Q4 2023 DLH Holdings Corp Earnings Call
[music].
Speaker 1: Thanks, Chris, and good morning, everyone.
Every hour.
Speaker 2: Good morning and welcome to the DLH Holdings Corp Fiscal 2023 4th Quarter Earnings Conference.
Good morning, and welcome to the DLH Holdings Corp, fiscal 2023 fourth quarter earnings Conference call.
Speaker 2: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0.
All participants will be in listen only mode.
Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
Speaker 2: After today's presentation, there will be an opportunity to ask questions.
After todays presentation, there will be an opportunity to ask questions.
Speaker 2: To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2.
To ask a question you May press Star then one on your telephone keypad.
To withdraw your question. Please press Star then two.
Please note this event is being recorded.
Speaker 2: I would now like to turn the conference over to Chris Whitty, Investor Relations Advisor. Please go ahead.
I would now like to turn the conference over to Chris Witty Investor Relations adviser. Please go ahead.
Speaker 3: Thank you, and good morning, everyone. On the call with me today is Zach Parker, President and Chief Executive Officer, and Katherine Johnbolt, Chief Financial Officer.
Thank you and good morning, everyone on the call with me today is that Parker, President and Chief Executive Officer, and Catherine Jon Bell Chief Financial Officer, The company's earnings release and presentation are available on our website under the Investor page I would now like to provide a brief safe Harbor statement, which is also shown on slide three of the presentation.
Speaker 3: The company's earnings release and presentation are available on our website under the investor.
Speaker 3: I would now like to provide a brief safe harbor statement, which is also shown on slide 3 of the presentation.
Speaker 3: This column includes four looking statements that relate to the company's outlook for fiscal 2024 and beyond.
This call May include forward looking statements that relate to the company's outlook for fiscal 2024 and beyond.
Speaker 3: These four looking statements are subject to various risks and uncertainties that could cause actual results and events to differ materially from the same.
These forward looking statements are subject to various risks and uncertainties that could cause actual results and events to differ materially from these statements.
Speaker 3: Please refer to the risk factors contained in the company's annual report on Form 10K and in our other filings with the SEC. We do not undertake any duty to update the company's annual report on Form 10K.
Please refer to the risk factors contained in the company's annual report on Form 10-K, and there are other filings with the SEC.
We do not undertake any duty to update any forward looking statements.
Speaker 3: On today's call, we will be referencing both GAAP and non-GAAP financial measures.
On today's call, we will be referencing both GAAP and non-GAAP financial measures.
Speaker 3: A reconciliation of our non-GAAP results to our reported GAAP results is included in our earnings release and in the investor presentation on DLH's website.
A reconciliation of our non-GAAP results to our reported GAAP results is included in our earnings release and in the Investor presentation on D. L wages website.
Speaker 3: President and CEO Zach Parker will speak next, followed by CFO Katherine Johnbolt, after which we'll open it up for questions. With that, I'd now like to turn the call over to Zach. Please go ahead, Zach.
President and CEO Zach Parker will speak next followed by CFO, Kathryn Johnboat after which we'll open it up for questions.
I'd now like to turn the call over to Zach. Please go ahead.
Okay.
Thank you, Chris and good morning, everyone.
Speaker 1: Welcome to our 2023 fourth quarter conference call.
Welcome to our 2023 fourth quarter conference call I am very pleased with the way that we have finished the year and with our strong position heading into fiscal 2024.
Speaker 1: I am very pleased with the way that we have finished the year and with our strong position heading into fiscal 2024.
Speaker 1: But first, let me take a minute to, once again, thank our dedicated employees for the passion, the commitment.
But first let me take a minute to once again, thank our dedicated employees for the passion and commitment.
Speaker 1: and the performance excellence that they have delivered in support of all of our customers' missions and to our corporation.
And the performance excellence that they have delivered in support of all of our customers' mission and to our corporation.
Speaker 1: This has been a transformative year for our company. And without the steadfast contribution of our team members at every level, DLH would not be the leading technology solutions and services provider that it is today.
This has been a transformative year for our company.
And without the steadfast contribution of our team members at every level.
DLH would not be the leading technology solutions and services provider that it is today.
