On July 31, 2024, DLH Holdings Corp (DLHC, Financial) released its 8-K filing for the fiscal third quarter ended June 30, 2024. DLH Holdings Corp is a provider of technology-enabled business process outsourcing and program management solutions in the United States, serving several government agencies, including the Department of Veteran Affairs.
Performance Overview
DLH Holdings Corp reported third-quarter revenue of $100.7 million, a slight decrease from $102.2 million in the same period last year. This decline reflects growth in the Department of Health and Human Services portfolio, offset by small business set-aside contract conversions. Earnings for the quarter were $1.1 million, or $0.08 per diluted share, down from $1.7 million, or $0.12 per diluted share, in the third quarter of fiscal 2023.
Financial Achievements and Challenges
Despite the revenue decline, DLH Holdings Corp managed to reduce its total debt from $170.8 million as of March 31, 2024, to $166.5 million as of June 30, 2024. The company also reported an EBITDA of $10.0 million for the third quarter, compared to $11.4 million in the same period last year.
The third quarter results depict the dynamic nature of our Company, with growth in key markets being offset by some of our contracts transitioning to small businesses, impacting our top line," said Zach Parker, DLH President and Chief Executive Officer.
Income Statement Highlights
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue | $100.7 million | $102.2 million |
| Net Income | $1.1 million | $1.7 million |
| Earnings Per Share (Diluted) | $0.08 | $0.12 |
| EBITDA | $10.0 million | $11.4 million |
Balance Sheet and Cash Flow
DLH Holdings Corp reported total assets of $324.96 million as of June 30, 2024, down from $339.84 million as of September 30, 2023. The company generated $4.6 million in operating cash during the third quarter and had cash of $0.4 million at the end of the period. The debt reduction of $4.3 million during the quarter was attributed to voluntary prepayments applied to floating rate debt.
Analysis and Future Outlook
The company's performance in the third quarter highlights the challenges of transitioning contracts and the impact of federal procurement delays. However, the reduction in debt and strong cash flow are positive indicators. The backlog of $670.5 million, including $141.5 million in funded backlog, suggests potential for future growth.
Despite the complexity and delays of federal procurement, our robust pipeline of qualified new business continues to offer substantial growth opportunities in our core markets for the future," added Parker.
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Explore the complete 8-K earnings release (here) from DLH Holdings Corp for further details.
