DLHC - Earnings call transcript Q4 2021

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Operator

Good morning and welcome to The DLH Holdings Fiscal 2021, Fourth Quarter Earnings Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. the to turn Relations Witty, to Advisor. like conference Chris over Investor I'd go Please ahead.

Chris Witty

good morning, And you. Thank everyone.

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

Zach Parker

call. Welcome quarter you fiscal I we how about morning, and our finished you, XXXX. am me. year to out tell good conference with Thank Chris, to and the fourth everyone. Excuse pleased excited I'm

growth believe out million which both results. and last year's the strength We last Let term. me us markets including focus committed million the are We organically, would whole. the a DLH quarter At development existing on and well XXX.X fourth by proud how in focus reflects XX the $X.X nearly and This $XX.X shape strategy technology solid that in roughly of $XX and margins, leaves such execute quarter. ability balance our impact high with it to remained for provide our cash-generating I of us million and focused work of impose of in the million None QX one challenges, forward. fiscal I'll able the recent extremely pandemic-related all who We with of great indebted. of overview you IBA as million million. $XXX.X quarter and backlog time, moment. pandemic. I a unique of responsible our sharing XXXX our begin ended initiatives, touch award levels, grew EPS reported which million $X.XX our year. clients including Slide am of for for really posted fiscal And controlling results. underscores strengthens of near truly for with which with year. which talented of diverse knew Alaska, X, the fourth Starting Even are health These through valuable of will included performance the the we the revenue all, long from our exceptional and results sales economic of generating acquisition % operating to $X.XX the FEMA same uncertainty. year, and workforce of we business to on over in Yet from $XXX.X political some on during contributions are highlight a Company's $XX.X record closed This We team that, the income constraints, to our Leading for fiscal full has the core our down the debt. diluted XXXX high-level paralysis, times on applications our sheet serving as year excellence, up as operations, a growing fundamentals, costs. and a use pay proven 'XX, for

Turning market like outlook for our our FY 'XX. the to to update X, investors current on Slide I'd positioning and

reduced Congress last such federal lack contractors the budgets and visibility an another for environment, delays and mid-February. government of continuing with based week, general In that ultimately, programs their common is impacting funds to through their across given the Just regard on slowed, it the face approved to is board. Decision over projects priorities, thus resolution making spending clarity budgets.

even going our with high we our and forward. remain demand uncertainly, However, believe that in will this services agencies

of really support the us gives confidence which Health widespread Department and and continued enjoy we provide. which VA, critical Services, course services on bipartisan customers, primary Our health-related emphasis Human include of the Defense,

DLH our data transformations pursue in -security cyber across computing, addition, and markets, In clients. cloud our our win and new allowing capabilities to analytics leveraging digital in advanced are

benefit these with we impact utilizing negative contractors, implementation this of big an vaccine past government people anticipate grown here pandemic-related Not evidenced economic we've applications, many on abroad. for requirements not any doing Even find Company. is the material possible only can there's DLH do that research, a and to center great during data year, to focus disease -- millions of initiatives, otherwise uncertain the Telehealth of infectious of solutions at the environment. and As

for are programs intimate countermeasures the to scientist, the pandemic: and to in researchers, had employees have to expertise since support COVID-XX. of recognized nationally we approximately knowledge Our began, ready engineers, develop regard and pandemic With beyond. XXXX XXX gain and

and only recently brings what to practitioners top country. today, within and team on me XX hired healthcare Ferebee Slide Officer. need human sure X, to Chief of shown capital areas recruiting and set we space. and contracting over but stay He federal in a as XXX continue our In our event, of of as addition, executive we years personnel deploy human we positions of medical our government help response we to challenges will not tomorrow. course, tackle investing to game, over of that rural In has Maliek Human leadership and resources Resources in make logistics particularly the unique COVID-XX, of leadership the competencies strategies Maliek have on To spread emergency the leveraged our foresee we attack in top capabilities contingency in talent. the