Speaker 1: in all three channels, our digital transformation and cybersecurity.
And all three channels and our digital transformation and cyber security.
Speaker 1: science and research and development and our systems engineering integration.
Our science and research and development and.
And our systems engineering and integration.
Speaker 1: All of our members have really shined. So thank you.
All of our members have really shined. So thank you.
Now turning to slide four.
Speaker 1: I'll first provide a high-level overview of the financial highlights for the quarter and the fiscal 2023.
First provide a high level overview of the financial highlights for the quarter and the fiscal 2023.
Speaker 1: Fourth quarter revenue was $101.5 million, reflecting the impact of our acquisition, as well as organic growth across our existing business.
Fourth quarter revenue was one of the $1 5 million, reflecting the impact of our acquisition as well as organic growth across our existing business.
Speaker 1: For the full year, revenue rose nearly $376 million from an adjusted $269 million in fiscal 2022, which, of course, excludes the short-term turnkey contract with FEMA to support Alaska's response to COVID-19.
For the full year revenue rose nearly $376 million from an adjusted 269 million in fiscal 2020 to.
Which of course excludes the short term turnkey contract with FEMA to support Alaska's response to COVID-19.
Speaker 1: Given our sizable backlog, increased addressable market, and access to bid on various task orders through our several large contracts, we believe that the future continues to look bright for DLH.
Given our sizable backlog increased addressable market.
And access to bid on various task orders through our several large contracts. We believe that the future continues to look bright for DLH.
Speaker 1: Adjusted operating income was $7.8 million for the quarter and $26.5 million for the fiscal 2023, while adjusted EBITDA rose to $12.1 million for Q4 and $42.1 million for the year.
Adjusted operating income was $7 8 million for the quarter and $26 5 million for the fiscal 2023.
While adjusted EBITDA rose to $12 1 million for Q4.
And $42 1 million for the year.
Speaker 1: In addition, we generated $31 million in cash from operations over the past 12 months and exited a quarter with an approximate $179.4 million in debt.
In addition, we generated $31 million in cash from operations over the past 12 months and exited the quarter with an approximate $179 4 million in debt.
Speaker 1: That is down $207.6 million after our December 22 acquisition.
Is down.
207.6 million after our December 22 acquisition.
Speaker 1: As Catherine will discuss further in a moment, we plan to continue using our company's strong cash flow generation to reduce debt in the coming year as we work towards further de-levering our balance sheet.
As Kathryn will discuss further in a moment.
We plan to continue using our companys strong cash flow generation to reduce debt in the coming year.
As we work towards further delevering our balance sheet.
Speaker 1: Our adjusted EPS was $0.16 per diluted share for the quarter and $0.55 for the full year. And our backlog, as of September 30, 2023, was just under $705 million.
Our adjusted EPS was <unk> 16 cents per diluted share for the quarter.
<unk> 55 for the full year and our backlog as of September 30th 2023 was just under $705 million.
Speaker 1: We continue to operate in an active bid environment, even as the government still works its way through the current continuing resolution circumstance.
We continue to operate in an active bid environment, even if the government still works through its way works its way through the current continuing resolution circumstance.
Speaker 1: We remain very upbeat about the opportunities ahead and the path to accelerate top line growth forward organically.
We remain very upbeat about the opportunities ahead, and the path to accelerated top line growth forward organically.
Speaker 1: On that point, slide 5 provides an update on certain key market conditions and metrics that have the potential to impact the company in the quarters to come.
On that point slide five provides an update on certain key market conditions and metrics that have the potential for it to impact the company in the quarters to come.
First the company has worked diligently to align our business structure with our expanded capabilities and technology based go to market strategy.
Speaker 1: First, the company has worked diligently to align our business structure with our expanded capabilities and technology-based go-to-market strategy.
Speaker 1: Our highly credentialed staff are dedicated to providing the most advanced solutions that address the needs of each of our clients, positioning us to compete for more higher value opportunities going forward.
Our highly credentialed staff are dedicated to providing the most advanced solutions that address the needs of each of our class positioning and positioning us to compete for more higher value opportunities going forward.
