DLH (DLHC) 10-Q 2 Aug 23 2023 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Jun. 30, 2023	Jul. 31, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
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 Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		13,899,969
Entity Central Index Key	0000785557
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--09-30

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenue	$ 102,241	$ 66,440	$ 274,385	$ 327,940
Contract costs	80,919	49,668	216,779	271,184
General and administrative costs	9,935	7,535	27,670	22,178
Corporate development costs	0	250	1,735	250
Depreciation and amortization	4,280	1,873	11,281	5,740
Operating Costs and Expenses	95,134	59,326	257,465	299,352
Income from operations	7,107	7,114	16,920	28,588
Interest expense	4,917	512	11,512	1,739
Income before provision for income taxes	2,190	6,602	5,408	26,849
Provision for income taxes	452	1,738	1,318	7,003
Net income	$ 1,738	$ 4,864	$ 4,090	$ 19,846
Net income per share - basic (in dollars per share)	$ 0.13	$ 0.38	$ 0.30	$ 1.55
Net income per share - diluted (in dollars per share)	$ 0.12	$ 0.34	$ 0.28	$ 1.40
Weighted average common stock outstanding
Basic (in shares)		12,812		12,779

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash	$ 530	$ 228
Accounts receivable	67,882	40,496
Other current assets	4,082	2,878
Total current assets	72,494	43,602
Equipment and improvements, net	1,690	1,704
Operating lease right-of-use assets	17,911	16,851
Goodwill	138,301	65,643
Intangible assets, net	128,891	40,884
Other long-term assets	88	328
Total assets	359,375	169,012
Debt obligations - current, net of deferred financing costs	28,716	0
Current liabilities:
Operating lease liabilities - current	3,478	2,235
Accrued payroll	17,545	9,444
Accounts payable and accrued liabilities	25,602	26,862
Total current liabilities	75,341	38,541
Deferred taxes, net	1,203	1,534
Operating lease liabilities - long-term	16,485	16,461
Debt obligations - long-term, net of deferred financing costs	159,379	20,416
Other long-term liabilities	1,801	0
Total long-term liabilities	178,868	38,411
Total liabilities	254,209	76,952
SHAREHOLDERS’ EQUITY
Common stock, $0.001 par value; 40,000 shares authorized; 13,900 and 13,047 shares issued and outstanding at June 30, 2023 and September 30, 2022, respectively	14	13
Additional paid-in capital	100,072	91,057
Retained earnings	5,080	990
Total shareholders’ equity	105,166	92,060
Total liabilities and shareholders' equity	$ 359,375	$ 169,012

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2023	Sep. 30, 2022
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	40,000,000	40,000,000
Common stock, issued (in shares)	13,900,000	13,047,000
Common stock, outstanding (in shares)	13,900,000	13,047,000

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Operating activities
Net income	$ 4,090	$ 19,846
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	11,281	5,740
Amortization of deferred financing costs charged to interest expense	1,540	497
Stock-based compensation expense	2,020	1,952
Deferred Income Tax Expense (Benefit)	0	(1)
Changes in operating assets and liabilities
Increase (Decrease) in Accounts Receivable	(1,918)	(16,890)
Increase (Decrease) in Other Current Assets	130	(152)
Accrued payroll	274	4,032
Deferred revenue	0	(22,273)
Accounts payable and accrued liabilities	(4,221)	2,380
Other long-term assets and liabilities	1,801	110
Net cash provided by (used in) operating activities	14,997	(4,759)
Investing activities
Business acquisition, net of cash acquired	(180,711)	0
Purchase of equipment and improvements	(580)	(244)
Net cash used in investing activities	(181,291)	(244)
Financing activities
Proceeds from revolving line of credit	144,697	0
Repayment of revolving line of credit	(128,204)	0
Proceeds from debt obligations	168,000	13,500
Repayments of debt obligations	(10,688)	(31,750)
Payments of deferred financing costs	(7,666)	0
Proceeds from issuance of common stock upon exercise of options and warrants	1,107	543
Payment of tax obligations resulting from net exercise of stock options	(650)	(281)
Net cash provided by (used in) financing activities	166,596	(17,988)
Net change in cash	302	(22,991)
Cash - beginning of period	228	24,051
Cash - end of period	530	1,060
Supplemental disclosure of cash flow information
Cash paid during the period for interest	10,006	1,195
Cash paid during the period for income taxes	4,055	6,403
Common stock surrendered for the exercise of stock options	$ 238	$ 256

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Total	Common Stock	Additional Paid-In Capital	Retained Earnings
Beginning Balance (in shares) at Sep. 30, 2021		12,714,000
Beginning balance at Sep. 30, 2021	$ 65,608,000	$ 13,000	$ 87,893,000	$ (22,298,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Expense related to director restricted stock units	486,000		486,000
Common stock surrendered for the exercise of stock options (in shares)		(31,000)
Common stock surrendered for the exercise of stock options	(281,000)		(281,000)
Exercise of stock options (in shares)		224,000
Exercise of stock options	343,000		343,000
Exercise of stock warrants (in shares)		54,000
Exercise of stock warrants	200,000		200,000
Net income	19,846,000			19,846,000
Ending Balance (in shares) at Jun. 30, 2022		12,961,000
Ending balance at Jun. 30, 2022	87,668,000	$ 13,000	90,107,000	(2,452,000)
Beginning Balance (in shares) at Mar. 31, 2022		12,794,000
Beginning balance at Mar. 31, 2022	82,361,000	$ 13,000	89,664,000	(7,316,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Expense related to director restricted stock units	162,000		162,000
Common stock surrendered for the exercise of stock options (in shares)		(31,000)
Common stock surrendered for the exercise of stock options	(281,000)		(281,000)
Exercise of stock options (in shares)		198,000
Exercise of stock options	81,000		81,000
Net income	4,864,000			4,864,000
Ending Balance (in shares) at Jun. 30, 2022		12,961,000
Ending balance at Jun. 30, 2022	$ 87,668,000	$ 13,000	90,107,000	(2,452,000)
Beginning Balance (in shares) at Sep. 30, 2022	13,047,000	13,047,000
Beginning balance at Sep. 30, 2022	$ 92,060,000	$ 13,000	91,057,000	990,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance and fair value adjustment of common stock in business combination (in shares)	527,000
Issuance and fair value adjustment of common stock in business combination	$ 6,539,000	$ 1,000	6,538,000
Expense related to director restricted stock units	539,000		539,000
Expense related to employee stock options	1,481,000		1,481,000
Common stock surrendered for the exercise of stock options (in shares)		(67,000)
Common stock surrendered for the exercise of stock options	$ (650,000)		(650,000)
Exercise of stock options (in shares)	393,000	393,000
Exercise of stock options	$ 1,107,000		1,107,000
Net income	$ 4,090,000			4,090,000
Ending Balance (in shares) at Jun. 30, 2023	13,900,000	13,900,000
Ending balance at Jun. 30, 2023	$ 105,166,000	$ 14,000	100,072,000	5,080,000
Beginning Balance (in shares) at Mar. 31, 2023		13,793,000
Beginning balance at Mar. 31, 2023	101,940,000	$ 14,000	98,584,000	3,342,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Expense related to director restricted stock units	179,000		179,000
Expense related to employee stock options	489,000		489,000
Exercise of stock options (in shares)		107,000
Exercise of stock options	820,000		820,000
Net income	$ 1,738,000			1,738,000
Ending Balance (in shares) at Jun. 30, 2023	13,900,000	13,900,000
Ending balance at Jun. 30, 2023	$ 105,166,000	$ 14,000	$ 100,072,000	$ 5,080,000

Basis of Presentation_and Princ

Basis of Presentation and Principles of Consolidation	9 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of DLH Holdings Corp. and its wholly-owned subsidiaries (together with its subsidiaries, "DLH" or the "Company" and also referred to as "we," "us" and "our"). All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In management's opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending September 30, 2023 or any future period. Amounts as of and for the three and nine months ended June 30, 2023 and June 30, 2022 are unaudited. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2022 filed with the Securities and Exchange Commission on December 5, 2022.

