DLH (DLHC) 10-Q 13 Feb 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2017	Jan. 31, 2018
Document and Entity Information
Entity Registrant Name	DLH Holdings Corp.
Entity Central Index Key	785,557
Document Type	10-Q
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		11,882,494

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Revenue	$ 30,215	$ 26,111
Direct expenses	23,683	20,300
Gross margin	6,532	5,811
General and administrative expenses	4,880	4,721
Depreciation and amortization	506	201
Income from operations	1,146	889
Interest expense, net	278	364
Income before income taxes	868	525
Income tax expense, net	3,719	201
Net income (loss)	$ (2,851)	$ 324
Net income per share, basic (in dollars per share)	$ (0.24)	$ 0.03
Net income (loss) per share - diluted (in dollars per share)	$ (0.24)	$ 0.03
Weighted average common shares outstanding
Basic (in shares)	11,837	11,201
Diluted (in shares)	11,837	12,690

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017
Current assets:
Cash and cash equivalents	$ 3,243	$ 4,930
Accounts receivable	12,843	11,911
Other current assets	586	598
Total current assets	16,672	17,439
Equipment and improvements, net	1,701	1,391
Deferred taxes, net	6,100	9,639
Goodwill and other intangible assets, net	40,676	41,116
Other long-term assets	139	139
Total assets	65,288	69,724
CURRENT LIABILITIES
Debt obligations - current	6,529	6,518
Derivative financial instruments, at fair value	0	306
Accrued payroll	3,592	3,723
Accounts payable, accrued expenses, and other current liabilities	9,536	10,895
Total current liabilities	19,657	21,442
LONG TERM LIABILITIES
Total long term liabilities	11,541	12,427
Total liabilities	31,198	33,869
Commitments and contingencies
SHAREHOLDERS’ EQUITY
Common stock, $.001 par value; authorized 40,000 shares; issued and outstanding 11,882 at December 31, 2017 and 11,767 at September 30, 2017	12	12
Additional paid-in capital	83,644	82,687
Accumulated deficit	(49,566)	(46,844)
Total shareholders’ equity	34,090	35,855
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 65,288	$ 69,724

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2017	Sep. 30, 2017
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	40,000	40,000
Common stock, issued (in shares)	11,837	11,767
Common stock, outstanding (in shares)	11,837	11,767

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Operating activities
Net income (loss)	$ (2,851)	$ 324
Adjustments to reconcile net income(loss) to net cash (used in) provided by operating activities:
Depreciation and amortization expense	506	201
Amortization of debt financing costs as interest expense	65	60
Change in fair value of derivative financial instruments	0	79
Stock based compensation expense	757	485
Deferred taxes, net	3,539	0
Changes in operating assets and liabilities
Accounts receivable	(931)	(655)
Other current assets	11	(83)
Accounts payable, accrued payroll, accrued expenses and other current liabilities	(1,486)	(199)
Other long term assets/liabilities	(4)	85
Net cash (used in) provided by operating activities	(394)	297
Investing activities
Acquisition net of cash acquired	0	(250)
Purchase of equipment and improvements	(375)	(41)
Net cash used in investing activities	(375)	(291)
Financing activities
Repayments on senior debt	(937)	(938)
Repayments of capital lease obligations	(5)	(24)
Proceeds from issuance of stock upon exercise of options	24	0
Net cash used in financing activities	(918)	(962)
Net change in cash and cash equivalents	(1,687)	(956)
Cash and cash equivalents at beginning of period	4,930	3,427
Cash and cash equivalents at end of period	3,243	2,471
Supplemental disclosures of cash flow information
Cash paid during the period for interest	219	225
Cash paid during the period for income taxes	480	300
Derivatives, financial instruments reclassified as equity (see Note 4)	$ (306,000)	$ 0

Basis of Presentation

Basis of Presentation	3 Months Ended
	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of DLH and its subsidiaries, all of which are wholly owned. All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended December 31, 2017 are not necessarily indicative of the results that may be expected for the year ending September 30, 2018 . Amounts as of and for the periods ended December 31, 2017 and December 31, 2016 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, 2017 filed with the Securities and Exchange Commission on December 9, 2017 .

Restatement of Previously Issue

Restatement of Previously Issued Financial Statements	3 Months Ended
	Dec. 31, 2017
Accounting Changes and Error Corrections [Abstract]
Restatement of Previously Issued Financial Statements	Restatement of Previously Issued Financial Statements In preparation of the Company’s condensed financial statements as of and for the three months ended December 31, 2017, the Company concluded it should correct the amount previously recorded as Debt obligations - current. In January 2018, the Company made an additional debt repayment of $2.9 million , resulting from an excess cash flow provision in its credit facility. This payment was calculated based upon the year ended September 30, 2017 operating results. As such, the $2.9 million should have been reflected within the Debt obligations - current on the Company’s Balance Sheet at September 30, 2017. In addition, the Company has concluded that based on its working capital position at June 30, 2017, it was more likely than not that an excess cash flow payment would be generated as of September 30, 2017. The Company’s estimate of the additional debt payment resulting from the projected excess cash flow provision totaling $2.2 million should have been reflected within the Debt obligations - current on the Company’s Unaudited Balance Sheet at June 30, 2017. Funding of the excess cash flow payment from cash on hand has no impact to the Company’s net debt position, as the use of cash has an offsetting reduction to debt. From a liquidity position, the Company continues to have sufficient access to cash to support the operations of the business, through access to its revolving credit facility. The Company does not expect to make further excess cash flow payments under the provisions of the credit facility. See Note 6 for further information. The following table summarizes the effect of the restatement to the Company’s financial statements for (i) its audited balance sheet as of September 30, 2017, and (ii) its unaudited condensed interim balance sheet as of June 30, 2017. The reclassification of an additional debt repayment resulting from an excess cash flow provision of our credit facility did not affect any previously reported operating results, net income, earnings per share, cash flows, total assets, total liabilities or stockholders equity. In thousands As Previously Reported Adjustments As Restated Balance sheet as of September 30, 2017 (audited) Debt obligations - current $ 3,601 $ 2,917 $ 6,518 Total current liabilities $ 18,525 $ 2,917 $ 21,442 Total long term liabilities $ 15,344 $ (2,917 ) $ 12,427 Total liabilities $ 33,869 $ — $ 33,869 Balance sheet as of June 30, 2017 (unaudited) Debt obligations - current $ 3,590 $ 2,154 $ 5,744 Total current liabilities $ 16,114 $ 2,154 $ 18,268 Total long term liabilities $ 16,215 $ (2,154 ) $ 14,061 Total liabilities $ 32,329 $ — $ 32,329

Business Overview

Business Overview	3 Months Ended
	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business Overview	Business Overview DLH is a full-service provider of technology-enabled health and readiness enhancement services to government agencies including the Department of Veteran Affairs ("VA"), Department of Health and Human Services ("HHS"), Department of Defense ("DoD"), and other government agencies. DLH Holdings Corp. (together with its subsidiaries, "DLH" or the "Company" and also referred to as "we," "us" and "our") manages its operations from its principal executive offices in Atlanta, Georgia. We have complimentary headquarters offices in Silver Spring, Maryland. We employ over 1,400 skilled employees working in more than 30 locations throughout the United States. Presently, the Company derives 100% of its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors. A major customer is defined as a customer from whom the Company derives at least 10% of its revenues. Our largest customer continues to be the VA, which comprised approximately 66% and 61% of revenue for the three months ended December 31, 2017 and 2016 , respectively. Additionally, HHS represents a major customer, comprising 32% of revenue for the three months ended December 31, 2017 and 29% for the three months ended December 31, 2016 . In addition, substantially all accounts receivable, including unbilled accounts receivable, are from agencies of the U.S. Government as of December 31, 2017 and September 30, 2017 . We believe that the credit risk associated with our receivables is limited due to the creditworthiness of these customers. See Note 5, Supporting Financial Information-Accounts Receivable. As of December 31, 2017 , awards from VA and HHS have anticipated periods of performance ranging from approximately one to up to two years. These agreements are subject to the Federal Acquisition Regulations. While there can be no assurance as to the actual amount of services that the Company will ultimately provide to VA and HHS under its current contracts, we believe that our strong working relationships and our effective service delivery support ongoing performance for the contract term. The Company's results of operations, cash flows and financial condition would be materially adversely affected in the event that we were unable to continue our relationship with VA or HHS.

