DLH Holdings Corp (DLHC) Reports Fiscal 2023 Fourth Quarter and Full Year Results
DLHC's fourth quarter revenue increased to $101.5 million in fiscal 2023 from $67.2 million in fiscal 2022.
Full year revenue grew to $375.9 million in fiscal 2023, excluding short-term FEMA contracts.
Adjusted EBITDA for fiscal 2023 reached $42.1 million, with debt reduced by over $28 million post-acquisition.
Contract backlog stood at $704.8 million as of September 30, 2023.
On December 6, 2023, DLH Holdings Corp (NASDAQ:DLHC) released its 8-K filing, announcing financial results for its fourth quarter and fiscal year ended September 30, 2023. The company, a leading provider of technology and health solutions to federal agencies, reported significant revenue growth and a strong commitment to debt reduction.
Fiscal 2023 Fourth Quarter Performance
DLHC's fourth quarter revenue saw a substantial increase to $101.5 million, up from $67.2 million in the same quarter of the previous year. This growth primarily reflects the impact of the company's December 2022 acquisition and net organic growth. Despite a non-cash impairment charge of $7.7 million, Adjusted Net Income and Adjusted Diluted EPS were $2.3 million and $0.16, respectively. EBITDA for the quarter was $4.4 million, with Adjusted EBITDA at $12.1 million.
Full Year Financial Highlights
For the full fiscal year 2023, DLHC's revenue was $375.9 million, compared to $395.2 million in fiscal 2022. Excluding the short-term FEMA contracts, revenue grew significantly from the previous year. The company also reported earnings of $1.5 million, or $0.10 per diluted share, after accounting for the non-cash impairment charge. Adjusted EBITDA for the year stood at $42.1 million, a notable increase from the previous year's $29.1 million.
Balance Sheet and Cash Flow
DLHC ended the fourth quarter with total debt at $179.4 million, down from $207.6 million following the December 2022 acquisition. The company reduced its debt by $28.2 million, thanks to mandatory payments and voluntary prepayments. The company's operating cash flow was robust, generating $31.0 million during fiscal 2023.
Management's Outlook
"With a year under our belt since our transformative technology acquisition, we are pleased with the evolution of DLH into a unique provider of digital transformation and cyber security, science research and development, and systems engineering services across a broad array of health, human services, and military clients," said Zach Parker, DLH President and Chief Executive Officer. "Our top line in fiscal 2023 surpassed $375 million, and we delivered $42.1 million of Adjusted EBITDA. At the same time, we remained focused on paying down debt to strengthen the balance sheet and decrease interest expense reducing debt by more than $28 million since completing the acquisition. Our cash-generating ability continues to return value to our shareholders through debt reduction while providing the financial flexibility to pursue strategic opportunities to deliver organic growth."
Strategic Positioning and Future Growth
DLHC's contract backlog was $704.8 million as of September 30, 2023, a significant increase from the previous year's $482.5 million. The company's management expressed confidence in DLHC's suite of services and contract portfolio, expecting to maintain revenue volume averaging over $100 million per quarter. The focus on leveraging capabilities and pursuing strategic opportunities is aimed at fostering top-line growth and strong operating results in fiscal 2024 and beyond.
For more detailed financial information and future outlook, interested parties can join DLHC's management for a conference call and webcast on December 7, 2023. Presentation materials and a digital recording of the conference call will be available on the DLH Investor Relations website.
DLH's financial results reflect a year of strategic growth and operational efficiency, positioning the company for continued success in the federal technology and health solutions market. For investors and stakeholders, DLHC's commitment to debt reduction and strong backlog suggest a stable foundation for future growth.
For further details on DLH Holdings Corp (NASDAQ:DLHC)'s financial performance, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from DLH Holdings Corp for further details.
This article first appeared on GuruFocus.