Speaker 1: As customers continue to utilizing the professional services contractors, we can leverage our expertise, our experience, and applications to further penetrate agencies and to add to our book of business and accelerated growth.
As customers continue to utilizing the professional services contractors, we can leverage our expertise our experience and applications to further penetrate agencies and to add to our book of business and accelerated growth.
Second the federal government remains committed to expanding the role of cyber security given the crucial ongoing need to protect sensitive information and big data networks as well as the personal records of millions of Americans.
Speaker 1: Second, the federal government remains committed to expanding the role of cybersecurity, given the crucial ongoing need to protect sensitive information and big data networks, as well as the personal records of millions of Americans.
Speaker 1: The use of cloud-based computing only increases cybersecurity's criticality and importance to protecting sensitive government systems and data. This aligns well with.
The use of cloud based computing only increases cyber securities criticality and important to protecting sensitive government systems and data.
This aligns well with our intellectual property, our secure data platforms and technology driven solutions.
Speaker 1: secure data platforms, and technology-driven solutions.
Speaker 1: Third, as I mentioned a moment ago, the federal government continues to operate under a continuing resolution with certain agencies funded through January 19th and others through February 2nd.
Third as I mentioned, a moment ago. The federal government continues to operate under a continuing resolution with certain agencies funded through January 19th and others through February 2nd.
Speaker 1: While this does, at times, restrict and hamper certain decision making across some of the federal agencies, particularly with regard to awarding of new contracts, it is not expected to materially impact DLH's current book of business, New Orleans.
While this does at times restrict and have for a certain decision making across some of the federal agencies, particularly with regard to awarding of new contracts. It is not expected to materially impact DLH is current book of business.
Nor the near term outlook.
Speaker 1: Our wide array of programs and services provide a solid bedrock for the company's top line over the coming months.
Our wide array of programs and services provides a solid bedrock for the company's top line over the coming months.
Speaker 1: In addition, the core agencies which we support, those include, of course, the Department of Defense, including its DHA, Defense Health Agency.
In addition, the core agencies, which we support those include of course, the department of defense, including DHA Defense Health Agency.
Speaker 1: Veteran Affairs, and the Health and Human Services organizations, they typically receive broad bipartisan support, which we anticipate.
Veteran affairs and <unk>.
Health and human services organizations.
Typically receive broad bipartisan support which.
Which we anticipate will continue.
Okay.
Speaker 1: The White House, in its fiscal 2024 preliminary budget, called for historic investments in research, artificial intelligence, machine language, and digital transformation.
The White house and its fiscal 2024 preliminary budget cultural historic investments in research artificial intelligence machine language and digital transformation.
Speaker 1: which would all play very well to our growing and somewhat unique capabilities, and increase the opportunity.
Which would all play very well to our <unk>.
Growing in.
Somewhat unique capabilities and increase the opportunity for <unk>.
Speaker 1: further top line expansion along strong underlying performance.
Their top line expansion along strong underlying.
Performance.
Speaker 1: And lastly, our expanded capabilities and expertise provide the opportunity for us to bid on task orders from several new.
And lastly.
Our expanded capabilities and expertise provide the opportunity for us to bid on task orders from several new.
Speaker 1: large IDIQ contracts, and those that remain on the horizon.
Large <unk> contracts and remain and those that remain on the horizon.
Speaker 1: There is every indication that the government will continue to award a growing volume of work through these pre-screened arrangements.
There is every indication that the government will continue to award a growing volume of work through these prescreened arrangements.
Speaker 1: Strategic contracts that are under consideration, applicable to us, include our CBITS contract, relatively recently announced.
Strategic contracts that are under consideration.
Applicable to US include our <unk> contract.
Relatively recently announced.
Speaker 1: The major CIO SP4, supporting biomedical research coming out of the National Institute of Health.
The major CIO SB four <unk>.
Supporting biomedical research coming out of National Institute of Health.
Speaker 1: Oasis, and several other very large ceiling multi-year contract vehicles.
Oasis and several other highly five very large ceiling multiyear contract vehicles.
Speaker 1: These multiple award IDIQ contracts offer numerous opportunities for high value work over the coming years that can substantially raise the revenue base of the company and task orders as they are awarded.