Significant Accounting Policies

Significant Accounting Policies	9 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The most significant of these estimates and assumptions relate to estimating revenues and costs including overhead and its allocation, estimating progress toward the completion of performance obligations, assessing fair value of acquired assets and liabilities accounted for through business acquisitions, valuing and determining the amortization periods for long-lived intangible assets, interest rate swaps, stock-based compensation, right-of-use assets and leases liabilities, and 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. Revenue The Company's revenues from contracts with customers are derived from offerings that include technology-enabled business process outsourcing, program management solutions, and public health research and analytics, substantially within the U.S. government and its agencies. The Company has various types of contracts including time-and-materials contracts, cost-reimbursable contracts, and firm-fixed-price contracts. We consider a contract with a customer to exist when there is a commitment by both parties (customer and Company), payment terms are determinable, there is commercial substance, and collectability is probably in accordance with Accounting Standards Codification ("ASC") No. 606, Revenue from Contracts with Customers ("Topic 606"). We recognize revenue over time when there is a continuous transfer of control to our customer as performance obligations are satisfied. For our U.S. government contracts, this continuous transfer of control to the customer is transferred over time and revenue is recognized based on the extent of progress toward completion of the performance obligation. We consider control to transfer when we have a right to payment. In some instances, the Company commences providing services prior to formal approval to begin work from the customer. The Company considers these factors, the risks associated with commencing work, and legal enforceability in determining whether a contract exists under Topic 606. Contract modification can occur throughout the life of the contract and can affect the transaction price, extend the period of performance, adjust funding, or create new performance obligations. We review each modification to assess the impact of these contract changes to determine if it should be treated as part of the original performance obligation or as a separate contract. 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 service contracts, we satisfy our performance obligations as services are rendered. We use cost-based input and time-based output methods to measure progress based on the contract type. • Time and material - We bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced as the amount corresponds directly to the value of our performance to date. Revenue is recognized to the extent of billable rates times hours delivered plus materials and other reimbursable costs incurred. • Cost reimbursable - We record reimbursable costs as incurred, including an estimated share of the contractual fee earned. • Firm fixed price - We recognize revenue over time using a straight-line measure of progress Contract costs generally include direct costs such as labor, materials, subcontract costs, and indirect costs identifiable with or allocable to a specific contract. Costs are expensed as incurred and include an estimate of the contractual fees earned. Contract costs incurred for U.S. government contracts, including indirect costs, are subject to audit and adjustment by various government audit agencies. Historically, our adjustments have not been material. 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 Accounts receivable, 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 or prepayment for services to be rendered. Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, contract assets, contract liabilities, 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 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 recorded 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. Maintenance and repair costs are expensed as incurred. 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. Lease Liabilities The Company has 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 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 secured term loan 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. Goodwill The Company reviews goodwill for impairment on an annual basis and on a quarterly basis the Company assesses the impact of any macroeconomic changes that may impact the business conditions to determine if these changes have any adverse impact to goodwill. 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. The Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill. Provision for Income Taxes The Company accounts for income taxes in accordance with the asset and 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 sheets 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 June 30, 2023 or September 30, 2022. We report interest and penalties as a component of provision for income taxes. During the three and nine months ended June 30, 2023 and June 30, 2022, we recognized no interest and no penalties related to income taxes. Stock-based Compensation The Company uses the fair value-based method for stock-based compensation. Options issued are designated as either an incentive stock option 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 t o employees and non- employee s are reco rded at fair value on the date of the grant and expensed over the period of vesting. The Company uses a Monte Carlo method 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 common stock. 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 method that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation expense is recognized over the service period. Cash and Cash Equivalents The Company considers 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. Accounts Receivable Receivables include amounts billed and currently due from customers where the right to consideration is unconditional and amounts unbilled. Both billed and unbilled amounts are non-interest bearing, unsecured, and recognized at an estimated realizable value that includes costs and fees, and are generally expected to be billed and received within a single year. 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 June 30, 2023 or September 30, 2022. 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 June 30, 2023 and September 30, 2022, the Company did not hold any treasury stock. Preferred Stock Our certificate of incorporation authorizes the issuance of "blank check" preferred stock with 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 June 30, 2023 and September 30, 2022, 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 instruments for trading or speculative purposes. Risks & Uncertainties Management evaluates the impact of global markets and economic factors on our industry and the potential for adverse effects on the Company's consolidated financial position and its operations. As of June 30, 2023, there was no indication of any global or economic impacts to our industry.

New Accounting Pronouncements

New Accounting Pronouncements	9 Months Ended
	Jun. 30, 2023
Accounting Changes and Error Corrections [Abstract]
New Accounting Pronouncements	New Accounting Pronouncements In March 2020 and January 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and ASU No. 2021-01, “Reference Rate Reform (Topic 848): Scope,” respectively (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In December 2022, FASB issued ASU 2022-06 "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848" which defers the end date for electing the relief provided in Topic 848 from December 31, 2022 to December 31, 2024. In the first quarter of fiscal 2023, the Company adopted the optional expedients and exceptions provided in Topic 848. The adoption did not have a material impact on the Company’s consolidated financial statements.

Business Combination

Business Combination	9 Months Ended
	Jun. 30, 2023
Business Combination and Asset Acquisition [Abstract]
Business Combination	Business Combination Acquisition of Grove Resource Solutions, LLC On December 8, 2022, the Company acquired 100% of the equity interests of Grove Resource Solution, LLC ("GRSi") for a purchase price of $188.0 million, inclusive of the working capital adjustment completed and paid during this fiscal quarter. The acquisition was financed through a combination of: • borrowings of $181.5 million under the Company’s amended and restated credit facility; and • common stock issued of approximately 0.5 million shares, which were valued at $6.5 million in the aggregate, based on the shares issued to the previous owners as determined by the equity purchase agreement and the stock price on the acquisition date. The acquisition of GRSi was consistent with the Company’s growth strategy, as it provided contract diversification, addition of key capabilities and increased presence in the military health market. The estimated goodwill derived from this transaction is primarily due to these attributes. The Company has used the acquisition method of accounting for this transaction, whereby the assets acquired and liabilities assumed are recognized based upon their estimated fair values at the acquisition date. The purchase price for GRSi was $188.0 million adjusted to reflect acquired cash, assumed liabilities and net working capital adjustments. The Purchase Agreement contains customary representations, warranties and covenants by the parties. Subject to certain limitations and conditions, the seller and the equity holders of the seller do not have indemnity obligation for damages resulting from breaches or inaccuracies of the representations, warranties, and covenants of the seller, GRSI and the equity holders as set forth in the Purchase Agreement. The Purchase Agreement also provided for the establishment of an escrow account in order to satisfy (i) any downward adjustment of the purchase price base on GRSI's net working capital at the closing and (ii) certain specified indemnification obligations of the seller and equity holders that may arise following the closing. The escrow account is funded by an aggregate amount of approximately $4.3 million and the stock consideration. A representations and warranties insurance policy has been purchased by the Company in connection with the Purchase Agreement, under which the Company may seek recourse for breaches of the representations and warranties of the seller, GRSI and the equity holders. The representations and warranties insurance policy is subject to certain customary exclusions and a deductible. In accordance with ASU 2017-01, the Company evaluated the transaction as an acquisition of a business. The Company has assessed the acquisition price to the fair value of the assets and liabilities of GRSi at the acquisition date. Based on the unaudited financial statements of GRSi on December 8, 2022, we accounted for the total acquisition consideration and allocation of fair value of the related assets and liabilities as follows (in thousands): Purchase price for GRSi $ 187,997 Purchase price allocation: Cash 747 Accounts receivable 25,468 Other current assets 1,354 Accounts payable and accrued expenses (2,449) Payroll liabilities (7,826) Other current liabilities (325) Equipment and improvements, net 463 Other long-term assets and liabilities (781) Intangible assets 98,688 Total identifiable net assets acquired 115,339 Goodwill $ 72,658 All operating units are aggregated into a single reportable segment. The acquisition of GRSi did not create an additional reportable segment as all operations report to a single Chief Operating Decision Maker (CODM), serve a similar customer base, and provide similar services within a common regulatory environment. The goodwill represents intellectual capital and the acquired workforce, of which both do not qualify as a separate intangible asset. During the three months ended and nine months ended June 30, 2023, following the completion of the acquisition, GRSi contributed approximately $34.4 million and $73.9 million of revenue and $2.6 million and $4.1 million of income from operations, respectively. The following table presents certain results for the three and nine months ended June 30, 2023 and 2022 as though the acquisition of GRSi had occurred on October 1, 2021. The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of our results if the acquisition had taken place on that date. The pro forma information was prepared by combining our reported historical results with the historical results of GRSi for the pre-acquisition periods. In addition, the reported historical amounts were adjusted for the following items, net of associated tax effects: • The impact of recording GRSi's intangible asset amortization. • The impact of interest expense for the new credit facility. • The removal of legacy GRSi director's fees. • The removal of transaction costs for the acquisition incurred by GRSi. (unaudited) (unaudited) (in thousands) (in thousands) Three Months Ended Nine Months Ended June 30, June 30, Pro forma results 2023 2022 2023 2022 Revenue $ 102,241 $ 94,326 $ 301,481 $ 407,795 Net income 1,738 4,603 4,683 15,455 Number of shares outstanding - basic 13,854 12,812 13,638 12,779 Number of shares outstanding - diluted 14,539 14,235 14,421 14,205 Basic earnings per share $0.13 $0.36 $0.34 $1.21 Diluted earnings per share $0.12 $0.32 $0.32 $1.09

