DLHC - Earnings call transcript Q3 2021

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Operator

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

Chris Witty

morning, good and you, everyone. Thank

other up call and turn release Zach. questions. in to the ahead, it presentation Zach. will website. Securities duty for and presentation. We This company’s in with On various on With GAAP to call will provide Form shown XX-K DLH’s may the A reported XXXX statements and forward-looking like the President included Officer. on forward-looking These GAAP and Investor relate to be outlook is our any available that risks could a release to referencing Parker, page. update the non-GAAP include earnings the that, to cause also not is and to I the that now like the statements CEO, next; filings Safe today’s do company’s by the today Chief the from financial for The our our in Executive to statements. both materially the actual to under results forward-looking which Please annual earnings of Financial brief differ call, Please CFO, open call is after these and fiscal uncertainties with Chief Officer; reconciliation Zach subject refer measures. we’ll non-GAAP beyond. investor factors JohnBull, and risk results results On Harbor in on are our which followed we X are to now me Slide Commission. President Exchange and undertake report statements. and and website presentation PowerPoint events would company’s I’d and of speak any on Parker, Zach over contained go Kathryn Kathryn JohnBull, statement,

Zach Parker

Starting I and very we’re rest the globe some a our level who we’ve earnings good of We want ever greater employees with XX% to be place Chris, per and I’ll X, Slide very for high fiscal in acquisition outlook of of the best our challenging pleased on to operating [ph]. to performance despite solutions million $XX.X year of our tremendous first morning, the growth clients our couldn’t year-over-year mix track rose with quality overview times. I of proud the Revenue enterprise. XXXX quarter with make a on provide everyone. margins strong XXXX. the deliver from the more color quarter programs with conference you, services across continue top call. our of benefited and to and with IBA, organic to nearly Welcome million posted for $X.X across or and even Thank X% reflecting, along third $X.XX of share. as plans

of We we’ve operations cash of to use $XX.X this the roughly pay ability. also million down down Year-to-date, generated quarter. paid to million $X.X million some generating $X during and the of debt debt strong cash company’s approximately due from

overall announced million our to which quarter, the period will in We expected financial won over moment. flexibility a our that add was improve discuss We and over to previously in five-year contracted third backlog. as CMOP continue VA’s to de-lever Award Logistics the $XXX a value Catherine Medical we more in

government standard expect the a proceed their and to work by During which, the on outcome. continues and course through process, this bidding and Logistics quarter, In this contract, small of CMOP contract the extended a award. addressing company’s to the through concerns to business await resolution [ph], was we protested the a our and XXXX November Medical even contract as we was of backlog robust for favorable meantime, remains resolution

long-term strategy company. which our I’d X. Slide to includes as investors grow and continues – like update of Now, evolve the to success, turning to on we our

programs nationally for record large growth track markets our integrating that performance we within and the excellent capabilities, that position successfully our serve. delivering on acquisitions, Given of healthcare expanding has its believe technology DLA dispersed enhanced we

portion us health several strategy give a long-term agencies our visibility us in While and presence all programs contracts services federal stability anchor revenue sites. regarding and with the health our of our full and the across across and – a given has key base, diversification military range systems

service members to continue the We the citizens, veterans. and serve the soldiers, our

address today expanded, serving where of focused remained on we’ve truly for real-world formula they we’ve clients the to our as even and success, needs tomorrow. However, healthcare value-added solutions can bring

our leveraging our – is to strategy of an services the into service. largely are are customer expanded targeted technical same, set in utmost our the dedication but Our agencies this technology solutions, as

rapidly down prodigious to cash our capital to we’ve flow working that is this use business win simulation, advanced more Therefore, dilution bring healthcare we’re industry. modeling intelligence, telehealth our flexible, built a able in see to of a on we the the that $XXX we’ve in grow of names foundation that expertise rise process cloud-based workforce which pay well leverages and We’ve continue The winning a accomplished transformation, has respected by this and that past near nearly our and and hire results. shareholders. consistently and analytics, maximizes continue We’ve and artificial annually, a remain adapt in balance We that to and sheet, and against shareholder to terms frequent the of highly applications, valuable a on and delivery, replicate customers returns acquisitions in services prevent We professional, our in related interacting deployment workforce requirements during ever business; and and remotely, we shown to long-term process. brightest, confident well we can lines positioned leveraging our than based And million can ways acquisition debt in the industries that with growth from leading our to used are way accessing refined XXXX, in us talent best next strengthen financial a existing with growth revenue credentialed terms digital strategy including this as and most changing ahead pandemic that committed, compete positioned our sensible healthcare existing the of of platform, our been new $XXX enables invest confident generation credit year company advantage variety more. to posting of the a systems fiscal solid level capital performance research, of to and revenue opportunities are companies. will make take then target we equity technology, We all million management. to our the and strong deployed. that are to the for

