Integrity & Trust | Performance Excellence | Inclusion & Diversity | Agility
Investor Presentation
August, 2016
Zachary Parker | President & Chief Executive Officer
Kathryn JohnBull | Chief Financial Officer
2
Forward Looking Statement
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995. These statements relate to future events or DLH`s future financial performance. Any statements that are not
statements of historical fact (including without limitation statements to the effect that the Company or its management
"believes", "expects", "anticipates", "plans", “intends” and similar expressions) should be considered forward looking
statements that involve risks and uncertainties which could cause actual events or DLH`s actual results to differ
materially from those indicated by the forward-looking statements. For a discussion of such risks and uncertainties, see
“Risk Factors” in the company’s periodic reports filed with the SEC, including our Annual Report on Form 10-K for the
fiscal year ended September 30, 2015. In light of the risks and uncertainties inherent in the forward-looking statements
included herein, the inclusion of such statements should not be regarded as a representation by the Company or any
other person that the objectives and plans of the Company will be achieved. The forward-looking statements contained
in this presentation are made as of the date hereof and may become outdated over time. The Company does not assume
any responsibility for updating any forward-looking statements.
This presentation contains non-GAAP financial information. Management uses this information in its internal analysis of
results and believes that this information may be informative to investors in gauging the quality of our financial
performance, identifying trends in our results, and providing meaningful period-to-period comparisons. These measures
should be used in conjunction with, rather than instead of, their comparable GAAP measures. A reconciliation of non-
GAAP measures to the comparable GAAP measures presented in this document is contained at the end of this
presentation and in the Company’s most quarterly earnings press releases for the relevant periods indicated in this
presentation.
3
Investor Highlights
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
• “Pure Play” government services provider
• Leading position in growing healthcare markets,
with long-term contracts at attractive federal
agencies
– VA, DoD, HHS, CDC
• Completed transformational acquisition of Danya
– Brings leading contract vehicles, strong margins
– Increases Company revenue base by 50% and aligns with
core end markets
• Strong cash flow and improving balance sheet
• Disciplined management has overhauled company
• Well positioned for higher growth and financial
performance going forward
4© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
Who We Are & What We Do
Primary DLH Markets and Offerings
Health Services for
Active Duty Military
and Veterans
• Clinical device research and
development
• Medication Therapy
Management (pharma)
• Access to care (Behavioral and
Medications)
• Case management tools and
services
• Lifecycle management of
medical devices
• Analytics and decision support
systems
• Supply chain and inventory
management
Human
Services &
Solutions
Public Health
and Life
Sciences
5© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
(1) A reconciliation of third quarter fiscal 2016 Adjusted EBITDA, a non-GAAP measure, can be found at the end of this presentation. Historical information can be
found in the quarterly and annual reports filed with the Securities and Exchange Commission, located on the Company website at www.dlhcorp.com/sec-filings.aspx.
DLH Has Dramatically Changed in Six Years
FY2010-2012: Changed Corporate Leadership
FY2011: Long Range Strategic Plan (LRSP) Developed
FY2012: Create Stability and Backlog
FY2013: Project L.E.A.N. Cost Realignment
FY2014-15: Financial Health and Business Development
FY2016: Technology leverage and Acquisition of Danya
6
Transformative Acquisition: Danya – May 2016
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
Highly complementary businesses with common core capabilities for complex, nationally
dispersed programs, operational synergies, and new business opportunities
Portfolio Diversification
• Expands DLH’s market opportunity and diversifies its portfolio of healthcare and
human services contracts and programs to four top federal agencies
– Department of Veterans Affairs (“VA”)
– Department of Health and Human Services (“HHS”)
– Department of Defense (“DoD”)
– Centers for Disease Control and Prevention (“CDC”)
Deep Domain Expertise
• Recognized professional subject matter experts and management teams tackling
critical long-term national issues and trends in public health, healthcare delivery,
systems migrations, and compliance monitoring
Corporate Culture
• Common set of values delivered to customers and throughout the workforce:
– Integrity & Trust
– Inclusion & Diversity
7
LTM Trading Performance Relative to Industry (1)
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
Government Services: SAIC, BAH, LDOS, CACI, MANT, KEYW, ICFI,
EGL, VSEC, NCIT, VEC, CSRA
Defense Primes: LMT, GD, RTN, BA., NOC, LLL (1) As of August 4, 2016 per S&P Capital IQ
50
70
90
110
130
150
170
190
210
230
Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16
In
de
xe
d Pric
e
82.8%
50
7
90
11
30
15
70
19
210
3
Mar-15 Apr-15 Jun-15 Jul-15 Sep-15 Oct-15 Dec-15 Jan-16 Mar-16
Indexed Price
DLH Government Services Defense Primes Russell 2000
8
Danya’s Markets & Capabilities
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
• Danya’s flagship prime contract with HHS’ Office of Head Start (“OHS”) aligns with
DLH’s capabilities and solutions that impact diverse communities and populations
• DLH expects to integrate components of its capabilities to deliver tailored solutions for
customers in health IT, pharmacy medication adherence & compliance, telehealth, and
medical service delivery
• With Danya, DLH will to continue to drive innovative solutions and ensure program
success through strategy development and effective management
Danya’s Capability-Driven Core Solutions Offerings
Solutions
Danya Monitoring
Systems
Information
Networks
eLearning Modules
Message
Development
Reporting
Dashboards
Capabilities
Monitoring and Evaluation
Capacity Building
Technology Solutions
Communication
Customers
9
DLH Broad Healthcare Delivery Solutions
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
10
Breadth and Depth in Pharmacy
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
Coverage ranging from single clinic to operating in high-volume
automated prescription production and distribution system environments.
