 |
Depreciation and amortization | 8,115 | 7,003 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of deferred financing costs charged to interest expense | 792 | 721 |
Stock based compensation expense | 1,660 | 910 |
Deferred taxes, net | 1,213 | 2,308 |
Gain from lease modification | 0 | (121) |
Changes in operating assets and liabilities | ||
Accounts receivable | (906) | (5,408) |
Other current assets | (766) | (1,592) |
Accrued payroll | (1,486) | 489 |
Deferred revenue | 22,273 | 0 |
Accounts payable, accrued expenses, and other current liabilities | 4,139 | 7,188 |
Other long-term assets and liabilities | 486 | 839 |
Net cash provided by operating activities | 45,665 | 19,451 |
Investing activities | ||
Business acquisition, net of cash acquired | 59 | (32,678) |
Purchase of equipment and improvements | (103) | (152) |
Net cash used in investing activities | (44) | (32,830) |
Financing activities | ||
Proceeds from debt obligations | 0 | 33,000 |
Repayment of debt obligations | (23,250) | (19,000) |
Repurchase of common stock | 0 | (211) |
Payment of deferred financing costs | (43) | (898) |
Proceeds from stock option exercise | 366 | 55 |
Net cash (used in)/provided by financing activities | (22,927) | 12,946 |
Net change in cash and cash equivalents | 22,694 | (433) |
Cash and cash equivalents at beginning of year | 1,357 | 1,790 |
Cash and cash equivalents at end of year | 24,051 | 1,357 |
Supplemental disclosures of cash flow information | ||
Cash paid during the year for interest | 2,941 | 2,806 |
Cash paid during the year for income taxes | 936 | 917 |
Supplemental disclosures of non-cash activity | ||
Non-cash cancellation of common stock | $ 68 | $ 211 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative-effect adjustment for adoption of ASC 842 | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated DeficitCumulative-effect adjustment for adoption of ASC 842 |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | ||||||
Beginning Balance (shares) at Sep. 30, 2019 | 12,036 | 0 | |||||
Beginning Balance at Sep. 30, 2019 | $ 45,571 | $ (2) | $ 12 | $ 0 | $ 85,114 | $ (39,555) | $ (2) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Expense related to director restricted stock unit (shares) | 90 | ||||||
Expense related to director restricted stock units | 347 | 347 | |||||
Expense related to employee stock options | 563 | 563 | |||||
Exercise of stock options (shares) | 395 | ||||||
Exercise of stock options | 55 | 55 | |||||
Repurchases of common stock (in shares) | 28 | ||||||
Repurchases of common stock | (113) | $ (113) | |||||
Cancellation of common stock (in shares) | (117) | (28) | |||||
Cancellation of common stock | (98) | $ 113 | (211) | ||||
Net income | $ 7,114 | 7,114 | |||||
Ending Balance (shares) at Sep. 30, 2020 | 12,404 | 12,404 | 0 | ||||
Ending Balance at Sep. 30, 2020 | $ 53,437 | $ 12 | $ 0 | 85,868 | (32,443) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Expense related to director restricted stock unit (shares) | 141 | ||||||
Expense related to director restricted stock units | 467 | 467 | |||||
Expense related to employee stock options | $ 1,193 | 1,193 | |||||
Exercise of stock options (shares) | 175 | 175 | |||||
Exercise of stock options | $ 434 | $ 1 | 433 | ||||
Repurchases of common stock | 0 | ||||||
Cancellation of common stock (in shares) | (6) | ||||||
Cancellation of common stock | (68) | (68) | |||||
Net income | $ 10,145 | 10,145 | |||||
Ending Balance (shares) at Sep. 30, 2021 | 12,404 | 12,714 | 0 | ||||
Ending Balance at Sep. 30, 2021 | $ 65,608 | $ 13 | $ 0 | $ 87,893 | $ (22,298) |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of DLH Holdings Corp. and its subsidiaries (together with its subsidiaries, "DLH" or the "Company" and also referred to as "we," "us," and "our"), 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 U.S. generally accepted accounting principles ("GAAP") and with the instructions to Form 10-K, Regulation S-X, and Regulation S-K. |
Business Overview
Business Overview | 12 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Overview | Business Overview The Company is a full-service provider of technology-enabled health and human services, providing solutions to three market focus areas: Defense and Veterans' Health Solutions, Human Solutions and Services, and Public Health and Life Sciences. We deliver domain-specific expertise, industry best-practices and innovations to customers across these markets leveraging seven core competencies: secure data analytics, clinical trials and laboratory services, case management, performance evaluation, system modernization, operational logistics and readiness, and strategic digital communications. The Company manages its operations from its principal executive offices in Atlanta, Georgia, and we have a complementary headquarters office in Silver Spring, Maryland. We employ over 2,300 skilled employees working in more than 30 locations throughout the United States and one location overseas. At present, the Company derives 99% 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 three largest customers are the Department of Veteran Affairs ("VA"), the Department of Health and Human Services ("HHS"), and the Department of Defense ("DoD"). The following table summarizes the revenues by customer for the years ended September 30, 2021 and 2020, respectively: Year Ended September 30, 2021 2020 (Amounts in thousands) Revenue Percent of total revenue Revenue Percent of total revenue Department of Veterans Affairs $ 110,078 45 % $ 100,204 48 % Department of Health and Human Services 91,543 37 % 95,026 45 % Department of Defense 30,930 13 % 1,303 1 % Customers with less than 10% share of total revenue 13,543 5 % 12,652 6 % Total revenue $ 246,094 100 % $ 209,185 100 % |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which requires companies to record an allowance for expected credit losses over the contractual term of certain financial assets, including short-term trade receivables and contract assets. Additionally, it expands disclosure requirements for credit quality of financial assets. ASU 2016-13 became effective for the Company in the first quarter of fiscal year 2021. The adoption of this standard did not have a material impact on our operating results, financial position, or cash flows. For further detail of our outstanding receivables see Note 7 . In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions for the application of U.S. GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") and other references rates expected to be discontinued due to reference rate reform. ASU 2020-04 became effective on March 12, 2020 for all entities meeting certain criteria. The Company may elect to apply the amendments using a prospective approach through December 31, 2022. The Company is currently assessing the impact of electing this standard on its consolidated financial statements and related disclosures and does not expect the impact to be material. In April 2020, the FASB issued a Staff Q&A, Topic 842 and 840: Accounting For Lease Concessions Related to the Effects of the COVID-19 Pandemic in order to provide clarity regarding the accounting treatment for lease concessions provided as a result of COVID-19. Under existing lease guidance, changes to certain lease terms not specified in the original lease agreement require modification accounting treatment. To provide relief, the FASB Staff Q&A permits alternatives to modification accounting under Topic 842. For concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or our obligations as the lessee, we are not required to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the lease agreement and can elect to apply or not apply the lease modification guidance in Topic 842. In fiscal year 2021, we elected to account for lease concessions received for one of our operating leases as a resolution of a contingency, whereby we remeasured our lease liability and recorded the adjustment against the right-of-use asset, without reassessing lease classification or modifying the original discount rate. As a result of this election, our lease liability and right-of-use-asset decreased by less than $0.1 million. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2021 | |
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 and intangible assets, interest rate swaps, stock-based compensation, right-of-use assets and liabilities, 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 would 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. Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, contract assets, accrued expenses, and accounts payable approximate fair value due to the short-term nature of these instruments. The fair values of the Company's debt instruments approximate fair value because the underlying interest rates approximate market rates that the Company could obtain for similar instruments at the balance sheet dates. Long-lived Assets Our long-lived assets include equipment and improvements, intangible assets, right-of-use assets, and goodwill. The Company continues to review its long-lived 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. 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 years) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Intangible assets (other than goodwill) are originally recorded at fair value and are amortized on a straight-line basis over their estimated useful lives of 10 years. Maintenance and repair costs are expensed as incurred. Right-of-use assets are measured at the present value of future minimum lease payments, including all probable renewals, plus lease payments made to the lessor before or at lease commencement and indirect costs paid, less incentives received. Our right-of-use assets include long-term leases for facilities and equipment and are amortized over their respective lease terms. Goodwill At September 30, 2021, we performed a goodwill impairment evaluation on the year-end carrying value of approximately $65.6 million. We performed a qualitative 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, 2021, as no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill. Our assessment incorporated effects of the COVID-19 pandemic, which is not expected to have a meaningful impact on our financial results. Notwithstanding this evaluation, 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. Similarly, there were no impairments during the prior year ended September 30, 2020. Income Taxes The Company 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, 2021 and 2020. We report interest and penalties as a component of income tax expense. For the years ended September 30, 2021 and 2020, 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 and Black Scholes 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 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. Treasury