Revenue Recognition

Revenue Recognition	9 Months Ended
	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
Revenue Recognition	Revenue Recognition The following table summarizes the contract balances recognized on the Company's consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Contract assets $ 19,300 $ 7,682 Contract assets are included presented as part of the accounts receivables on the consolidated balances sheets. Contract liabilities are presented as deferred revenue, which had no balance as of June 30, 2023 and September 30, 2022. 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 for the three and nine months ended June 30, 2023 and 2022 was as follows (in thousands): Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 Department of Veterans Affairs $ 35,898 $ 33,344 $ 104,489 $ 92,270 Department of Health and Human Services 44,536 27,741 115,528 78,452 Department of Defense 21,003 8,272 50,802 25,227 Department of Homeland Security 256 (4,908) 639 126,397 Other 548 1,991 2,927 5,594 Total $ 102,241 $ 66,440 $ 274,385 $ 327,940 Revenue by contract type for the three and nine months ended June 30, 2023 and 2022 was as follows (in thousands): Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 Time and Materials $ 51,572 $ 44,672 $ 154,366 $ 263,072 Cost Reimbursable 29,110 11,979 58,951 34,364 Firm Fixed Price 21,559 9,789 61,068 30,504 Total $ 102,241 $ 66,440 $ 274,385 $ 327,940 Revenue by whether the Company acts as a prime contractor or a subcontractor for the three and nine months ended June 30, 2023 and 2022 was as follows (in thousands): Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 Prime Contractor $ 97,885 $ 58,743 $ 259,692 $ 304,862 Subcontractor 4,356 7,697 14,693 23,078 Total $ 102,241 $ 66,440 $ 274,385 $ 327,940

Leases

Leases	9 Months Ended
	Jun. 30, 2023
Leases [Abstract]
Leases	Leases The following table summarizes lease balances presented on our consolidated balance sheets was as follows (in thousands): June 30, September 30, 2023 2022 Operating lease right-of-use assets $ 17,911 $ 16,851 Operating lease liabilities, current $ 3,478 $ 2,235 Operating lease liabilities - long-term 16,485 16,461 Total operating lease liabilities $ 19,963 $ 18,696 As of June 30, 2023, operating leases for facilities and equipment have remaining lease terms of less than 1 to 7.9 years. For the three and nine months ended June 30, 2023 and 2022, total lease costs for our operating leases was as follows (in thousands): Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 Operating $ 1,097 $ 869 $ 2,921 $ 2,684 Short-term 83 33 225 85 Variable 47 44 63 89 Sublease income (a) (71) (69) (214) (188) Total lease costs $ 1,156 $ 877 $ 2,995 $ 2,670 (a) 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 includes two additional 1-year term extension options. The Company's future minimum lease payments as of June 30, 2023 as follows (in thousands): For the Fiscal Year Ending September 30, 2023 (remaining) $ 1,165 2024 4,611 2025 3,928 2026 3,700 2027 2,627 Thereafter 8,672 Total future lease payments 24,703 Less: imputed interest (4,740) Present value of future minimum lease payments 19,963 Less: current portion of operating lease liabilities (3,478) Long-term operating lease liabilities $ 16,485 At June 30, 2023, the weighted-average remaining lease term and weighted-average discount rate are 6.3 years and 6.4% respectively. The calculation of the weighted-average discount rate was determined based on borrowing terms from our secured term loan. Other information related to our leases for the nine months ended June 30, 2023 and 2022 was as follows (in thousands): 2023 2022 Cash paid for amounts included in the measurement of lease liabilities 3,317 $ 2,566 Lease liabilities arising from obtaining right-of-use assets 2,052 $ —

Supporting Financial Informatio

Supporting Financial Information	9 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Supporting Financial Information	Supporting Financial Information Accounts receivable The following table summarizes accounts receivable presented on our consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Billed receivables $ 48,582 $ 32,814 Contract assets 19,300 7,682 Allowance for doubtful accounts — — Accounts receivable $ 67,882 $ 40,496 Other current assets The following table summarizes other current assets presented on our consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Prepaid insurance and benefits $ 1,316 $ 737 Prepaid licenses and other expenses 1,694 1,196 Other receivables 1,072 945 Other current assets $ 4,082 $ 2,878 Equipment and improvements, net The following table summarizes equipment and improvements, net presented on our consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Furniture and equipment $ 877 $ 893 Computer equipment 5,328 2,316 Computer software 1,733 4,407 Leasehold improvements 1,878 1,614 Total equipment and improvements 9,816 9,230 Less: accumulated depreciation and amortization (8,126) (7,526) Equipment and improvements, net $ 1,690 $ 1,704 Depreciation and amortization expense was $0.2 million for each of the three months ended June 30, 2023 and 2022. Depreciation and amortization expense was $0.6 million and $0.8 million for the nine months ended June 30, 2023 and 2022, respectively. Intangible assets The following table summarizes intangible assets, net presented on our consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Intangible assets Customer contracts and related customer relationships $ 113,622 $ 47,044 Covenants not to compete 637 522 Trade name 13,034 3,051 Backlog 37,249 15,237 Total intangible assets 164,542 65,854 Less: accumulated amortization Customer contracts and related customer relationships (27,087) (19,731) Covenants not to compete (362) (316) Trade name (1,859) (1,048) Backlog (6,343) (3,875) Total accumulated amortization (35,651) (24,970) Intangible assets, net $ 128,891 $ 40,884 Amortization expense was $4.1 million and $1.6 million for the three months ended June 30, 2023 and 2022, respectively. Amortization expense was $10.7 million and $4.9 million for the nine months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, the estimated amortization expense per fiscal year as follows (in thousands): 2023 (remaining) $ 4,096 2024 16,386 2025 16,385 2026 15,652 2027 14,624 Thereafter 61,748 Total amortization expense $ 128,891 Goodwill The change in the carrying amount of goodwill as follows presented on our consolidated balance sheets as follows (in thousands): Balance at September 30, 2022 $ 65,643 Increase from GRSi acquisition (a) 72,658 Balance at June 30, 2023 $ 138,301 Ref (a) ; The Company has completed its valuation assessment of the GRSi acquisition. Please refer to Note 4 for more information. Accounts payable and accrued liabilities The following table summarizes accounts payable and accrued liabilities presented on our consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Accounts payable $ 15,559 $ 11,886 Accrued benefits 4,073 3,857 Accrued bonus and incentive compensation 3,147 3,625 Accrued workers' compensation insurance 2,749 4,880 Other accrued expenses 74 2,614 Accounts payable and accrued liabilities $ 25,602 $ 26,862 Debt obligations The following table summarizes debt obligations presented on our consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Secured revolving line of credit $ 16,448 $ — Secured term loan 179,312 22,000 Less: unamortized deferred financing costs (7,665) (1,584) Net bank debt obligations 188,095 20,416 Less: current portion of debt obligations, net of deferred financing costs (a) (28,716) — Long-term portion of debt obligations, net of deferred financing costs $ 159,379 $ 20,416 (a) Current portion comprises term loan amortization of $14.3 million and the $16.4 million outstanding balance on the secured revolving line of credit, net of $2.0 million of unamortized deferred financing costs. Interest expense The following table summarizes interest expense presented on our consolidated statements of operations for the three and nine months ended June 30, 2023 and 2022 as follows (in thousands): Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 Interest expense (a) $ 4,282 $ 334 $ 9,972 $ 1,242 Amortization of deferred financing costs (b) 635 178 1,540 497 Interest expense $ 4,917 $ 512 $ 11,512 $ 1,739 (a) Interest expense on borrowing. (b) Amortization of expenses related to secured term loan and secured revolving line of credit.

Credit Facilities

Credit Facilities	9 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
Credit Facilities	Credit FacilitiesA summary of our credit facilities as of June 30, 2023 and September 30, 2022 is as follows (in millions): June 30, 2023 September 30, 2022 Arrangement Loan Balance Interest Arrangement Loan Balance Interest Secured term loan (a) due December 8, 2027 $ 179.3 SOFR* + 4.2% Secured term loan due September 30, 2025 $ 22.0 LIBOR + 2.5% Secured revolving line of credit (b) due December 8, 2027 $ 16.4 SOFR* + 4.2% Secured Revolving line of Credit due September 20, 2025 $ — LIBOR + 2.5% *Secured Overnight Financing Rate ("SOFR") as of June 30, 2023 wa s 5.2%. 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 as of June 30, 2023 is $16.2 million matures in 2024, and the fixed rate is 1.61%. On January 31, 2023, we executed an additional floating-to-fixed interest rate swap with FNB; the notional amount as of June 30, 2023 is $96.0 million, it matures in January 2026, and the fixed rate is 4.10% The total floating-to-fixed swap balance as of June 30, 2023 is $112.2 million. As a result of entering these agreements, for the nine months ended June 30, 2023, interest expense has been decreased by approximately $0.6 million. (a) Represents the principal amounts payable on our term loan, which 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 December 8, 2027. 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 the following: 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 total leverage ratio not exceeding the ratio of 4.50:1.0 to 2.00:1.0 through maturity. The total leverage 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-cash charges, losses or expenses, including stock-based compensation, and (v) non-recurring charges, losses or expenses to include transaction and non-cash equity expense. We are in compliance with all loan covenants and restrictions. We are required to pay quarterly amortization payments, which commenced in December 2022. The annual amortization amounts are $14.3 million each for fiscal years 2023 and 2024, $19.0 million each for fiscal years 2025 and 2026, and $23.8 million for fiscal year 2027, with the remaining unpaid loan balance due at maturity in December 2027. The quarterly payments are equal installments. The Company made a mandatory prepayment of $3.6 million during the quarter ended June 30, 2023 bringing the outstanding principal balance on the secured term loan to $179.3 million. We have satisfied mandatory principal amortization until June 30, 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 the total leverage 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 total leverage 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 total leverage 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 indebtedness. For additional information regarding the schedule of future payment obligations, please refer to Note 11. Commitments and Contingencies . (b) The secured revolving line of credit has a ceiling of up to $70.0 million; as of June 30, 2023 we had unused borrowing capacity of $32.9 million, wh ich is net of outstanding letters of credit. 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 quarter and had an outstanding balance at June 30, 2023 of $16.4 million. The Company's total borrowing availability, based on eligible accounts receivable at June 30, 2023, was $32.9 million. As part of the revolving credit facility, the lenders agreed to a sublimit o f $10.0 million for letters of credit for the account of the Company, subject to applicable procedures.