These multiple award <unk> contract.
Offer numerous opportunities for high value work over the coming years that can substantially raised the revenue base of the company and task orders as they are awarded.
Speaker 1: We're confident in our ability to win task orders on these vehicles, which we expect to impact the company's growth trajectory for years to come.
We're confident in our ability to win task orders on these vehicles, which we expect to impact the company's growth trajectory for years to come.
Speaker 1: Given our advanced solutions, highly engaged customer relationships, and the unparalleled expertise of our amazing staff, we're very optimistic for FY24 and beyond.
Given our advanced solutions highly engaged customer relationships and the unparalleled expertise of our amazing staff, we're very optimistic for FY 'twenty four and beyond.
Speaker 1: With that, I'd now like to turn the call over to our Chief Financial Officer, Catherine Johnville. Catherine.
With that I'd now like to turn the call over to our Chief Financial Officer, Kathryn Jamba Kathryn.
Speaker 4: Thank you, Zach, and good morning, everyone. We're pleased to report our fiscal final results for fiscal 2023, and we believe these results demonstrate how our broad capabilities, employee expertise, and delivery execution produce consistently strong financial performance.
Thank you Zach and good morning, everyone. We're pleased to report our fifth our fiscal final results for fiscal 2023, and we believe these results demonstrate how our broad capabilities employee expertise.
And delivery execution produced consistently strong financial performance.
Yeah.
Speaker 4: Starting with slide 7, we provide a high-level overview of our results for Q4 of FY23 compared to the same quarter of FY22 on both a gap and adjusted basis.
Starting with starting with slide seven we provide a high level overview of our results for Q4, FY2023 compared to the same quarter of FY 'twenty two on both a GAAP and adjusted basis for fiscal 'twenty three adjusted EBITDA.
Speaker 4: The fiscal 23 adjusted EBITDA and adjusted operating income figures exclude the previously announced $7.7 million impairment charge related to real estate assets as we consolidated underutilized premises as part of an ongoing facility rationalization effort.
Adjusted operating income figures exclude the previously announced $7 $7 million impairment charge related to real estate assets as we consolidated underutilized premises as part of an ongoing facility rationalization effort.
Speaker 4: Walking from operating to net income, interest expense was $4.8 million in the fiscal fourth quarter of 2023, reflecting higher debt outstanding due to the acquisition and increased interest rates.
Walking from operating to net income interest expense was $4 $8 million in the fiscal fourth quarter of 'twenty, three reflecting higher debt outstanding due to the acquisition and increased interest rates.
Speaker 4: DLH recorded a tax benefit of $2 million during the fourth quarter of Fiscal 23 versus an expense of $0.8 million last year. As a result, we reported a net loss in the fourth quarter of approximately $2.6 million or $0.18 per diluted share.
DLH recorded a tax benefit of $2 million during the fourth quarter of fiscal 'twenty three versus an expense of <unk> 8 million last year. As a result, we reported a net loss in the fourth quarter of approximately $2 6 million or <unk> 18 per diluted share.
Speaker 4: By comparison, the prior year fourth quarter adjusted results exclude $0.4 million of corporate development costs related to the December 22 acquisition from operating income. Interest expense was $0.5 million in the period, and we reported net income of $3.4 million or 24 cents a share.
By comparison in the prior year fourth quarter adjusted results exclude $4 million of corporate development costs related to the December 'twenty two acquisition.
From operating income interest expense was $2 5 million in the period and we reported net income of $3 4 million or <unk> 24 cents a share.
Speaker 4: A full reconciliation of this information is also included in the back of the presentation as well as in our press release and associated filings. Slide 8 shows these details in graphic form.
For a full reconciliation of this information is also included in the back of the presentation as well as in our press release and associated filings.
Slide eight shows these details in graphic form.
Speaker 4: Adjusted revenue rose 51% to roughly $102 million this quarter, from $67 million last year, reflecting both organic and acquisition-related growth.
Adjusted revenue rose, 51% to roughly $102 million this quarter from $67 million last year, reflecting both organic and acquisition related growth.