Stock The Company periodically purchases its own common stock that is traded on public markets as part of announced stock repurchase programs. The repurchased common stock is classified as treasury stock on the consolidated balance sheets and held at cost. As of September 30, 2021, the Company did not hold any treasury stock. Preferred Stock Our certificate of incorporation authorizes the issuance of "blank check" preferred stock with such designations, rights and preferences as may be determined from time to time by our board of directors up to an aggregate of 5,000,000 shares of preferred stock. As of September 30, 2021, the Company has not issued any preferred stock. Interest Rate Swap The Company uses derivative financial instruments to manage interest rate risk associated with its variable debt. The Company's objective in using these interest rate derivatives is to manage its exposure to interest rate movements and reduce volatility of interest expense. The gains and losses due to changes in the fair value of the interest rate swap agreements completely offset changes in the fair value of the hedged portion of the underlying debt. Offsetting changes in fair value of both the interest rate swaps and the hedged portion of the underlying debt are recognized in interest expense in the Consolidated Statements of Operations. The Company does not hold or issue any derivative instrument for trading or speculative purposes. Risks & Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position and the results of its operations, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition We recognize revenue over time when there is a continuous transfer of control to our customer. For our U.S. government contracts, this continuous transfer of control to the customer is supported by clauses in the contract that allow the U.S. government to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. When control is transferred over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. For services contracts, we satisfy our performance obligations as services are rendered. We use cost-based input and time-based output methods to measure progress. Contract costs include labor, material and allocable indirect expenses. For time-and-material contracts, we bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced since the amount corresponds directly to the value of our performance to date. We consider control to transfer when we have a present right to payment. Essentially, all of our contracts satisfy their performance obligations over time. Contracts are often modified to account for changes in contract specifications and requirements. Contract modifications impact performance obligations when the modification either creates new or changes the existing enforceable rights and obligations. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue and profit cumulatively. Furthermore, a significant change in one or more estimates could affect the profitability of our contracts. We recognize adjustments in estimated profit on contracts in the period identified. For time-and-materials contracts, revenue is recognized to the extent of billable rates times hours delivered plus materials and other reimbursable costs incurred. Revenue for cost-reimbursable contracts is recorded as reimbursable costs are incurred, including an estimated share of the applicable contractual fees earned. For firm-fixed-price contracts, the consideration received for our performance is set at a predetermined price. Revenue for our firm-fixed-price contracts is recognized over time using a straight-line measure of progress or using the percentage-of-completion method whereby progress toward completion is based on a comparison of actual costs incurred to total estimated costs to be incurred over the contract term. Contract costs are expensed as incurred. Estimated losses are recognized when identified. Contract assets - Amounts are invoiced as work progresses in accordance with agreed-upon contractual terms. In part, revenue recognition occurs before we have the right to bill, resulting in contract assets. These contract assets are reported within receivables, net on our consolidated balance sheets and are invoiced in accordance with payment terms defined in each contract. Period end balances will vary from period to period due to agreed-upon contractual terms. Contract liabilities - Amounts are a result of billings in excess of costs incurred. The following table summarizes the contract balances recognized within the Company's consolidated balance sheets (in thousands): September 30, September 30, Ref 2021 2020 Contract assets $ 7,307 $ 7,943 Contract liabilities (a) $ 22,473 $ 200 Ref (a): The increase in contract liabilities is primarily due to contract start up funding provided under a contract awarded at the end of the fiscal year. Disaggregation of revenue from contracts with customers We disaggregate our revenue from contracts with customers by customer, contract type, as well as whether the Company acts as prime contractor or subcontractor. We believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following series of tables present our revenue disaggregated by these categories: Revenue by customer (in thousands): Year Ended September 30, 2021 2020 Department of Veterans Affairs $ 110,078 $ 100,204 Department of Health and Human Services 91,543 95,026 Department of Defense 30,930 1,303 Other 13,543 12,652 Total Revenue $ 246,094 $ 209,185 Revenue by contract type (in thousands): Year Ended September 30, 2021 2020 Time and Materials $ 185,656 $ 147,509 Cost Reimbursable 48,101 58,091 Firm Fixed Price 12,337 3,585 Total Revenue $ 246,094 $ 209,185 Revenue by whether the Company acts as a prime contractor or a subcontractor (in thousands): Year Ended September 30, 2021 2020 Prime Contractor $ 215,241 $ 193,448 Subcontractor 30,853 15,737 Total Revenue $ 246,094 $ 209,185 |
Leases
Leases | 12 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | Leases We have leases for facilities and office equipment. Our lease liabilities are recognized as the present value of the future minimum lease payments over the lease term. Our right-of-use assets are recognized as the present value of the future minimum lease payments over the lease term less unamortized lease incentives and the balance remaining in deferred rent liability under ASC 840. Our lease payments consist of fixed and in-substance fixed amounts attributable to the use of the underlying asset over the lease term. Variable lease payments that do not depend on an index rate or are not in-substance fixed payments are excluded in the measurement of right-of-use assets and lease liabilities and are expensed in the period incurred. The incremental borrowing rate on our credit facility is used in determining the present value of future minimum lease payments. Some of our lease agreements include options to extend the lease term or terminate the lease. These options are accounted for in our right-of-use assets and lease liabilities when it is reasonably certain that the Company will extend the lease term or terminate the lease. The Company does not have any finance leases. As of September 30, 2021, operating leases for facilities and equipment have remaining lease terms of 1.2 to 9.5 years. The following table summarizes lease balances on our consolidated balance sheet at September 30, 2021 and 2020 (in thousands): September 30, September 30, 2021 2020 Operating lease right-of-use assets $ 19,919 $ 22,427 Operating lease liabilities, current $ 2,261 $ 2,045 Operating lease liabilities, long-term 19,374 21,620 Total operating lease liabilities $ 21,635 $ 23,665 The Company subleases a portion of one of its leased facilities. The sublease is classified as an operating lease with respect to the underlying asset. The sublease term is 5 years and ends June 2025. The sublease includes two additional 1 year term extension options. For the years ended September 30, 2021 and 2020, total lease costs for our operating leases are as follows (in thousands): Year Ended September 30, 2021 2020 Operating $ 3,653 $ 4,236 Short-term 103 155 Variable 81 63 Sublease income (302) (271) Total lease costs $ 3,535 $ 4,183 At September 30, 2021, the weighted-average remaining lease term and weighted-average discount rate are 8.3 years and 6.0%, respectively. The calculation of the weighted-average discount rate was determined based on borrowing terms from our senior credit facility. Other information related to our leases is as follows (in thousands): Year Ended September 30, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities $ 3,306 $ 3,586 New lease liabilities, net of new right-of-use-assets $ — $ 229 Lease liabilities arising from obtaining right-of-use-assets $ — $ 7,822 The Company's future minimum lease payments as of September 30, 2021 are as follows: For the Fiscal Year Ending September 30, (in thousands) 2022 $ 3,501 2023 3,391 2024 3,251 2025 3,092 2026 3,193 Thereafter 11,491 Total future minimum lease payments 27,919 Less: imputed interest (6,284) Present value of future minimum lease payments 21,635 Less: current portion of operating lease liabilities (2,261) Long-term operating lease liabilities $ 19,374 |
Supporting Financial Informatio