I our to Chief confident Kathryn? am so With Our proud performing and Officer, are capitalize will feel backlog respected. and I unusual of to come increasing so and returns and strong JohnBull. well Kathryn our our solutions to on call provide times. need the Financial which we remains health have such our as partners the expect over well-known that, for during staff turn ability like we technology-enabled for in care to shareholders just the I’d

Kathryn JohnBull

Thank you, Zach good and morning everyone.

solid posted have again to quarter. this once results pleased We’re

revenue the the third the $XX.X quarter quarter. in roughly in XXXX into continue versus the of X prior revenues along variance million IBA, across of and reflects in Slide impact for trends existing million year’s posted ended $X.X XX, presentation, we We The tied fourth three to million activity that organic in variety programs fiscal year. to the Turning the of $XX.X this to June a months growth increased acquisition such follow XXXX. anticipate

award optimistic through least about As Zach our of award. favorable so We remain being mentioned, under is extension we’re outcome CMOP of protested, an prior November. the Logistics award at the operating

of share Operating Turning million million income from margins $X.XX Slide $X.X approximately XXXX in We a share to income X% million quarter $X.X $X.XX $X.X and program or reported $X.X million quarter X.X% operating the from million Interest XXXX million or months last operations acquisition three fiscal to XXXX was quarter ended $X.X the of DLH versus and XX, the per million mix improved XXXX, million fiscal of favorable to June IBA. a third reflecting versus expense in $X.X net in year. provision third the versus during year leverage. X, tax due reflecting for recorded greater last fiscal diluted $X.X for levels fiscal year. the expense $X.X XXXX quarter increased third higher current debt for respectively. outstanding

X, was of versus sale million XXXX Turning $XX.X EBITDA Slide debt EBITDA our the as a in this this for income gives year. to versus of A the $X.X prior million snapshot last the and back updated $XX.X of year percent rose reconciliation in quarter the $X earnings statement fiscal to third Slide a position EBITDA million in third of presentation. quarter of net provided an quarter. to at period, of X. end GAAP our the is

for of million million $X.X below stronger financial at roughly and questions. As We quarter $XX.X to reflecting under to of I year. cash $XX.X we paid now facilities the $X of outstanding This the approximately over the of million debt like at XXXX, XX, versus statements. fiscal than operating million my debt that, call during much discussion sheet of a our operator With generated of leverage at June credit beginning quarter. to flow of with balance last ratio the the concludes and the open estimate the $XX end We would had debt. lower end turn down

Operator

ahead. The Thank Gomes question Capital. Joe go Please you. [Operator Instructions] of is from first NOBLE

Joe Gomes

Good morning.

Kathryn JohnBull

Good morning, Joe.

Joe Gomes

Thank you my for questions. taking

Kathryn JohnBull

to Great from you. hear

Zach Parker

doing, you Joe? are How

Joe Gomes

well. guys the well Hopefully Doing doing summer. same you we’re here, for this

Kathryn JohnBull

Absolutely.

Joe Gomes

year types First growth travel just in revenues pump last related question, of the that revenues. help had have growth the are of returned back? they to some we was come the pass-through you saw I the pointed so absence you still for up those that wondering, organic waiting out quarter, organic or

Zach Parker

still Yes. come to Those slow back. are

plans the to we’re see into of course, place. We are before Delta that determined that, started some variants come to pretty starting

we’ll later We’re plans country. that start in starting even year do of though increased, where travel, to mobility of substantially course, more to see our this has

some at, team inspections of since we’re way. and being members, very around We’re that cautiously ultimately our of clients looking still our some ours still and involves proceeding

has majority been with talent So organic of our to we’re for pleased the of and growth key delivery customers see that. the