New Accounting Pronouncements

New Accounting Pronouncements	3 Months Ended
	Dec. 31, 2017
Accounting Changes and Error Corrections [Abstract]
New Accounting Pronouncements	New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued amended guidance for revenue recognition. Subsequently, the FASB issued an amendment to defer for one year the effective date of the new guidance on revenue recognition, as well as issued additional clarifying amendments. The new guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires improved disclosure to help the users of the financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The new guidance supersedes most current revenue recognition guidance, including industry-specific guidance, and is effective for annual periods (including interim periods therein) beginning after December 15, 2017. The guidance allows either a full retrospective or modified retrospective transition method. The Company is evaluating the effects of this guidance. In February 2016, the FASB issued new accounting guidance related to leases. This update, effective for the Company beginning October 1, 2019, will replace existing guidance in GAAP and will require lessees to recognize lease assets and lease liabilities on the balance sheet for all leases and disclose key information about leasing arrangements. When implemented, lessees and lessors will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. As shown in Note 11, the Company currently has approximately $3.5 million of lease obligations that would be evaluated as the implementation of this guidance becomes effective. In July 2017, the FASB issued new accounting guidance related to certain equity-linked financial instruments with down round features, such as warrants. The guidance provides for a scope exception from derivative accounting if the instruments qualify for equity classification. Should the instruments qualify for equity classification, they would no longer be considered liabilities subject to fair value measurement at each reporting period. This update is effective for the Company as of its fiscal year beginning October 1, 2019, with early adoption permitted. The Company has elected to adopt the provisions of this ASU as of December 31, 2017. ADOPTION OF NEW ACCOUNTING STANDARD Effective December 31, 2017, the Company adopted the provisions of Accounting Standards Update ("ASU") 2017-11, "Earning Per Share (Topic 260): Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815). The provisions of this ASU change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The fair value of a financial instrument with a down round features is now permitted to be classified as a component of stockholder's equity, as opposed to a liability as it was previously required to be reported. In addition, the recorded fair value of the financial instruments is no longer required to be subsequently revalued. Should the down round feature of the financial instrument be triggered due to a change in the underlying strike price, the change in the fair value would be treated as a dividend and as a reduction of income available to common stockholders in accordance with the guidance of ASC-260. Prior accounting treatment In connection with issuing subordinated debt to finance its May 2, 2016 acquisition, the Company issued warrants to purchase 53,619 shares of Common Stock. These warrants contain certain pricing previsions which apply if the Company sells or issues Common Stock or Common Stock equivalents at a price that is less than the exercise price of the warrants, over the life of the warrants, excluding certain exempt issuances. In addition, these warrants may only be exercised with cash. Accordingly, the Company recognized a liability for these warrants based on their fair value as of the date of grant. The initial warrant liability recognized on the related warrants totaled $177 thousand. At each subsequent quarter end, the Company then remeasured the fair value of the warrants, and recorded the change in the warrant liability as a component of net income. As of September 30, 2017 , the warrant liability was valued at $306 thousand. Current accounting treatment. . The Company chose a modified retrospective adoption, and therefore, is recognizing the cumulative effect of the change as an adjustment to retained earnings in the period of adoption. The warrant liability has been eliminated from the Company's balance sheet for the quarterly period as of December 31, 2017 . The fair value of the warrant liability has been reduced by $306 thousand by reclassifying this liability to retained earnings and additional paid in capital by $129 thousand and $177 thousand, respectively.

Supporting Financial Informatio

Supporting Financial Information	3 Months Ended
	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Supporting Financial Information	Supporting Financial Information Accounts receivable (in thousands) December 31, September 30, Ref 2017 2017 Billed receivables $ 12,843 $ 11,862 Unbilled receivables — 49 Total accounts receivable 12,843 11,911 Less: Allowance for doubtful accounts (a) — — Accounts receivable, net $ 12,843 $ 11,911 Ref (a): Accounts receivable are non-interest bearing, unsecured and carried at fair value, which is net of an allowance for doubtful accounts. We evaluate our receivables on a quarterly basis and determine whether an allowance is appropriate based on specific collection issues. No allowance for doubtful accounts was deemed necessary at both December 31, 2017 and September 30, 2017 . Other current assets (in thousands) December 31, September 30, Ref 2017 2017 Prepaid insurance and benefits $ 381 $ 240 Other receivables and prepaid expenses 205 358 Other current assets $ 586 $ 598 Equipment and improvements, net (in thousands) December 31, September 30, Ref 2017 2017 Furniture and equipment $ 331 $ 331 Computer equipment 753 715 Computer software (a) 1,445 1,108 Leasehold improvements 66 66 Total fixed assets 2,595 2,220 Less accumulated depreciation and amortization (894 ) (829 ) Equipment and improvements, net (b) $ 1,701 $ 1,391 Ref (a): The Company is in the process of configuring a new Enterprise Resource Planning system. Capitalized costs include $1.0 million and $0.7 million as of December 31, 2017 and September 30, 2017 , respectively, of software licenses and implementation labor related to application development. Since the asset has not been placed in service, no depreciation related to the asset has been recognized. The asset was placed in service on January 1, 2018 with an estimated useful life of 5 years. Ref (b): Equipment and improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives ( 3 to 7 years) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are expensed as incurred. Depreciation of equipment was $65 thousand and $85 thousand for the three months ended December 31, 2017 and 2016 respectively. Goodwill and Intangibles (in thousands) as of December 31, 2017 Ref Goodwill Customer Relationships (a) Non Compete Agreement (a) Trade Name (a) Total Gross Balance at December 31, 2017 $ 25,989 $ 16,626 $ 480 $ 517 $ 43,612 Accumulated amortization at September 30, 2017 $ — $ (2,355 ) — $ (68 ) $ (73 ) $ (2,496 ) Current period amortization — (416 ) (12 ) (12 ) (440 ) Total accumulated amortization — (2,771 ) (80 ) (85 ) (2,936 ) Net balance at December 31, 2017 $ 25,989 $ 13,855 $ 400 $ 432 $ 40,676 Ref (a): Intangible assets subject to amortization. The intangibles are amortized on a straight-line basis over their estimated useful lives of 10 years . Total amount of amortization expense for the period ended December 31, 2017 was $0.4 million . Estimated amortization expense for future years: (in thousands) Year 1 $ 1,762 Year 2 1,762 Year 3 1,762 Year 4 1,762 Year 5 1,762 Thereafter 5,877 $ 14,687 Accounts payable, accrued expenses and other current liabilities (in thousands) December 31, September 30, Ref 2017 2017 Accounts payable $ 4,070 $ 5,205 Accrued benefits 2,283 1,831 Accrued bonus and incentive compensation 721 1,544 Accrued workers compensation insurance 2,062 1,598 Other accrued expenses 400 717 Accounts payable, accrued expenses, and other current liabilities $ 9,536 $ 10,895 Debt obligations (in thousands) December 31, September 30, Ref 2017 2017 Bank term loan (a) $ 18,750 $ 19,688 Less unamortized debt issuance costs (889 ) (961 ) Net bank debt obligation 17,861 18,727 Less current portion of bank debt obligations (6,529 ) (6,518 ) Long term portion of bank debt obligation $ 11,332 $ 12,209 Ref (a): Maturity of the bank debt obligation as follows, in thousands: Year 1 $ 6,667 Year 2 3,750 Year 3 3,750 Year 4 4,583 Total bank debt obligation $ 18,750 Interest expense (in thousands) Three Months Ended December 31, Ref 2017 2016 Interest expense (a) $ (219 ) $ (225 ) Amortization of debt financing costs as interest expense (b) (65 ) (60 ) Change in fair value of derivative financial instruments — (79 ) Other income (expense), net 6 — Interest expense, net $ (278 ) (364 ) Ref (a): Interest expense on borrowing Ref (b): Amortizations of expenses related to securing financing