Supporting Financial Information | 12 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supporting Financial Information | Supporting Financial Information Accounts receivable (in thousands) September 30, September 30, Ref 2021 2020 Billed receivables $ 26,140 $ 24,598 Contract assets 7,307 7,943 Total accounts receivable 33,447 32,541 Less: Allowance for doubtful accounts (a) — — Accounts receivable, net $ 33,447 $ 32,541 Ref (a): Accounts receivable are non-interest bearing, unsecured and carried at net realizable value. We evaluate our receivables on a quarterly basis and determine whether an allowance is appropriate based on specific collection issues. No allowance for doubtful accounts was deemed necessary at either September 30, 2021 or September 30, 2020. Other current assets (in thousands) September 30, September 30, 2021 2020 Prepaid insurance and benefits $ 655 $ 665 Other receivables 995 1,363 Prepaid expenses 2,615 1,471 Other current assets $ 4,265 $ 3,499 Equipment and improvements, net (in thousands) September 30, September 30, Ref 2021 2020 Furniture and equipment $ 958 $ 958 Computer equipment 1,262 1,171 Computer software 4,353 4,341 Leasehold improvements 1,595 1,595 Total equipment and improvements 8,168 8,065 Less accumulated depreciation and amortization (6,256) (4,726) Equipment and improvements, net (a) $ 1,912 $ 3,339 Ref (a): Depreciation and amortization was $1.5 million and $2.2 million for the years ended September 30, 2021 and 2020, respectively. Intangible assets, net (in thousands) September 30, September 30, Ref 2021 2020 Intangible assets Customer contracts and related customer relationships $ 62,281 $ 45,600 Covenants-not-to-compete 522 480 Trade name 3,051 2,109 Acquired intangibles - IBA acquisition — 16,223 Total intangible assets 65,854 64,412 Less accumulated amortization Customer contracts and related customer relationships (17,378) (11,150) Covenants-not-to-compete (264) (212) Trade name (743) (438) Total accumulated amortization (18,385) (11,800) Intangible assets, net (a) $ 47,469 $ 52,612 Ref (a): Total amount of amortization expense for the years ended September 30, 2021 and 2020 was $6.6 million and $4.8 million, respectively. Estimated amortization expense for future years: (in thousands) Fiscal 2022 $ 6,585 Fiscal 2023 6,585 Fiscal 2024 6,585 Fiscal 2025 6,585 Fiscal 2026 5,851 Thereafter 15,278 Total amortization expense $ 47,469 Goodwill The changes in the carrying amount of goodwill for the years ended September 30, 2021 and 2020 are as follows: (in thousands) Ref Total Balance at September 30, 2019 $ 52,758 Preliminary increase from IBA acquisition 14,386 Balance at September 30, 2020 67,144 Total adjustments from IBA acquisition (a) (1,501) Balance at September 30, 2021 $ 65,643 Ref (a): The adjustments were determined based on third party valuations. Accounts payable, accrued expenses, and other current liabilities (in thousands) September 30, September 30, 2021 2020 Accounts payable $ 16,684 $ 14,645 Accrued benefits 2,916 2,833 Accrued bonus and incentive compensation 2,381 2,340 Accrued workers' compensation insurance 7,014 5,529 Other accrued expenses 3,722 3,231 Accounts payable, accrued expenses, and other current liabilities $ 32,717 $ 28,578 Debt obligations (in thousands) September 30, September 30, 2021 2020 Bank term loan $ 46,750 $ 70,000 Less: unamortized deferred financing costs (2,114) (2,729) Net bank debt obligations 44,636 67,271 Less: current portion of bank debt obligations, net of deferred financing costs — (6,727) Long-term portion of bank debt obligations, net of deferred financing costs $ 44,636 $ 60,544 Interest expense (in thousands) Year Ended September 30, Ref 2021 2020 Interest expense (a) $ (2,992) $ (2,841) Amortization of deferred financing costs (b) (792) (721) Other income (expense), net (c) — 121 Interest expense, net $ (3,784) $ (3,441) Ref (a): Interest expense on borrowing Ref (b): Amortization of expenses related to term loan and revolving line of credit. |
Credit Facilities
Credit Facilities | 12 Months Ended |
Sep. 30, 2021 | |
Cash and Cash Equivalents [Abstract] | |
Credit Facilities | Credit Facilities A summary of our loan facility as of September 30, 2021 is as follows: ($ in Millions) As of September 30, 2021 Lender Arrangement Loan Balance Interest Maturity Date First National Bank of Pennsylvania Secured term loan (a) $ 46.8 LIBOR* + 3.5% 09/30/25 First National Bank of Pennsylvania Secured revolving line of credit (b) $ — LIBOR* + 3.5% 09/30/25 *LIBOR rate as of September 30, 2021 was 0.08%. As of September 30, 2020, our LIBOR rate is subject to a minimum floor of 0.5%. The floor affects interest payments for periods after September 30, 2020. (a) Represents the principal amounts payable on our secured term loan. The $70.0 million secured term loan is secured by liens on substantially all of the assets of the Company. The principal of the term loan is payable in quarterly installments with the remaining balance due on September 30, 2025. The Credit 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 quarterly financial covenants including: (i) a minimum fixed charge coverage ratio of at least 1.25 to 1.00, and (ii) a Funded Indebtedness to Adjusted EBITDA ratio not exceeding the ratio of 3.75:1.0 to 2.75:1.0 through maturity. Adjusted EBITDA ratio is calculated by dividing the Company's total interest-bearing debt by net income adjusted to exclude (i) interest and other expenses, (ii) provision for or benefit from income taxes, if any, (iii) depreciation and amortization, and (iv) non-recurring charges, losses or expenses to include transaction and non-cash equity expense. The term loan has an interest rate spread range from 2.5% to 4.5% depending on the funded indebtedness to adjusted EBITDA ratio. We are in compliance with all loan covenants and restrictions. We are required to pay quarterly amortization payments commencing in December 2020 through September 2025. The annual amount of principal amortization is based on a percentage of the loan balance at September 30, 2020. The annual amortization amounts are $7.0 million each for fiscal years 2021 and 2022 and $8.75 million each for fiscal years 2023 - 2025. The quarterly payments are in equal installments. During the year ended September 30, 2021, the Company made voluntary prepayments of $16.3 million, bringing the total amount paid on the secured loan term loan to $23.3 million. As of September 30, 2021, we have satisfied mandatory principal amortization until December 31, 2023. In addition to quarterly payments of the outstanding indebtedness, the loan agreement also requires annual payments of a percentage of excess cash flow, as defined in the loan agreement. The loan agreement states that an excess cash flow recapture payment must be made equal to (a) 75% of the excess cash flow for the immediately preceding fiscal year in which indebtedness to consolidated EBITDA ratio is greater than or equal to 2.50:1.0; (b) 50% of the excess cash flow for the immediately preceding fiscal year in which the funded indebtedness to consolidated EBITDA Ratio is less than 2.50:1.0 but greater than or equal to 1.5:1.0; or (c) 0% of the excess cash flow for the immediately preceding fiscal year in which the funded indebtedness to consolidated EBITDA Ratio is less than 1.5:1.0. In addition, the Company must make additional mandatory prepayment of amounts outstanding based on proceeds received from asset sales and sales of certain equity securities or other indebtedness. Due to the voluntary prepayment of term debt, there was no excess cash flow payment required. For additional information regarding the schedule of future payment obligations, please refer to Note 11 Commitments and Contingencies . On September 30, 2019, we executed a floating-to-fixed interest rate swap with First National Bank ("FNB") as counter party. The notional amount in the floating-to-fixed interest rate swap on September 30, 2021 is $22.8 million and matures in 2024. The notional amount was $28.8 million at the end prior fiscal year. The remaining outstanding balance of our term loan is subject to interest rate fluctuations and the minimum LIBOR floor. On the notional amount, the Company pays a base fixed rate of 1.61%, plus applicable credit spread. As a result, for the year ended September 30, 2021, interest expense increased by approximately $0.4 million. (b) The secured revolving line of credit has a ceiling of up to $25.0 million. Borrowing on the line of credit is secured by liens on substantially all of the assets of the Company. The Company accessed funds from the revolving credit facility during the year, but has no outstanding balance at September 30, 2021. The Company's total borrowing availability, based on eligible accounts receivables at September 30, 2021, was $25.0 million. As part of the revolving credit facility, the lenders agreed to a sublimit of $5 million for letters of credit for the account of the Company, subject to applicable procedures. |
Stock-based Compensation and Eq
Stock-based Compensation and Equity Grants | 12 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation and Equity Grants | Stock-based Compensation and Equity Grants Stock-based compensation expense Options issued under equity incentive plans were designated as either an incentive stock or a non-statutory stock option. No option was granted with a term of more than 10 years from the date of grant. Exercisability of option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued shares. As of September 30, 2021, there were 1.7 million shares available for grant. Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our Consolidated Statements of Operations: (in thousands) Year Ended Ref September 30, 2021 2020 DLH employees (a) $ 1,193 $ 563 Non-employee directors (b) 467 347 Total stock option expense $ 1,660 $ 910 Ref (a): Included in this amount are equity grants of restricted stock units to Named Executive Officers ("NEO"), which were issued in accordance with the DLH long-term incentive compensation policy in this fiscal year, and stock option grants to NEO and non-NEO company employees. The restricted stock units totaled 147,431 restricted stock units issued and outstanding at September 30, 2021. Ref (b): In the first quarter of fiscal 2021, we issued 63,177 restricted stock units to the Company's non-employee directors, all of which vested as of September 30, 2021. The shares of common stock underlying such restricted stock units were issued on September 30, 2021. Unrecognized stock-based compensation expense (in thousands) Year Ended September 30, Ref 2021 2020 Unrecognized expense for DLH employees (a) $ 4,468 $ 2,633 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 Monte Carlo 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. On a weighted average basis, this expense is expected to be recognized within the next 4.70 years. Stock option activity for the year ended September 30, 2021: 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, 2020 2,129 $6.14 7.4 $ 6,583 Granted (a) 455 $10.47 — — Exercised (175) $2.48 — — Cancelled (35) $7.36 — — Options outstanding, September 30, 2021 2,374 $7.77 7.7 $ 15,899 Ref (a): Utilizing a volatility of 50% along with assumptions of a 10-year term and the aforementioned 10-day stock price threshold results in an indicated range of value of the Options granted during the year ended September 30, 2021, as follows using the Monte Carlo method. Volatility 50% Vesting Expected Strike Stock Threshold Term Calculated Grant Date Price Price Price (Years) Fair Value December 15, 2020 $ 10.05 $ 10.05 $ 13.00 10 $ 5.83 July 30, 2021 $ 10.75 $ 10.75 $ 14.00 10 $ 5.83 Notes: Results based on 100,000 simulations Stock options shares outstanding, vested and unvested for the years ended September 30, 2021 and 2020 (in thousands): Number of Shares September 30, Ref 2021 2020 Vested and exercisable (a) 1,662 1,213 Unvested (b) 712 916 Options outstanding 2,374 2,129 Ref (a): Weighted average exercise price of vested and exercisable shares was $3.91 and $2.25 at September 30, 2021 and 2020, respectively. Aggregate intrinsic value was approximately $13.9 and $6.1 million at September 30, 2021 and 2020, respectively. Weighted average contractual term remaining was 6.0 years and 4.6 years at September 30, 2021 and 2020, respectively. Ref (b): Certain awards vest upon satisfaction of certain performance criteria. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common shares outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method. (in thousands) Year Ended September 30, 2021 2020 Numerator: Net income $ 10,145 $ 7,114 Denominator: Denominator for basic net income per share - weighted-average outstanding shares 12,549 12,282 Effect of dilutive securities: Stock options and restricted stock 1,048 823 Denominator for diluted net income per share - weighted-average outstanding shares 13,597 13,105 Net income per share - basic $ 0.81 $ 0.58 Net income per share - diluted $ 0.75 $ 0.54 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contractual Obligations as of September 30, 2021 (in thousands): Payments Due Per Fiscal Year Total 2022 2023 2024 2025 2026 Thereafter Debt obligations $ 46,750 $ — $ — $ 8,250 $ 38,500 $ — $ — Facility leases 27,701 3,418 3,308 3,199 3,092 3,193 11,491 Equipment operating leases 218 83 83 52 — — — Total contractual obligations $ 74,669 $ 3,501 $ 3,391 $ 11,501 $ 41,592 $ 3,193 $ 11,491 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 as of September 30, 2021 and September 30, 2020 was approximately $7.0 million and $5.5 million, respectively. Legal Proceedings As a commercial enterprise and employer, the Company is subject to various claims and legal actions in the ordinary course of business. These matters can include professional liability, employment-relations issues, workers’ compensation, tax, payroll and employee-related matters, other commercial disputes arising in the course of its business, and inquiries and investigations by governmental agencies regarding our employment practices or other matters. The Company is not aware of any pending or threatened litigation that it believes is reasonably likely to have a material adverse effect on its results of operations, financial position or cash flows. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsThe Company has determined that for the years ended September 30, 2021 and 2020 and through the filing date of this report, there were no significant related party transactions that have occurred which require disclosure through the date that these consolidated financial statements were issued. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The significant components of income tax expense for income taxes from continuing operations are summarized as follows (in thousands): Year Ended September 30, 2021 2020 Current expense $ 2,081 $ 598 Deferred expense 1,213 2,308 Total expense $ 3,294 $ 2,906 The following table indicates the significant differences between our income taxes at the federal statutory rate and the Company's effective tax rate for continuing operations (in thousands): Year Ended September 30, 2021 2020 Federal statutory rate $ 2,822 $ 2,104 State taxes, net 376 554 Other permanent items 96 160 Deferred tax estimate adjustment — 88 Total $ 3,294 $ 2,906 An analysis of the Company's deferred tax assets and liabilities is as follows (in thousands): Year Ended September 30, 2021 2020 Deferred income tax assets: Net operating loss carry forwards, net $ 29 $ 1,554 Stock based compensation 508 140 Accrued expenses 1,944 1,698 Other items, net — 258 Total deferred tax asset 2,481 3,650 Deferred tax liability: Equipment and intangible assets (3,507) (3,613) Right of use liability (150) — Total deferred tax liability (3,657) (3,613) Net deferred tax (liability)/asset $ (1,176) $ 37 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Sep. 30, 2021 | |
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) 2021 Quarters Ref First Second Third Fourth Revenue (a) $ 57,852 $ 61,506 $ 61,555 $ 65,182 Income from operations 3,635 4,620 4,939 4,030 Interest expense, net (1,080) (1,004) (893) (808) Income before income taxes 2,555 3,616 4,046 3,222 Income tax expense 741 1,049 1,166 339 Net income $ 1,814 $ 2,567 $ 2,880 $ 2,883 Earnings per share: Basic $ 0.15 $ 0.20 $ 0.23 $ 0.23 Diluted $ 0.13 $ 0.19 $ 0.21 $ 0.21 2020 Quarters First Second Third Fourth Revenue $ 52,238 $ 54,798 $ 51,459 $ 50,691 Income from operations 3,126 3,837 3,800 2,698 Interest expense, net (941) (906) (813) (781) Income before income taxes 2,185 2,931 2,987 1,917 Income tax expense 634 855 863 554 Net income $ 1,551 $ 2,076 $ 2,124 $ 1,363 Earnings per share: Basic $ 0.13 $ 0.17 $ 0.17 $ 0.11 Diluted $ 0.12 $ 0.16 $ 0.16 $ 0.10 Ref (a): Given its closing on the final day of fiscal year 2020, IBA has no impact to fiscal 2020 quarterly results and is fully included in each of the quarters of fiscal 2021. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefits Plans | Employee Benefit PlansAs of September 30, 2021, the Company and its subsidiaries maintain a 401(k) Plan (the "401(k) Plan"), a defined contribution and supplemental pension plan for the benefit of its eligible employees. The Company may provide a discretionary matching contribution of a participant's elective contributions under the 401 (k) Plan. The Company recorded related expense of $1.5 million in fiscal 2021 and $1.2 million in fiscal year 2020. The increase was primarily due to headcount growth from the IBA acquisition. Participants are always fully vested in their elective contributions and vests in Company matching contributions over a four year period. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsManagement has evaluated subsequent events through the date that the Company's consolidated 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 consolidated financial statements were issued. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of DLH Holdings Corp. and its subsidiaries (together with its subsidiaries, "DLH" or the "Company" and also referred to as "we," "us," and "our"), 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 U.S. generally accepted accounting principles ("GAAP") and with the instructions to Form 10-K, Regulation S-X, and Regulation S-K. |
New Accounting Pronouncements | New Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which requires companies to record an allowance for expected credit losses over the contractual term of certain financial assets, including short-term trade receivables and contract assets. Additionally, it expands disclosure requirements for credit quality of financial assets. ASU 2016-13 became effective for the Company in the first quarter of fiscal year 2021. The adoption of this standard did not have a material impact on our operating results, financial position, or cash flows. For further detail of our outstanding receivables see Note 7 . In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions for the application of U.S. GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") and other references rates expected to be discontinued due to reference rate reform. ASU 2020-04 became effective on March 12, 2020 for all entities meeting certain criteria. The Company may elect to apply the amendments using a prospective approach through December 31, 2022. The Company is currently assessing the impact of electing this standard on its consolidated financial statements and related disclosures and does not expect the impact to be material. In April 2020, the FASB issued a Staff Q&A, Topic 842 and 840: Accounting For Lease Concessions Related to the Effects of the COVID-19 Pandemic in order to provide clarity regarding the accounting treatment for lease concessions provided as a result of COVID-19. Under existing lease guidance, changes to certain lease terms not specified in the original lease agreement require modification accounting treatment. To provide relief, the FASB Staff Q&A permits alternatives to modification accounting under Topic 842. For concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or our obligations as the lessee, we are not required to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the lease agreement and can elect to apply or not apply the lease modification guidance in Topic 842. In fiscal year 2021, we elected to account for lease concessions received for one of our operating leases as a resolution of a contingency, whereby we remeasured our lease liability and recorded the adjustment against the right-of-use asset, without reassessing lease classification or modifying the original discount rate. As a result of this election, our lease liability and right-of-use-asset decreased by less than $0.1 million. In August 2020, the FASB issued ASU 2020-06, which amends the measurement and disclosure of convertible instruments, contracts in an entity's own equity, and EPS guidance. The guidance can be adopted using a modified retrospective method or a fully retrospective method. The amendments are effective for fiscal years beginning after December 15, 2021 for public entities, excluding those that are smaller reporting companies. For all other entities the amendments are effective for fiscal years beginning after December 15, 2023. The Company does not expect the update to have a material impact on its consolidated financial statements and related disclosures. |
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 and intangible assets, interest rate swaps, stock-based compensation, right-of-use assets and liabilities, 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 would 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. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, contract assets, accrued expenses, and accounts payable approximate fair value due to the short-term nature of these instruments. The fair values of the Company's debt instruments approximate fair value because the underlying interest rates approximate market rates that the Company could obtain for similar instruments at the balance sheet dates. |
Long Lived Assets | Long-lived Assets Our long-lived assets include equipment and improvements, intangible assets, right-of-use assets, and goodwill. The Company continues to review its long-lived 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. 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 years) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Intangible assets (other than goodwill) are originally recorded at fair value and are amortized on a straight-line basis over their estimated useful lives of 10 years. Maintenance and repair costs are expensed as incurred. |
Income Taxes | Income Taxes The Company 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 |
Share-based Equity Compensation | 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 and Black Scholes 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 | 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 | Earnings per ShareBasic 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 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. |