translating credentialed, adept which commitment executive, both performance, Here's he is a top-tier is leadership. employee that profitability requires growth and asset improve a business actions Company-wide forward and into workforce, vision one -- our Our engagements, thinking at strong number

of people, capabilities So X, excited ability onboard, organic in of a of to this some which we vote next-generation to shows DLH. of course, thought be trusted technical build start services, at We agencies. unique supplier XXXX. solutions Maliek our across as our strategy, are our confidence believe to well really technology, recent to a our and Slide as our these to fiscal represents have and leaders help of a to us great the wins, contribute will,

providing to stand over how solid into X. year where call results and steady, the turning that increased shown role on XXXX, identifying fiscal the certainly heading leadership in while understand and in let as up we government as We've This Kathryn, me awards DLH agencies role and ways, across certain pandemic, our is well. we new penetrating unique, in opportunities doing and adept helping illustrated summarize leveraging impressive challenging our a many Slide serve. have -- in target and Before racked in the We've to markets. our expansion of been a and new -- respond embraced avenues federal and so, some have has

and Officer, broad credentials, that sitting analyze agencies. we It and issues doing while are of for demand place of wins proposition, lingering to of our addition, finding underlying the the well-positioned array staff, while a We're to even Company get optimize a ahead. I'd business out laying for research, our labor we the phase new Kathryn. others, value come in and beyond. of dedicated millions. days easing integrating profile. a our new execute I is ability Financial our the federal roadmap win services, services for from a data mission profile need, so bolster elevated to next DLH to the boost 'XX across our successful our impacting they to with team chain out in a strategic enduring that, economy, that like over passionate have improve greater We're -- serve improving to from JohnBull. to success customers. call very the on helping including clinical tightening evolving strong delivered believe people our year healthcare technology of able track turn our strong fiscal and the constraints and acquisitions – our supply history solutions In the costs proven have record upbeat to of Chief proving pandemic our new in government the of for about attractive to our track America to a the remain and midst we health is leadership and organically, our serve that lives this closed With select, growth the needs In Having vision, with we technology-enabled a market, for deploy backlog, due closing, I year strong Kathryn confident of FEMA that and the to -- have

Kathryn Johnbull

And you, good Thank Zach. everyone. morning,

We strong finish fiscal report a such to XXXX. to are pleased

we million in the the Turning XXXX, quarter. the $XX.X acquisition months of fourth XXth, and to quarter The reflects versus IBA, September growth for in of along new legacy X roughly awards revenue $XX.X million year's X, tied $X.X business posted of our across increased prior ended impact Slide the million the revenue with to volume in programs.

the depend demand exercised will in XXXX largely for exercises COVID options fiscal impact QX be revenue. a the the has mentioned, date, expect the these After range on as option million appropriate. staffing valued customer X-month a fiscal their at from underway, first our QX. the value approximately ongoing we had To reflected in quarter in awards announced contracts first benefit aggregate believe puts at in in a currently base in-between run of for $XXX million Zach And FEMA over of or current $XX million $XXX previously as Alaska. we to periods. addition, the greatly related the to of which X fiscal XXXX rate XXXX, that, will in In million, Such emergency medical the on whether contract services, customer evaluate Alaska, $XX are our

reflecting revenue. results large income Alaska from improved stronger 'XX approximately income the Turning provision those results $X.XX in million in Note and operations fiscal to fourth materials regarding $X.X reported of programs or XXXX million tax of contribution orders $X million slide program respectively. had a expense $X.X shares fourth expect of versus prior $X.X $X.X and X leverage. $X.X approximately to than from and quarter during a net or fiscal Operating revenue $X.X nature of at X.X% last fiscal with XX, QX, million diluted operating the will % fiscal work, significantly million Interest last in yield from X.X% in in XXXX, quarter flat a cost-reimbursable the We per both which DLH my was of -- subcontracted comments of favorable share versus the contracts. The expense pretax for margins fiscal services. margins we a million XXXX QX the year. to quarters impact mix -- XXXX recorded be years. those year. greater related generally FEMA time line fourth XXXX that expected $X.XX essentially and due that, was million XXXX Reflecting