Credit Facilities

Credit Facilities	3 Months Ended
	Dec. 31, 2017
Debt Disclosure [Abstract]
Credit Facilities	Credit Facilities A summary of our loan facilities and subordinated debt financing as of December 31, 2017 is as follows: ($ in Millions) As of December 31, 2017 Lender Arrangement Loan Balance Interest Maturity Date Fifth Third Bank Secured term loan $25 million ceiling (a) $ 18.8 LIBOR* + 3.0% 05/01/21 Fifth Third Bank Secured revolving line of credit $10 million ceiling (b) $ — LIBOR* + 3.0% 05/01/18 *LIBOR rate as of December 31, 2017 was 1.69% (a) Represents the principal amounts payable on our Term Loan with Fifth Third Bank. The $25.0 million term loan from Fifth Third Bank was funded at closing and is secured by liens on substantially all of the assets of the Company. The principal of the Term Loan is payable in fifty-nine consecutive monthly installments of $312,500 with the remaining balance due on May 1, 2021. The Term Loan agreement requires compliance with a number of financial covenants and contains restrictions on our ability to engage in certain transactions. We are in compliance with all loan covenants and restrictions. Among other matters, we must comply with limitations on: granting liens; incurring other indebtedness; maintenance of assets; investments in other entities and extensions of credit; mergers and consolidations; and changes in nature of business. The loan agreement also requires us to comply with certain quarterly financial covenants including: (i) a minimum fixed charge coverage ratio of at least 1.35 to 1.0 commencing with the quarter ending June 30, 2016, and for all subsequent periods, and (ii) a Funded Indebtedness to Adjusted EBITDA ratio not exceeding the ratio of 2.99 to 1.0 at closing and thereafter a ratio ranging from 3.0 to 1.0 for the period through December 31, 2017 to 2.5 to 1.0 for the period ending September 30, 2018 through maturity. Adjusted EBITDA ratio is calculated by dividing the Company's total interest-bearing debt by net income adjusted to exclude (i) interest and other expenses, including acquisition expenses, net, (ii) provision for or benefit from income taxes, if any, (iii) depreciation and amortization, and (iv) G&A expenses - equity grants. In addition to monthly 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 each year in which the Funded Indebtedness to Adjusted EBITDA ratio is greater than or equal to 2.50 :1.0, or (b) 50% of the Excess Cash Flow for each fiscal year in which the funded indebtedness to Adjusted EBITDA Ratio is less than 2.50 :1.0 but greater than or equal to 2.0 :1.0. DLH made an excess cash flow payment of $2.9 million on January 16, 2018 (see Note 14). DLH does not expect to make any future excess cash flow payments. (b) The secured revolving line of credit from Fifth Third Bank has a ceiling of up to $10.0 million . Borrowing on the line of credit is secured by liens on substantially all of the assets of the Company. The Company's total borrowing availability, based on eligible accounts receivables at December 31, 2017 , was $10.0 million . This capacity was comprised of $0.6 million in a stand-by letter of credit and unused borrowing capacity of $9.4 million . The revolving line of credit is subject to loan covenants as described above in the Term Loan, and DLH is fully compliant with those covenants.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Dec. 31, 2017
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation of goodwill and intangible assets, valuation allowances established against accounts receivable and deferred tax assets, excess cash flow payments on our term debt, measurement of loss development on workers’ compensation claims, and fair value of derivatives. We evaluate these estimates and judgments on an ongoing basis and base our estimates on historical experience, current and expected future outcomes, third-party evaluations and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. We revise material accounting estimates if changes occur, such as more experience is acquired, additional information is obtained, or there is new information on which an estimate was or can be based. Actual results could differ from those estimates. In particular, a material reduction in the fair value of goodwill could have a material adverse effect on the Company’s financial position and results of operations. We account for the effect of a change in accounting estimate during the period in which the change occurs. Revenue Recognition DLH’s revenue is derived from professional and other specialized service offerings to US Government agencies through a variety of contracts, some of which are fixed-price in nature and/or sourced through Federal Supply Schedules administered by the General Services Administration (“GSA”) at fixed unit rates or hourly arrangements. Revenue on time and materials contracts is recognized based on hours performed times the applicable hourly rate, plus materials and other direct costs incurred on the contract. Revenue on fixed fee for service contracts is recognized over the period of performance of the contract. Revenue on cost reimbursable contracts is recognized equal to allowable costs incurred, plus a ratable portion of the applicable fee. We generally operate as a prime contractor, but have also entered into contracts as a subcontractor. Our company's current business base is 95% prime contracts and 5% subcontracts. DLH recognizes and records revenue on government contracts when: (a) persuasive evidence of an arrangement exists; (b) the services have been delivered to the customer; (c) the sales price is fixed or determinable and free of contingencies or significant uncertainties; and (d) collectibility is reasonably assured. Business Combinations In accordance with Accounting Standards Codifications 805, "Business Combinations" ("ASC 805") the Company records acquisitions under the purchase method of accounting, under which the acquisition purchase price is allocated to the assets acquired and the liabilities assumed based upon the respective fair values. The Company utilizes some estimates and in some instances, may retain the services of an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities, assumed, and contingent considerations granted. Such estimates and valuation require the Company to make significant assumptions. These assumptions may include projections of future events and operating performance. Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, unbilled revenues, accrued expenses, accrued earn outs payable, 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. Goodwill and other intangible assets DLH continues to review its goodwill and other intangible assets for possible impairment or loss of value at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. At September 30, 2017 , we performed a goodwill impairment evaluation on the year-end carrying value of approximately $26 million . We performed both a qualitative and quantitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted at September 30, 2017 . For the three months ended December 31, 2017 , the Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of 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. Long Lived Assets Equipment and improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives ( 3 to 7 years) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Income Taxes DLH accounts for income taxes in accordance with the liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance sheet when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is "more-likely-than-not" that the position will be sustained upon examination. We had no uncertain tax positions at either December 31, 2017 or September 30, 2017 . We report interest and penalties as a component of income tax expense. In the fiscal quarters ended December 31, 2017 and September 30, 2017 , we recognized no interest and no penalties related to income taxes. Stock-based Equity Compensation The Company uses the fair value-based method for stock-based equity compensation. Options issued are designated as either an incentive stock or a non-statutory stock option. No option may be granted with a term of more than 10 years from the date of grant. Option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued common shares. All awards to employees and non-employees are recorded at fair value on the date of the grant and expensed over the period of vesting. The Company uses a Monte Carlo simulation option pricing model to estimate the fair value of each stock option at the date of grant. Any consideration paid by the option holders to purchase shares is credited to capital stock. Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. We maintain cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 . Deposits held with financial institutions may exceed the $250,000 limit. Earnings (Loss) per Share Basic earnings per share is calculated by dividing income(loss) available to common shareholders by the weighted average number of common stock outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income (loss) available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method. Reclassification We present financial statements consistent with a consolidation model for all entities. Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. These reclassifications had no effect on previously reported results of operations or accumulated deficit.