Related Party Transactions

Related Party Transactions	9 Months Ended
	Jun. 30, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Related Party TransactionsThe Company has determined that for the three and nine months ended June 30, 2023 and June 30, 2022 there were no significant related party transactions that have occurred which require disclosure through the date that these consolidated financial statements were issued.

Stock-based Compensation and Eq

Stock-based Compensation and Equity Grants	9 Months Ended
	Jun. 30, 2023
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 incentive stock or non-statutory stock options. No option is 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 June 30, 2023, there were 0.9 million shares available for grant under the 2016 Omnibus Equity Incentive Plan. Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our consolidated statements of operations for the three and nine months ended June 30, 2023 and 2022 was as follows (in thousands): (in thousands) (in thousands) Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 DLH employees (a) $ 489 $ 481 $ 1,481 $ 1,466 Non-employee directors (b) 179 162 539 486 Total stock option expense $ 668 $ 643 $ 2,020 $ 1,952 (a) Included in this amount are equity grants of restricted stock units ("RSU") to Executive Officers, which were issued in accordance with the DLH long-term incentive compensation policy in this fiscal year, and stock option grants to employees during prior fiscal years. The RSUs totaled 337,578 and 161,485 issued and outstanding at June 30, 2023 and 2022, respectively. During the nine months ended June 30, 2023, 197,174 RSUs were granted to Executive Officers. Of the RSUs granted, 141,892 have performance-based vesting criteria and the remaining 55,282 have service-based vesting criteria. Utilizing a volatility of 50% along with assumptions of a 3-year term and the performance vesting criteria results in an indicated range of value, the RSUs granted during nine months ended June 30, 2023, as follows using the Monte Carlo Method. Volatility 50% Calculated Grant Date Performance Vesting Base Performance Vesting Criteria (Years) Fair Value January 27, 2023 Revenue Revenue increase at the end of the performance period as compared to the year ended September 30, 2022 3 $ 3.51 January 27, 2023 Stock price Stock price is at least $33.21 per share average for the 30 days prior to the end of the performance period 3 $ 2.92 Notes: Results based on 100,000 simulations (b) Equity grants of RSUs were made in accordance with DLH compensation policy for non-employee directors and a total of 50,367 and 53,510 restricted stock units were issued and outstanding at June 30, 2023 and 2022, respectively. These grants have service-based vesting criteria and vest at the end of this fiscal year. Unrecognized stock-based compensation expense Unrecognized stock-based compensation expense is presented in the table below for the three months ended June 30, 2023 and 2022 as follows (in thousands): 2023 2022 Unrecognized expense for DLH employees (a) $ 7,358 $ 5,498 Unrecognized expense for non-employee directors 155 162 Total unrecognized expense $ 7,513 $ 5,660 (a) On a weighted average basis, the unrecognized expense for the three months ended June 30, 2023 is expected to be recognized within the next 4.1 years. Stock option activity for the nine months ended June 30, 2023 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 Shares Price Term Value Options outstanding, September 30, 2022 2,392 $ 7.05 5.40 $ 13,566 Granted (a) 400 11.66 — — Exercised (b) (393) 3.42 — — Cancelled (158) 9.07 — — Options outstanding, June 30, 2023 2,241 $ 8.36 5.92 $ 6,499 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 three months ended March 31, 2023, as follows using the Monte Carlo Method. Volatility 50% Vesting Expected Strike Stock Threshold Term Calculated Grant Date Price Price Price (Years) Fair Value January 26, 2023 $ 11.66 $ 11.66 $ 15.00 10 $ 7.41 Notes: Results based on 100,000 simulations Ref (b): The intrinsic value of options exercised for the three and nine months ended June 30, 2023 were $0.2 million and $3.4 million. Stock options shares outstanding, vested and unvested for the periods ended as follows (shares in thousands): June 30, September 30, 2023 2022 Vested and exercisable (a) 1,616 2,117 Unvested (b) 625 275 Options outstanding 2,241 2,392 (a) The weighted average exercise price of vested and exercisable shares was $6.45 and $5.86 at June 30, 2023 and September 30, 2022, respectively. Aggregate intrinsic value was approximately $6.5 million and $13.6 million at June 30, 2023 and September 30, 2022, respectively. The weighted average contractual term remaining was 4.6 years and 4.9 years at June 30, 2023 and September 30, 2022, respectively. (b) Certain awards vest upon satisfaction of certain performance criteria.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Jun. 30, 2023
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. Earnings per share information is presented in the table below for the three and nine months ended June 30, 2023 and 2022 as follows (in thousands except for per share amounts): (In thousands) Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 Numerator: Net income $ 1,738 $ 4,864 $ 4,090 $ 19,846 Denominator: Denominator for basic net income per share - weighted-average outstanding shares 13,854 12,812 13,638 12,779 Effect of dilutive securities: Stock options and restricted stock 685 1,423 783 1,426 Denominator for diluted net income per share - weighted-average outstanding shares 14,539 14,235 14,421 14,205 Net income per share - basic $ 0.13 $ 0.38 $ 0.30 $ 1.55 Net income per share - diluted $ 0.12 $ 0.34 $ 0.28 $ 1.40

Commitment and Contingencies

Commitment and Contingencies	9 Months Ended
	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Contractual obligations as of June 30, 2023 are as follows (in thousands): Payments Due Per Fiscal Year (Remaining) Total 2023 2024 2025 2026 2027 Thereafter Debt obligations $ 195,760 $ 3,563 $ 14,250 $ 19,000 $ 19,000 $ 23,750 $ 116,197 Facility operating leases 24,636 1,148 4,561 3,928 3,700 2,627 8,672 Equipment operating leases 67 17 50 — — — — Total contractual obligations $ 220,463 $ 4,728 $ 18,861 $ 22,928 $ 22,700 $ 26,377 $ 124,869 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 June 30, 2023 and September 30, 2022 was $2.7 million and $4.9 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, 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

Significant Accounting Polici_2

Significant Accounting Policies (Policies)	9 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The most significant of these estimates and assumptions relate to estimating revenues and costs including overhead and its allocation, estimating progress toward the completion of performance obligations, assessing fair value of acquired assets and liabilities accounted for through business acquisitions, valuing and determining the amortization periods for long-lived intangible assets, interest rate swaps, stock-based compensation, right-of-use assets and leases liabilities, and 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. Revenue The Company's revenues from contracts with customers are derived from offerings that include technology-enabled business process outsourcing, program management solutions, and public health research and analytics, substantially within the U.S. government and its agencies. The Company has various types of contracts including time-and-materials contracts, cost-reimbursable contracts, and firm-fixed-price contracts. We consider a contract with a customer to exist when there is a commitment by both parties (customer and Company), payment terms are determinable, there is commercial substance, and collectability is probably in accordance with Accounting Standards Codification ("ASC") No. 606, Revenue from Contracts with Customers ("Topic 606"). We recognize revenue over time when there is a continuous transfer of control to our customer as performance obligations are satisfied. For our U.S. government contracts, this continuous transfer of control to the customer is transferred over time and revenue is recognized based on the extent of progress toward completion of the performance obligation. We consider control to transfer when we have a right to payment. In some instances, the Company commences providing services prior to formal approval to begin work from the customer. The Company considers these factors, the risks associated with commencing work, and legal enforceability in determining whether a contract exists under Topic 606. Contract modification can occur throughout the life of the contract and can affect the transaction price, extend the period of performance, adjust funding, or create new performance obligations. We review each modification to assess the impact of these contract changes to determine if it should be treated as part of the original performance obligation or as a separate contract. 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 service contracts, we satisfy our performance obligations as services are rendered. We use cost-based input and time-based output methods to measure progress based on the contract type. • Time and material - We bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced as the amount corresponds directly to the value of our performance to date. Revenue is recognized to the extent of billable rates times hours delivered plus materials and other reimbursable costs incurred. • Cost reimbursable - We record reimbursable costs as incurred, including an estimated share of the contractual fee earned. • Firm fixed price - We recognize revenue over time using a straight-line measure of progress Contract costs generally include direct costs such as labor, materials, subcontract costs, and indirect costs identifiable with or allocable to a specific contract. Costs are expensed as incurred and include an estimate of the contractual fees earned. Contract costs incurred for U.S. government contracts, including indirect costs, are subject to audit and adjustment by various government audit agencies. Historically, our adjustments have not been material. 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 Accounts receivable, 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 or prepayment for services to be rendered.
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, contract liabilities, 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 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.
Leases	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. Lease Liabilities The Company has 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 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 secured term loan 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.
Goodwill	Goodwill The Company reviews goodwill for impairment on an annual basis and on a quarterly basis the Company assesses the impact of any macroeconomic changes that may impact the business conditions to determine if these changes have any adverse impact to goodwill. 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. The Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill.
Provision for Income Taxes	Provision for Income TaxesThe Company accounts for income taxes in accordance with the asset and 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 sheets 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.
Stock-based Compensation	Stock-based Compensation The Company uses the fair value-based method for stock-based compensation. Options issued are designated as either an incentive stock option 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 t o employees and non- employee s are reco rded at fair value on the date of the grant and expensed over the period of vesting. The Company uses a Monte Carlo method 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 common stock. 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 method that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation expense is recognized over the service period.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers 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. Accounts Receivable Receivables include amounts billed and currently due from customers where the right to consideration is unconditional and amounts unbilled. Both billed and unbilled amounts are non-interest bearing, unsecured, and recognized at an estimated realizable value that includes costs and fees, and are generally expected to be billed and received within a single year. 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 June 30, 2023 or September 30, 2022.
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 June 30, 2023 and September 30, 2022, the Company did not hold any treasury stock. 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 instruments for trading or speculative purposes.
Revenue Recognition	Disaggregation of Revenue from Contracts with Customers
New Accounting Pronouncements	New Accounting Pronouncements In March 2020 and January 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and ASU No. 2021-01, “Reference Rate Reform (Topic 848): Scope,” respectively (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In December 2022, FASB issued ASU 2022-06 "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848" which defers the end date for electing the relief provided in Topic 848 from December 31, 2022 to December 31, 2024. In the first quarter of fiscal 2023, the Company adopted the optional expedients and exceptions provided in Topic 848. The adoption did not have a material impact on the Company’s consolidated financial statements.