prior-year period. EBITDA was million the $X.X for million of quarter in Slide to XX, the versus XXXX fiscal fourth Turning $X

decade. to As which $X.X in 'XX our results million statement ultimately to closed. transaction of year. evaluating, presentation. of versus last $X.X million of EBITDA net GAAP our sales, QX visualize the XX, earnings $X.X A million percent Slide this a achievement rose the is back impact in quarter wanted absorbed for not over at was development corporate fiscal provided we of this record our past reconciliation income in of to On and investors the EBITDA a

effective really progression we've up As This growth, infrastructure, leverage you EBITDA as our and of as as prospective EBITDA steady to can reflecting commitment see, achieved the our illustrates chain shown steadily what and our fourth the rates, quarter. improving we maximizing to updated we've our at increasing but through shareholders. value improving expanding and well top-line growth. of scales corporate far, Slide the position accomplished proud We're returns performance so beginning it's just this an our Company's our potential. of debt the XX, the of is snapshot think for end our

As of million the pay of our approximately XX, us of Including advance facilities year, we generated of at the FEMA first the awarded end had million to credit during billion We September cash flow debt $XX.X million related operating fiscal payment of $XX.X approximately $XX $XX.X to under down in outstanding $XX.X approximately debt. versus XXXX. September. contract million allowing

the continue strengthen payments to Balance Operator concludes that, questions. now my financial like the for even mandatory turn would to debt the to all through principal to discussion more our I This but feasible, forward. statements. of With satisfied going on Sheet when XXst, loan facility over to have reduce call open we'll December We the XXXX,

Operator

We pause will assemble momentarily now question-and-answer to begin we Instructions] [Operator roster. the At our will this session. time,

Zach Parker

Thank you, Anthony.

Operator

with Capital. Our NOBLE comes Joe from first question Gomes

ahead. go may You

Joe Gomes

everyone, and congrats end quarter year results. Thanks. Good the morning on

Kathryn Johnbull

joining morning you. us. Thanks Joe. Good for Thank

Joe Gomes

want getting to Alaska. also. the with in start first there on I exercise congratulations female ward So Again, the

additional on there us give that's that and other could out maybe may little you bid on, you state think on? be how or are Just bidding what detail a opportunities there you progressing

Zach Parker

your continue you the continued Thank much, that Joe. business. Yes. very appreciate from and support Appreciate --

of both Alaska has was and -- awarded charter FEMA awarded nation. Awards the Alaska competitively both across competitively FEMA our from a So a

were across Agreement, you may awards expand, common were these the these the covered in so -- after we're BPA, across to we shortly pandemic other for As successfully community working a do the the commitment like same area. Government much where of largely year, is earlier the That recall such disaster were how of exists a that's Ordering which type against the this. states government's capability awards going Northwest and measures and that -- leverage they response Pacific a issued the support potential that to federal see may -- two began, Basic this anticipate the awarded to Gulf to forefront looking won. competed them expand in that nation. And with we broadly think COVID-XX, And

on tuned stay we'll So that.

Joe Gomes

IDIQs on it. touched last give and that. on about there again, cloud Maybe health a the know here. Great. a to the you those continuing right. stand little be would is And Thank color. you major little of they've lot now you color impact I were expected pushed on could the IT I for to appreciated? on Maybe that incentive the further do continuing talked more resolution, briefly Where a we -- think be rolling been by resolution forward more quarter you