Stock-based Compensation, Equit

Stock-based Compensation, Equity Grants, and Warrants	3 Months Ended
	Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based Compensation, Equity Grants, and Warrants	Stock-based Compensation, Equity Grants, and Warrants Stock-based compensation expense Options issued under equity incentive plans were designated as either an incentive stock or a non-statutory stock option. No option was granted with a term of more than 10 years from the date of grant. Exercisability of option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued shares. As of December 31, 2017 , there were 0.2 million shares available for grant. Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our statement of operations: (in thousands) Three Months Ended Ref December 31, 2017 2016 DLH employees $ 64 $ 6 Non-employee directors (a) 693 479 Total stock option expense $ 757 $ 485 Ref (a): Equity grants of restricted stock, in accordance with DLH compensation policy for non-employee directors. Unrecognized stock-based compensation expense (in thousands) Three Months Ended December 31, Ref 2017 2016 Unrecognized expense for DLH employees (a) $ 1,076 $ 12 Unrecognized expense for non-employee directors (b) — 8 Total unrecognized expense $ 1,076 $ 20 Ref (a): Compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The compensation expense for that portion of awards has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. For options that vest based on the Company’s common stock achieving and maintaining defined market prices, the Company values the awards with a binomial model that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation expense is recognized over the derived service period determined in the valuation. The remaining term for the weighted average expense of these shares will be 59 months . Ref (b): Unrecognized stock expense related to prior year's equity grants of restricted stock to non-employee directors, based on performance criteria, in accordance with DLH compensation policy for non-employee directors. Stock option activity for the three months ended December 31, 2017 The aggregate intrinsic value in the table below represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in the money options on those dates. This amount will change based on the fair market value of the Company’s stock. (in years) Weighted Weighted Average (in thousands) (in thousands) Average Remaining Aggregate Number of Exercise Contractual Intrinsic Ref Shares Price Term Value Options outstanding September 30, 2017 1,994 $3.83 6.4 8,489 Granted 217 Exercised (25 ) Options outstanding, December 31, 2017 2,186 $4.37 6.9 $ 7,799 Indication of Value Summary Utilizing a volatility range 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 as follows using the Monte Carlo Method. Volatility 50% Vesting Expected Strike Stock Threshold Risk-Free Term Calculated Grant Date Price Price Price Rate (Years) Fair Value 11/29/2017 $ 6.46 $ 6.46 $ 12.00 2.4 % 10 $ 3.98 12/1/2017 $ 6.28 $ 6.28 $ 8.00 2.4 % 10 $ 3.87 12/1/2017 $ 6.28 $ 6.28 $ 10.00 2.4 % 10 $ 3.82 Notes: Results based on 100,000 simulations Stock options shares outstanding, vested and unvested for the period ended (in thousands) Number of Shares December 31, Ref 2017 2016 Vested and exercisable (a) $ 1,302 $ 1,959 Unvested 884 267 Options outstanding $ 2,186 $ 2,226 Ref (a): Certain awards vest upon satisfaction of certain performance criteria.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company has financial instruments, including accounts receivable, accounts payable, loan payable, notes payable, and accrued expense. Due to the short term nature of these instruments, DLH estimates that the fair value of all financial instruments at December 31, 2017 and September 30, 2017 does not differ materially from the aggregate carrying values of these financial instruments recorded in the accompanying consolidated balance sheets.

Earnings (Loss) Per Share

Earnings (Loss) Per Share	3 Months Ended
	Dec. 31, 2017
Earnings Per Share [Abstract]
Earnings (Loss) Per Share	Earnings (Loss) Per Share Basic earnings per share is calculated by dividing income(loss) available to common shareholders by the weighted average number of common shares outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income(loss) available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method. Three Months Ended December 31, December 31, 2017 2016 Numerator: Net income (loss) $ (2,851 ) $ 324 Denominator: Denominator for basic net income per share - weighted-average outstanding shares 11,837 11,201 Effect of dilutive securities: Stock options and restricted stock — 1,489 Denominator for diluted net income per share - weighted-average outstanding shares 11,837 12,690 Net income (loss) per share - basic $ (0.24 ) $ 0.03 Net income (loss) per share-diluted $ (0.24 ) $ 0.03

Commitment and Contingencies

Commitment and Contingencies	3 Months Ended
	Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Contractual Obligations as of December 31, 2017 Payments Due By Period Contractual Obligations Next 12 2-3 4-5 More than 5 (Amounts in thousands) Ref Total Months Years Years Years Debt Obligations $ 18,750 $ 6,667 $ 7,500 $ 4,583 — Facility leases 3,450 911 1,423 656 460 Equipment operating leases 67 35 32 — — Total Obligations $ 22,267 $ 7,613 $ 8,955 $ 5,239 $ 460 Worker's Compensation We accrue worker's 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 December 31, 2017 and September 30, 2017 was $2.06 million and $1.60 million , respectively. Legal Proceedings As a commercial enterprise and employer, the Company is subject to various claims and legal actions in the ordinary course of business. These matters can include professional liability, employment-relations issues, workers’ compensation, tax, payroll and employee-related matters, other commercial disputes arising in the course of its business, and inquiries and investigations by governmental agencies regarding our employment practices or other matters. The Company is not aware of any pending or threatened litigation that it believes is reasonably likely to have a material adverse effect on its results of operations, financial position or cash flows.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Dec. 31, 2017
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions. The Company has determined that for the quarter ended December 31, 2017 there were no significant related party transactions that have occurred which require disclosure through the date that these financial statements were issued.

Income Taxes

Income Taxes	3 Months Ended
	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes DLH accounts for income taxes in accordance with the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the balance sheet when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. On December 22, 2017, the Tax Cuts and Jobs Act (the “2017 Tax Act”) was enacted. The 2017 Tax Act significantly reduces U.S. federal tax rates, modifies rules regarding deductibility of executive compensation, limits deductions of interest expense, and revises rules regarding usability of net operating losses. Net loss for the quarter ended December 31, 2017 includes an aggregate net discrete tax provision of $3.4 million as a result of the 2017 Tax Act, principally associated with revaluing the benefits of our net operating loss carryforwards from the previously recognized 34% federal rate to the 21% rate enacted.

Subsequent Events

Subsequent Events	3 Months Ended
	Dec. 31, 2017
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events. On January 16, 2018 the Company made an excess cash flow payment of $2.9 million as provided in its Loan Agreement. Management has evaluated subsequent events through the date that the Company's financial statements were issued. Based on this evaluation, the Company has determined that no other subsequent events have occurred which require disclosure through the date that these financial statements were issued.

Significant Accounting Polici20

Significant Accounting Policies (Policies)	3 Months Ended
	Dec. 31, 2017
Accounting Policies [Abstract]
New Accounting Pronouncements and Adoption of New Accounting Standards	New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued amended guidance for revenue recognition. Subsequently, the FASB issued an amendment to defer for one year the effective date of the new guidance on revenue recognition, as well as issued additional clarifying amendments. The new guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires improved disclosure to help the users of the financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The new guidance supersedes most current revenue recognition guidance, including industry-specific guidance, and is effective for annual periods (including interim periods therein) beginning after December 15, 2017. The guidance allows either a full retrospective or modified retrospective transition method. The Company is evaluating the effects of this guidance. In February 2016, the FASB issued new accounting guidance related to leases. This update, effective for the Company beginning October 1, 2019, will replace existing guidance in GAAP and will require lessees to recognize lease assets and lease liabilities on the balance sheet for all leases and disclose key information about leasing arrangements. When implemented, lessees and lessors will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. As shown in Note 11, the Company currently has approximately $3.5 million of lease obligations that would be evaluated as the implementation of this guidance becomes effective. In July 2017, the FASB issued new accounting guidance related to certain equity-linked financial instruments with down round features, such as warrants. The guidance provides for a scope exception from derivative accounting if the instruments qualify for equity classification. Should the instruments qualify for equity classification, they would no longer be considered liabilities subject to fair value measurement at each reporting period. This update is effective for the Company as of its fiscal year beginning October 1, 2019, with early adoption permitted. The Company has elected to adopt the provisions of this ASU as of December 31, 2017. ADOPTION OF NEW ACCOUNTING STANDARD Effective December 31, 2017, the Company adopted the provisions of Accounting Standards Update ("ASU") 2017-11, "Earning Per Share (Topic 260): Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815). The provisions of this ASU change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The fair value of a financial instrument with a down round features is now permitted to be classified as a component of stockholder's equity, as opposed to a liability as it was previously required to be reported. In addition, the recorded fair value of the financial instruments is no longer required to be subsequently revalued. Should the down round feature of the financial instrument be triggered due to a change in the underlying strike price, the change in the fair value would be treated as a dividend and as a reduction of income available to common stockholders in accordance with the guidance of ASC-260.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation of goodwill and intangible assets, valuation allowances established against accounts receivable and deferred tax assets, excess cash flow payments on our term debt, measurement of loss development on workers’ compensation claims, and fair value of derivatives. We evaluate these estimates and judgments on an ongoing basis and base our estimates on historical experience, current and expected future outcomes, third-party evaluations and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. We revise material accounting estimates if changes occur, such as more experience is acquired, additional information is obtained, or there is new information on which an estimate was or can be based. Actual results could differ from those estimates. In particular, a material reduction in the fair value of goodwill could have a material adverse effect on the Company’s financial position and results of operations. We account for the effect of a change in accounting estimate during the period in which the change occurs.
Revenue Recognition	Revenue Recognition DLH’s revenue is derived from professional and other specialized service offerings to US Government agencies through a variety of contracts, some of which are fixed-price in nature and/or sourced through Federal Supply Schedules administered by the General Services Administration (“GSA”) at fixed unit rates or hourly arrangements. Revenue on time and materials contracts is recognized based on hours performed times the applicable hourly rate, plus materials and other direct costs incurred on the contract. Revenue on fixed fee for service contracts is recognized over the period of performance of the contract. Revenue on cost reimbursable contracts is recognized equal to allowable costs incurred, plus a ratable portion of the applicable fee. We generally operate as a prime contractor, but have also entered into contracts as a subcontractor. Our company's current business base is 95% prime contracts and 5% subcontracts. DLH recognizes and records revenue on government contracts when: (a) persuasive evidence of an arrangement exists; (b) the services have been delivered to the customer; (c) the sales price is fixed or determinable and free of contingencies or significant uncertainties; and (d) collectibility is reasonably assured.
Business Combinations	Business Combinations In accordance with Accounting Standards Codifications 805, "Business Combinations" ("ASC 805") the Company records acquisitions under the purchase method of accounting, under which the acquisition purchase price is allocated to the assets acquired and the liabilities assumed based upon the respective fair values. The Company utilizes some estimates and in some instances, may retain the services of an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities, assumed, and contingent considerations granted. Such estimates and valuation require the Company to make significant assumptions. These assumptions may include projections of future events and operating performance.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, unbilled revenues, accrued expenses, accrued earn outs payable, 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.
Goodwill and Other Intangible Assets	Goodwill and other intangible assets DLH continues to review its goodwill and other intangible assets for possible impairment or loss of value at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. At September 30, 2017 , we performed a goodwill impairment evaluation on the year-end carrying value of approximately $26 million . We performed both a qualitative and quantitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted at September 30, 2017 . For the three months ended December 31, 2017 , the Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of 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.
Long-lived Assets	Long Lived Assets Equipment and improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives ( 3 to 7 years) and the shorter of the initial lease term or estimated useful life for leasehold improvements.
Income Taxes	Income Taxes DLH accounts for income taxes in accordance with the liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance sheet when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is "more-likely-than-not" that the position will be sustained upon examination. We had no uncertain tax positions at either December 31, 2017 or September 30, 2017 . We report interest and penalties as a component of income tax expense. In the fiscal quarters ended December 31, 2017 and September 30, 2017 , we recognized no interest and no penalties related to income taxes.
Stock-based Equity Compensation	Stock-based Equity Compensation The Company uses the fair value-based method for stock-based equity compensation. Options issued are designated as either an incentive stock or a non-statutory stock option. No option may be granted with a term of more than 10 years from the date of grant. Option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued common shares. All awards to employees and non-employees are recorded at fair value on the date of the grant and expensed over the period of vesting. The Company uses a Monte Carlo simulation option pricing model to estimate the fair value of each stock option at the date of grant. Any consideration paid by the option holders to purchase shares is credited to capital stock.
Cash and Cash Equivalents	Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. We maintain cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 . Deposits held with financial institutions may exceed the $250,000 limit.
Earnings (Loss) Per Share	Earnings (Loss) per Share Basic earnings per share is calculated by dividing income(loss) available to common shareholders by the weighted average number of common stock outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income (loss) available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method.
Reclassification	Reclassification We present financial statements consistent with a consolidation model for all entities. Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. These reclassifications had no effect on previously reported results of operations or accumulated deficit.