Speaker 4: Adjusted EBITDA for the three months ended September 30, 2023, was approximately $12.1 million versus $7 million in the prior year period, an increase of 73 percent.
Adjusted EBITDA for the three months ended September 32003 was approximately $12 1 million versus $7 million in the prior year period.
An increase of 73%.
Speaker 4: As a percentage of sales, adjusted EBITDA margin was 11.9% versus 10.4 in the prior year period, reflecting higher value capabilities across a larger base of business. While our fiscal 23 fourth quarter results are particularly strong due to the timing of certain expenses, we expect our EBITDA margin to remain at approximately 11% prospectively.
As a percentage of sales adjusted EBITDA margin was 11, 9% versus $10 four in the prior year period.
Collecting higher value higher value capabilities across a larger base of business well.
While our fiscal 'twenty three fourth quarter results are particularly strong due to the timing of certain expenses, we expect our EBITDA margin to remain approximately at approximately 11% prospectively.
Speaker 4: After reducing adjusted EBITDA by depreciation and amortization expense of $4.3 and $1.9 million for the respective quarters, adjusted income from operations was $7.8 million for the quarter.
After reducing adjusted EBITDA by depreciation and amortization expense of $4, three and $1 9 million for the respective quarters. Adjusted income from operations was $7 8 million for the quarter.
Speaker 4: 23 versus 5.1 million in the prior year period, an increase of approximately 53 percent.
23, eight versus $5 1 million in the prior year period, an increase of approximately 53%.
Speaker 4: As a percent of revenue, the company reported adjusted operating margin of 7.7% in Fiscal 23 versus 7.5% in Fiscal 22, with a richer mix of business offsetting the impact from higher non-cash depreciation and amortization expense.
As a percent of revenue the company reported adjusted operating margin of seven 7% in fiscal 'twenty three versus seven 5% in fiscal 'twenty, two with a richer mix of business offsetting the impact from higher noncash depreciation and amortization expense the.
Speaker 4: The company generated $31 million in operating cash for the full fiscal year versus $14.3 million on an adjusted basis in fiscal 22. As Zach mentioned, we anticipate continued strong cash flow generation going forward, allowing us to further deliver the company in the quarters to come.
The company generated $31 million in operating cash for the full fiscal year versus $14 3 million on an adjusted basis in fiscal 'twenty two.
Zach mentioned, we anticipate continued strong cash flow generation going forward, allowing us to further delever the company in the quarters to come.
Speaker 4: Turning to slide 9, we give an overview of key metrics on a year-over-year basis.
Turning to slide nine we give an overview of key metrics on a year over year basis, highlighting the significant improvement in adjusted EBITDA, while interest expense rose considerably due to the higher debt balance and elevated interest rates. Our delevering strategy is clearly focused on eliminating debt utilizing.
Speaker 4: highlighting the significant improvement in adjusted EBITDA.
Speaker 4: While interest expense rose considerably due to the higher debt balance and elevated interest rates, our delevering strategy is clearly focused on eliminating debt, utilizing both mandatory and voluntary repayments as rapidly as possible, thus reducing our interest expense exposure.
Both mandatory and voluntary repayments as rapidly as possible, thus, reducing our interest expense exposure note that approximately $6 million of quarterly interest expense is noncash ameren as amortization of financing arrangement fees.
Speaker 4: Note that approximately $0.6 million of quarterly interest expense is non-cash amortization of financing arrangement fees.
Speaker 4: I'd like to emphasize that our adjusted operating income performance improved substantially, reflecting favorable contract margins on our current mix of programs and the impact of increased operating leverage, although these results were offset by non-cash depreciation and amortization expense. The bottom line is that our acquisitions significantly opened new doors for the company, elevated our presence in key agencies, and strengthened our margin profile over the long term.
I'd like to emphasize that our adjusted operating income performance improved substantially reflecting favorable contract margins on our current mix of programs and the impact of increased operating leverage, albeit although these results were offset by noncash depreciation and amortization expense. The bottom line is that our.
Acquisition significantly opened new doors for the company.
<unk>, our presence in key agencies and strengthen our margin profile over the long term.