Business Combinations (Tables)

Business Combinations (Tables)	9 Months Ended
	Jun. 30, 2023
Business Combination and Asset Acquisition [Abstract]
Schedule of Total Consideration and Preliminary Fair Value of Assets and Liabilities	Based on the unaudited financial statements of GRSi on December 8, 2022, we accounted for the total acquisition consideration and allocation of fair value of the related assets and liabilities as follows (in thousands): Purchase price for GRSi $ 187,997 Purchase price allocation: Cash 747 Accounts receivable 25,468 Other current assets 1,354 Accounts payable and accrued expenses (2,449) Payroll liabilities (7,826) Other current liabilities (325) Equipment and improvements, net 463 Other long-term assets and liabilities (781) Intangible assets 98,688 Total identifiable net assets acquired 115,339 Goodwill $ 72,658
Schedule of Pro Forma Information	In addition, the reported historical amounts were adjusted for the following items, net of associated tax effects: • The impact of recording GRSi's intangible asset amortization. • The impact of interest expense for the new credit facility. • The removal of legacy GRSi director's fees. • The removal of transaction costs for the acquisition incurred by GRSi. (unaudited) (unaudited) (in thousands) (in thousands) Three Months Ended Nine Months Ended June 30, June 30, Pro forma results 2023 2022 2023 2022 Revenue $ 102,241 $ 94,326 $ 301,481 $ 407,795 Net income 1,738 4,603 4,683 15,455 Number of shares outstanding - basic 13,854 12,812 13,638 12,779 Number of shares outstanding - diluted 14,539 14,235 14,421 14,205 Basic earnings per share $0.13 $0.36 $0.34 $1.21 Diluted earnings per share $0.12 $0.32 $0.32 $1.09

Revenue Recognition (Tables)

Revenue Recognition (Tables)	9 Months Ended
	Jun. 30, 2023
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 on the Company's consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Contract assets $ 19,300 $ 7,682
Schedule of Disaggregation of Revenue From Contracts with Customers	The following series of tables present our revenue disaggregated by these categories: Revenue by customer for the three and nine months ended June 30, 2023 and 2022 was as follows (in thousands): Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 Department of Veterans Affairs $ 35,898 $ 33,344 $ 104,489 $ 92,270 Department of Health and Human Services 44,536 27,741 115,528 78,452 Department of Defense 21,003 8,272 50,802 25,227 Department of Homeland Security 256 (4,908) 639 126,397 Other 548 1,991 2,927 5,594 Total $ 102,241 $ 66,440 $ 274,385 $ 327,940 Revenue by contract type for the three and nine months ended June 30, 2023 and 2022 was as follows (in thousands): Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 Time and Materials $ 51,572 $ 44,672 $ 154,366 $ 263,072 Cost Reimbursable 29,110 11,979 58,951 34,364 Firm Fixed Price 21,559 9,789 61,068 30,504 Total $ 102,241 $ 66,440 $ 274,385 $ 327,940 Revenue by whether the Company acts as a prime contractor or a subcontractor for the three and nine months ended June 30, 2023 and 2022 was as follows (in thousands): Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 Prime Contractor $ 97,885 $ 58,743 $ 259,692 $ 304,862 Subcontractor 4,356 7,697 14,693 23,078 Total $ 102,241 $ 66,440 $ 274,385 $ 327,940

Leases (Tables)

Leases (Tables)	9 Months Ended
	Jun. 30, 2023
Leases [Abstract]
Schedule of Summarized Lease Balances in Consolidated Balance Sheet	The following table summarizes lease balances presented on our consolidated balance sheets was as follows (in thousands): June 30, September 30, 2023 2022 Operating lease right-of-use assets $ 17,911 $ 16,851 Operating lease liabilities, current $ 3,478 $ 2,235 Operating lease liabilities - long-term 16,485 16,461 Total operating lease liabilities $ 19,963 $ 18,696
Schedule of Lease Costs and Other Information Related to Leases	For the three and nine months ended June 30, 2023 and 2022, total lease costs for our operating leases was as follows (in thousands): Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 Operating $ 1,097 $ 869 $ 2,921 $ 2,684 Short-term 83 33 225 85 Variable 47 44 63 89 Sublease income (a) (71) (69) (214) (188) Total lease costs $ 1,156 $ 877 $ 2,995 $ 2,670 Other information related to our leases for the nine months ended June 30, 2023 and 2022 was as follows (in thousands): 2023 2022 Cash paid for amounts included in the measurement of lease liabilities 3,317 $ 2,566 Lease liabilities arising from obtaining right-of-use assets 2,052 $ —
Schedule of Company's Future Lease Payments	The Company's future minimum lease payments as of June 30, 2023 as follows (in thousands): For the Fiscal Year Ending September 30, 2023 (remaining) $ 1,165 2024 4,611 2025 3,928 2026 3,700 2027 2,627 Thereafter 8,672 Total future lease payments 24,703 Less: imputed interest (4,740) Present value of future minimum lease payments 19,963 Less: current portion of operating lease liabilities (3,478) Long-term operating lease liabilities $ 16,485

Supporting Financial Informat_2

Supporting Financial Information (Tables)	9 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of Accounts Receivable	Accounts receivable The following table summarizes accounts receivable presented on our consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Billed receivables $ 48,582 $ 32,814 Contract assets 19,300 7,682 Allowance for doubtful accounts — — Accounts receivable $ 67,882 $ 40,496
Schedule of Other Current Assets	Other current assets The following table summarizes other current assets presented on our consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Prepaid insurance and benefits $ 1,316 $ 737 Prepaid licenses and other expenses 1,694 1,196 Other receivables 1,072 945 Other current assets $ 4,082 $ 2,878
Schedule of Equipment and Improvements, Net	Equipment and improvements, net The following table summarizes equipment and improvements, net presented on our consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Furniture and equipment $ 877 $ 893 Computer equipment 5,328 2,316 Computer software 1,733 4,407 Leasehold improvements 1,878 1,614 Total equipment and improvements 9,816 9,230 Less: accumulated depreciation and amortization (8,126) (7,526) Equipment and improvements, net $ 1,690 $ 1,704
Schedule of Intangible Assets	Intangible assets The following table summarizes intangible assets, net presented on our consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Intangible assets Customer contracts and related customer relationships $ 113,622 $ 47,044 Covenants not to compete 637 522 Trade name 13,034 3,051 Backlog 37,249 15,237 Total intangible assets 164,542 65,854 Less: accumulated amortization Customer contracts and related customer relationships (27,087) (19,731) Covenants not to compete (362) (316) Trade name (1,859) (1,048) Backlog (6,343) (3,875) Total accumulated amortization (35,651) (24,970) Intangible assets, net $ 128,891 $ 40,884
Schedule of Estimated Amortization of Intangible Assets	As of June 30, 2023, the estimated amortization expense per fiscal year as follows (in thousands): 2023 (remaining) $ 4,096 2024 16,386 2025 16,385 2026 15,652 2027 14,624 Thereafter 61,748 Total amortization expense $ 128,891
Schedule of Accounts Payable, Accrued Expenses, and Other Current Liabilities	Accounts payable and accrued liabilities The following table summarizes accounts payable and accrued liabilities presented on our consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Accounts payable $ 15,559 $ 11,886 Accrued benefits 4,073 3,857 Accrued bonus and incentive compensation 3,147 3,625 Accrued workers' compensation insurance 2,749 4,880 Other accrued expenses 74 2,614 Accounts payable and accrued liabilities $ 25,602 $ 26,862
Schedule of Debt Obligations	Debt obligations The following table summarizes debt obligations presented on our consolidated balance sheets as follows (in thousands): June 30, September 30, 2023 2022 Secured revolving line of credit $ 16,448 $ — Secured term loan 179,312 22,000 Less: unamortized deferred financing costs (7,665) (1,584) Net bank debt obligations 188,095 20,416 Less: current portion of debt obligations, net of deferred financing costs (a) (28,716) — Long-term portion of debt obligations, net of deferred financing costs $ 159,379 $ 20,416 (a) Current portion comprises term loan amortization of $14.3 million and the $16.4 million outstanding balance on the secured revolving line of credit, net of $2.0 million of unamortized deferred financing costs.
Schedule of Interest Expense	Interest expense The following table summarizes interest expense presented on our consolidated statements of operations for the three and nine months ended June 30, 2023 and 2022 as follows (in thousands): Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 Interest expense (a) $ 4,282 $ 334 $ 9,972 $ 1,242 Amortization of deferred financing costs (b) 635 178 1,540 497 Interest expense $ 4,917 $ 512 $ 11,512 $ 1,739 (a) Interest expense on borrowing. (b) Amortization of expenses related to secured term loan and secured revolving line of credit.
Schedule of Changes in Carrying Amount of Goodwill	Goodwill The change in the carrying amount of goodwill as follows presented on our consolidated balance sheets as follows (in thousands): Balance at September 30, 2022 $ 65,643 Increase from GRSi acquisition (a) 72,658 Balance at June 30, 2023 $ 138,301 Ref (a) ; The Company has completed its valuation assessment of the GRSi acquisition. Please refer to Note 4 for more information.