Restatement of Previously Iss21

Restatement of Previously Issued Financial Statements (Tables)	3 Months Ended
	Dec. 31, 2017
Accounting Changes and Error Corrections [Abstract]
Schedule of Effects of Restatement to the Company's Financial Statements	The following table summarizes the effect of the restatement to the Company’s financial statements for (i) its audited balance sheet as of September 30, 2017, and (ii) its unaudited condensed interim balance sheet as of June 30, 2017. The reclassification of an additional debt repayment resulting from an excess cash flow provision of our credit facility did not affect any previously reported operating results, net income, earnings per share, cash flows, total assets, total liabilities or stockholders equity. In thousands As Previously Reported Adjustments As Restated Balance sheet as of September 30, 2017 (audited) Debt obligations - current $ 3,601 $ 2,917 $ 6,518 Total current liabilities $ 18,525 $ 2,917 $ 21,442 Total long term liabilities $ 15,344 $ (2,917 ) $ 12,427 Total liabilities $ 33,869 $ — $ 33,869 Balance sheet as of June 30, 2017 (unaudited) Debt obligations - current $ 3,590 $ 2,154 $ 5,744 Total current liabilities $ 16,114 $ 2,154 $ 18,268 Total long term liabilities $ 16,215 $ (2,154 ) $ 14,061 Total liabilities $ 32,329 $ — $ 32,329

Supporting Financial Informat22

Supporting Financial Information (Tables)	3 Months Ended
	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of Accounts Receivable	Accounts receivable (in thousands) December 31, September 30, Ref 2017 2017 Billed receivables $ 12,843 $ 11,862 Unbilled receivables — 49 Total accounts receivable 12,843 11,911 Less: Allowance for doubtful accounts (a) — — Accounts receivable, net $ 12,843 $ 11,911 Ref (a): Accounts receivable are non-interest bearing, unsecured and carried at fair value, which is net of an allowance for doubtful accounts. We evaluate our receivables on a quarterly basis and determine whether an allowance is appropriate based on specific collection issues. No allowance for doubtful accounts was deemed necessary at both December 31, 2017 and September 30, 2017 .
Schedule of Other Current Assets	Other current assets (in thousands) December 31, September 30, Ref 2017 2017 Prepaid insurance and benefits $ 381 $ 240 Other receivables and prepaid expenses 205 358 Other current assets $ 586 $ 598
Schedule of Equipment and Improvements, Net	Equipment and improvements, net (in thousands) December 31, September 30, Ref 2017 2017 Furniture and equipment $ 331 $ 331 Computer equipment 753 715 Computer software (a) 1,445 1,108 Leasehold improvements 66 66 Total fixed assets 2,595 2,220 Less accumulated depreciation and amortization (894 ) (829 ) Equipment and improvements, net (b) $ 1,701 $ 1,391 Ref (a): The Company is in the process of configuring a new Enterprise Resource Planning system. Capitalized costs include $1.0 million and $0.7 million as of December 31, 2017 and September 30, 2017 , respectively, of software licenses and implementation labor related to application development. Since the asset has not been placed in service, no depreciation related to the asset has been recognized. The asset was placed in service on January 1, 2018 with an estimated useful life of 5 years. Ref (b): Equipment and improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives ( 3 to 7 years) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are expensed as incurred.
Schedule of Goodwill and Intangibles	Goodwill and Intangibles (in thousands) as of December 31, 2017 Ref Goodwill Customer Relationships (a) Non Compete Agreement (a) Trade Name (a) Total Gross Balance at December 31, 2017 $ 25,989 $ 16,626 $ 480 $ 517 $ 43,612 Accumulated amortization at September 30, 2017 $ — $ (2,355 ) — $ (68 ) $ (73 ) $ (2,496 ) Current period amortization — (416 ) (12 ) (12 ) (440 ) Total accumulated amortization — (2,771 ) (80 ) (85 ) (2,936 ) Net balance at December 31, 2017 $ 25,989 $ 13,855 $ 400 $ 432 $ 40,676 Ref (a): Intangible assets subject to amortization. The intangibles are amortized on a straight-line basis over their estimated useful lives of 10 years . Total amount of amortization expense for the period ended December 31, 2017 was $0.4 million . Estimated amortization expense for future years: (in thousands) Year 1 $ 1,762 Year 2 1,762 Year 3 1,762 Year 4 1,762 Year 5 1,762 Thereafter 5,877 $ 14,687
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense	Estimated amortization expense for future years: (in thousands) Year 1 $ 1,762 Year 2 1,762 Year 3 1,762 Year 4 1,762 Year 5 1,762 Thereafter 5,877 $ 14,687
Schedule of Accounts Payable, Accrued Expenses, and Other Current Liabilities	ccrued expenses and other current liabilities (in thousands) December 31, September 30, Ref 2017 2017 Accounts payable $ 4,070 $ 5,205 Accrued benefits 2,283 1,831 Accrued bonus and incentive compensation 721 1,544 Accrued workers compensation insurance 2,062 1,598 Other accrued expenses 400 717 Accounts payable, accrued expenses, and other current liabilities $ 9,536 $ 10,895
Schedule of Debt Obligations	Debt obligations (in thousands) December 31, September 30, Ref 2017 2017 Bank term loan (a) $ 18,750 $ 19,688 Less unamortized debt issuance costs (889 ) (961 ) Net bank debt obligation 17,861 18,727 Less current portion of bank debt obligations (6,529 ) (6,518 ) Long term portion of bank debt obligation $ 11,332 $ 12,209 Ref (a): Maturity of the bank debt obligation as follows, in thousands: Year 1 $ 6,667 Year 2 3,750 Year 3 3,750 Year 4 4,583 Total bank debt obligation $ 18,750
Schedule of Interest Income (Expense)	(in thousands) Three Months Ended December 31, Ref 2017 2016 Interest expense (a) $ (219 ) $ (225 ) Amortization of debt financing costs as interest expense (b) (65 ) (60 ) Change in fair value of derivative financial instruments — (79 ) Other income (expense), net 6 — Interest expense, net $ (278 ) (364 ) Ref (a): Interest expense on borrowing Ref (b): Amortizations of expenses related to securing financing

