DLHC - Earnings call transcript Q4 2018

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Operator

Good day, and welcome to the DLH Holdings Corporation Fiscal 2018 Quarter Four Earnings Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Chris Witty of Investor Relations. Please go ahead.

Chris Witty

morning good and you everyone. Thank

ahead, which, turn will go Zach. for After now like in earnings JohnBull. XX-K report of update would with any the measures, Parker Commission. over included call beyond. the factors This We Solutions our include GAAP me slide be On Zach. outlook site questions. to two speak to followed both undertake to duty contained and and On statements. the PowerPoint safe statements that statement, Zach Company's President Zach that under and and President CFO With Exchange actual brief in presentations release refer like uncertainties of are our any other investor to forward-looking are GAAP the form is call could reconciliation which and to Kathryn to is the Company's do quarter shown relate financial and investor in Kathryn annual these next JohnBull, Web the release and is referencing Services presentation results of the call presentation. not and now CEO; Please President to on CFO; forward-looking a Parker, statements events with open and Fisher, also site. for I page. Securities our on provide non-GAAP non-GAAP The the Company's fiscal call Arlene These our subject will would on the CEO may today the on differ Company's results DLH's to a from and press unit. risk to operating available will cause we risks today's harbor filings reported XXXX various statements. it and in Mission, Please fourth results Arlene that, forward-looking and Web by materially we Fisher, I up

Zach Parker

conference this you, begin overview been Starting Thank strong level to to year Welcome quarter up financial year by call. XXXX represents X.X% work It's proud million across and sales capabilities, force fiscal the agencies fourth to morning solid compared of million, million XX which me XXXX fourth by growth great X for in and reflecting DLH. enduring out many $XXX.X month This a contracts. the of providing and and our good of work Revenue accomplishments. XX.X% and recent the a let in field at Chris for the speaks very our the the very top We're rose our everyone. talent intense serve. with our performance year-over-year, Slide our programs staff the under high prior our fiscal the for $XX.X we of over line period. quarter performance recorded financial demand $XXX.X achievement, of the full we much here

of share XX.X% was per a year versus quarter for we ago. $X.XX margin $X.XX income gross net posted Our diluted and the

greatly and reduced million leverage debt versus senior during the fiscal beginning After we of down million at year generated also paying our of the $X.X of $X.X operations period, $XX.X just the $X.X from ended million with during We million cash quarter. XXXX. the

operating and $X.X the to over with Mission and X, $XX.X from from moment, turn balance operations a began Kathryn year Services XXXX fiscal million million As on books. the President like just unit. turn been great cash in as Arlene I'd will Fisher, our presentation a to in review Arlene? a to of Solutions generated sheet I'll it's Slide we

Arlene Fisher

some shaped outlook for our everyone. will XXXX. go morning, the recent quarter I over Good for developments Zach. and that you, Thank

several are years, five HSS was and QX most bills Defense, customers, took time be out materially already bid in of XX qualified that for Departments by we agencies through fiscal the things of fully our for impacted possible strong XXX that These including key the budget ongoing on million including One Congress the view coming XXXX, negotiation positive in shutdown, our any not and passed funded place BA. of should fiscal government that of years approximately first opportunities the continue appropriation for the XXXX. to leads. pipeline in Such

So in At as and changing landscape steps to quarter, any programs. strong. mitigate our the recompete across time, discussed for same diligent we will growth takings as the to encountered the key remains appropriate last outlook the sending challenges due be

to a active. continue and the potential on market look accretive acquisitions quite basis regular We at remains

transaction value added last growth selective looking our continue be we margins, in every expanding possible nearly to the proved our capabilities opportunity. excellent be profile, when to be using While increasing at will and aspect

depth enterprise We continue our the serve both of solutions. technology to and markets existing can to federal seek government for and bolster both out focused providers our the we breadth customers,

to At same business core and are consummate ability believe acquisition solid service activity. continue opportunity balance invest the to to if itself. DLH's demonstrated we presents we capabilities transaction development we positioned appropriate Given sheet and an time, well a debt, our in

the modernization our positioned have of based revenue you Gil this is in system data and appraised including our earned for maturity a for model initiatives, CMMI's Seal and for up of corporate heading quality performance. I validates and our share our that we Earlier performance healthcare results XXXX, agility confidence commitment Chief Approval and of staffing or professional. this level Achieving Company’s Tadmor the announcement aspects demonstrates our further standards, This well procedures solid innovation excellence, Gil organization We X.X. certification. version methods. for and appreciate including to key the for to technology of described to understood now Technology We A rating DHL a integration opportunity solutions, would enhance a process IT, Gold healthcare a appraisal future our at current year customers. process services the capability the rating health three various August, to providing position Officer. and like commission's indicates with announced and improvement. and to the three level mention commitment was tools joint and also posses DLH analytics