Credit Facilities (Tables)

Credit Facilities (Tables)	9 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
Schedule of Loan Facility	A summary of our credit facilities as of June 30, 2023 and September 30, 2022 is as follows (in millions): June 30, 2023 September 30, 2022 Arrangement Loan Balance Interest Arrangement Loan Balance Interest Secured term loan (a) due December 8, 2027 $ 179.3 SOFR* + 4.2% Secured term loan due September 30, 2025 $ 22.0 LIBOR + 2.5% Secured revolving line of credit (b) due December 8, 2027 $ 16.4 SOFR* + 4.2% Secured Revolving line of Credit due September 20, 2025 $ — LIBOR + 2.5%

Stock-based Compensation and _2

Stock-based Compensation and Equity Grants (Tables)	9 Months Ended
	Jun. 30, 2023
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 for the three and nine months ended June 30, 2023 and 2022 was as follows (in thousands): (in thousands) (in thousands) Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 DLH employees (a) $ 489 $ 481 $ 1,481 $ 1,466 Non-employee directors (b) 179 162 539 486 Total stock option expense $ 668 $ 643 $ 2,020 $ 1,952 (a) Included in this amount are equity grants of restricted stock units ("RSU") to Executive Officers, which were issued in accordance with the DLH long-term incentive compensation policy in this fiscal year, and stock option grants to employees during prior fiscal years. The RSUs totaled 337,578 and 161,485 issued and outstanding at June 30, 2023 and 2022, respectively. During the nine months ended June 30, 2023, 197,174 RSUs were granted to Executive Officers. Of the RSUs granted, 141,892 have performance-based vesting criteria and the remaining 55,282 have service-based vesting criteria. Utilizing a volatility of 50% along with assumptions of a 3-year term and the performance vesting criteria results in an indicated range of value, the RSUs granted during nine months ended June 30, 2023, as follows using the Monte Carlo Method. Unrecognized stock-based compensation expense is presented in the table below for the three months ended June 30, 2023 and 2022 as follows (in thousands): 2023 2022 Unrecognized expense for DLH employees (a) $ 7,358 $ 5,498 Unrecognized expense for non-employee directors 155 162 Total unrecognized expense $ 7,513 $ 5,660 (a) On a weighted average basis, the unrecognized expense for the three months ended June 30, 2023 is expected to be recognized within the next 4.1 years.
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 Shares Price Term Value Options outstanding, September 30, 2022 2,392 $ 7.05 5.40 $ 13,566 Granted (a) 400 11.66 — — Exercised (b) (393) 3.42 — — Cancelled (158) 9.07 — — Options outstanding, June 30, 2023 2,241 $ 8.36 5.92 $ 6,499
Schedule of Option Shares Outstanding, Vested and Expected to Vest	Stock options shares outstanding, vested and unvested for the periods ended as follows (shares in thousands): June 30, September 30, 2023 2022 Vested and exercisable (a) 1,616 2,117 Unvested (b) 625 275 Options outstanding 2,241 2,392 (a) The weighted average exercise price of vested and exercisable shares was $6.45 and $5.86 at June 30, 2023 and September 30, 2022, respectively. Aggregate intrinsic value was approximately $6.5 million and $13.6 million at June 30, 2023 and September 30, 2022, respectively. The weighted average contractual term remaining was 4.6 years and 4.9 years at June 30, 2023 and September 30, 2022, respectively. (b) Certain awards vest upon satisfaction of certain performance criteria.
Summary of Performance Vesting Critera	Volatility 50% Calculated Grant Date Performance Vesting Base Performance Vesting Criteria (Years) Fair Value January 27, 2023 Revenue Revenue increase at the end of the performance period as compared to the year ended September 30, 2022 3 $ 3.51 January 27, 2023 Stock price Stock price is at least $33.21 per share average for the 30 days prior to the end of the performance period 3 $ 2.92 Notes: Results based on 100,000 simulations
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions	Volatility 50% Vesting Expected Strike Stock Threshold Term Calculated Grant Date Price Price Price (Years) Fair Value January 26, 2023 $ 11.66 $ 11.66 $ 15.00 10 $ 7.41 Notes: Results based on 100,000 simulations

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Jun. 30, 2023
Earnings Per Share [Abstract]
Schedule of Diluted Earnings per Share	Earnings per share information is presented in the table below for the three and nine months ended June 30, 2023 and 2022 as follows (in thousands except for per share amounts): (In thousands) Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 Numerator: Net income $ 1,738 $ 4,864 $ 4,090 $ 19,846 Denominator: Denominator for basic net income per share - weighted-average outstanding shares 13,854 12,812 13,638 12,779 Effect of dilutive securities: Stock options and restricted stock 685 1,423 783 1,426 Denominator for diluted net income per share - weighted-average outstanding shares 14,539 14,235 14,421 14,205 Net income per share - basic $ 0.13 $ 0.38 $ 0.30 $ 1.55 Net income per share - diluted $ 0.12 $ 0.34 $ 0.28 $ 1.40

Commitment and Contingencies (T

Commitment and Contingencies (Tables)	9 Months Ended
	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Schedule of Contractual Obligations	Contractual obligations as of June 30, 2023 are as follows (in thousands): Payments Due Per Fiscal Year (Remaining) Total 2023 2024 2025 2026 2027 Thereafter Debt obligations $ 195,760 $ 3,563 $ 14,250 $ 19,000 $ 19,000 $ 23,750 $ 116,197 Facility operating leases 24,636 1,148 4,561 3,928 3,700 2,627 8,672 Equipment operating leases 67 17 50 — — — — Total contractual obligations $ 220,463 $ 4,728 $ 18,861 $ 22,928 $ 22,700 $ 26,377 $ 124,869

Significant Accounting Polici_3

Significant Accounting Policies (Details)	9 Months Ended
	Jun. 30, 2023 USD ($) shares
Acquired Indefinite-lived Intangible Assets [Line Items]
Estimated useful live of intangible assets	10 years
Cash, FDIC insured amount | $	$ 250,000
Preferred shares authorized (in shares) | shares	5,000,000
Employee Stock Option
Acquired Indefinite-lived Intangible Assets [Line Items]
Expiration term of share-based compensation plan	10 years
Minimum
Acquired Indefinite-lived Intangible Assets [Line Items]
Estimated useful of long-lived assets	3 years
Maximum
Acquired Indefinite-lived Intangible Assets [Line Items]
Estimated useful of long-lived assets	7 years

Business Combination - Narrativ

Business Combination - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Dec. 08, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Business Acquisition [Line Items]
Proceeds from debt obligations				$ 168,000	$ 13,500
Issuance and fair value adjustment of common stock in business combination (in shares)				527,000
Issuance and fair value adjustment of common stock in business combination				$ 6,539
Revenue		$ 102,241	$ 66,440	274,385	327,940
Income from operations		7,107	$ 7,114	16,920	$ 28,588
Grove Resource Solutions, LLC
Business Acquisition [Line Items]
Percentage of equity interest acquired	100%
Preliminary purchase price	$ 188,000
Proceeds from debt obligations	181,500
Issuance and fair value adjustment of common stock in business combination	6,500
Preliminary purchase price for GRSi	187,997
Escrow funds	$ 4,300
Revenue		34,400		(73,900)
Income from operations		$ (2,600)		$ (4,100)
Grove Resource Solutions, LLC | Common Stock
Business Acquisition [Line Items]
Issuance and fair value adjustment of common stock in business combination (in shares)	500,000