Treasury Stock and Preferred Stock | Treasury Stock The Company periodically purchases its own common stock that is traded on public markets as part of announced stock repurchase programs. The repurchased common stock is classified as treasury stock on the consolidated balance sheets and held at cost. As of September 30, 2021, the Company did not hold any treasury stock. Preferred Stock Our certificate of incorporation authorizes the issuance of "blank check" preferred stock with such designations, rights and preferences as may be determined from time to time by our board of directors up to an aggregate of 5,000,000 shares of preferred stock. As of September 30, 2021, the Company has not issued any preferred stock. |
Interest Rate Swap | Interest Rate Swap The Company uses derivative financial instruments to manage interest rate risk associated with its variable debt. The Company's objective in using these interest rate derivatives is to manage its exposure to interest rate movements and reduce volatility of interest expense. The gains and losses due to changes in the fair value of the interest rate swap agreements completely offset changes in the fair value of the hedged portion of the underlying debt. Offsetting changes in fair value of both the interest rate swaps and the hedged portion of the underlying debt are recognized in interest expense in the Consolidated Statements of Operations. The Company does not hold or issue any derivative instrument for trading or speculative purposes. |
Revenue Recognition | Revenue Recognition We recognize revenue over time when there is a continuous transfer of control to our customer. For our U.S. government contracts, this continuous transfer of control to the customer is supported by clauses in the contract that allow the U.S. government to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. When control is transferred over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. For services contracts, we satisfy our performance obligations as services are rendered. We use cost-based input and time-based output methods to measure progress. Contract costs include labor, material and allocable indirect expenses. For time-and-material contracts, we bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced since the amount corresponds directly to the value of our performance to date. We consider control to transfer when we have a present right to payment. Essentially, all of our contracts satisfy their performance obligations over time. Contracts are often modified to account for changes in contract specifications and requirements. Contract modifications impact performance obligations when the modification either creates new or changes the existing enforceable rights and obligations. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue and profit cumulatively. Furthermore, a significant change in one or more estimates could affect the profitability of our contracts. We recognize adjustments in estimated profit on contracts in the period identified. For time-and-materials contracts, revenue is recognized to the extent of billable rates times hours delivered plus materials and other reimbursable costs incurred. Revenue for cost-reimbursable contracts is recorded as reimbursable costs are incurred, including an estimated share of the applicable contractual fees earned. For firm-fixed-price contracts, the consideration received for our performance is set at a predetermined price. Revenue for our firm-fixed-price contracts is recognized over time using a straight-line measure of progress or using the percentage-of-completion method whereby progress toward completion is based on a comparison of actual costs incurred to total estimated costs to be incurred over the contract term. Contract costs are expensed as incurred. Estimated losses are recognized when identified. Contract assets - Amounts are invoiced as work progresses in accordance with agreed-upon contractual terms. In part, revenue recognition occurs before we have the right to bill, resulting in contract assets. These contract assets are reported within receivables, net on our consolidated balance sheets and are invoiced in accordance with payment terms defined in each contract. Period end balances will vary from period to period due to agreed-upon contractual terms. Contract liabilities - Amounts are a result of billings in excess of costs incurred. Disaggregation of revenue from contracts with customers |
Business Overview (Tables)
Business Overview (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedules of Revenues by Customer | The following table summarizes the revenues by customer for the years ended September 30, 2021 and 2020, respectively: Year Ended September 30, 2021 2020 (Amounts in thousands) Revenue Percent of total revenue Revenue Percent of total revenue Department of Veterans Affairs $ 110,078 45 % $ 100,204 48 % Department of Health and Human Services 91,543 37 % 95,026 45 % Department of Defense 30,930 13 % 1,303 1 % Customers with less than 10% share of total revenue 13,543 5 % 12,652 6 % Total revenue $ 246,094 100 % $ 209,185 100 % |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Balances Recognized on the Company's Consolidated Balance Sheets | The following table summarizes the contract balances recognized within the Company's consolidated balance sheets (in thousands): September 30, September 30, Ref 2021 2020 Contract assets $ 7,307 $ 7,943 Contract liabilities (a) $ 22,473 $ 200 Ref (a): The increase in contract liabilities is primarily due to contract start up funding provided under a contract awarded at the end of the fiscal year. |
Schedule of Disaggregation of Revenue From Contracts with Customers | The following series of tables present our revenue disaggregated by these categories: Revenue by customer (in thousands): Year Ended September 30, 2021 2020 Department of Veterans Affairs $ 110,078 $ 100,204 Department of Health and Human Services 91,543 95,026 Department of Defense 30,930 1,303 Other 13,543 12,652 Total Revenue $ 246,094 $ 209,185 Revenue by contract type (in thousands): Year Ended September 30, 2021 2020 Time and Materials $ 185,656 $ 147,509 Cost Reimbursable 48,101 58,091 Firm Fixed Price 12,337 3,585 Total Revenue $ 246,094 $ 209,185 Revenue by whether the Company acts as a prime contractor or a subcontractor (in thousands): Year Ended September 30, 2021 2020 Prime Contractor $ 215,241 $ 193,448 Subcontractor 30,853 15,737 Total Revenue $ 246,094 $ 209,185 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Schedule of Summarized Lease Balances in Consolidated Balance Sheet | The following table summarizes lease balances on our consolidated balance sheet at September 30, 2021 and 2020 (in thousands): September 30, September 30, 2021 2020 Operating lease right-of-use assets $ 19,919 $ 22,427 Operating lease liabilities, current $ 2,261 $ 2,045 Operating lease liabilities, long-term 19,374 21,620 Total operating lease liabilities $ 21,635 $ 23,665 |
Schedule of Lease Costs and Other Information Related to Leases | For the years ended September 30, 2021 and 2020, total lease costs for our operating leases are as follows (in thousands): Year Ended September 30, 2021 2020 Operating $ 3,653 $ 4,236 Short-term 103 155 Variable 81 63 Sublease income (302) (271) Total lease costs $ 3,535 $ 4,183 At September 30, 2021, the weighted-average remaining lease term and weighted-average discount rate are 8.3 years and 6.0%, respectively. The calculation of the weighted-average discount rate was determined based on borrowing terms from our senior credit facility. Other information related to our leases is as follows (in thousands): Year Ended September 30, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities $ 3,306 $ 3,586 New lease liabilities, net of new right-of-use-assets $ — $ 229 Lease liabilities arising from obtaining right-of-use-assets $ — $ 7,822 |
Schedule of Company's Future Lease Payments | The Company's future minimum lease payments as of September 30, 2021 are as follows: For the Fiscal Year Ending September 30, (in thousands) 2022 $ 3,501 2023 3,391 2024 3,251 2025 3,092 2026 3,193 Thereafter 11,491 Total future minimum lease payments 27,919 Less: imputed interest (6,284) Present value of future minimum lease payments 21,635 Less: current portion of operating lease liabilities (2,261) Long-term operating lease liabilities $ 19,374 |
Supporting Financial Informat_2
Supporting Financial Information (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable (in thousands) September 30, September 30, Ref 2021 2020 Billed receivables $ 26,140 $ 24,598 Contract assets 7,307 7,943 Total accounts receivable 33,447 32,541 Less: Allowance for doubtful accounts (a) — — Accounts receivable, net $ 33,447 $ 32,541 |
Schedule of Other Current Assets | Other current assets (in thousands) September 30, September 30, 2021 2020 Prepaid insurance and benefits $ 655 $ 665 Other receivables 995 1,363 Prepaid expenses 2,615 1,471 Other current assets $ 4,265 $ 3,499 |
Schedule of Equipment and Improvements, Net | Equipment and improvements, net (in thousands) September 30, September 30, Ref 2021 2020 Furniture and equipment $ 958 $ 958 Computer equipment 1,262 1,171 Computer software 4,353 4,341 Leasehold improvements 1,595 1,595 Total equipment and improvements 8,168 8,065 Less accumulated depreciation and amortization (6,256) (4,726) Equipment and improvements, net (a) $ 1,912 $ 3,339 |
Schedule of Intangible Assets, Net | Intangible assets, net (in thousands) September 30, September 30, Ref 2021 2020 Intangible assets Customer contracts and related customer relationships $ 62,281 $ 45,600 Covenants-not-to-compete 522 480 Trade name 3,051 2,109 Acquired intangibles - IBA acquisition — 16,223 Total intangible assets 65,854 64,412 Less accumulated amortization Customer contracts and related customer relationships (17,378) (11,150) Covenants-not-to-compete (264) (212) Trade name (743) (438) Total accumulated amortization (18,385) (11,800) Intangible assets, net (a) $ 47,469 $ 52,612 Ref (a): Total amount of amortization expense for the years ended September 30, 2021 and 2020 was $6.6 million and $4.8 million, respectively. |
Schedule of Estimated Future Amortization Expense of Finite-lived Intangibles | Estimated amortization expense for future years: (in thousands) Fiscal 2022 $ 6,585 Fiscal 2023 6,585 Fiscal 2024 6,585 Fiscal 2025 6,585 Fiscal 2026 5,851 Thereafter 15,278 Total amortization expense $ 47,469 |
Schedule of Goodwill | The changes in the carrying amount of goodwill for the years ended September 30, 2021 and 2020 are as follows: (in thousands) Ref Total Balance at September 30, 2019 $ 52,758 Preliminary increase from IBA acquisition 14,386 Balance at September 30, 2020 67,144 Total adjustments from IBA acquisition (a) (1,501) Balance at September 30, 2021 $ 65,643 Ref (a): The adjustments were determined based on third party valuations. |