Zach Parker

or continue Defense that to way. what these the require house that But we that money, trade-offs We're have solid. so What the feel us a exception of look comfortable are funds DOD. of continuing have contracts. new uncertainty. probably great today from near-term which probably exemptions, the are Department some to under-spending, is, stay some we move our COVID more on are current as money under-running, we work, out you pulsed we're think threats the have to of portions weeks agencies CR are last necessarily impact particular, largely X year it as of in obligated. it associated or the going to -- -- with we and of the two challenges But civilian over through to they indications extensions don't a That's can right pressure the in a not in since pretty still the the the number the budget agencies, to pipeline then, all in come know, in see still to the kicked mid-February, exemptions, because still and things emerge been DOD for civilian that It continuing really pipeline the of we as as with know things our in before, for the with case to the programs with The hand into agencies environment, the are concessions very and strong. that the programs, opposed of moved work as seeing Senate. has that type which at deal you pandemic as resolution new hearing the biggest get real indicated are the Congress, are the and As to kind the new is of continuing continuing creates what did

we'll CR to is our to monitor in new effect But that. continue will -- pipeline. the There that some be to our business still baked the So potentially of we has regard to work. organic neutral neutral think risk with

Joe Gomes

Zach Thanks -- and Okay. maybe for a look here. back X that, year

You made the and IBA acquisitions. the SX

they're how now mentioned fully integrated. You

pre they -acquisition these today? ability past of in plans? the on opportunities. versus are come about how Just one your You you bid mentioned more Are fruition performing to positives of was seeing acquisitions to that the the

Kathryn Johnbull

solutions, have have. we the definitely acquisitions of defence in life health sector. markets strategy and services: our human in were presence VA, of those overall those and Most health human full and to key X market part the sciences services Both public and

healthcare utilizing and pandemic COVID saw course, particularly disease and knew primary pervasive time, or a completion X issues to public an be. there's out that of in of have so we would Phase guessed acquisition government of fulfilled a timely turn for long-term, at we of us long-term, And the could None acquisition how though. coming of just and who But role relevant program. the with that that issues, course, Company health

from really agencies on as of of leveraging inside in market of beachhead see competitive in lot that growth their and a of really having acquisitions pleased getting capabilities so lens just as and So with position Likewise, I in emphasis We've quite with discussed a and we've a get fulfill move our key footprint rounded will we're augment More and that markets. has we've away their DHA now markets, to what IDA that of the and prior skills on have to way for certainly for market continued in in in a in proud calls, or see key capabilities that extremely those couple particularly our think going SXQR position value market, expected that focused, our trying out -- our we a that. every has DHA. We those being a portfolio. [Indiscernible], those team each markets. terms obviously team to a addition expansion our we now each and of in foothold to upped it

capabilities and And add So clients. active continue we're to M&A it's We're some as you leverage market. getting looking to with key know, those very visibility. a

successfully we additional So to ups the plus execute able fiscal be portfolio expect in 'XX. some to to

Joe Gomes

And in in. one sneak and but Earlier doing is -- job Kathryn, in it you call paying had clients, managing it may -- through that year, the that great one some, everything. if slower Great. a you've I more, were let's you --

to you on side? are would continuing where the creep cash running see any that of still the into the like system them you things again, starting receivable or the With are resolution,

Kathryn Johnbull

on ours. our looking cash-flow where we expect the also, early business September day their fiscal quite And do challenges early as to because September the integrating joke of to anywhere course, course, not return month well navigating softest but got last as QX -- get press government are don't last -- And XX. year. QX to certainly end But our at we favorable. traditionally had bit there's returns the I near very the fiscal prior everything QX we acquisition an the their year then only generating on often big XX, to were that are the far, of of as closed returns normal a after CR, of year So is for in processed in a favorable.

