DLH Holdings Corp.

Good day and welcome to the DLH Holdings Corp Fiscal 2022 Third Quarter Earnings Conference Call. All participants will be in a 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 a 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 Biddy, Investor Relations Advisor. Please go ahead.

Thank you, and good morning, everyone. On the call with me today is Zach Parker, President and CEO, and Catherine Johnbull, CFO. The company's earnings release and PowerPoint presentations 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 presentations. This call may include forward-looking statements that relate to the company's outlook for fiscal 2022 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. The 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 Catherine Johnville, after which we'll open it up for questions. And 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 fiscal 2022 third quarter conference call. I am pleased to report yet another solid quarter, particularly as we wind down our two major COVID-19 pandemic response programs, one with the FEMA Alaska countermeasures and the NIH infectious disease clinical trials for therapeutics. Both of these programs demonstrated DLH's ability to surge and provide a rapid response to national threats leveraging our emergency preparedness and global clinical research network capabilities. Beginning with slide three, I'll first provide a high-level overview of the quarter, starting with the top-line results. Revenue rose nearly 8 percent year-over-year to 66.4 million, reflecting strong demand across many of our programs and services. we are very pleased with the recent award activity and the large number of ongoing opportunities within the company, particularly as we approach the end of 2022 and will soon be launching into FY23. I'll discuss the outlook more in a moment. We posted operating income of $7.1 million, or 10.7% of sales, up 44% year-over-year, and recorded EBITDA of $9.0 million versus $7.0 million in the third quarter of fiscal 2021. Earnings per share rose nearly 50% to $0.34 per share, and we paid down an additional $9 million of debt during the quarter, into the period with a 28.5% million debt outstanding. Our backlog entering Q4 was a solid 510 million, setting the stage for continued strong performance going forward. Turning to slide four, I want to show some examples of how DLH brings innovation and value to its clients across the board. I could not be any prouder of the contributions that DLH employees are making to the missions, the very critical missions of our customers. First and foremost, one of our projects was recently named a Federal Health IT Innovation Award winner, highlighting our work with the Defense Medical Logistics Standard Support and Logical Programs. Here we successfully integrated several defense health supply chain management systems for the Defense Health Agency. This was a great achievement that illustrates the ability of our subject matter experts to innovate through novel applications of emerging and proven technologies. Also, the DoD Essence Biosurveillance Program positively identified the initial cases of monkeypox showing our partnerships advanced research and experience in detecting health and biological threats that impact and put at risk the force readiness of our military. At the same time, within the Veteran Affairs program, our CMOP contract recently broke all-time daily production records in meeting the medical needs of our nation's veterans. We are... very, very proud and continue to be very proud of the high performance work that our team continues to provide for our veterans for almost a quarter of a century. In addition, DLH was awarded a small but strategic contract to conduct on-site clinical monitoring for the outpatient treatment with anti-coronavirus immunoglobulin study at eight research sites outside of the United States, leveraging an NIAID, or Infectious Disease Funded Global Clinical Trials Network. It is incredible work that puts us right in the action with regard to further reducing the evolving threats posed by HIV. And lastly, as previously announced, our Infinibyte Cloud solution received full FedRAMP authorization earlier this year. This bolsters our secure data analytics, cloud migration, and platform as a service value propositions that are applicable to current and selected future clients. These are just a few examples that illustrates the differentiating of our talented experts and the tools that we apply in serving the interests of our government, the military, and our service members across the nation. Slide five provides an overview of the many avenues supporting the future expansion, which we believe has positioned us for many years of continued growth and solid performance. As I mentioned at the top, some of our turnkey programs have reached near completion stage, including much of the COVID-19 work in support of multiple agencies. There is always the potential for DLH to leverage this experience and the unique capabilities acquired during this time period across other infectious disease research, including future potential health threats. Overall, our focus areas continue to align with the federal government's spending priorities, and some recent awards offer the opportunity to accelerate top-line growth. Besides our recompete, we've announced several new contracts that position us for additional growth in the coming years that include multiple award contracts that are IDIQ in nature, with a ceiling of $10 billion to provide health-related research and development and R&D support to the U.S. Department of Defense, in particular the Defense Health Agency and the Medical Research and Development Command. This leverages our expertise in areas such as medical, simulation, and infectious disease research. We're also selected as part of another multiple award IDIQ contract with a $320 million ceiling for all five awardees, and that is to provide support for the National Cancer Institute with clinical support and study management, positioning us to help in the ongoing fight against cancer. This has, of course, been a strategic objective for us to expand our business presence within HHS and the National Institute of Health. While the maximum value of both of these awards is substantial, our potential would be based on actual task orders that must be competed over time. Nevertheless, we have begun to build a strong pursuit team with added senior credentials and are thrilled to be part of such critical research where our presence and impact will be felt for years to come. At the same time, we want to re-compete on work that we've held since 1986 with the National Institute of Environmental Health Sciences for exacting high standard statistical analysis and toxicology research. DLH will continue to provide software programming biostatistics, and data visualization for the National Toxicology Program and the Division of Intramural Research. We are very pleased to have been chosen once again for this important work, as well as providing epidemiological and public health support for the National Institute of Diabetes, Digestive, and Kidney Diseases to support expansion again of our chronic disease research. As we approach the end of the government's fiscal year, agency budget adjustments typically provide further opportunity for growth. Excuse me. And that growth can be with contracts that often are decided at a more rapid pace to finalize various procurement initiatives. Subsequent to September 30th, the outlook for our services also remains bright, reflecting generally positive demands and the trends for those demands for fiscal 23 and beyond. As we've said in the past, our innovative healthcare research and technology-based applications have strong bipartisan support on the Hill. While it is too early to say how the budget for fiscal 23 will play out, we're optimistic given that our current portfolio, reputation, and stature within the agencies that we serve and the ongoing need for diagnostic analytics-based approach to helping solve the nation's many health challenges. I do suspect that certainly a continuing resolution seems to be imminent, but we believe that the budget stability and our priorities will pave the way for added growth. At the same time, we have a strong pipeline of possible corporate development M&A opportunities that could also further improve our market position and offer new pathways for our strategic expansion. And as Catherine will share, our balance sheet remains strong and largely de-levered. We have every reason to think that the future will follow our long-standing formula of strategic growth and solid performance through a platform of high value-added services which have rewarded our shareholders as well as our clients with steady returns and continued excellence in performance. I believe that the best is yet to come for DLH, and we're excited to lead this charge. With that, I'd like to turn the call over to our Chief Financial Officer, Catherine Jombo. Catherine?