Joe Gomes

you color release, more be And in know I more do color the know, the a confident you we you little ultimately that VA give some you as Great, logistics to maybe little there. maybe that in award? in to, on thanks that. will successful a contract. but press getting verbiage cancel this When caused for had think timing exactly what you contract, and get there are why the

Zach Parker

very such contracts for the as of the this you, pretty a it protest. have now large pretty question. as bidders the them investment frequently this number Joe. will a They're when seeing on for a Joe, pursue some Thank a They it. shot if of course Yes, is a an to made there’s government have common the bet. at see larger for that to that one common magnitude. You VA, that focused there's opportunity work potential unfortunately, had – well

has this magnitude. a it So course been action on to protest of see nowadays of normal arise a contracts

deal to a of consistent one small be the This process, federal treat business, seriously happened to the evaluate through the run that Regarding got small agencies a any all they've with protest. business. to from to service is particular

make with to will going proposal but into go our of to our consistent now we're that an can adjudicate on have so usual it is requirements. a effort going to action of commitments it and that their they're couple to remain through normal and they prevail, that's award course, months. ultimately and We, optimistic course however, pretty the make sure And and its

Kathryn JohnBull

of that And really, is the – the best It's of basis couple-fold. our value it's the a the nature is procurement. confidence procurement firstly

our best perspective, of cash interest interest the government. our VA, the from represents that strong years in government, from best support in of working and cost-effectiveness performance So quality perspective, the our over of and many we've introduced the the the of

basis confidence that's in the a So really outcome of successful our

Joe Gomes

last or are And what could us the to couple next years. that the of you to set pretty term you winning near seen confident update. award coming be talked hope over the for about to you're great. seeing up some that might that able awards. those give you've quarter, was wondering Okay, a that see Thanks for update in little more as be you opportunity if I of

Zach Parker

Yes.

position in of recall years, very optimistic the great a really So or strategic pipeline A hit. while. great that our out opportunities the are seen has there. capabilities still remain few of of acquired examples one result the DLH, we the last have been our just will heavy coming very positioning a over couple Quarter We mature. we've X; as now This that proposal-development it's of largest of a deals

large-scale, this SPX. for from the having and involves completed multiple raising profitability. That has opportunities military we referred with of the a over and determine this Street of large IBA IDIQ in that just IDIQs the So the on towards the biomedical delivered as research; are that award there speak quarter. and years are CIO out, proposals IT the that couple anticipating research one of for in and as now two It indefinite the National pretty also next month. as IDIQ, and of critical the [indiscernible] an gone derived contracts and one obviously, Health quantity, our We're were is health the Institute throes profile to were agency, which SX win associated systems, recently capabilities our will

two those if a – have are the something been now we by vehicles, we are So degree current identified a our large will, those. to of you orders contracts past of for addressable have high we number large able access success us [indiscernible]. are hunting-license-type that think that of very have think being government-wide-type company, Those of representative the the state

that, slip continued normal the we've to major addition by In our some regular to right. of courses, opportunities, see to ones

said what's in just do the year. in a us lead and that while point and in some will still write think that this wins, similar, launch we moving organic active good in resolution very indications, still see the the the will to having infrastructure, that resolved XXXX. optimistic still ups, this, And optimistic have that, process build be we'll for we're all and doing we to in remaining However, XX budget that continuing more opportunities But everything fiscal there's do good number by a September. along, FY then expect continued a not of

Joe Gomes

Thank you for that.

your the Let jump of continuing In queue, leading you one in I'll potential resolution for And queue. me more. continuing budget ask queue. the into into and about kind here, we're the back right mentioned for

of kind there, of some budget looking about some the anything various, that talk And the & in You Services. positive being the the VA for proposals at budgeting made on jumps that at view your budget out today? as of viewpoint, guys be from disappointing, or Health proposals for a for and Human the potential proposed looking anything huge your would flip the side,

Kathryn JohnBull

that extremely our budget that Yes, is are the Health not to the general support assessment initiatives. Human Services surprisingly, favorable proposals & of agencies they really