Schedule of Accounts Payable, Accrued Expenses, and Other Current Liabilities | Accounts payable, accrued expenses, and other current liabilities (in thousands) September 30, September 30, 2021 2020 Accounts payable $ 16,684 $ 14,645 Accrued benefits 2,916 2,833 Accrued bonus and incentive compensation 2,381 2,340 Accrued workers' compensation insurance 7,014 5,529 Other accrued expenses 3,722 3,231 Accounts payable, accrued expenses, and other current liabilities $ 32,717 $ 28,578 |
Schedule of Debt Obligations | Debt obligations (in thousands) September 30, September 30, 2021 2020 Bank term loan $ 46,750 $ 70,000 Less: unamortized deferred financing costs (2,114) (2,729) Net bank debt obligations 44,636 67,271 Less: current portion of bank debt obligations, net of deferred financing costs — (6,727) Long-term portion of bank debt obligations, net of deferred financing costs $ 44,636 $ 60,544 |
Schedule of Interest Expense | Interest expense (in thousands) Year Ended September 30, Ref 2021 2020 Interest expense (a) $ (2,992) $ (2,841) Amortization of deferred financing costs (b) (792) (721) Other income (expense), net (c) — 121 Interest expense, net $ (3,784) $ (3,441) Ref (a): Interest expense on borrowing Ref (b): Amortization of expenses related to term loan and revolving line of credit. |
Credit Facilities (Tables)
Credit Facilities (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Loan Facilities and Subordinated Debt Financing | A summary of our loan facility as of September 30, 2021 is as follows: ($ in Millions) As of September 30, 2021 Lender Arrangement Loan Balance Interest Maturity Date First National Bank of Pennsylvania Secured term loan (a) $ 46.8 LIBOR* + 3.5% 09/30/25 First National Bank of Pennsylvania Secured revolving line of credit (b) $ — LIBOR* + 3.5% 09/30/25 *LIBOR rate as of September 30, 2021 was 0.08%. As of September 30, 2020, our LIBOR rate is subject to a minimum floor of 0.5%. The floor affects interest payments for periods after September 30, 2020. |
Stock-based Compensation and _2
Stock-based Compensation and Equity Grants (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our Consolidated Statements of Operations: (in thousands) Year Ended Ref September 30, 2021 2020 DLH employees (a) $ 1,193 $ 563 Non-employee directors (b) 467 347 Total stock option expense $ 1,660 $ 910 Ref (a): Included in this amount are equity grants of restricted stock units to Named Executive Officers ("NEO"), which were issued in accordance with the DLH long-term incentive compensation policy in this fiscal year, and stock option grants to NEO and non-NEO company employees. The restricted stock units totaled 147,431 restricted stock units issued and outstanding at September 30, 2021. Ref (b): In the first quarter of fiscal 2021, we issued 63,177 restricted stock units to the Company's non-employee directors, all of which vested as of September 30, 2021. The shares of common stock underlying such restricted stock units were issued on September 30, 2021. Unrecognized stock-based compensation expense (in thousands) Year Ended September 30, Ref 2021 2020 Unrecognized expense for DLH employees (a) $ 4,468 $ 2,633 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 Monte Carlo 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 |
Schedule of Stock Option Activity | 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, 2020 2,129 $6.14 7.4 $ 6,583 Granted (a) 455 $10.47 — — Exercised (175) $2.48 — — Cancelled (35) $7.36 — — Options outstanding, September 30, 2021 2,374 $7.77 7.7 $ 15,899 Ref (a): Utilizing a volatility of 50% along with assumptions of a 10-year term and the aforementioned 10-day stock price threshold results in an indicated range of value of the Options granted during the year ended September 30, 2021, as follows using the Monte Carlo method. |
Schedule of Stock Options, Valuation Assumptions | Volatility 50% Vesting Expected Strike Stock Threshold Term Calculated Grant Date Price Price Price (Years) Fair Value December 15, 2020 $ 10.05 $ 10.05 $ 13.00 10 $ 5.83 July 30, 2021 $ 10.75 $ 10.75 $ 14.00 10 $ 5.83 Notes: Results based on 100,000 simulations |
Schedule of Stock Option Shares Outstanding, Vested and Expected to Vest | Stock options shares outstanding, vested and unvested for the years ended September 30, 2021 and 2020 (in thousands): Number of Shares September 30, Ref 2021 2020 Vested and exercisable (a) 1,662 1,213 Unvested (b) 712 916 Options outstanding 2,374 2,129 Ref (a): Weighted average exercise price of vested and exercisable shares was $3.91 and $2.25 at September 30, 2021 and 2020, respectively. Aggregate intrinsic value was approximately $13.9 and $6.1 million at September 30, 2021 and 2020, respectively. Weighted average contractual term remaining was 6.0 years and 4.6 years at September 30, 2021 and 2020, respectively. Ref (b): Certain awards vest upon satisfaction of certain performance criteria. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Diluted Earnings Per Share | Diluted earnings per share is calculated using the treasury stock method. (in thousands) Year Ended September 30, 2021 2020 Numerator: Net income $ 10,145 $ 7,114 Denominator: Denominator for basic net income per share - weighted-average outstanding shares 12,549 12,282 Effect of dilutive securities: Stock options and restricted stock 1,048 823 Denominator for diluted net income per share - weighted-average outstanding shares 13,597 13,105 Net income per share - basic $ 0.81 $ 0.58 Net income per share - diluted $ 0.75 $ 0.54 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contractual Obligations | Contractual Obligations as of September 30, 2021 (in thousands): Payments Due Per Fiscal Year Total 2022 2023 2024 2025 2026 Thereafter Debt obligations $ 46,750 $ — $ — $ 8,250 $ 38,500 $ — $ — Facility leases 27,701 3,418 3,308 3,199 3,092 3,193 11,491 Equipment operating leases 218 83 83 52 — — — Total contractual obligations $ 74,669 $ 3,501 $ 3,391 $ 11,501 $ 41,592 $ 3,193 $ 11,491 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Significant Components of the Expense From Continuing Operations | The significant components of income tax expense for income taxes from continuing operations are summarized as follows (in thousands): Year Ended September 30, 2021 2020 Current expense $ 2,081 $ 598 Deferred expense 1,213 2,308 Total expense $ 3,294 $ 2,906 |
Schedule of Significant Differences Between the Income Taxes at Federal Statutory Rate and Effective Tax Rate | The following table indicates the significant differences between our income taxes at the federal statutory rate and the Company's effective tax rate for continuing operations (in thousands): Year Ended September 30, 2021 2020 Federal statutory rate $ 2,822 $ 2,104 State taxes, net 376 554 Other permanent items 96 160 Deferred tax estimate adjustment — 88 Total $ 3,294 $ 2,906 |
Schedule of Deferred Tax Assets and Liabilities | An analysis of the Company's deferred tax assets and liabilities is as follows (in thousands): Year Ended September 30, 2021 2020 Deferred income tax assets: Net operating loss carry forwards, net $ 29 $ 1,554 Stock based compensation 508 140 Accrued expenses 1,944 1,698 Other items, net — 258 Total deferred tax asset 2,481 3,650 Deferred tax liability: Equipment and intangible assets (3,507) (3,613) Right of use liability (150) — Total deferred tax liability (3,657) (3,613) Net deferred tax (liability)/asset $ (1,176) $ 37 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | A summary of quarterly information is as follows (in thousands, except per share data) 2021 Quarters Ref First Second Third Fourth Revenue (a) $ 57,852 $ 61,506 $ 61,555 $ 65,182 Income from operations 3,635 4,620 4,939 4,030 Interest expense, net (1,080) (1,004) (893) (808) Income before income taxes 2,555 3,616 4,046 3,222 Income tax expense 741 1,049 1,166 339 Net income $ 1,814 $ 2,567 $ 2,880 $ 2,883 Earnings per share: Basic $ 0.15 $ 0.20 $ 0.23 $ 0.23 Diluted $ 0.13 $ 0.19 $ 0.21 $ 0.21 2020 Quarters First Second Third Fourth Revenue $ 52,238 $ 54,798 $ 51,459 $ 50,691 Income from operations 3,126 3,837 3,800 2,698 Interest expense, net (941) (906) (813) (781) Income before income taxes 2,185 2,931 2,987 1,917 Income tax expense 634 855 863 554 Net income $ 1,551 $ 2,076 $ 2,124 $ 1,363 Earnings per share: Basic $ 0.13 $ 0.17 $ 0.17 $ 0.11 Diluted $ 0.12 $ 0.16 $ 0.16 $ 0.10 Ref (a): Given its closing on the final day of fiscal year 2020, IBA has no impact to fiscal 2020 quarterly results and is fully included in each of the quarters of fiscal 2021. |
Business Overview - Narrative (
Business Overview - Narrative (Details) | 12 Months Ended | |
Sep. 30, 2021employeebusiness_arealocationcustomer | Sep. 30, 2020 | |
Concentration Risk [Line Items] | ||
Number of market focus areas | business_area | 3 | |
Number of market core competencies | business_area | 7 | |
Number of employees (over) | employee | 2,300 | |
Number of largest customers | customer | 3 | |
Customer Concentration | Revenue Concentration | ||
Concentration Risk [Line Items] | ||
Percent of total revenue | 100.00% | 100.00% |
Customer Concentration | Revenue Concentration | Federal Government | ||
Concentration Risk [Line Items] | ||
Percent of total revenue | 99.00% | |
United States | ||
Concentration Risk [Line Items] | ||
Number of locations in which the entity operates (more than) | location | 30 | |
Overseas | ||
Concentration Risk [Line Items] | ||
Number of locations in which the entity operates (more than) | location | 1 |
Business Overview - Revenues by
Business Overview - Revenues by Customer (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Concentration Risk [Line Items] | ||||||||||
Revenue | $ 65,182 | $ 61,555 | $ 61,506 | $ 57,852 | $ 50,691 | $ 51,459 | $ 54,798 | $ 52,238 | $ 246,094 | $ 209,185 |
Revenue Concentration | Customer Concentration | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Revenue | $ 246,094 | $ 209,185 | ||||||||
Percent of total revenue | 100.00% | 100.00% | ||||||||
Revenue Concentration | Customer Concentration | Department of Veterans Affairs | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Revenue | $ 110,078 | $ 100,204 | ||||||||
Percent of total revenue | 45.00% | 48.00% | ||||||||
Revenue Concentration | Customer Concentration | Department of Health and Human Services | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Revenue | $ 91,543 | $ 95,026 | ||||||||
Percent of total revenue | 37.00% | 45.00% | ||||||||
Revenue Concentration | Customer Concentration | Department of Defense | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Revenue | $ 30,930 | $ 1,303 | ||||||||
Percent of total revenue | 13.00% | 1.00% | ||||||||
Revenue Concentration | Customer Concentration | Customers with less than 10% share of total revenue | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Revenue | $ 13,543 | $ 12,652 | ||||||||