Slide growth revenue shown continue As X, of and XXXX on in EBITDA. trend long results a

detailed that, discussion year JohnBull. of results to turn over Zach Following XXXX outlook financial CFO, call thoughts the our would fiscal the his fiscal operating Kathryn with Kathryn? to With Kathryn, now like the about XXXX. share will for I

Kathryn JohnBull

good and Arlene morning Thanks everyone.

end pleased We a report are fiscal to to solid XXXX.

fourth revenue XX, across reflected contract X, increase prior services an existing on programs our million, and $XX.X ongoing The posted Slide revenues the expansion XXXX we of to quarter. key three higher of demand ended over representing the September year months Turning for vehicles. of X.X%

in per million in While we generally to as the revenue swings in be stated fiscal above can there remain quarter-to-quarter. XXXX, expect programmatic past $XX quarter spending

Zach endeavor are trends due we to We headwinds factors offset the discussed, about will re-compete and year next faced any by changing to demand optimistic dynamics.

Now, moving to X. gross profit Slide on

posted of This quarter, million increase profit $X.X the total Company versus last X.X% margin higher with $X.X million the due expansion. year approximately revenue both gross and to

a reflecting XX.X% was fourth gross margin mix. of year, program quarter As sales, full last XX.X% versus percentage the

across can our As program quarter quarter to vary with gross to margins timing key revenue, contracts. due

reflecting of fiscal the $X.XX $X.X Jobs fourth Cuts million rose in G&A for slightly recorded $X.X prior provision months Turning XXXX. the for from XXXX million in reflects year, gross expenses. prorated $X.X net enacted versus diluted income to expense diluted XX, Tax the We Act per year XXXX. ended $X.X fiscal Slide and lower quarter tax provision period. and income million X, to income the DLH versus in from share higher the XXXX from tax of of net September tax of reported reduction last QX an or $X for the impact million million operations approximately in share of The XXXX profit or three rate million XX.X%, $X.XX per for the XXXX $X.X December increase

expenses earnings gross in Turning EBITDA of A EBITDA effectively million as million net to percent margin ended XXXX, while for in versus indirect three months versus was statement. XXXX XX.X% $X.X GAAP QX in in growth of last year to a revenue was XX, income reflecting revenue Slide year. September is EBITDA $X.X controlled. X, XXXX fiscal the our and were X.X% reconciliation the

million. the to of balance beginning our sheet on the the nothing at can at year. $X.X versus the We hand turning of you of end our had $X.X borrowed snapshot term Slide had end fiscal and credit revolving We a of quarter. of see approximately million XX, under of balance cash facility the quarter, a loan had at the Now million $X.X our

for That EBITDA fiscal of debt strong cash down of at Our year our in over indicators due statements. financial than now the to the million of like less stands the discussion a net I pay now and forward of Zach? this debt fiscal back XXXX. the discussion that, Zach my Zach flow as call operations X mentioned. DLH turn would concludes $XX With to to to trailing position for

Zach Parker

I'd Kathryn. XX. like Slide some just will shown few minutes a as factors operating our to fiscal environment into spend influence other you, covering that on Thank XXXX

the and have manages contracts agencies to that remember contracts key all are strong that despite First, shutdowns, DLH the within XXXX delivered the very and bipartisan budget the services been headlines those fiscal funded that negotiations for support. enjoy fully about under government helpful it's

to bit current to certainty and develop help primary a sustain the strong business that able and our Given there more new is for pipeline. budget budget on customers, addressable we're a focus

and have that alluded the work. propositions In we M&A opportunities and compete acquisitive acquisition to high ability in when an and debt both the pursuing demonstrated positioned allow as which acquisitions and perspective, our and new robust. businesses to, believe our which to to successfully mergers volume value credentials be us new are organic as will arena addition, further in we believe of enhance continue we certifications differentiate enhanced integrate some DLH previous M&A believe of our value industry, we having will to well Arlene service well, From

issue every are COMP course, are primary we has of through monitoring exception. navigate VA the business Of status no our The challenges is today we to that recompete. and

recompete in as aside contractor. on settling As call, XX-K our the for it discussed earnings this small veteran we under disclosed contract a set issued provisions and prime was business prior a

We that the An resolution. monitoring additional regard. keep in and we'll continuing you are a participating is that factor to for XXXX fiscal posted opportunity, in continue we’re recompete

this more will budget, parts be federal some important of others. than the For

the been primary mentioned, Arlene already agencies fully DLH supports XXXX. that funded As for have

some operator business well are continue basis. will fiscal to within programs both agencies dynamic open to prepared are that our for we I are that for DLH regular in our turn that Some at opportunities challenges believe for to a closing, another that still In call pursuing monitor now we it anticipate will new looking bring. XXXX, call we year and With on budget will and and uncertainty those like opportunities the to over that that, questions. be the the to continue would

Operator

Please [Operator Gomes Instructions] Joe with comes Our question Capital. first go ahead. Nobel from