Credit Facilities (Tables)

Credit Facilities (Tables)	3 Months Ended
	Dec. 31, 2017
Debt Disclosure [Abstract]
Schedule of Credit Facilities	A summary of our loan facilities and subordinated debt financing as of December 31, 2017 is as follows: ($ in Millions) As of December 31, 2017 Lender Arrangement Loan Balance Interest Maturity Date Fifth Third Bank Secured term loan $25 million ceiling (a) $ 18.8 LIBOR* + 3.0% 05/01/21 Fifth Third Bank Secured revolving line of credit $10 million ceiling (b) $ — LIBOR* + 3.0% 05/01/18 *LIBOR rate as of December 31, 2017 was 1.69% (a) Represents the principal amounts payable on our Term Loan with Fifth Third Bank. The $25.0 million term loan from Fifth Third Bank was funded at closing and is secured by liens on substantially all of the assets of the Company. The principal of the Term Loan is payable in fifty-nine consecutive monthly installments of $312,500 with the remaining balance due on May 1, 2021. The Term Loan agreement requires compliance with a number of financial covenants and contains restrictions on our ability to engage in certain transactions. We are in compliance with all loan covenants and restrictions. Among other matters, we must comply with limitations on: granting liens; incurring other indebtedness; maintenance of assets; investments in other entities and extensions of credit; mergers and consolidations; and changes in nature of business. The loan agreement also requires us to comply with certain quarterly financial covenants including: (i) a minimum fixed charge coverage ratio of at least 1.35 to 1.0 commencing with the quarter ending June 30, 2016, and for all subsequent periods, and (ii) a Funded Indebtedness to Adjusted EBITDA ratio not exceeding the ratio of 2.99 to 1.0 at closing and thereafter a ratio ranging from 3.0 to 1.0 for the period through December 31, 2017 to 2.5 to 1.0 for the period ending September 30, 2018 through maturity. Adjusted EBITDA ratio is calculated by dividing the Company's total interest-bearing debt by net income adjusted to exclude (i) interest and other expenses, including acquisition expenses, net, (ii) provision for or benefit from income taxes, if any, (iii) depreciation and amortization, and (iv) G&A expenses - equity grants. In addition to monthly 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 each year in which the Funded Indebtedness to Adjusted EBITDA ratio is greater than or equal to 2.50 :1.0, or (b) 50% of the Excess Cash Flow for each fiscal year in which the funded indebtedness to Adjusted EBITDA Ratio is less than 2.50 :1.0 but greater than or equal to 2.0 :1.0. DLH made an excess cash flow payment of $2.9 million on January 16, 2018 (see Note 14). DLH does not expect to make any future excess cash flow payments. (b) The secured revolving line of credit from Fifth Third Bank has a ceiling of up to $10.0 million . Borrowing on the line of credit is secured by liens on substantially all of the assets of the Company.

Stock-based Compensation, Equ24

Stock-based Compensation, Equity Grants, and Warrants (Tables)	3 Months Ended
	Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based Compensation Expense	Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our statement of operations: (in thousands) Three Months Ended Ref December 31, 2017 2016 DLH employees $ 64 $ 6 Non-employee directors (a) 693 479 Total stock option expense $ 757 $ 485 Ref (a): Equity grants of restricted stock, in accordance with DLH compensation policy for non-employee directors. Unrecognized stock-based compensation expense (in thousands) Three Months Ended December 31, Ref 2017 2016 Unrecognized expense for DLH employees (a) $ 1,076 $ 12 Unrecognized expense for non-employee directors (b) — 8 Total unrecognized expense $ 1,076 $ 20 Ref (a): Compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The compensation expense for that portion of awards has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. For options that vest based on the Company’s common stock achieving and maintaining defined market prices, the Company values the awards with a binomial model that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation expense is recognized over the derived service period determined in the valuation. The remaining term for the weighted average expense of these shares will be 59 months . Ref (b): Unrecognized stock expense related to prior year's equity grants of restricted stock to non-employee directors, based on performance criteria, in accordance with DLH compensation policy for non-employee directors.
Stock Option Activity	The aggregate intrinsic value in the table below represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in the money options on those dates. This amount will change based on the fair market value of the Company’s stock. (in years) Weighted Weighted Average (in thousands) (in thousands) Average Remaining Aggregate Number of Exercise Contractual Intrinsic Ref Shares Price Term Value Options outstanding September 30, 2017 1,994 $3.83 6.4 8,489 Granted 217 Exercised (25 ) Options outstanding, December 31, 2017 2,186 $4.37 6.9 $ 7,799
Stock Options Fair Value Assumptions	Utilizing a volatility range 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 as follows using the Monte Carlo Method. Volatility 50% Vesting Expected Strike Stock Threshold Risk-Free Term Calculated Grant Date Price Price Price Rate (Years) Fair Value 11/29/2017 $ 6.46 $ 6.46 $ 12.00 2.4 % 10 $ 3.98 12/1/2017 $ 6.28 $ 6.28 $ 8.00 2.4 % 10 $ 3.87 12/1/2017 $ 6.28 $ 6.28 $ 10.00 2.4 % 10 $ 3.82 Notes: Results based on 100,000 simulations
Stock Option Shares Outstanding, Vested and Expected to Vest	Stock options shares outstanding, vested and unvested for the period ended (in thousands) Number of Shares December 31, Ref 2017 2016 Vested and exercisable (a) $ 1,302 $ 1,959 Unvested 884 267 Options outstanding $ 2,186 $ 2,226 Ref (a): Certain awards vest upon satisfaction of certain performance criteria.

Earnings (Loss) Per Share (Tabl

Earnings (Loss) Per Share (Tables)	3 Months Ended
	Dec. 31, 2017
Earnings Per Share [Abstract]
Diluted earnings per share	Diluted earnings per share is calculated using the treasury stock method. Three Months Ended December 31, December 31, 2017 2016 Numerator: Net income (loss) $ (2,851 ) $ 324 Denominator: Denominator for basic net income per share - weighted-average outstanding shares 11,837 11,201 Effect of dilutive securities: Stock options and restricted stock — 1,489 Denominator for diluted net income per share - weighted-average outstanding shares 11,837 12,690 Net income (loss) per share - basic $ (0.24 ) $ 0.03 Net income (loss) per share-diluted $ (0.24 ) $ 0.03

Commitment and Contingencies (T

Commitment and Contingencies (Tables)	3 Months Ended
	Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Contractual Obligation, Fiscal Year Maturity Schedule	Contractual Obligations as of December 31, 2017 Payments Due By Period Contractual Obligations Next 12 2-3 4-5 More than 5 (Amounts in thousands) Ref Total Months Years Years Years Debt Obligations $ 18,750 $ 6,667 $ 7,500 $ 4,583 — Facility leases 3,450 911 1,423 656 460 Equipment operating leases 67 35 32 — — Total Obligations $ 22,267 $ 7,613 $ 8,955 $ 5,239 $ 460

Restatement of Previously Iss27

Restatement of Previously Issued Financial Statements - Narrative (Details) - USD ($) $ in Thousands	Jan. 16, 2018	Jan. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Debt obligations - current			$ 6,529	$ 6,518
Reclassifications for Additional Debt Repayments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Debt obligations - current				6,518	$ 5,744
Term Loans | Term Loan with Fifth Third Bank | Reclassifications for Additional Debt Repayments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Debt obligations - current				$ 2,900	$ 2,200
Subsequent Event | Term Loans | Term Loan with Fifth Third Bank
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Excess cash flow payment of loan agreement	$ 2,900	$ 2,900