That's favorable But lot of current repeating in a QX colliding -- much QX, much just we normal year pay expectation of I of I In would terms icing success. that I requirements, at that terms QX debt. Cash-flow be consider as achievement in top. worked team the the extremely observation the course, year. in the quite cash definitely nice that last more be around for hold tough that just I and had flow on my meantime, to XX, a year manage to you down we the right, to And, to of is look that factors hard DSOs for But traditional forward some more highly a So to honestly, Thanks think going position cake. if given be expect and this said. would successful that. fiscal our don't though. QX with collection. turn exited we our to

Joe Gomes

Congratulates to and year, excellent quarter looking again you. the forward XXXX. on Thank

Kathryn Johnbull

Thank you, Joe.

Zach Parker

Thank Joe. you,

Operator

Global Partners. [Operator next Brian with Alliance question Our from Instructions] Kinstlinger, comes

You may go ahead.

Brian Kinstlinger

guys. And Hi, results. taking my for great Thanks questions.

Kathryn Johnbull

us, Thanks Brian. joining for

Brian Kinstlinger

Yeah, of course.

and the a options, X plan be for follow-on of heavy. see it its understanding these right. short-term then compete the given last, hopefully, down? would programs subcontractor do course, with line what you work, potential for? After Which, for the easier Do short-term On you I'm

trying year. for the Just to this understand out how plays

Operator

has main you. Thank appears speaker will me. Pardon I It possible. that line as in as join the soon them disconnected.

Brian Kinstlinger

Hello?

Operator

The line please. been reconnected. main has question, your speaker could you restate Brian,

Brian Kinstlinger

just said, Great, kidding. I Maybe was it something

Kathryn Johnbull

Right.

Brian Kinstlinger

wind-down, understanding there's do Alaska than to easier executed was be would of following awards, plan typical. you options, trying you with or happens contracts. which expect not, the short-term just I What think subcontractors are the for something compete is assuming after, get a course, are for an to after or they and on there

Zach Parker

some -- demobilization. also as contracts going ramp them mobilize range a extend Those it. ramp that options and and a set They're they then, it Yes. a be Brian. exercised for turnkey means -- question, great they to which have us, We No, up can are to down. in have currently projects call

those, do a be depending certain of to will on and But successful, start hold situation we we of front will there each -- -- so the for it. get of A, that And expect that ground. will in upon Alaska

obviously, could change variance Now, that.

And regard to cover there contract has opportunities? that is the know states to as we With expand we're -- that. At GSA We the be so. as U.S. are to to yet. working coverage additional question, FEMA, continue going provide but with indicated Joe's FEMA so And is Jackie, know, we That to I other not elsewhere. to looking monitor could hope what present, throughout to of occurred feverishly And they our Officer, FEMA. working Chief and Growth scope

all get will on QX expect to as But do we'll that. we nation, now posted into hope QX. you hope that's a if to whether successful regard and keep we more weeks So of know through Alaska, to our we're slow right and or to to we But as the But that coming now, as not going occur. backlog -- that within as down. about with

Brian Kinstlinger

is you a loaded? follow-up. quantify up that of then come will loaded and what And percentage or renewal in Great. XX whether Can for back-end your front-end fiscal revenue

Zach Parker

Alaska. Yes. Well, excluding of course,

contracts. continuing We've received for VAC been that's bit well Mops. on Our we continue And C over have a for Mop the re-competes of the recent recently be just discussed largest we of of full-year years. to course, year still the X an extension documented, quite that operations, X our that

for their that, material going re-competitions. the no Besides re-evaluate FY the renewal we on to -- have we position government in continue expect contracts that that will 'XX. we're so are And again up

Brian Kinstlinger

months, work. you've 'XX for it obviously, the last bid it Over been you Can be and how talked about Great. what the And year less impact has that you or submissions we CR bidding see for you and on talk talk on this work trending pipeline environment mentioned. or means ago, up and how civilian more submission fiscal down business? plan appears then flat? your than about proposal about for new the X to agencies less then And the

Zach Parker

Yes.