Speaker 4: Slide 10 illustrates the successful deployment of our sizable cash flow generation to pay down debt and strengthen the company's balance sheet over the past four quarters, along with an initial estimate for the year.
Slide 10 illustrates the successful deployment of our sizable cash flow generation to pay down debt and strengthen the companys balance sheet over the past four quarters, along with an initial estimate for the year ahead, we paid off approximately $16 4 million of debt in Q4, ending the fiscal year with Seth.
Speaker 4: We've paid off approximately $16.4 million of debt in Q4, ending the fiscal year with $179.4 million outstanding. This means in total we've eliminated $28.2 million of debt since December 22. Doing so by satisfying our mandatory payments of $14.3 million and making voluntary prepayments of $13.9 million.
$179 4 million outstanding. This means in total we've eliminated sleep eliminated $28 $2 million of debt since December 20 to doing so by satisfying our mandatory payments of $14 3 million and making voluntary prepayments of $13 9 million.
Speaker 4: Approximately 60% of our debt carries a fixed interest rate, so all payments we make are against higher interest floating rate debt.
Approximately 60% of our debt carries a fixed interest rate. So all payments, we make are against higher interest floating floating rate debt.
Speaker 4: Notably, the company's interest rate swaps maintained a relative 50-50 split between fixed and floating debt between fiscal 23, limiting our interest rate risk. As a result of our effective implementation of swap arrangements, our effective interest rate since the December 22 acquisition was approximately 8.7%.
Notably the Companys interest expense and interest rate swaps maintained a relative 50 50 split between fixed and floating debt between fiscal 'twenty three limiting our interest rate risk as a result of our effective implementation of swap arrangements our effective interest rate since the December 'twenty two acquisition was approximate.
Eight 7%.
Speaker 4: We continue to actively manage our working capital and cash flow requirements while simultaneously investing in the business and utilizing the favorable tax attributes of our acquisitions and our stock compensation plans to minimize cash tax payments.
We continue to actively manage our working capital and cash flow requirements, while simultaneously investing in the business and utilizing the favorable tax attributes of our acquisitions and our stock compensation plans to minimize cash tax payments.
Speaker 4: Our strategy to effectively manage cash flow to pay down debt is designed to reduce future interest expense obligations. Looking forward, we anticipate that our delevering strategy will leave us somewhere between $157 or as low as $153 million of debt by the end of fiscal 24.
Our strategy to effectively manage cash flow to pay down debt is designed.
<unk> future interest expense obligations looking forward, we anticipate that our de levering strategy will leave us.
Somewhere between 157 or as low as $153 million of debt by the end of fiscal 'twenty four.
Speaker 4: Turning to slide 11, we're poised for a new stage in our growth trajectory and development as a company. Our focus remains on expanding top-line volume through high-quality franchise programs while continuing our delivery of strong margins. The transformation of DLH into a world-class technology provider illustrates the successful execution of our acquisitive and organic growth strategies and our commitment to generating long-term value for our shareholders.
Turning to slide 11, we're poised for a new stage in our growth trajectory in development as a company our focus remains on expanding top line volume through high quality franchise programs, while continuing our delivery of strong margins the transformation of DLH.
H into a world class technology provider illustrates the successful execution of our acquisitive and organic growth strategies, and our commitment to generating long term value for our shareholders.
Speaker 4: We stand ready to take DLH to the next level, delivering unique, innovative solutions across the federal health and cyber defense market.
We stand ready to take DLH to the next level delivering unique innovative solutions across the federal health and cyber defense markets.
Speaker 4: This concludes my discussion of the financial statements, and with that, I would now like to turn the call over to our operator for questions.
This concludes my discussion of the financial statements and with that I would now like to turn the call over to our operator for questions.
Yeah.
We will now begin the question and answer session.
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To ask a question you May press Star then one on your telephone keypad.
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At this time, we will pause momentarily to assemble the roster.
Yeah.
Speaker 2: And our first question will come from Joe Gomes of Noble Capital Markets. Please go ahead.
And our first question will come from Joe Gomes of Noble capital markets. Please go ahead.
Speaker 5: Good morning, this is Justin Zopo filling in for Joe. Hey Justin. Hey Justin, how are you? Good.