Restatement of Previously Iss28

Restatement of Previously Issued Financial Statements (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Debt obligations - current	$ 6,529	$ 6,518
Total current liabilities	19,657	21,442
Total long term liabilities	11,541	12,427
Total liabilities	$ 31,198	33,869
Reclassifications for Additional Debt Repayments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Debt obligations - current		6,518	$ 5,744
Total current liabilities		21,442	18,268
Total long term liabilities		12,427	14,061
Total liabilities		33,869	32,329
Reclassifications for Additional Debt Repayments | As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Debt obligations - current		3,601	3,590
Total current liabilities		18,525	16,114
Total long term liabilities		15,344	16,215
Total liabilities		33,869	32,329
Reclassifications for Additional Debt Repayments | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Debt obligations - current		2,917	2,154
Total current liabilities		2,917	2,154
Total long term liabilities		(2,917)	(2,154)
Total liabilities		$ 0	$ 0

Business Overview (Details)

Business Overview (Details)	3 Months Ended
	Dec. 31, 2017employeelocation	Dec. 31, 2016
Concentration Risk [Line Items]
Number of employees | employee	1,400
Number of locations in which entity operates | location	30
US Government [Member] | Customer concentration | Revenue concentration
Concentration Risk [Line Items]
Concentration risk percentage	100.00%
Department of Veterans Affairs [Member] | Customer concentration | Revenue concentration
Concentration Risk [Line Items]
Concentration risk percentage	66.00%	61.00%
Human Services and Solutions [Member] | Customer concentration | Revenue concentration
Concentration Risk [Line Items]
Concentration risk percentage	32.00%	29.00%
Department of Defense and Department of Veterans Affairs [Member] | Minimum
Concentration Risk [Line Items]
Government contract, term of award	1 year
Department of Defense and Department of Veterans Affairs [Member] | Maximum
Concentration Risk [Line Items]
Government contract, term of award	2 years

New Accounting Pronouncements (

New Accounting Pronouncements (Details) - USD ($) $ in Thousands	May 02, 2016	Dec. 31, 2017	Sep. 30, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Lease obligations, future minimum payments due		$ 3,500
Number of warrants issued (in shares)	53,619
Derivative financial instruments, at fair value	$ 177	0	$ 306
Accounting Standards Update 2017-11 [Member] | Warrant [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Derivative financial instruments, at fair value		(306)
Accounting Standards Update 2017-11 [Member] | Retained Earnings [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect on equity of new accounting pronouncement in period of adoption		129
Accounting Standards Update 2017-11 [Member] | Additional Paid-in Capital [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect on equity of new accounting pronouncement in period of adoption		$ 177

Supporting Financial Informat31

Supporting Financial Information - Accounts Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	$ 12,843	$ 11,911
Less: Allowance for doubtful accounts	0	0
Accounts receivable, net	12,843	11,911
Billed Receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	12,843	11,862
Unbilled Receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	$ 0	$ 49

Supporting Financial Informat32

Supporting Financial Information - Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prepaid insurance and benefits	$ 381	$ 240
Other receivables and prepaid expenses	205	358
Other current assets	$ 586	$ 598

Supporting Financial Informat33

Supporting Financial Information - Equipment and Improvements, net (Details) - USD ($)	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017
Property, Plant and Equipment [Line Items]
Furniture and equipment	$ 331,000		$ 331,000
Computer equipment	753,000		715,000
Computer software	1,445,000		1,108,000
Leasehold improvements	66,000		66,000
Total fixed assets	2,595,000		2,220,000
Less accumulated depreciation and amortization	(894,000)		(829,000)
Equipment and improvements, net	$ 1,701,000		$ 1,391,000
Minimum
Property, Plant and Equipment [Line Items]
Estimated useful of long-lived assets	3 years
Maximum
Property, Plant and Equipment [Line Items]
Estimated useful of long-lived assets	7 years
New Enterprise Resource Planning (ERP) System
Property, Plant and Equipment [Line Items]
Capitalized costs of license and implementation related to application development	$ 1,038,000
Amortization of software licenses and implementation costs	$ 0
Estimated useful life of capitalized computer software	5 years
Leasehold Improvements | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful of long-lived assets	3 years
Leasehold Improvements | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful of long-lived assets	7 years
Equipment
Property, Plant and Equipment [Line Items]
Depreciation	$ 65,000	$ 85,000

Supporting Financial Informat34

Supporting Financial Information - Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Sep. 30, 2017
Finite Lived Intangible Assets [Roll Forward]
Goodwill	$ 25,989	$ 26,000
Intangible assets, including goodwill, gross balance	43,612
Accumulated amortization finite-lived intangibles, beginning balance	(2,496)
Current period amortization	(440)
Accumulated amortization finite-lived intangibles, ending balance	(2,936)
Finite-lived intangibles, net balance	14,687
Intangible assets, including goodwill, net balance	$ 40,676	$ 41,116
Estimated useful live of finite-lived intangible assets	10 years
Customer Relationships [Member]
Finite Lived Intangible Assets [Roll Forward]
Finite-lived intangible assets, gross balance	$ 16,626
Accumulated amortization finite-lived intangibles, beginning balance	(2,355)
Current period amortization	(416)
Accumulated amortization finite-lived intangibles, ending balance	(2,771)
Finite-lived intangibles, net balance	13,855
Noncompete Agreements [Member]
Finite Lived Intangible Assets [Roll Forward]
Finite-lived intangible assets, gross balance	480
Accumulated amortization finite-lived intangibles, beginning balance	(68)
Current period amortization	(12)
Accumulated amortization finite-lived intangibles, ending balance	(80)
Finite-lived intangibles, net balance	400
Trade Names [Member]
Finite Lived Intangible Assets [Roll Forward]
Finite-lived intangible assets, gross balance	517
Accumulated amortization finite-lived intangibles, beginning balance	(73)
Current period amortization	(12)
Accumulated amortization finite-lived intangibles, ending balance	(85)
Finite-lived intangibles, net balance	$ 432

Supporting Financial Informat35

Supporting Financial Information - Intangible Assets Estimated Future Amortization Expense (Details) $ in Thousands	Dec. 31, 2017USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Year 1	$ 1,762
Year 2	1,762
Year 3	1,762
Year 4	1,762
Year 5	1,762
Thereafter	5,877
Finite-Lived Intangible Assets, Net	$ 14,687

Supporting Financial Informat36

Supporting Financial Information - Accounts Payable, Accrued Expense and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accounts payable	$ 4,070	$ 5,205
Accrued benefits	2,283	1,831
Accrued bonus and incentive compensation	721	1,544
Accrued workers compensation insurance	2,062	1,598
Other accrued expenses	400	717
Total accrued expenses and other current liabilities	$ 9,536	$ 10,895

Supporting Financial Informat37

Supporting Financial Information - Debt Obligations (Details) - Notes Payable to Banks [Member] - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017
Debt Instrument [Line Items]
Bank term loan	$ 18,750	$ 19,688
Less unamortized debt issuance costs	(889)	(961)
Net bank debt obligation	17,861	18,727
Less current portion of bank debt obligations	(6,529)	(6,518)
Long term portion of bank debt obligation	$ 11,332	$ 12,209

Supporting Financial Informat38

Supporting Financial Information - Maturities of Debt Obligations (Details) - Notes Payable to Banks [Member] - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017
Debt Instrument [Line Items]
Year 1	$ 6,667
Year 2	3,750
Year 3	3,750
Year 4	4,583
Total bank debt obligation	$ 18,750	$ 19,688

Supporting Financial Informat39

Supporting Financial Information - Other Income (Expense) (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Interest expense	$ (219)	$ (225)
Amortization of debt financing costs as interest expense	(65)	(60)
Change in fair value of derivative financial instruments	0	(79)
Other income (expense), net	6	0
Other income (expense) net	$ (278)	$ (364)