Percent of total revenue | 5.00% | 6.00% |
New Accounting Pronouncements (
New Accounting Pronouncements (Details) - COVID-19 $ in Millions | 12 Months Ended |
Sep. 30, 2021USD ($)lease_concesion | |
New Accounting Pronouncement, Early Adoption [Line Items] | |
Number of operating lease concessions | lease_concesion | 1 |
Decrease in operating lease liabilities due to lease concessions | $ 0.1 |
Decrease in operating right-of-use assets due to lease concessions | $ 0.1 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill [Line Items] | |||
Finite-lived intangibles estimated useful lives | 10 years | ||
Goodwill | $ 65,643,000 | $ 67,144,000 | $ 52,758,000 |
Goodwill impairment loss | 0 | 0 | |
Uncertain tax positions | 0 | 0 | |
Tax interest | 0 | 0 | |
Tax penalties | 0 | $ 0 | |
FDIC insurance limit amount | $ 250,000 | ||
Treasury stock (shares) | 0 | ||
Authorized shares of preferred stock (shares) | 5,000,000 | ||
Issued preferred stock (shares) | 0 | ||
Stock Options | |||
Goodwill [Line Items] | |||
Number of options authorized for issuance (in shares) | 0 | ||
Expiration term of options | 10 years | ||
Minimum | |||
Goodwill [Line Items] | |||
Estimated useful lives of property and equipment | 3 years | ||
Maximum | |||
Goodwill [Line Items] | |||
Estimated useful lives of property and equipment | 7 years |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Sep. 30, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 7,307 | $ 7,943 |
Contract liabilities | $ 22,473 | $ 200 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||||||||
Total Revenue | $ 65,182 | $ 61,555 | $ 61,506 | $ 57,852 | $ 50,691 | $ 51,459 | $ 54,798 | $ 52,238 | $ 246,094 | $ 209,185 |
Prime Contractor | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Total Revenue | 215,241 | 193,448 | ||||||||
Subcontractor | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Total Revenue | 30,853 | 15,737 | ||||||||
Time and Materials | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Total Revenue | 185,656 | 147,509 | ||||||||
Cost Reimbursable | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Total Revenue | 48,101 | 58,091 | ||||||||
Firm Fixed Price | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Total Revenue | $ 12,337 | $ 3,585 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 12 Months Ended |
Sep. 30, 2021sublease_optionsublease | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Number of subleased facilities | sublease | 1 |
Sublease term | 5 years |
Number of sublease extension options | sublease_option | 2 |
Sublease option extension period | 1 year |
Weighted-average remaining lease term | 8 years 3 months 18 days |
Weighted-average discount rate | 6.00% |
Facilities and Equipment | Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Remaining lease term | 1 year 2 months 12 days |
Facilities and Equipment | Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Remaining lease term | 9 years 6 months |
Leases - Summary of Lease Balan
Leases - Summary of Lease Balances in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Sep. 30, 2020 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 19,919 | $ 22,427 |
Operating lease liabilities, current | 2,261 | 2,045 |
Operating lease liabilities - long-term | 19,374 | 21,620 |
Total operating lease liabilities | $ 21,635 | $ 23,665 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||
Operating | $ 3,653 | $ 4,236 |
Short-term | 103 | 155 |
Variable | 81 | 63 |
Sublease income | (302) | (271) |
Total lease costs | $ 3,535 | $ 4,183 |
Leases - Other Information Rela
Leases - Other Information Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 3,306 | $ 3,586 |
New lease liabilities, net of new right-of-use-assets | 0 | 229 |
Lease liabilities arising from obtaining right-of-use-assets | $ 0 | $ 7,822 |
Leases - Company's Future Minim
Leases - Company's Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Sep. 30, 2020 |
Leases [Abstract] | ||
2022 | $ 3,501 | |
2023 | 3,391 | |
2024 | 3,251 | |
2025 | 3,092 | |
2026 | 3,193 | |
Thereafter | 11,491 | |
Total future minimum lease payments | 27,919 | |
Less: imputed interest | (6,284) | |
Present value of future minimum lease payments | 21,635 | $ 23,665 |
Less: current portion of operating lease liabilities | (2,261) | (2,045) |
Long-term operating lease liabilities | $ 19,374 | $ 21,620 |
Supporting Financial Informat_3
Supporting Financial Information - Accounts Receivable (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Billed receivables | $ 26,140,000 | $ 24,598,000 |
Contract assets | 7,307,000 | 7,943,000 |
Total accounts receivable | 33,447,000 | 32,541,000 |
Less: Allowance for doubtful accounts | 0 | 0 |
Accounts receivable, net | $ 33,447,000 | $ 32,541,000 |
Supporting Financial Informat_4
Supporting Financial Information - Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Sep. 30, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid insurance and benefits | $ 655 | $ 665 |
Other receivables | 995 | 1,363 |
Prepaid expenses | 2,615 | 1,471 |
Other current assets | $ 4,265 | $ 3,499 |
Supporting Financial Informat_5
Supporting Financial Information - Equipment and Improvements, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Furniture and equipment | $ 958 | $ 958 |
Computer equipment | 1,262 | 1,171 |
Computer software | 4,353 | 4,341 |
Leasehold improvements | 1,595 | 1,595 |
Total equipment and improvements | 8,168 | 8,065 |
Less accumulated depreciation and amortization | (6,256) | (4,726) |
Equipment and improvements, net | 1,912 | 3,339 |
Depreciation | $ 1,500 | $ 2,200 |
Supporting Financial Informat_6
Supporting Financial Information - Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 65,854 | $ 64,412 |
Less accumulated amortization | (18,385) | (11,800) |
Intangible assets, net | 47,469 | 52,612 |
Amortization expense of intangibles | 6,600 | 4,800 |
IBA | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 0 | 16,223 |
Customer contracts and related customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 62,281 | 45,600 |
Less accumulated amortization | (17,378) | (11,150) |
Covenants-not-to-compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 522 | 480 |
Less accumulated amortization | (264) | (212) |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 3,051 | 2,109 |
Less accumulated amortization | $ (743) | $ (438) |
Supporting Financial Informat_7
Supporting Financial Information - Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Sep. 30, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Fiscal 2022 | $ 6,585 | |
Fiscal 2023 | 6,585 | |
Fiscal 2024 | 6,585 | |
Fiscal 2025 | 6,585 | |
Fiscal 2026 | 5,851 | |
Thereafter | 15,278 | |
Intangible assets, net | $ 47,469 | $ 52,612 |
Supporting Financial Informat_8
Supporting Financial Information - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 67,144 | $ 52,758 |
Preliminary increase from IBA acquisition | 14,386 | |
Total adjustments from IBA acquisition | (1,501) | |
Ending balance | $ 65,643 | $ 67,144 |
Supporting Financial Informat_9
Supporting Financial Information - Accounts Payable, Accrued Expense and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Sep. 30, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $ 16,684 | $ 14,645 |
Accrued benefits | 2,916 | 2,833 |
Accrued bonus and incentive compensation | 2,381 | 2,340 |
Accrued workers' compensation insurance | 7,014 | 5,529 |
Other accrued expenses | 3,722 | 3,231 |
Accounts payable, accrued expenses, and other current liabilities | $ 32,717 | $ 28,578 |
Supporting Financial Informa_10
Supporting Financial Information - Debt Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Sep. 30, 2020 |
Debt Instrument [Line Items] | ||
Net bank debt obligations | $ 46,750 | |
Less: current portion of bank debt obligations, net of deferred financing costs | 0 | $ (6,727) |
Long-term portion of bank debt obligations, net of deferred financing costs | 44,636 | 60,544 |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Bank term loan | 46,750 | 70,000 |
Less: unamortized deferred financing costs | (2,114) | (2,729) |
Net bank debt obligations | 44,636 | 67,271 |
Less: current portion of bank debt obligations, net of deferred financing costs | 0 | (6,727) |
Long-term portion of bank debt obligations, net of deferred financing costs | $ 44,636 | $ 60,544 |
Supporting Financial Informa_11
Supporting Financial Information - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
Interest expense | $ (2,992) | $ (2,841) | ||||||||
Amortization of deferred financing costs | (792) | (721) | ||||||||
Other income (expense), net | 0 | 121 | ||||||||
Interest expense, net | $ (808) | $ (893) | $ (1,004) | $ (1,080) | $ (781) | $ (813) | $ (906) | $ (941) | $ (3,784) | $ (3,441) |
Credit Facilities - Summary of
Credit Facilities - Summary of Loan Facilities and Subordinated Debt Financing (Details) - Secured Debt - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Instrument [Line Items] | ||
Loan Balance | $ 46,750,000 | $ 70,000,000 |
Secured term loan | ||
Debt Instrument [Line Items] | ||
Loan Balance | $ 46,800,000 | |
Secured term loan | LIBOR | ||
Debt Instrument [Line Items] | ||
Debt instrument, basis spread on variable rate | 0.035% | |
Debt instrument, interest rate, effective percentage | 0.08% | |
Debt instrument, floor percentage | 0.50% | |
Secured revolving line of credit | ||
Debt Instrument [Line Items] | ||
Loan Balance | $ 0 | |
Secured revolving line of credit | LIBOR | ||
Debt Instrument [Line Items] | ||
Debt instrument, basis spread on variable rate | 0.035% | |
Debt instrument, interest rate, effective percentage | 0.08% | |
Debt instrument, floor percentage | 0.50% |
Credit Facilities - Narrative (
Credit Facilities - Narrative (Details) | 12 Months Ended | |
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | |
Line of Credit Facility [Line Items] | ||
Debt annual amortization amount fiscal year 2021 | $ 0 | |
Debt annual amortization amount fiscal year 2022 | 0 | |
Debt annual amortization amount fiscal year 2023 | 8,250,000 | |
Debt annual amortization fiscal year 2024 | 38,500,000 | |
Debt annual amortization fiscal year 2025 | 0 | |
Total repayments of debt | 23,250,000 | $ 19,000,000 |
Excess cash flow payment required | 0 | |
Interest Rate Swap | ||
Line of Credit Facility [Line Items] | ||
Notional amount of floating-to-fix interest rate swap | $ 22,800,000 | 28,800,000 |
Fixed interest rate applicable to swaps | 1.61% | |
Increase in interest expense | $ 400,000 | |
Secured Debt | ||
Line of Credit Facility [Line Items] | ||
Bank term loan | 46,750,000 | $ 70,000,000 |
Secured Debt | Term loan | ||
Line of Credit Facility [Line Items] | ||
Secured term loan, face amount | $ 70,000,000 | |
Fixed charge coverage ratio | 1.25 | |
Ratio of debt to EBITDA | 2.75 | |
Debt annual amortization amount fiscal year 2021 | $ 7,000,000 | |