COVID-XX. of they think highly nice perspective, from a budget. did those proposal for we while final course, aisle, play So and bipartisan a the quite still that expect for on in the out not and sides substantial with its we tail to increase we public is health Both what's and the process their NIH both go of in scientific to sentiment effect that several we general the in study. a will as the of end that, there's back our increase and to the the going we of And I we on be and get number, a understand But just from response think of long just comorbidities variants. may the that, bit said, in both the perspective. those, the there's up to little study highly, course, are get addition funding, we in the consistently critical of exiting bit, the populations to a that triage analysis impact ongoing independently programs surprisingly, that support having are a fact, enjoy last Phase estimated always But for on from there for naturally, so of veterans strong given we very there months, coronavirus supported

a well with opportunities it But really think and sustaining do Zach IDIQs, is to health to issues set validates focused affect people. phase we those the doubling we're to full back reliance was surprised So, required just to are on the increase. we be back think the first the respond those It country extremely on very many teammates. prepared see build to acquisition program positioned so that, fully to of bit gratifying. going little and and we really really intent skills of those mentioned, a And capabilities respond without even not our that positioned on

So where respond to past of It key a part RFPs. response large license was it's, team and the hunting the fundamental – now of quarters our vehicles over very our And be capability last to we'll those to to appropriate strategy as part by validated own positioned IDIQ years. but course, have those few the our mature. large independent fully

So, we're will that the evolve certainly opportunities organically plus-ups that the both on things see bullish out enjoyed evolving. budget we we of and those

Joe Gomes

thank questions. in jump back queue. for I'll answering Great, you my

Kathryn JohnBull

from great hear Always Joe. you. to Thank you

Zach Parker

Joe. you thank Yes,

Kathryn JohnBull

Thank you.

Operator

next Global Brian Partners. question from will of The be Kinstlinger Alliance

Kathryn JohnBull

Brian. Hey,

Brian Kinstlinger

Yes. Hi, you? thanks How for taking are my questions.

Zach Parker

do How you Good. do?

Brian Kinstlinger

Really that enough best it, for they you maybe the had and Was is can it businesses looking the was I basis was the business had, I small work they being value? upheld? protested? missed the the I was it What thought that was evaluated, questions small not provide basis the for

Zach Parker

on Yes, there's little protest. information that's of the the bit a basis of publicly available

find at usually can gao.gov. You those

ultimately is VA going to here. always each on to current stay through know has due the of really CMOP more operate this than regard. so into these publicly previous don't And, that its specifics. we to just nothing that optimistic one But on And in proposals our render and know process, protest. that prevailed VA do started course, more sustained get opinion. what's we available they've We the contracts,

Brian Kinstlinger

upheld, through protest proposal they're or clearly, was evaluating the that. still But so Okay. it's and a additionally, going new

Zach Parker

award, No, yes, starting find not go XXX our through what until such to way the do due process of so nature always that they new some what’s suspend the a it. or we're they XXX they day they usually to as time

Brian Kinstlinger

the said being contract upheld me cancel was the you confused I it when Right, That it. get or of reproposed. whether was wording that

reproposed it's evaluating the the answer no, yet. being so not protest. is And They're

Zach Parker

correct. That's

Brian Kinstlinger

comfortable And for in again, with that Is down question Okay point my right? get do Thanks. opportunities? second pay debt then at evaluating you, you M&A you as cash flow, good. what

Kathryn JohnBull

that We remain stopped well so of certainly We looking. we really capacity have up were if would times we execute is come to we we've responsive group transactions were deal. now. never that we've for levered, active got that below But an which on lending over space, once in opportunities times, that closed, Having a as we just supportive extremely regardless us. three slip below they three said expect even that right to

Brian Kinstlinger

Right.

Okay. much. Thanks so

Zach Parker

Thank you, Brian.

Kathryn JohnBull

joining for Brian. us, Thanks

Operator

no [Operator further would queue. Instructions] remarks. any time, the there the Zach to in conference over back At questions be turn to closing this to I appears for like Parker

Zach Parker

you you for for Thank up yet following your blessed you, interest Have But and and We and Bye attention approach you not to all a Carrie. forecast of now. as and And continued our our to forward with some FY what's we vision again, color come. support to you DLH. for give XXXX. for look day. Thank thank results the around only future again. once year-end our

Operator

presentation. for The you Thank all concluded now attending thank you. has today's conference

now Have day. disconnect a You your may lines. great

DLH (DLHC) 7 Aug 212021 Q3 Earnings call transcript