Business Combinations - Schedul

Business Combinations - Schedule of Assets and Liabilities Purchase Price Allocation (Details) - Grove Resource Solutions, LLC - USD ($) $ in Thousands		9 Months Ended
	Dec. 08, 2022	Jun. 30, 2023
Business Acquisition, Contingent Consideration [Line Items]
Preliminary purchase price for GRSi	$ 187,997
Cash	747
Accounts receivable	25,468
Other current assets	1,354
Accounts payable and accrued expenses	2,449
Payroll liabilities	7,826
Other current liabilities	325
Equipment and improvements, net	463
Other long-term assets and liabilities	781
Intangible assets	98,688
Total identifiable net assets acquired	115,339
Goodwill	$ 72,658	$ 72,658

Business Combinations - Pro For

Business Combinations - Pro Forma Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Business Acquisition [Line Items]
Basic (in shares)		12,812		12,779
Grove Resource Solutions, LLC
Business Acquisition [Line Items]
Revenue		$ 94,326	$ 301,481	$ 407,795
Net income (loss)		$ 4,603	$ 4,683	$ 15,455
Basic (in shares)	13,854	12,812	13,638	12,779
Diluted (in shares)	14,539	14,235	14,421	14,205
Basic earnings per share (loss) (in dollars per share)		$ 0.36	$ 0.34	$ 1.21
Diluted earnings per share (loss) (in dollars per share)		$ 0.32	$ 0.32	$ 1.09

Revenue Recognition - Contract

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Contract assets	$ 19,300	$ 7,682

Revenue Recognition - Disaggreg

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Total	$ 102,241	$ 66,440	$ 274,385	$ 327,940
Prime Contractor
Disaggregation of Revenue [Line Items]
Total	97,885	58,743	259,692	304,862
Subcontractor
Disaggregation of Revenue [Line Items]
Total	4,356	7,697	14,693	23,078
Time and Materials
Disaggregation of Revenue [Line Items]
Total	51,572	44,672	154,366	263,072
Cost Reimbursable
Disaggregation of Revenue [Line Items]
Total	29,110	11,979	58,951	34,364
Firm Fixed Price
Disaggregation of Revenue [Line Items]
Total	21,559	9,789	61,068	30,504
Department of Veterans Affairs
Disaggregation of Revenue [Line Items]
Total	35,898	33,344	104,489	92,270
Department of Health and Human Services
Disaggregation of Revenue [Line Items]
Total	44,536	27,741	115,528	78,452
Department of Defense
Disaggregation of Revenue [Line Items]
Total	21,003	8,272	50,802	25,227
Department of Homeland Security
Disaggregation of Revenue [Line Items]
Total	256	(4,908)	639	126,397
Other
Disaggregation of Revenue [Line Items]
Total	$ 548	$ 1,991	$ 2,927	$ 5,594

Leases - Summary of Lease Balan

Leases - Summary of Lease Balances in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Leases [Abstract]
Operating lease right-of-use assets	$ 17,911	$ 16,851	$ 16,851
Operating lease liabilities - current	3,478	2,235	2,235
Operating lease liabilities - long-term	16,485	$ 16,461	16,461
Total operating lease liabilities	$ 19,963		$ 18,696

Leases - Narrative (Details)

Leases - Narrative (Details)	9 Months Ended
	Jun. 30, 2023 sublease_option sublease
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of facilities subleased | sublease	1
Sublease term	5 years
Sublease number of additional extension options | sublease_option	2
Sublease extension option period	1 year
Weighted-average remaining lease term	6 years 3 months 18 days
Weighted-average discount rate	6.40%
Minimum | Facilities and Equipment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease term (in years)	1 year
Maximum | Facilities and Equipment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease term (in years)	7 years 10 months 24 days

Leases - Lease Costs (Details)

Leases - Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Leases [Abstract]
Operating	$ 1,097	$ 869	$ 2,921	$ 2,684
Short-term	83	33	225	85
Variable	47	44	63	89
Sublease income (a)	(71)	(69)	(214)	(188)
Total lease costs	$ 1,156	$ 877	$ 2,995	$ 2,670

Leases - Company's Future Minim

Leases - Company's Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Leases [Abstract]
2023 (remaining)	$ 1,165
2024	4,611
2025	3,928
2026	3,700
2027	2,627
Thereafter	8,672
Total future lease payments	24,703
Less: imputed interest	(4,740)
Total operating lease liabilities	19,963		$ 18,696
Less: current portion of operating lease liabilities	(3,478)	$ (2,235)	(2,235)
Long-term operating lease liabilities	$ 16,485	$ 16,461	$ 16,461

Leases - Other Information Rela

Leases - Other Information Related to Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 3,317	$ 2,566
Lease liabilities arising from obtaining right-of-use assets	$ 2,052	$ 0

Supporting Financial Informat_3

Supporting Financial Information - Accounts Receivable (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Billed receivables	$ 48,582	$ 32,814
Contract assets	19,300	7,682
Less: Allowance for doubtful accounts	0	0
Accounts Receivable, before Allowance for Credit Loss, Current	$ 67,882	$ 40,496

Supporting Financial Informat_4

Supporting Financial Information - Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prepaid insurance and benefits	$ 1,316		$ 737
Other receivables	1,694		1,196
Prepaid licenses and other expenses	1,072		945
Other current assets	$ 4,082	$ 2,878	$ 2,878

Supporting Financial Informat_5

Supporting Financial Information - Equipment and Improvements, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Furniture and equipment	$ 877		$ 877			$ 893
Computer equipment	5,328		5,328			2,316
Computer software	1,733		1,733			4,407
Leasehold improvements	1,878		1,878			1,614
Total equipment and improvements	9,816		9,816			9,230
Less: accumulated depreciation and amortization	(8,126)		(8,126)			(7,526)
Equipment and improvements, net	1,690		1,690		$ 1,704	$ 1,704
Depreciation expense	$ 200	$ 200	$ 600	$ 800

Supporting Financial Informat_6

Supporting Financial Information - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Depreciation	$ 0.2	$ 0.2	$ 0.6	$ 0.8
Amortization expense of intangible assets	$ 4.1	$ 1.6	$ 10.7	$ 4.9

Supporting Financial Informat_7

Supporting Financial Information - Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 164,542		$ 164,542		$ 65,854
Total accumulated amortization	(35,651)		(35,651)		(24,970)
Intangible assets, net	128,891		128,891		40,884
Amortization expense of intangible assets	4,100	$ 1,600	10,700	$ 4,900
Customer contracts and related customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	113,622		113,622		47,044
Total accumulated amortization	(27,087)		(27,087)		(19,731)
Covenants not to compete
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	637		637		522
Total accumulated amortization	(362)		(362)		(316)
Trade name
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	13,034		13,034		3,051
Total accumulated amortization	(1,859)		(1,859)		(1,048)
Backlog
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	37,249		37,249		15,237
Total accumulated amortization	$ (6,343)		$ (6,343)		$ (3,875)

Supporting Financial Informat_8

Supporting Financial Information - Goodwill (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2023 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Beginning Balance	$ 65,643
Ending Balance	$ 138,301

Supporting Financial Informat_9

Supporting Financial Information - Estimated Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
2023 (remaining)	$ 4,096
2024	16,386
2025	16,385
2026	15,652
2027	14,624
Thereafter	61,748
Intangible assets, net	$ 128,891	$ 40,884

Supporting Financial Informa_10

Supporting Financial Information - Accounts Payable, Accrued Expense and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accounts payable	$ 15,559		$ 11,886
Accrued benefits (a)	4,073		3,857
Accrued bonus and incentive compensation	3,147		3,625
Accrued workers' compensation insurance	2,749		4,880
Other accrued expenses	74		2,614
Accounts payable and accrued liabilities	$ 25,602	$ 26,862	$ 26,862

Supporting Financial Informa_11

Supporting Financial Information - Debt Obligations (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Debt Instrument [Line Items]
Less: unamortized deferred financing costs	$ (7,665)		$ (1,584)
Long-term portion of debt obligations, net of deferred financing costs	188,095		20,416
Less: current portion of debt obligations, net of deferred financing costs	(28,716)	$ 0
Long-term portion of debt obligations, net of deferred financing costs	159,379	$ 20,416	20,416
Secured debt, current	14,300
Line of credit, current	16,400
Debt instrument, unamortized discount (premium) and debt issuance costs, net	2,000
Secured Debt
Debt Instrument [Line Items]
Long-term debt	179,312		22,000
Less: current portion of debt obligations, net of deferred financing costs	(28,716)		0
Secured Revolving Line of Credit
Debt Instrument [Line Items]
Long-term debt	$ 16,448		$ 0

Supporting Financial Informa_12

Supporting Financial Information - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Interest Expense	$ 4,282	$ 334	$ 9,972	$ 1,242
Amortization of deferred financing costs charged to interest expense	635	178	1,540	497
Interest expense	$ 4,917	$ 512	$ 11,512	$ 1,739

Credit Facilities - Summary of

Credit Facilities - Summary of Loan Facility (Details) - Secured Debt - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022
Line of Credit Facility [Line Items]
Long-term debt	$ 179,312	$ 22,000
Term Loans
Line of Credit Facility [Line Items]
Long-term debt	16,400	0
Revolving Line of Credit
Line of Credit Facility [Line Items]
Long-term debt	$ 179,300	$ 22,000
Revolving Line of Credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Line of Credit Facility [Line Items]
Interest rate spread		5.20%

