DLH Holdings Corp.

Good day and welcome to the DLH Holdings Corporation third quarter earnings conference call. 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. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Witte, the Investor Relations Advisor. Please go ahead.

Thank you, and good morning, everyone. On the call with me today is Zach Parker, President and Chief Executive Officer, and Catherine Jambol, 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 forward-looking 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 filings 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 the earnings release and in the investor presentation on DLH's website. President and CEO Zach Parker will speak next, followed by CFO Catherine Johnball, 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.

Thank you, Chris, and good morning, everyone. Welcome to our third quarter conference call. I couldn't be more pleased with our performance And we're on track with our best year ever with even greater plans in place for fiscal 22. I will remain very proud of our tremendous employees across the globe who continue to deliver top quality services and solutions to our clients despite very challenging times. Starting with slide three, I'll first provide a high level overview of the quarter and some color on the outlook for the rest of 2021. Revenue rose nearly 20% year-over-year to $61.6 million as we benefited from the acquisition of IBA along with organic growth across the enterprise. We posted operating margins of 8% reflecting a strong mix of programs and earnings of $2.9 million or 21 cents per share. We also generated some $9.3 million of cash from operations and used this to pay down approximately $9 million of debt during the quarter. Near the date, we paid down roughly $16.2 million of debt due to the company's strong cash-generating ability. We continue to delever and improve our overall financial flexibility, as Catherine will discuss more in a moment. We previously announced that we had won the VA's CMOP Medical Logistics Award in the third quarter, which was expected to add over $200 million in contracted value over a five-year period to our backlog. During the quarter, this contract was protested by a small business bidder, and the government continues to work through their standard process, addressing the concerns, and proceed to a resolution and award. In the meantime, the company's medical logistics CMOP contract was extended through November of 2021, and our backlog remains robust even as we await resolution on this contract, for which, of course, we expect a favorable outcome. Now, turning to slide four, I'd like to update our investors on our long-term strategy of success, which includes and continues to evolve as we grow the company. Given our track record of successfully integrating acquisitions, delivering excellent performance on large nationally dispersed programs, and expanding our healthcare technology capabilities, we believe that DLH has enhanced its position for growth within the markets that we serve. While several long-term anchor contracts give us visibility and stability regarding a portion of our revenue base, our diversification strategy has given us a presence across all across the full range of federal health and military health systems and services with key programs and agencies in our sites. We continue to serve the citizens, the soldiers, the service members, and our veterans. However, even as we've expanded, we've remained focused on our formula for success, serving clients where they can truly bring value-added, real-world solutions to address the healthcare needs of today and tomorrow. Our services are leveraging an expanded set of technology solutions, but our targeted agencies are largely the same, as this is our dedication to our strategy and to the utmost in customer service. We continue to hire the best and the brightest leveraging talent that we bring from a variety of healthcare-related industries and companies. We've built a foundation for strong long-term growth with a professional, highly credentialed workforce that can compete and win against the most respected names in the industry. Therefore, we've been able to see revenue rise to a level of nearly $250 million annually and we are confident that we're well positioned to grow to our next revenue target of $500 million based on our existing platform, including research, technology, healthcare delivery, and performance management. The past year during a pandemic has shown that our services are more valuable than ever and that our workforce is flexible, committed, and can adapt to rapidly changing requirements in terms of working remotely, interacting with customers in new ways, and winning business that leverages our expertise in digital transformation, artificial intelligence, advanced analytics, cloud-based applications, modeling and simulation, telehealth systems, and more. And we've accomplished all this in a sensible way in terms of capital deployment. By accessing our credit lines to make acquisitions and invest in the business, We prevent frequent equity dilution of our existing shareholders. We then use our prodigious cash flow generation to pay down debt and strengthen our balance sheet, which enables us to replicate this process. We've used this strategy consistently, leading to a refined acquisition process that maximizes shareholder returns and growth on the capital deployed. We remain well positioned to take advantage of the opportunities ahead and are confident that as we near fiscal 2022, the company will continue posting solid financial results. Our backlog remains strong and we will capitalize on the increasing need for technology enabled healthcare solutions for which we are so well known and respected. I feel confident in our ability to provide the returns our shareholders have come to expect, just as I am proud of our staff and partners in performing so well during such unusual times. With that, I'd like to turn the call over to our Chief Financial Officer, Catherine Joplin. Catherine?