Good morning. This is the adjustments are fulfilling on for Joe.
Hey, Justin Justin how are you.
Yes.
Speaker 6: I just wanted to start off with just looking at the IDIQ contract, obviously, and the presentation.
I just wanted to.
Right off with just looking at the IV IQ contracts obviously.
Meditation.
Speaker 6: you guys having priority IDIQs remain pending. I just want to ask, is the company starting to see this opportunity to start bidding on new awards? Like has the environment has gotten better from what it was the previous quarter?
Yes, it's a priority.
The IQ users remain pending.
I just wanted to ask like as a company starting to feed of opportunities as they are bidding on new awards.
The environment has gotten better from what it was in previous quarters.
Speaker 1: I missed you were breaking up on the last part there with regard to before the environment was that just
You were breaking up on the last part there with regard to before the environment was at Justin.
Speaker 6: Oh, I was saying, has the environment gotten better from the previous quarter?
Okay.
Environment gotten better from the previous quarter.
Speaker 1: Yeah, a little bit. We're seeing signs that, you know, our biggest one that's pending for us is one we refer to as CIO SP4. We've had, you know, probably eight
Yeah, a little bit we're seeing signs that.
Biggest one that's pending for US is when we referred to as Cio's before.
We've had.
Probably eight.
Speaker 1: eight or nine opportunities over the last year and a half that we've been looking at that we had earmarked for post-CLS award.
Eight or nine opportunities over the last year and a half that we have been looking at that.
That where we had earmarked for post CLS or award.
Speaker 1: And so time has not been helping, but we are seeing some indications that the government is working their way through all of the protest information. We're hearing good signs just as recently as the last week and a half.
And so time has not been helping but we are seeing some indications that the government is working their way through all of the protest information. We're hearing good signs just as recently as last week and a half that they may finally get off top dead Center and give award in in the near term so that'll bode well, we obviously have missed some opportunities but we.
Speaker 1: that they may finally get off Top Dead Center and get an award in, in the near term. So that'll bode well. We obviously have missed some opportunities, but we also have been looking strategically ahead and we think there are still several opportunities.
Also have been looking strategically you are ahead and we think there are still several opportunities that could be early part of this fiscal 'twenty four it could still yield some bookings during this fiscal so yes that big one is really looking like.
Speaker 1: that could be an early part of this fiscal in 24, that could still yield some bookings during this fiscal.
Speaker 1: Yeah, that that big one is is really looking like, you know, we're expecting to see an award. You know, we currently do not have a prime seat in the unrestricted.
We're expecting to see and what we currently do not have a prime seat in the unrestricted.
Speaker 1: CLSP3. This bid went in over a year ago and the government was really conveying that they were going to have an award quite some time ago, so we would have those task orders be able to bid again.
<unk> three right Ben.
Bid went in over a year ago.
Government was.
It was really conveying that theyre going to have an award quite some time ago. So we would have those task orders being bid again so.
Speaker 1: You know, it's taken a while, but the tea leaves are looking better this quarter than last.
It's taken a while but.
T leaves are looking better this quarter than last quarter.
Yeah, great. Thank you.
Speaker 6: Yeah, great. Thank you. Yeah, I know. Can you kind of just provide us a little update just on the VI contract side? I know last quarter, you know, you guys, then nothing really seemed to change, but you guys were a little optimistic. You know, any update, any color on that would be great.
I know it can be kind of surprised us a little update on that.
That contract side I know last quarter you know.
Then nothing really see entertains, but you guys were a little optimistic.
Any update any color on that would be great.
Speaker 5: Which contract was that? Was it on our VA contract? The VA side.
Which contract was that skewed our.
Our VA contract the VA side, yes.
Speaker 1: Yeah, there's been very little activity still, you know, we continue to be the incumbent. We continue to be very excited around the opportunity to to work and to continue doing this, this period while they're still making acquisition decisions.
Yes, theres been very little activity still we continue to be the incumbent we're continuing to be very excited around the opportunity to.
To work.
And to continue doing this.
This period, while they are still making acquisition decisions.