Credit Facilities - Narrative (

Credit Facilities - Narrative (Details)	3 Months Ended	9 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Line of Credit Facility [Line Items]
Debt amortization fiscal year 2021	$ 14,250,000	$ 14,250,000
Debt amortization fiscal year 2022	19,000,000	19,000,000
Debt amortization fiscal year 2023	19,000,000	19,000,000
Debt amortization fiscal year 2024	23,750,000	23,750,000
Interest Rate Swap
Line of Credit Facility [Line Items]
Derivative notional amount	112,200,000	112,200,000
Interest expense increase (less than)		600,000
Interest Rate Swap One
Line of Credit Facility [Line Items]
Derivative notional amount	$ 16,200,000	$ 16,200,000
Derivative fixed interest rate	1.61%	1.61%
Interest Rate Swap Two
Line of Credit Facility [Line Items]
Derivative notional amount	$ 96,000,000	$ 96,000,000
Derivative fixed interest rate	4.10%	4.10%
Secured Debt
Line of Credit Facility [Line Items]
Long-term debt	$ 179,312,000	$ 179,312,000	$ 22,000,000
Secured Debt | Term Loans
Line of Credit Facility [Line Items]
Fixed charge coverage ratio		1.25
Debt amortization fiscal year 2021	14,300,000	$ 14,300,000
Debt amortization fiscal year 2022	14,300,000	14,300,000
Debt amortization fiscal year 2023	19,000,000	19,000,000
Debt amortization fiscal year 2024	19,000,000	19,000,000
Debt amortization fiscal year 2025	23,800,000	23,800,000
Voluntary principal amortization of term debt	3,600,000
Long-term debt	16,400,000	$ 16,400,000	0
Secured Debt | Term Loans | Excess Cash Flows 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 EBDTA		75%
Ratio of funded indebtedness to adjusted EBDTA, actual		2.50
Secured Debt | Term Loans | Excess Cash Flows Less Than 2.50
Line of Credit Facility [Line Items]
Percentage of excess cash flow for each year of funded indebtedness to EBDTA		50%
Secured Debt | Term Loans | Excess Cash Flows Equal to 1.50
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to adjusted EBDTA, actual		1.5
Secured Debt | Term Loans | Excess Cash Flows Less Than 1.50
Line of Credit Facility [Line Items]
Percentage of excess cash flow for each year of funded indebtedness to EBDTA		0%
Ratio of funded indebtedness to adjusted EBDTA, actual		1.5
Secured Debt | Term Loans | Maximum
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to EBITDA through maturity		4.50
Secured Debt | Term Loans | Maximum | Excess Cash Flows Less Than 2.50
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to adjusted EBDTA, actual		2.50
Secured Debt | Term Loans | Minimum
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to EBITDA through maturity		2
Secured Debt | Revolving Line of Credit
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity	70,000,000	$ 70,000,000
Line of credit, unused borrowing capacity	32,900,000	32,900,000
Long-term debt	$ 179,300,000	$ 179,300,000	22,000,000
Secured Debt | Letter of Credit
Line of Credit Facility [Line Items]
Line of credit, current borrowing capacity			$ 10,000,000

Stock-based Compensation and _3

Stock-based Compensation and Equity Grants - Narrative (Details) $ in Millions	3 Months Ended	9 Months Ended
	Jun. 30, 2023 USD ($) shares	Jun. 30, 2023 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercises in period, intrinsic value | $	$ 0.2	$ 3.4
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of awards authorized for issuance (in shares)	0	0
Expiration term of share-based compensation plan		10 years
Number of shares available for grant (in shares)	900,000	900,000

Stock-based Compensation and _4

Stock-based Compensation and Equity Grants - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Expense related to employee stock-based compensation		$ 481		$ 1,466
Expense related to director restricted stock units	$ 179	162	$ 539	486
Total unrecognized expense	7,513	5,660	$ 7,513	5,660
Volatility			50%
Additional Paid-In Capital
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Expense related to employee stock-based compensation		481		1,466
Expense related to director restricted stock units	179	162	$ 539	$ 486
Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)			337,578	161,485
Expected term (years)			3 years
DLH employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total unrecognized expense	7,358	5,498	$ 7,358	$ 5,498
Weighted average share based compensation expense recognition period			4 years 1 month 6 days
Non-employee directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total unrecognized expense	$ 155	162	$ 155	$ 162
Non-employee directors | Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)			50,367	53,510
NEO | Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)			197,174
Volatility	50%
NEO | Performance Based Restricted Stock Units (RSUs)
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)			141,892
NEO | Service Based Restricted Stock Units (RSUs)
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)			55,282
Selling, General and Administrative Expenses
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock option expense	$ 668	$ 643	$ 2,020	$ 1,952

Stock-based Compensation and _5

Stock-based Compensation and Equity Grants - Performance Based Awards (Details)	9 Months Ended
	Jun. 30, 2023 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	50%
Stock Price Per Share, Minimum Average Price	$ 33.21
Performance Based Restricted Stock Awards, Revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	3 years
Calculated fair value (in dollars per share)	$ 3.51
Performance Based Restricted Stock Awards, Stock Price
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	3 years
Calculated fair value (in dollars per share)	$ 2.92

Stock-based Compensation and _6

Stock-based Compensation and Equity Grants - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Jan. 26, 2023	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility				50%
Number of Shares
Options outstanding, September 30, 2021 (in shares)			2,392,000	2,392,000
Granted (in shares)				400,000
Exercised (in shares)				(393,000)
Cancelled (in shares)				(158,000)
Options outstanding, December 31, 2021 (in shares)		2,241,000		2,241,000
Weighted Average Exercise Price
Options outstanding, September 30, 2021 (in dollars per share)			$ 7.05	$ 7.05
Granted (in dollars per share)				11.66
Exercised (in dollars per share)				3.42
Cancelled (in dollars per share)				9.07
Options outstanding, December 31, 2021 (in dollars per share)		$ 8.36		$ 8.36
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term			5 years 4 months 24 days	5 years 11 months 1 day
Aggregate Intrinsic Value
Options outstanding at September 30, 2021			$ 13,566	$ 13,566
Options outstanding at December 31, 2021		$ 6,499		$ 6,499
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)				3 years
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	10 years			10 years
Stock price threshold term				10 days
NEO | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility		50%

Stock-based Compensation and _7

Stock-based Compensation and Equity Grants - Stock Options Fair Value Assumptions (Details) - $ / shares		9 Months Ended
	Jan. 26, 2023	Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility		50%
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Strike price (in dollars per share)	$ 11.66
Stock price (in dollars per share)	11.66
Threshold vesting price (in dollars per share)	$ 15
Expected term (years)	10 years	10 years
Calculated fair value (in dollars per share)	$ 7.41

Stock-based Compensation and _8

Stock-based Compensation and Equity Grants - Stock Options Outstanding, Vested and Unvested (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended	9 Months Ended
	Dec. 31, 2022	Jun. 30, 2023	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Vested and exercisable (in shares)		1,616	2,117
Unvested (in shares)		625	275
Option outstanding (in shares)		2,241	2,392
Weighted average exercise price (in dollars per share)		$ 6.45	$ 5.86
Aggregate intrinsic value		$ 6.5	$ 13.6
Weighted average remaining term	4 years 10 months 24 days	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		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Numerator:
Net income	$ 1,738	$ 4,864	$ 4,090	$ 19,846
Denominator:
Denominator for basic net income (loss) per share - weighted-average outstanding shares (in shares)		12,812		12,779
Effect of dilutive securities:
Stock options and restricted stock (in shares)	685	1,423	783	1,426
Net income per share - basic (in dollars per share)	$ 0.13	$ 0.38	$ 0.30	$ 1.55
Net income per share - diluted (in dollars per share)	$ 0.12	$ 0.34	$ 0.28	$ 1.40

Commitments and Contingencies -

Commitments and Contingencies - Contractual Obligations (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Debt obligations
2022 (remaining)	$ 3,563
2024	14,250
2025	19,000
2026	19,000
2027	23,750
Thereafter	116,197
Operating Leases
Total future lease payments	24,703
2023 (remaining)	1,165
2024	4,611
2025	3,928
2026	3,700
2027	2,627
Thereafter	8,672
Total Contractual Obligations
Total Obligations	220,463
2022 (remaining)	4,728
2024	18,861
2025	22,928
2026	22,700
2027	26,377
Thereafter	124,869
Debt Obligation
Total Contractual Obligations
Total Obligations	195,760
Facility operating leases
Operating Leases
2023 (remaining)	1,148
2024	4,561
2025	3,928
2026	3,700
2027	2,627
Thereafter	8,672
Total Contractual Obligations
Total Obligations	24,636
Equipment operating leases
Operating Leases
2023 (remaining)	17
2024	50
2025	0
2026	0
2027	0
Thereafter	0
Total Contractual Obligations
Total Obligations	$ 67

Commitment and Contingencies -

Commitment and Contingencies - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Accrued workers' compensation insurance	$ 2,749	$ 4,880