DLH Holdings Corp.

Good day and welcome to the DLH Holdings Fiscal 2020 Fourth Quarter Earnings Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would like now to turn the conference over to Chris Witte, Investor Relations Advisor,

Thank you and good morning, everyone. On the call with me today is Zach Parker, President and Chief Executive Officer, and Kathryn JohnBull, Chief Financial Officer. The company's earnings release and PowerPoint 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 two of the presentation. This call may include full-length statements that relate to the company's outlook for fiscal 2021 and beyond. These forward-looking statements are subject to various risks and uncertainties that could cause actual results and events to differ materially from these statements. Please refer to the risk factors contained in the company's annual report on Form 10-K and in our other findings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statements. On today's call, we will be referencing both GAAP and non-GAAP financial measures. 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. President and CEO Zach Parker will speak next, followed by CFO Kathryn JohnBull, 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.

Thanks, Chris, and good morning to our friends and shareholders. Welcome to our fourth quarter and year-end conference call. The last 12 months have been a very active time for the company, setting the stage for continued solid operating performance in fiscal 2021. First, however, as we all know, 2020 has been a tumultuous year for our nation as well as our DLH employees throughout the world, one which saw major social and civil unrest ignited by a series of high-profile killings in Black communities and, of course, the onset of the coronavirus. which has become the worst global pandemic in a century. I'd like to take a moment to praise our courageous and truly mission-focused employees who throughout these difficult times have been more committed to the services that we provide to the underserved, our military, and our veterans. Throughout the pandemic, we have had over a thousand essential personnel entering government facilities on a daily basis braving the various challenges to deliver high quality and highly productive services to our customers throughout the country. And doing so with complete adherence to CDC and DLH guidelines, resulting in an infinitesimal number of COVID cases. And to the several hundred employees assigned to our DLH offices, but adhering to our stay at home directive, Thank you. You have done a tremendous job of adjusting to the many challenges of the quarantines and telework without skipping a beat. We realize this can be taxing and look forward to the days where your choice can become the driver for our workplace decisions. We are indebted to you all. Starting with slide three, let me begin by providing a high-level overview of our financial performance and some color on the outlook for the coming year. The company posted revenue of $50.7 million for the quarter, as Kathryn will review in a moment, and $209.2 million for the fiscal year in total. This represents an increase of more than 30% year over year, reflecting recent acquisitions, new contract awards, and solid results across our core programs and services despite The Global Pandemic. Operating income was $13.5 million for the year, and we posted earnings of $0.54 per share, while EBITDA rose to $20.5 million in fiscal 2020 versus $13.9 million last year. We also completed the acquisition of Irving Burton Associates for $32 million on September 30th, bringing health IT solutions and strong credentials with the Defense Health Agency and the Medical Research and Development Command to DLH. We generated 19.5 million in cash from operations during the year, which we used to pay down 19 million of debt prior to the acquisition of IBA. So while starting FY21 with 70 million of indebtedness, you can rest assured that we plan to once again use the same recipe going forward, utilizing free cash flow to de-lever the company, as Kathryn will go over momentarily. As shown on slide four, a record backlog of nearly 700 million provides a strong foundation for the long-term health of the company, bolstered by new wins related to COVID-19, a stronger position within the markets we serve, and greater opportunities for growth than ever before. Technology innovations to drive program efficiencies contributed to our recompete award of $150 million Office of Head Start system contract during the quarter. We have benefited from the recent actions of the VA on our Heritage CMOP programs with determinations leading to cancellation of the small business set-aside solicitation while remaining in contention for our associated medical logistics work. Accordingly, I feel real proud about the company's performance and our outlook going forward. As I mentioned earlier in the year, DLH is well positioned within our key spending areas, and we believe strongly that the recent election has not changed that. In fact, we address it, I address it as neutral to positive. Turning to slide five, we show that we normally state that our key markets and specific programs enjoy widespread support from both sides of the aisle. I would also add one positive note given the election results. We believe that several healthcare related spending items will be higher priority under the new administration, resulting in greater access to healthcare and new spending opportunities on health related priorities. Not only for the general public, but also for our military and veterans community. We expect that the pandemic preparation will also take a larger role going forward and that the Affordable Care Act may be enhanced and adjusted during the next four years assuming that Congress concurs. The bottom line is that we anticipate that the agencies we serve will likely operate at current or better spending levels over the next several years. Again, underscoring both the strength and Stability of the markets we serve. Of course, we expect that the BCA caps will expire during FY21, but the potential of a continuing resolution provides good stability as we enter FY21. Turning to slide six, I want to provide an update on the pandemic and its impact to DLH. As we have said in the past, our portfolio of mission-critical, Healthcare-related services across key federal agencies provide numerous opportunities to assist the government in addressing the challenges faced due to COVID-19. Though as always, there are some headwinds in the government contracting market when facing outbreaks and the like, we remain cautiously optimistic about the continuing opportunities for DLH to be at the forefront of combating this threat and working feverishly alongside our clients toward mitigation. We won new awards this year in that realm during FY20, and we will continue to conduct trials for the safety and efficacy of investigational therapeutics, working closely with the agency, their thought leaders, regarding policies and approaches to respond to the pandemic. I am sure our listeners are well aware of the ongoing dynamics regarding COVID-19, with the positive news about vaccines Offset by increases in infections worldwide. It is still a very fluid situation involving the partnership of government and industry, and DLH remains well poised to continue support in a variety of these programs. We have an active pipeline of opportunities across the entire business platform, and overall, such growth areas are far more offsetting than the near-term headwinds. created by certain opportunities associated with program delays, travel restrictions, and potential cancellations. While we can't elaborate further just yet, we do expect that additional work and anticipated task orders could increase our organic growth rate in FRI 21 to a higher level than this past year. These are very critical times and DLH is playing a vital role in moving the nation forward addressing many near-term health-related priorities. Turning to slide seven, I'd like to review our current strategic visions before handing it over to Kathryn. We've come a long way since I came on board 10 years ago and we wanted to celebrate the fact that DLH has completed its transition into a strong, differentiated company with broad, unique capabilities spanning across all three of our market focus areas. And our recent acquisitions, including Dania, S3, and IBA, have continued to bolster our strategic direction. We're also rapidly developing our market presence in data analytics, artificial intelligence, and machine learning, and secure systems. The cyber community will also continue to be key as we position our InfiniBuy cloud solution to expand in the digital transformation technologies. We are at the next stage of our development and will look forward to organically growing as well as through acquisitions into an even greater technology leading enterprise that can serve the health related customers throughout the full lifecycle of modernization. It is an exciting time here at DLH, but we won't be looking to grow just for growth's sake. Rather, our new capabilities and market pursuits will continue to be strategically aligned and continue to diversify the business space. We'll improve the lives of millions of Americans and ultimately increase the returns for our shareholders. Of course, we'll continue to utilize our operating cash flow to pay down the debt, to delever the balance sheet, and reduce the interest expense while investing appropriately in business development opportunities and technology enhancements. We're focused on the next decade during which we will build upon what we've accomplished thus far, further transforming DLH into a leader in healthcare-related technology-enabled cloud-based solutions for key agencies in the federal government. Given our accomplishments in 2020, are investments coming in 2021. During this pandemic and global economic turntown, we are upbeat about the future and the opportunities for tomorrow. I'd like to turn the call over to our financial officer, Kathryn JohnBull. Kathryn.