Credit Facilities - Loan Facili

Credit Facilities - Loan Facilities and Subordinated Debt (Details) - USD ($)	3 Months Ended
	Dec. 31, 2017	Sep. 30, 2017
London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Interest rate (percent)	1.69%
Term Loans
Line of Credit Facility [Line Items]
Maximum availability	$ 25,000,000
Term Loans | London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Basis spread on loan	3.00%
Term Loans | Term Loan with Fifth Third Bank
Line of Credit Facility [Line Items]
Maximum availability	$ 25,000,000
Number of equal installment payments	59 months
Periodic principal payment	$ 312,500
Line of Credit
Line of Credit Facility [Line Items]
Maximum availability	$ 10,000,000
Line of Credit | London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Basis spread on loan	3.00%
Notes Payable to Banks [Member]
Line of Credit Facility [Line Items]
Loan balance	$ 18,750,000	$ 19,688,000
Notes Payable to Banks [Member] | Term Loans
Line of Credit Facility [Line Items]
Loan balance	18,800,000
Notes Payable to Banks [Member] | Line of Credit
Line of Credit Facility [Line Items]
Loan balance	$ 0

Credit Facilities - Narrative (

Credit Facilities - Narrative (Details) $ in Millions	Jan. 16, 2018USD ($)	Jan. 31, 2018USD ($)	Dec. 31, 2017USD ($)
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			75.00%
Excess Cash Flows Less Than 2.50 Greater Than 2.00
Line of Credit Facility [Line Items]
Percentage of excess cash flow for each year of funded indebtedness to EBDTA			50.00%
Term Loans
Line of Credit Facility [Line Items]
Fixed charge coverage ratio			0.0135
Ratio of debt to EBITDA at closing at thereafter			0.0299
Ratio of debt to EBDTA for the period through December 31, 2017			3
Ratio of debt to EBDTA for the period ending September 30, 2018 through maturity			0.025
Term Loans | Excess Cash Flows Greater Than Or Equal to 2.50
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to adjusted EBDTA, actual			2.50
Line of Credit
Line of Credit Facility [Line Items]
Unused borrowing capacity			$ 9.4
Line of credit, maximum borrowing capacity			10
Letter of Credit
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity			$ 0.6
Term Loan with Fifth Third Bank | Term Loans | Subsequent Event
Line of Credit Facility [Line Items]
Excess cash flow payment of loan agreement	$ 2.9	$ 2.9
Maximum | Term Loans | Excess Cash Flows Less Than 2.50 Greater Than 2.00
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to adjusted EBDTA, actual			2.50
Minimum | Term Loans | Excess Cash Flows Less Than 2.50 Greater Than 2.00
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to adjusted EBDTA, actual			2

Significant Accounting Polici42

Significant Accounting Policies (Details) - USD ($)	3 Months Ended		12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017
Acquired Indefinite-lived Intangible Assets [Line Items]
Business base percentage, prime contracts	95.00%
Business base percentage, subcontracts	5.00%
Goodwill	$ 25,989,000		$ 26,000,000
Goodwill impairment			0
Uncertain tax positions	0		$ 0
Income tax interest expense	0	$ 0
Income tax penalties	0	$ 0
Cash, FDIC insured amount	$ 250,000,000
Employee Stock Option
Acquired Indefinite-lived Intangible Assets [Line Items]
Number of awards authorized for issuance (in shares)	0
Expiration term of share-based compensation plan	10 years
Employee Stock Option | Long Term Incentive Plan 2006 [Member]
Acquired Indefinite-lived Intangible Assets [Line Items]
Number of awards authorized for issuance (in shares)	0
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

Stock-based Compensation, Equ43

Stock-based Compensation, Equity Grants, and Warrants - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense	$ 757	$ 485
Unrecognized stock-based compensation expense	$ 1,076		$ 20
Weighted average share based compensation expense recognition period	59 months
DLH Employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Unrecognized stock-based compensation expense	$ 1,076		12
Non-employee Directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Unrecognized stock-based compensation expense	0		$ 8
Selling, General and Administrative Expenses | DLH Employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense	64	6
Selling, General and Administrative Expenses | Non-employee Directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense	$ 693	$ 479
Employee Stock Option
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of awards authorized for issuance (in shares)	0
Expiration term of share-based compensation plan	10 years
Number of shares available for grant (in shares)	200,000

Stock-based Compensation, Equ44

Stock-based Compensation, Equity Grants, and Warrants - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017
Number of Shares
Outstanding at the beginning of the period (in shares)	1,994
Granted (in shares)	217
Exercised (in shares)	(25)
Outstanding at the end of the period (in shares)	2,186	1,994
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 3.83
Outstanding at the end of the period (in dollars per share)	$ 4.37	$ 3.83
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term	6 years 11 months 12 days	6 years 4 months 24 days
Aggregate Intrinsic Value
Outstanding at the beginning of the period (in dollars)	$ 8,489
Outstanding at the end of the period (in dollars)	$ 7,799	$ 8,489

Stock-based Compensation, Equ45

Stock-based Compensation, Equity Grants, and Warrants - Stock Options Fair Value Assumptions (Details) - $ / shares	Dec. 01, 2017	Nov. 29, 2017	Dec. 31, 2017
11/29/2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Strike price (in dollars per share)		$ 6.46
Stock price (in dollars per share)		6.46
Threshold vesting price (in dollars per share)		12
Calculated fair value (in dollars per share)		$ 3.98
12/1/2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Strike price (in dollars per share)	$ 6.28
Stock price (in dollars per share)	6.28
Threshold vesting price (in dollars per share)	8
Calculated fair value (in dollars per share)	3.87
12/1/2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Strike price (in dollars per share)	6.28
Stock price (in dollars per share)	6.28
Threshold vesting price (in dollars per share)	10
Calculated fair value (in dollars per share)	$ 3.82
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility rate			50.00%
Expected term (years)			10 years
Stock price threshold term			10 days
Employee Stock Option | 11/29/2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)		10 years
Risk free interest rate		2.40%
Employee Stock Option | 12/1/2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	10 years
Risk free interest rate	2.40%
Employee Stock Option | 12/1/2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	10 years
Risk free interest rate	2.40%

Stock-based Compensation, Equ46

Stock-based Compensation, Equity Grants, and Warrants - Stock Options Outstanding, Vested and Unvested (Details) - shares shares in Thousands	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Vested and exercisable (in shares)	1,302		1,959
Unvested (in shares)	884		267
Option outstanding (in shares)	2,186	1,994	2,226

Earnings (Loss) Per Share (Deta

Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Numerator [Abstract]
Net income (loss)	$ (2,851)	$ 324
Denominator [Abstract]
Denominator for basic net income (loss) per share - weighted-average outstanding shares (shares)	11,837	11,201
Effect of dilutive securities:
Stock options and restricted stock (shares)	0	1,489
Denominator for diluted net income (loss) per share - weighted-average outstanding shares (shares)	11,837	12,690
Net income (loss) per share - basic (dollars per share)	$ (0.24)	$ 0.03
Net income (loss) per share - diluted (in dollars per share)	$ (0.24)	$ 0.03

Commitment and Contingencies (D

Commitment and Contingencies (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017
Operating Leases
Total operating leases	$ 3,500
Long Term Debt and Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
Total Obligations	22,267
Next 12 Months	7,613
2-3 Years	8,955
4-5 Years	5,239
More than 5 Years	460
Facility Leases [Member]
Operating Leases
Total operating leases	3,450
Next 12 Months	911
2-3 Years	1,423
4-5 Years	656
More than 5 Years	460
Equipment Leases [Member]
Operating Leases
Total operating leases	67
Next 12 Months	35
2-3 Years	32
4-5 Years	0
More than 5 Years	0
Notes Payable to Banks [Member]
Debt Obligations
Total bank debt obligation	18,750	$ 19,688
Next 12 Months	6,667
2-3 Years	7,500
4-5 Years	4,583
More than 5 Years	$ 0

Commitment and Contingencies -

Commitment and Contingencies - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
Accrued workers compensation insurance	$ 2,062	$ 1,598

Income Taxes (Details)

Income Taxes (Details) $ in Millions	3 Months Ended
	Dec. 31, 2017USD ($)
Income Tax Disclosure [Abstract]
Net discrete tax provision as result of 2017 Tax Act	$ 3.4

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ in Millions	Jan. 16, 2018	Jan. 31, 2018
Subsequent Event | Term Loan with Fifth Third Bank | Term Loans
Subsequent Event [Line Items]
Excess cash flow payment of loan agreement	$ 2.9	$ 2.9