• Virtual / Tele-pharmacy services
• Pharmacy systems automation (including robotics),
implementation, and testing
• Bio-hazards management; Med/Surg systems and
equipment
• Cold storage systems; Specialty-meds
• Controlled substance management
• Prescription servicing and Quality Assurance (out-
patient and in-patient)
• Medical warehouse supply chain management
11
Differentiation in Process & Technology
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
DLH delivers high-value performance in partnership with and in support
of customers, teams, and end-users as measured by….
DLH’s ePRAT provides a web-based, open-architecture,
secure system to manage expert delivery and
resourcing of the “continuum of care requirements”
for combatants, veterans, and retirees. Designed to
meet HIPAA, CCAC, CARF, FISMA, NIST requirements
DLH’s unique approach to integration of people,
processes, and technology tools to measure,
manage and optimize our performance at project or
enterprise levels.
12
Federal Health Markets Attractive for Growth
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
National health spending expected to reach $5.63 trillion and comprise 20.1% of GDP by 2025
Federal portion expected to grow at a 4.9% CAGR, reaching $1.75 trillion by 2025
13
Buying Behavior: FY2015 HHS Spending
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
Source: Federal Procurement Data System, GovWin IQ
14© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
Buying Behavior: FY2015 Contract Vehicle
Source: Federal Procurement Data System, GovWin IQ
15© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
S
T
RA
T
E
G
IC
MODE
L
P
O
S
IT
IO
NING
K
E
Y
S
DRIVE PRFORMANCE
EXCELLENCE
BUILD UPON CURRENT
DIFFERENTIATORS
BUILD POWERHOUSE
MARKETING POSITION
DEPLOY CAPITAL
FOR GROWTH
NAVIGATE POLITICAL
ENVIRONMENT ISSUES
DLH
P
L
A
Y
B
O
O
K
Organic Growth Acquisitions Margin Expansion Shareholder Value
Leverage outstanding performance track record that has resulted
JD Power award for Veterans Affairs client to expand within the
VA and adjacent federal health oriented markets (including DoD)
GAMEPLAN
GROWTH
Build upon current
market leading
customer satisfaction
Instill continuous
improvement culture
throughout operations
Accelerate technology
refresh cycle time
Prioritize healthcare
COTS solutions where
feasible
Deliver strategically
aligned and robust
“Qualified NB Pipeline”
Expand and align
business development
resources
Make acquisitions
consistent with growth
strategy
Solidify financing
capacity
Ensure adequate and
scaled “Deal Flow”
Increase connectivity
to market “Shapers”
Engage trade
associations & capital
market affiliations
Align composition of
board of directors to fit
Focus growth where government decision makers prioritize “best
value” over “lowest and cheapest price”
Shape new business pursuits around greater complexity work
requirements which typically yield higher gross margins
Use dramatically improved company financial health posture to
add appropriately scaled acquisition to the DLH playbook
16
Recent Results – QTR Ended 6/30/16
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
$0
$9
$18
$27
FY 15 Q3 FY16 Q3
$16.8
$25.0
Revenue + 49%
$0
$2
$4
$6
FY15 Q3 FY16 Q3
$3.0
$5.5
Gross Margin + 80%
$0.0
$0.8
$1.6
$2.4
FY15 Q3 FY16 Q3
$0.8
$1.7
Operating Income + 119%
$0.0
$0.8
$1.6
$2.4
FY15 Q3 FY16 Q3
$0.8
$2.1
Adjusted EBITDA* + 153%
* A reconciliation of Adjusted EBITDA, a non-GAAP measure, can be found at the
end of this presentation.