Speaker 5: You know, our best estimate is that, you know, we do not see a material effect, even if they progress with their decisions. We do not see a material effect, you know, this fiscal, which could be subject to change, but we've continued to really work very closely, continue to deliver the results, and our workforce is doing a tremendous job in not getting too distracted with the acquisition.
Our best estimate is that we do not see a material effect.
Even if they progressed with their decisions.
We didn't actually a material effect.
This fiscal <unk>.
Would be subject to change.
But we've continued to really work very closely continue to.
To deliver the results and our work force is doing a tremendous job and not getting too distracted with the acquisition side.
Okay.
Speaker 6: Great. And then last one, if I may, you know, last quarter in regards to the bid and proposal backlog, you know, you guys mentioned that the non-IDIQ area was kind of trending positively, you know, can you guys see kind of seeing that going into the new year?
Great and then last one if I may.
Last quarter in regards to the.
Proposal backlog.
You guys mentioned.
The 90, IV IQ area is kind of trending positively.
And because the kind of theme that going into the new year.
Speaker 1: Yeah, you know, we do. The biggest wild card on that is really how agencies respond to that CR decision, the last one, of course, being February 1.
Yes.
We do the biggest wildcard on that.
From is really.
How how agencies respond to that CR decision that the last one of course being in February one.
There are some agencies that have been reluctant to put.
Speaker 1: you know, new contracts in place, largely because of uncertainty about their full year budget impact. But, you know, our leadership team has been really working very hard to work with those customers, encourage them to issue those task orders on, you know, our current work, you know, the national.
New contracts in place largely because of uncertainty about their full year budget impact, but our leadership team has been really working very hard to work with those customers.
Encourage them.
To issue those task orders on our current.
The national.
Speaker 5: The Cancer Institute, you know, we're starting to see some signs that they may start to leverage the multiple ward IDIQ we have there. We're starting to see signs that the Defense Health Agency also.
Cancer Institute.
We're starting to see some signs that they may start to leverage.
The multiple award <unk> IQ, we have there.
We're starting to see signs that the defense Health Agency also is moving forward.
Speaker 1: is moving forward, you know, they've got in our minds, they've got a lot more budget certainty than some of the other agencies as it relates to, you know, the non, you know, weapons and systems. So, we're really, you know, optimistic that, you know, we'll see some more bid flow come through over the next quarter. And we'll
And our minds, they've got a lot more budget certainty than some of the other agencies as it relates to.
The non <unk>.
Weapons and system so.
Really optima.
Optimistic that we will see.
Some more bid flow come through over the next quarter and.
And we will get our share.
Speaker 6: Well, great. Yeah, thank you for taking my questions, and congratulations on my quarter in here.
Oh, great. Yes. Thank you for taking my questions and congratulations on the quarter and year.
Thank you.
Once again, if you would like to ask a question. Please press Star then one.
Speaker 2: Once again, if you would like to ask a question, please press star, then 1.
Speaker 2: Seeing no further questions at this time, this concludes our question and answer session. I would like to turn the conference back over to Mr. Zach Parker for any closing remarks.
Seeing no further questions at this time. This concludes our question and answer session I would like to turn the conference back over to Mr. Zach Parker for any closing remarks.
Speaker 1: Thank you, Andrea. And thank you all for your participation and steadfast support of DLH. We're really, really pleased as we close the year that we are so well positioned to now execute that next leg of our strategy with respect to both organic growth and performance excellence. So thank you for your participation.
Thank you Andrea and thank you all for your participation and steadfast support of DLH.
Really really pleased as we closed the year that we are so well positioned to execute that next leg of our of our strategy with with with respect to both organic growth and performance excellence. So thank you for your participation of course next calendar quarter, we will be having our annual meeting.
Speaker 1: Of course, next calendar quarter, we will be having our annual meeting with the shareholders, so we'll look forward to having a little deeper dive and some further engagement with you all. So thank you, have a blessed day, and we'll chat with you soon. Bye for now.
With shareholders. So we'll look forward to having a little deeper dive in some further engagement with you. All so thank you have a blessed day.
Yet with you soon bye for now.
The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
Speaker 2: The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect.
Speaker 7: ?
[music].
Yes.
Yeah.