DLH Holdings Corp.

Hello and welcome to the DLH Holdings Fiscal 2023 First 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 telephone keypad. To withdraw from the question queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Witte, Investor Relations Advisor. Chris, 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 Johnball, 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 three of the presentations. This call may include forward-looking statements that relate to the company's outlook for fiscal 2023 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 our earnings release and in the investor presentation on DLH's website. President and CEO Zach Parker will speak next, followed by CFO Catherine Jambal, 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 the 2023 first quarter conference call. I am truly excited about how well our leadership team and our talented workforce has delivered during this quarter, and I'm really excited to give you an update around all of those aspects on this session. Beginning with slide four, I'll first provide a high-level overview of the quarter's major developments and accomplishments, including, of course, our acquisition of the privately held GRSI on December 8th of last year. adding approximately 700 highly credentialed professionals to DLH and significantly strengthening our digital transformation and cyber capabilities. DLH has incorporated some tremendously talented expertise, both technically and analytically, into our already nationally recognized team of researchers, analysts, technologists, and project managers. This powerful combination of resources positions DLH to drive even greater value for our shareholders, our stakeholders, which include our talented employees and its leadership team, our mission-critical customers, and our shareholders. What we now bring to the market is more differentiated and powerful than ever before, and we look forward to this new growth stage in the company's history. Truly excited about the trajectory. Given the date of the acquisition, our financial results for this quarter include a portion of GRSI. We are well on our way to integrating this unique enterprise, which I'll discuss even more in a moment. Q1 revenue was $72.7 million, which was lower than last year due to the large short-term FEMA contracts, which we completed in Alaska during fiscal year 2022. Catherine will provide pro forma and adjusted numbers for all of our results momentarily. We reported operating income at $3.9 million and reported EBITDA was $6.3 million. Following the acquisition of GRSI, our debt grew, and at the end of the quarter, we had approximately $203 million of indebtedness outstanding. As prior transactions, we have a plan and a strong track record of using the company's operating cash flow to delever the balance sheet as quickly as possible. Our reported EPS was 11 cents per diluted share. Bolstered by the acquisition, our backlog stood at $965 million at the end of the quarter, putting us in great shape for the rest of fiscal 23 and beyond. Turning to slide five, I want to briefly provide an overview of our most recent transaction. As a reminder, we hosted a conference call specifically for the GRSI acquisition in December, which referenced a detailed presentation on our website, and I'd encourage our listeners to pursue this if they have not done so already. That said, I believe this acquisition is one of the most strategically important decisions we've made over the past decade. It has brought together tremendous capabilities and complementary businesses in terms of clients, capabilities, culture, and strengthened our position for organic growth and a leader in digital transformation and IT modernization. The acquisition also expands our portfolio of programs at the National Institute of Health, which has been a strategic target for us for some time. and has offered diversified opportunities within the Department of Defense, particularly the Navy and the Marine Corps, which also have been very, very targeted enterprises. The information warfare community really helps to elevate our cyber positions and all things associated with digital transformation. The bottom line, is that this acquisition significantly broadens our technical capabilities, providing us greater access to mission critical areas expected to accelerate growth. I think most of our investors are aware that we have been moving into the digital transformation space for some time, and this is where GRSI has unique and proven experience, expertise, as well as a strong track record. Combining the technical capabilities With our nationally recognized research, scientific research expertise and capabilities, along with our R&D competencies derived from our IBA acquisition, our role in providing highly differentiated solutions critical to a host of new business development initiatives remains tantamount. GRSI has also enhanced our cybersecurity offerings, further diversifying our operational capabilities opened up new markets, and brought an attractive book of business. At closing, the company had a combined backlog of just around one billion and annualized adjusted EBITDA of approximately 50 million. Given this transformational acquisition and the strong demand for our technology-enabled services, we remain optimistic about the federal market and growth going forward. There continues to be a commitment throughout the government for infrastructure upgrades, overall modernization, enhanced cloud computing and cybersecurity, and we have a solid pipeline of opportunities on the horizon and are actively engaged in new business development opportunities to expand that business. particularly in the scientific and research side where we're looking at opportunities such as the major CIOSP4 opportunity coming up in the near term. Suffice it to say, we are at a whole new level in terms of size and scope, but we're still the same innovative DLH with the entrepreneurial spirit to provide innovative, cost-effective technology solutions to our core customers, in the adjacent markets. With that, I'd like to turn the call over to our Chief Financial Officer, Catherine Joplin.