.
17
Liquidity – 6/30/2016
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
$25.0M$2.8M $10.0M
Gaining Strength Post Acquisition
Cash on Hand Term LoanRevolving
Credit Facility
Paid off $5.0M Acq. Loan
$0.8M loan balance
tied to operational cash flow
$24.7M Balance
Plan to accelerate
principal payments with
cash from profitable
operations
18
Investor Highlights
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
• “Pure Play” government services provider
• Leading position in growing healthcare markets,
with long-term contracts at attractive federal
agencies
– VA, DoD, HHS, CDC
• Completed transformational acquisition of Danya
– Brings leading contract vehicles, strong margins
– Increases Company revenue base by 50% and aligns with
core end markets
• Strong cash flow and improving balance sheet
• Disciplined management has overhauled company
• Well positioned for higher growth and financial
performance going forward
Integrity & Trust | Performance Excellence | Inclusion & Diversity | Agility
Backup Slides
45
20
FY16 YTD Year over Year ― 9 months ended 6/30/16
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
$0
$20
$40
$60
FY15-9mo. FY16-9mo.
$48.4
$58.5
Revenue + 21%
$0
$4
$8
$12
FY15-9mo. FY16-9mo.
$8.3
$11.6
Gross Margin $ + 40%
$0.0
$1.5
$3.0
$4.5
FY15-9mo. FY16-9mo.
$1.5
$2.7
Operating Income + 78%
$0.0
$1.5
$3.0
$4.5
FY15-9mo. FY16-9mo.
$2.0
$3.6
Adjusted EBITDA* + 79%
* A reconciliation of Adjusted EBITDA, a non-GAAP measure, can be found at the
end of this presentation.
21
Cash Flows for Nine Months Ended 6/30/16
© 2016 | DLH | Confidential & Proprietary | FY16 Q3 Board of Directors Meeting | 11 August 2016
FY16 Beginning Cash $5,558
Cash generated from operating activities $3,380
Cash used in investing activities (32,278)
Cash from financing activities 26,610
FY16 Ending Cash $2,820
(10/1/15)
(6/30/16)
$ in Thousands
Financed Danya Acquisition on 5/3/16
22
F3Q16 Financials
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
(unaudited) (unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
2016 2015 2016 2015
Revenue $ 24,989 $ 16,781 $ 58,482 $ 48,357
Direct expenses 19,533 13,743 46,885 40,055
Gross margin 5,456 3,038 11,597 8,302
General and administrative expenses 3,374 2,270 8,402 6,719
Depreciation and amortization expense 414 5 456 45
Income from operations 1,668 763 2,739 1,538
Total other income (expense), net (374 ) (34 ) (1,076 ) (723 )
Income before income taxes 1,294 729 1,663 815
Income tax expense(benefit) 518 292 666 326
Net income $ 776 $ 437 $ 997 $ 489
Net income per share - basic $ 0.08 $ 0.05 $ 0.10 $ 0.05
Net income per share - diluted $ 0.07 $ 0.04 $ 0.09 $ 0.05
Weighted average common shares outstanding
Basic 10,154 9,552 9,812 9,580
Diluted 11,311 9,956 10,855 9,990
23
F3Q16 Adjusted EBITDA Reconciliation(1)
© 2016 | DLH Proprietary | Investor Presentation August 10, 2016
(1) For a further explanation of Adjusted EBITDA, a non-GAAP measure, please refer to the Company’s most recent quarterly and
annual reports filed with the Securities and Exchange Commission, which can be found on the DLH website
at: www.dlhcorp.com/news-releases.aspx and/or www.dlhcorp.com/sec-filings.aspx.
© 2016 | DLH | Proprietary24
Corporate Headquarters:
3565 Piedmont Rd NE
Building 3, Suite 700
Atlanta, GA 30305
National Capital Region Office:
8737 Colesville Road
Suite 1100
Silver Spring, MD 20910
