New Jersey | 22-1899798 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
3565 Piedmont Road, NE |
Atlanta, GA 30305 |
(Address and zip code of principal executive offices) |
(866) 952-1647 |
(Registrant's telephone number, including area code |
CHECK THE APPROPRIATE BOX BELOW IF THE FORM 8-K FILING IS INTENDED TO SIMULTANEOUSLY SATISFY THE FILING OBLIGATION OF THE REGISTRANT UNDER ANY OF THE FOLLOWING PROVISIONS: ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition | |
On August 6, 2018, DLH Holdings Corp. announced by press release its financial results for its fiscal quarter ended June 30, 2018. A copy of the press release is attached hereto as Exhibit 99.1. The information in Item 2.02 of this Current Report shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in Item 2.02 of this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. | ||
Item 9.01 | Financial Statements and Exhibits | |
Exhibit Number | Exhibit Title or Description | |
DLH Holdings Corp. | ||
By: /s/ Kathryn M. JohnBull | ||
Name: Kathryn M. JohnBull | ||
Title: Chief Financial Officer | ||
Date: August 6, 2018 |
Exhibit Number | Description |
• | Fiscal third quarter revenue of $36.1 million, up 23.5% over the third quarter of fiscal 2017 |
• | Income from operations of $2.6 million for the quarter versus $1.8 million in 2017 |
• | Diluted earnings per share of $0.13 for the quarter versus $0.08 per share in the prior-year period |
• | Generated operating cash flow of $4.0 million for the quarter |
• | Reduced senior debt to $14.0 million at quarter end; cash balance at $6.6 million |
COMMUNICATIONS | INVESTOR RELATIONS | |
Contact: Tiffany McCall | Contact: Chris Witty | |
Phone: 404-334-6000 | Phone: 646-438-9385 | |
Email: tiffany.mccall@dlhcorp.com | Email: cwitty@darrowir.com |
(unaudited) | (unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Revenue | $ | 36,131 | $ | 29,256 | $ | 100,747 | $ | 85,272 | |||||||||
Direct expenses | 27,793 | 22,871 | 78,429 | 66,805 | |||||||||||||
Gross margin | 8,338 | 6,385 | 22,318 | 18,467 | |||||||||||||
General and administrative expenses | 5,136 | 4,122 | 14,700 | 12,722 | |||||||||||||
Depreciation and amortization | 588 | 510 | 1,654 | 1,264 | |||||||||||||
Income from operations | 2,614 | 1,753 | 5,964 | 4,481 | |||||||||||||
Interest expense, net | 262 | 269 | 801 | 888 | |||||||||||||
Income before income taxes | 2,352 | 1,484 | 5,163 | 3,593 | |||||||||||||
Income tax expense, net | 738 | 539 | 5,084 | 1,345 | |||||||||||||
Net income | $ | 1,614 | $ | 945 | $ | 79 | $ | 2,248 | |||||||||
Net income per share – basic | $ | 0.14 | $ | 0.08 | $ | 0.01 | $ | 0.20 | |||||||||
Net income per share – diluted | $ | 0.13 | $ | 0.08 | $ | 0.01 | $ | 0.18 | |||||||||
Weighted average common shares outstanding | |||||||||||||||||
Basic | 11,899 | 11,299 | 11,875 | 11,250 | |||||||||||||
Diluted | 12,884 | 12,445 | 12,872 | 12,417 |
June 30, 2018 | September 30, 2017 | ||||||||
(unaudited) | |||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 6,590 | $ | 4,930 | |||||
Accounts receivable | 12,420 | 11,911 | |||||||
Other current assets | 856 | 598 | |||||||
Total current assets | 19,866 | 17,439 | |||||||
Equipment and improvements, net | 1,630 | 1,391 | |||||||
Deferred taxes, net | 4,875 | 9,639 | |||||||
Goodwill, net | 25,989 | 25,989 | |||||||
Intangible assets, net | 13,805 | 15,127 | |||||||
Other long-term assets | 139 | 139 | |||||||
Total assets | $ | 66,304 | $ | 69,724 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
Current liabilities: | |||||||||
Debt obligations - current | $ | 3,633 | $ | 6,518 | |||||
Derivative financial instruments, at fair value | — | 306 | |||||||
Accrued payroll | 5,034 | 3,723 | |||||||
Accounts payable, accrued expenses, and other current liabilities | 10,475 | 10,895 | |||||||
Total current liabilities | 19,142 | 21,442 | |||||||
Total long term liabilities | 9,707 | 12,427 | |||||||
Total liabilities | 28,849 | 33,869 | |||||||
Commitments and contingencies | |||||||||
Shareholders' equity: | |||||||||
Common stock, $.001 par value; authorized 40,000 shares; issued and outstanding 11,899 at June 30, 2018 and 11,767 at September 30, 2017 | 12 | 12 | |||||||
Additional paid-in capital | 84,079 | 82,687 | |||||||
Accumulated deficit | (46,636) | (46,844) | |||||||
Total shareholders’ equity | 37,455 | 35,855 | |||||||
Total liabilities and shareholders' equity | $ | 66,304 | $ | 69,724 |
(unaudited) | (unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
Operating activities | |||||||||||||||||||||
Net income | $ | 1,614 | $ | 945 | $ | 79 | $ | 2,248 | |||||||||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||||||||||||||||||||