Joe Gomes

that So level little of I -- you revenue year a increase just a we out should this little as more, could year. they wonder thinking give are could bit you the what as you similar detail there. first same going you wondering more did say quarters dynamic talking was to next you if think if play year. that I and color How be on

Zach Parker

with budget doing new we're new our technology do as on our customers. implementing and We looking continue book things well current operationally with business we're our as and both some So the opportunities the of will pursuit at systems, hill. leveraging to happening scale on and have will by be others stability less impacted what's we impacted of the that be by range the on smaller think contract a new

that will monitor So to we a continue on basis. to quarterly have

part in under dynamics it extend would federal handle would the expect budget funding As help But in FY later year. continuing get the you the probably on of well majority delay throughout to will how throughout government so, that did a the large one on they'll more for I going to it navigate 'XX. will those resolution be the month. space better know, in doing And past we're kick this right the for I until time. expect

both quality continuous initiatives and Woolsen those reporting to operations, as We we'll year. some evolve and Kevin continue about they implement continue, and throughout however, at to Arlene's be improvement the excited

Joe Gomes

flags, you doing not Obviously, so acquisition potential and if more little I here. looking know wonder for while for space you've and see. thing a been or you a talked about And lengthening process run of M&A right out buy I color, that you first consummated something the another what speak, the hasn't the yet? provide for of this just But again to to out

Arlene Fisher

in first things year. there down hardware the the coming on Definitely, drill look part in those maybe those so marketplace, 'XX just are point you was not statistics and M&A 'XX flat it if to 'XX space, or for in breakout and a pretty that addressable where really a into by of our looks the dominated similarly But not service products, once at just what that the volume be just high in are you heavy more special out are Intel was from, transactions roadmap our fiber offerings. things year

So the really and things are those half those from the expect that of their In coincidently of targets re-compete particular part dominated that of when function I targets the secure first as a our come space. contrast really mature by within cycle. major was to just contracts year addressable the

with flow things markets things interested in. much aligned had has our year we're are that that the addressable of half second the squarely stronger and The for

half it's opportunity. giving active plenty on as see an we the So focus and second as very of us that 'XX

hard you number presently exactly, definitely there So active to of but I timing that would gauge tell a opportunities.

Zach Parker

Let add that me as just Kathrin indicated. to

and taken we really with to range And how -- we deleveraging we’re drive up still We our some million apertures our aggressive are it's year. is able look with we will still our steps as range opportunities than a might and flow of if at to were million, as good And seeing something around with open $XXX more forth, last we able we indicated what large I think so sweet those. of some is and entered to to $XX -- bit of spot Kathryn million be the $XX address. we've our think to interests probably will with are we ability little the in deal

going some regard. quality the seeing will we to we’re So I opportunities be deal for think flow there us reason year. this posted opportunity us in it's a that to gives continue assess good to keep And you now that think to

Joe Gomes

awards I And might us one what quarter first me, key update for little you're next for you looking of that year, last into on give wonder if just one of rest this the a here maybe year? are

Zach Parker

like have categories our we've activity. driving in got bid of industry, broad are two the of we our many folks So that things

The it successes proposals of and value first one there some small required our to IDIQ, are pursue contracts smaller quick turnaround in these We've indefinite often where work. called some quantity those was websites. had recent some very internal posted

in FYXX to to and opportunities got those are These in opportunities in of we've once few generally $XX north we’ve that to be think the place. those that maturing $XXX continue sweet said a continue other those, that think $XX to address the million. range operating million our more to substantially are positioned you departments. under number that, know, of million opportunities spot going going are we’re We’re will ourselves, while are uncertainty we the started we integration also that well as period, of Having of that and particularly budgets with really

That’s why for folks their of that making qualified is a of of billion us. little again a course existing wins. a they speed some that do in this a And together got to acts bit feel approaching of bridging and some contracts little backlog less these are is that will these So pipeline we've we some that already. budget government and still half for that awards we’re open if gaining get see of

Operator

CEO would Instructions] President closing in remarks. turn for [Operator no like Parker, there further At are to queue. questions Mr. conference question the over any the this time, now to I and

Zach Parker

to thank support. would right. you. that I Well, All had. questions your for thank you've you appreciate the Thank you like operator, Again,

to expect year in a indicated this we bit performance a dynamic that driving business we're of have like clothing only but FY our I not color out be to each continue 'XX, to think in in going that add I'd I little of invest areas. improvement to

worth entity. not most keep to platform really While I've fiscal posted fully from laid new that continuing to an that out, a million built features this I and would And only are do support acquisition support system to Danya we the and but as you have We're the we'll million year. infrastructure as company capabilities. and $XXX this now, we of $XXX ERP our of implement built Kathryn we've integrated throughout

today. everyone you I your So for Bye want a blessed time to Hanukkah, Wish thank And Christmas, a you'll happy for Merry have happy now. Year. Kwanzaa. a a New

DLH (DLHC) 13 Dec 182018 Q4 Earnings call transcript