are very be year. million do as for what contract those forward as make ended looking have we Samsung. we're have the the awarded, the same the we added We're We HHS as proposals of activity will fiscal within those year. with civilian seeing able that a have contracts we'll contracts next crystal We our Disease than within well. $XX they think health some also just for to ball behavioral next still as Of released. get course, out We able solicitations were several to and side moving X understanding. recurring continue what modest we get Center less that such found we X a request And closely size, IDIQ of the And Control months. still not we the solicitations they're will for organizations on that to continue some the through, that new we to to of the expect over not for award do do agencies going at multiple scope -- some that agencies do as them, they to still work you issue with good to have our issue relatively that but was saw,

first multi-award that for IDIQ of contract we heavy over So contracts we this the 'XX. had bids all, expect -- have, bid FY into actual hopeful a last activity this, will very within that translate year. that roughly funded We're

as that we provide of year. an certainly on at CR early color next update coming greater have out part and look we'll we'll the So on that of

Kathryn Johnbull

pursuits thing Brian, our delayed CR that, there's operating be target no that be a as that, it's welcome course a there will never to And a in that I some question add just of And environment. of to result. would will be

Officer, or against our the the or is that we've the expanded given the growth of -- across with business the the and think market impact Chief addition offsetting leverage slowdown we cadence Growth capabilities that been way Officer that our we've and the Chief to the However, address shared, strategic comment, really of CR. as tempo integrated. And Growth our and from mitigating efforts ability the We our acquisitions the of of to up. development definitely

Brian Kinstlinger

realized you key the and challenges but The you talk last call retain given win higher ability here, about attract in question have, documented this personnel to mentioned the I these and or are programs, well you I Thanks. shortage? your labor

Zach Parker

affect the so critical best able who's been Ferebee to the Yeah. great I the was challenges, is of of resignation commitments government have that for best. in not and attract the nation, to government causing added vaccine on volatility we're Maliek truly We're such the for with faced, documented, dealing with important high well an Alion to it's very that DE&I, things search level That's is more a there. number agencies. particularly regard we having mandates, federal us It's asset the really why retain to find And across in best you it talent. that executive just leaned about agency, couldn't things most agree some our only of was nationwide caliber of someone get board a with why the ESG, is acute assignment as, Science. and Company. to of to And attract, with our whole ability to as and treat the asset excited with Federal to were recent us

in it's the find Right. inability your well think executive we notice the you due a know, unvaccinated. you vaccination, had we as unvaccinated to challenges XXX the address So from not September, probably if out you came when that individuals right. to that order, And

address that to the while So a degree how a wrestle workforce hesitant trying that we've also of response have to varying navigate had to how to through folks, companies ourselves regulations going on there. we're with associated had with

of and work having variety in at and feel with industry, that today, having at here we groundwork But on not -- seen we're starting by in workforce a the for our for of well candidates the associated -- this really, management business. bit Maliek really have some Headquarters magnitude laid a the with how executive we're having had just team aspect decades. best vision talent we we is talent have underway. to we're slate out our there's quite Maliek. Kathryn And lay time Atlanta. in the then the spend and to of going curbed things So of that become our spent good And leadership

Brian Kinstlinger

questions, Thanks my taking for Great. guys.

Zach Parker

You bet. Thank you.

Kathryn Johnbull

Brian. care, Take

Operator

callers this to there [Operator further queue. in be time, the At no appear instructions]

I'll closing it Mr. for back Parker So turn any remarks. over to

Zach Parker

more And for to on each you importantly, you Anthony. call. you, Thank of today's thank participating

indicated, entry I 'XX. into we're quarter of really results real excited with the a pleased FY Particularly strong fourth our As about how of leverages that FY 'XX.

blessed a will upcoming the its greater now. the evolve the stay shareholders, We develop Our of also clarity. And CR to for Bye the from Have look activities Please as of forward posture hope as have a results. clarity transition we QX and you-all. well. tuned day. include, and greater to annual the thank meeting to end course, around by

Operator

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

now You may disconnect.

DLH (DLHC) 7 Dec 212021 Q4 Earnings call transcript