Depreciation and amortization expense | 588 | 509 | 1,654 | 1,264 | |||||||||||||||||
Amortization of debt financing costs as interest expense | 70 | 67 | 202 | 194 | |||||||||||||||||
Change in fair value of derivative financial instruments | — | (3) | — | 49 | |||||||||||||||||
Stock based compensation expense | 241 | 64 | 1,169 | 613 | |||||||||||||||||
Deferred taxes, net | 598 | 362 | 4,764 | 1,004 | |||||||||||||||||
Changes in operating assets and liabilities | |||||||||||||||||||||
Accounts receivable | (81) | 247 | (508) | (1,987) | |||||||||||||||||
Other current assets | 88 | 137 | (259) | (78) | |||||||||||||||||
Accounts payable, accrued payroll, accrued expenses and other current liabilities | 928 | 133 | 897 | 1,519 | |||||||||||||||||
Other long term assets/liabilities | (49) | 21 | (5) | 145 | |||||||||||||||||
Net cash provided by operating activities | 3,997 | 2,482 | 7,993 | 4,971 | |||||||||||||||||
Investing activities | |||||||||||||||||||||
Acquisition, net of cash acquired | — | — | — | (250) | |||||||||||||||||
Purchase of equipment and improvements | 17 | (111) | (571) | (785) | |||||||||||||||||
Net cash used in investing activities | 17 | (111) | (571) | (1,035) | |||||||||||||||||
Financing activities | |||||||||||||||||||||
Repayments on senior debt | (937) | (938) | (5,730) | (2,813) | |||||||||||||||||
Deferred debt financing costs | (70) | — | (70) | — | |||||||||||||||||
Repayments of capital lease obligations | (3) | (22) | (8) | (62) | |||||||||||||||||
Proceeds from issuance of stock upon exercise of options | — | 99 | 46 | 113 | |||||||||||||||||
Net cash used in financing activities | (1,010) | (861) | (5,762) | (2,762) | |||||||||||||||||
Net change in cash and cash equivalents | 3,004 | 1,510 | 1,660 | 1,174 | |||||||||||||||||
Cash and cash equivalents at beginning of period | 3,586 | 3,091 | 4,930 | 3,427 | |||||||||||||||||
Cash and cash equivalents at end of period | $ | 6,590 | $ | 4,601 | $ | 6,590 | $ | 4,601 | |||||||||||||
Supplemental disclosures of cash flow information | |||||||||||||||||||||
Cash paid during the period for interest | $ | 192 | $ | 228 | $ | 619 | $ | 662 | |||||||||||||
Cash paid during the period for income taxes | $ | 52 | $ | 90 | $ | 630 | $ | 390 | |||||||||||||
Derivative warrant liability reclassified as equity | $ | — | $ | — | $ | (306) | $ | — | |||||||||||||
Noncash issuance of stock upon exercise of options | $ | — | $ | — | $ | 25 | $ | — |
Three Months Ended | Nine Months Ended | |||||||||||
June 30, 2018 | June 30, 2018 | |||||||||||
Market Mix: | ||||||||||||
Defense/VA | 62 | % | 65 | % | ||||||||
Human Services and Solutions | 34 | % | 32 | % | ||||||||
Public Health/Life Sciences | 4 | % | 3 | % | ||||||||
Contract Mix: | ||||||||||||
Time and Materials | 95 | % | 97 | % | ||||||||
Cost Plus Fixed Fee | 4 | % | 2 | % | ||||||||
Firm Fixed Price | 1 | % | 1 | % | ||||||||
Prime vs Sub: | ||||||||||||
Prime | 99 | % | 99 | % | ||||||||
Sub | 1 | % | 1 | % |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||||||||||
Net income (loss) | $ | 1,614 | $ | 945 | $ | 669 | $ | 79 | $ | 2,248 | $ | (2,169) | ||||||||||||
(i) Interest expense | 262 | 269 | (7) | 801 | 888 | (87) | ||||||||||||||||||
(ii) Provision for taxes | 738 | 539 | 199 | 5,084 | 1,345 | 3,739 | ||||||||||||||||||
(iii) Depreciation, amortization | 588 | 510 | 78 | 1,654 | 1,265 | 389 | ||||||||||||||||||
EBITDA | $ | 3,202 | $ | 2,263 | $ | 939 | $ | 7,618 | $ | 5,746 | $ | 1,872 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||||||||||||||||||
Net income | $ | 1,614 | $ | 945 | $ | 669 | $ | 79 | $ | 2,248 | $ | (2,169) | |||||||||||||||||||||||||
Write-down of deferred tax assets | $ | — | $ | — | $ | — | $ | 3,365 | $ | — | $ | 3,365 | |||||||||||||||||||||||||
Pro-forma impact of tax rate change | $ | — | $ | 145 | $ | (145) | $ | — | $ | 350 | $ | (350) | |||||||||||||||||||||||||
Net income, excluding effect of the 2017 Tax Act | $ | 1,614 | $ | 1,090 | $ | 524 | $ | 3,444 | $ | 2,598 | $ | 846 | |||||||||||||||||||||||||
Net income per fully-diluted share | $ | 0.13 | $ | 0.08 | $ | 0.05 | $ | 0.01 | $ | 0.18 | $ | (0.17) | |||||||||||||||||||||||||
Impact of write-down of deferred tax asset | $ | — | $ | — | $ | — | $ | 0.26 | $ | — | $ | 0.26 | |||||||||||||||||||||||||
Pro-forma impact of tax rate change | $ | — | $ | 0.01 | $ | (0.01) | $ | — | $ | 0.03 | $ | (0.03) | |||||||||||||||||||||||||
Net income per fully-diluted share, excluding effect of the 2017 Tax Act | $ | 0.13 | $ | 0.09 | $ | 0.04 | $ | 0.27 | $ | 0.21 | $ | 0.06 |
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