Debt annual amortization amount fiscal year 2022 | 7,000,000 | |
Debt annual amortization amount fiscal year 2023 | 8,750,000 | |
Debt annual amortization fiscal year 2024 | 8,750,000 | |
Debt annual amortization fiscal year 2025 | 8,750,000 | |
Voluntary repayments of debt | 16,300,000 | |
Total repayments of debt | 23,300,000 | |
Bank term loan | $ 46,800,000 | |
Secured Debt | Term loan | Maximum | ||
Line of Credit Facility [Line Items] | ||
Ratio of debt to EBITDA | 3.75 | |
Debt instrument, interest rate, effective percentage | 4.50% | |
Secured Debt | Term loan | Minimum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, interest rate, effective percentage | 2.50% | |
Secured Debt | Term loan | Excess Cash Flow Greater Than or Equal to 2.50 | ||
Line of Credit Facility [Line Items] | ||
Percentage of excess cash flow for each year of funded indebtedness to adjusted EBITDA | 75.00% | |
Ratio of funded indebtedness to adjusted EBIDTA | 2.50 | |
Secured Debt | Term loan | Excess Cash Flow Less Than 2.50 But Greater Than or Equal to 1.50 | ||
Line of Credit Facility [Line Items] | ||
Percentage of excess cash flow for each year of funded indebtedness to adjusted EBITDA | 50.00% | |
Secured Debt | Term loan | Excess Cash Flow Less Than 2.50 But Greater Than or Equal to 1.50 | Maximum | ||
Line of Credit Facility [Line Items] | ||
Ratio of funded indebtedness to adjusted EBIDTA | 2.50 | |
Secured Debt | Term loan | Excess Cash Flow Equal to 1.50 | ||
Line of Credit Facility [Line Items] | ||
Ratio of funded indebtedness to adjusted EBIDTA | 1.5 | |
Secured Debt | Term loan | Excess Cash Flow Less Than 1.50 | ||
Line of Credit Facility [Line Items] | ||
Percentage of excess cash flow for each year of funded indebtedness to adjusted EBITDA | 0.00% | |
Ratio of funded indebtedness to adjusted EBIDTA | 1.5 | |
Secured Debt | Secured revolving line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit ceiling | $ 25,000,000 | |
Bank term loan | 0 | |
Remaining borrowing availability | 25,000,000 | |
Secured Debt | Letters of credit | ||
Line of Credit Facility [Line Items] | ||
Remaining borrowing availability | $ 5,000,000 |
Stock-based Compensation and _3
Stock-based Compensation and Equity Grants - Narrative (Details) - Stock Options | 12 Months Ended |
Sep. 30, 2021shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of options that may be granted with a term of more than 10 years from date of grant (in shares) | 0 |
Expiration term of options | 10 years |
Number of shares available for grant (in shares) | 1,700,000 |
2016 Omnibus Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of options that may be granted with a term of more than 10 years from date of grant (in shares) | 0 |
Expiration term of options | 10 years |
Stock-based Compensation and _4
Stock-based Compensation and Equity Grants - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Selling, General and Administrative Expenses | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total compensation expense | $ 1,660 | $ 910 | |
DLH employees | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Unrecognized expense for DLH employees | $ 4,468 | 2,633 | |
Weighted average period for recognition of compensation expense | 4 years 8 months 12 days | ||
DLH employees | Selling, General and Administrative Expenses | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total compensation expense | $ 1,193 | 563 | |
Non-employee directors | Restricted Stock Units | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Number of restricted stock units issued (in shares) | 63,177 | ||
Number of restricted stocks vested in period (in shares) | 63,177 | ||
Non-employee directors | Selling, General and Administrative Expenses | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total compensation expense | $ 467 | $ 347 | |
NEO | Restricted Stock Units | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Number of restricted stock units issued (in shares) | 147,431 | ||
Number of restricted stock outstanding (in shares) | 147,431 |
Stock-based Compensation and _5
Stock-based Compensation and Equity Grants - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Jul. 30, 2021 | Dec. 15, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Number of Shares | ||||
Outstanding at September 30, 2020 (in shares) | 2,129 | |||
Granted (in shares) | 455 | |||
Exercised (in shares) | (175) | |||
Cancelled (in shares) | (35) | |||
Outstanding at September 30, 2021 (in shares) | 2,374 | 2,129 | ||
Weighted Average Exercise Price | ||||
Outstanding at September 30, 2020 (in dollars per share) | $ 6.14 | |||
Granted (in dollars per share) | 10.47 | |||
Exercised (in dollars per share) | 2.48 | |||
Cancelled (in dollars per share) | 7.36 | |||
Outstanding at September 30, 2021 (in dollars per share) | $ 7.77 | $ 6.14 | ||
Weighted Average Remaining Contractual Term (in years) | ||||
Outstanding at September 30, 2020 | 7 years 8 months 12 days | 7 years 4 months 24 days | ||
Outstanding at September 30, 2021 | 7 years 8 months 12 days | 7 years 4 months 24 days | ||
Aggregate Intrinsic Value | ||||
Outstanding at the September 30, 2020 | $ 6,583 | |||
Options outstanding at September 30, 2021 | $ 15,899 | $ 6,583 | ||
Stock Options | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Volatility rate | 50.00% | 50.00% | 50.00% | |
Term | 10 years | 10 years | 10 years | |
Stock price threshold term | 10 days |
Stock-based Compensation and _6
Stock-based Compensation and Equity Grants - Stock Options Fair Value Assumptions (Details) - Stock Options - $ / shares | Jul. 30, 2021 | Dec. 15, 2020 | Sep. 30, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 50.00% | 50.00% | 50.00% |
Strike price (in dollars per share) | $ 10.75 | $ 10.05 | |
Stock price (in dollars per share) | 10.75 | 10.05 | |
Vesting threshold price (in dollars per share) | $ 14 | $ 13 | |
Expected term (Years) | 10 years | 10 years | 10 years |
Calculated fair value (in dollars per share) | $ 5.83 | $ 5.83 |
Stock-based Compensation and _7
Stock-based Compensation and Equity Grants - Stock Options Outstanding, Vested and Unvested (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Vested and exercisable (in shares) | 1,662 | 1,213 |
Unvested (in shares) | 712 | 916 |
Options outstanding (in shares) | 2,374 | 2,129 |
Weighted average exercise price of vested and exercisable shares (in dollars per share) | $ 3.91 | $ 2.25 |
Aggregate intrinsic value of vested and exercisable shares | $ 13.9 | $ 6.1 |
Weighted average contractual term remaining of vested and exercisable shares | 6 years | 4 years 7 months 6 days |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||||||||
Net income | $ 2,883 | $ 2,880 | $ 2,567 | $ 1,814 | $ 1,363 | $ 2,124 | $ 2,076 | $ 1,551 | $ 10,145 | $ 7,114 |
Denominator: | ||||||||||
Denominator for basic net income per share - weighted-average outstanding shares (in shares) | 12,549 | 12,282 | ||||||||
Effect of dilutive securities: | ||||||||||
Stock options and restricted stock (in shares) | 1,048 | 823 | ||||||||
Denominator for diluted net income per share - weighted-average outstanding shares (in shares) | 13,597 | 13,105 | ||||||||
Net income per share - basic (in dollars per share) | $ 0.23 | $ 0.23 | $ 0.20 | $ 0.15 | $ 0.11 | $ 0.17 | $ 0.17 | $ 0.13 | $ 0.81 | $ 0.58 |
Net income per share - diluted (in dollars per share) | $ 0.21 | $ 0.21 | $ 0.19 | $ 0.13 | $ 0.10 | $ 0.16 | $ 0.16 | $ 0.12 | $ 0.75 | $ 0.54 |
Commitments and Contingencies -
Commitments and Contingencies - Contractual Obligations (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Maturity of Debt Obligations | |
Net bank debt obligations | $ 46,750 |
2022 | 0 |
2023 | 0 |
2024 | 8,250 |
2025 | 38,500 |
2026 | 0 |
Thereafter | 0 |
Maturity Operating Leases | |
Total future minimum lease payments | 27,919 |
2022 | 3,501 |
2023 | 3,391 |
2024 | 3,251 |
2025 | 3,092 |
2026 | 3,193 |
Thereafter | 11,491 |
Maturity Total Contractual Obligations | |
Total contractual obligations | 74,669 |
2022 | 3,501 |
2023 | 3,391 |
2024 | 11,501 |
2025 | 41,592 |
2026 | 3,193 |
Thereafter | 11,491 |
Facility leases | |
Maturity Operating Leases | |
Total future minimum lease payments | 27,701 |
2022 | 3,418 |
2023 | 3,308 |
2024 | 3,199 |
2025 | 3,092 |
2026 | 3,193 |
Thereafter | 11,491 |
Equipment operating leases | |
Maturity Operating Leases | |
Total future minimum lease payments | 218 |
2022 | 83 |
2023 | 83 |
2024 | 52 |
2025 | 0 |
2026 | 0 |
Thereafter | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Workers' compensation liability | $ 7 | $ 5.5 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||||||||
Current expense | $ 2,081 | $ 598 | ||||||||
Deferred expense | 1,213 | 2,308 | ||||||||
Total expense | $ 339 | $ 1,166 | $ 1,049 | $ 741 | $ 554 | $ 863 | $ 855 | $ 634 | $ 3,294 | $ 2,906 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||||||||
Federal statutory rate | $ 2,822 | $ 2,104 | ||||||||
State taxes, net | 376 | 554 | ||||||||
Other permanent items | 96 | 160 | ||||||||
Deferred tax estimate adjustment | 0 | 88 | ||||||||
Total expense | $ 339 | $ 1,166 | $ 1,049 | $ 741 | $ 554 | $ 863 | $ 855 | $ 634 | $ 3,294 | $ 2,906 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Sep. 30, 2020 |
Deferred income tax assets: | ||
Net operating loss carry forwards, net | $ 29 | $ 1,554 |
Stock based compensation | 508 | 140 |
Accrued expenses | 1,944 | 1,698 |
Other items, net | 0 | 258 |
Total deferred tax asset | 2,481 | 3,650 |
Deferred tax liability: | ||
Equipment and intangible assets | (3,507) | (3,613) |
Right of use liability | (150) | 0 |
Total deferred tax liability | (3,657) | (3,613) |
Net deferred tax (liability) | $ (1,176) | |
Net deferred tax asset | $ 37 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
Revenue | $ 65,182 | $ 61,555 | $ 61,506 | $ 57,852 | $ 50,691 | $ 51,459 | $ 54,798 | $ 52,238 | $ 246,094 | $ 209,185 |
Income from operations | 4,030 | 4,939 | 4,620 | 3,635 | 2,698 | 3,800 | 3,837 | 3,126 | 17,223 | 13,461 |
Interest expense, net | (808) | (893) | (1,004) | (1,080) | (781) | (813) | (906) | (941) | (3,784) | (3,441) |
Income before income taxes | 3,222 | 4,046 | 3,616 | 2,555 | 1,917 | 2,987 | 2,931 | 2,185 | 13,439 | 10,020 |
Income tax expense | 339 | 1,166 | 1,049 | 741 | 554 | 863 | 855 | 634 | 3,294 | 2,906 |
Net income | $ 2,883 | $ 2,880 | $ 2,567 | $ 1,814 | $ 1,363 | $ 2,124 | $ 2,076 | $ 1,551 | $ 10,145 | $ 7,114 |
Basic (in dollars per share) | $ 0.23 | $ 0.23 | $ 0.20 | $ 0.15 | $ 0.11 | $ 0.17 | $ 0.17 | $ 0.13 | $ 0.81 | $ 0.58 |
Diluted (in dollars per share) | $ 0.21 | $ 0.21 | $ 0.19 | $ 0.13 | $ 0.10 | $ 0.16 | $ 0.16 | $ 0.12 | $ 0.75 | $ 0.54 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan, recorded expense | $ 1,500 | $ 1,200 |
Defined contribution plan, matching contributions period | 4 years |