DLH Holdings Corp.

Good morning and welcome to the DLH Holdings Corp Fiscal 2023 Fourth 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 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, 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 Johnbull, Chief Financial Officer. The company's earnings release and 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 presentation. This column may include forward-looking statements that relate to the company's outlook for fiscal 2024 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 SEC. 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 John Bull, 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 2023 fourth quarter conference call. I am very pleased with the way that we have finished the year and with our strong position heading into fiscal 2024. But first, let me take a minute to once again thank our dedicated employees for the passion, the commitment, and the performance excellence that they have delivered in support of all of our customers' missions and to our corporation. This has been a transformative year for our company, and without the steadfast contribution of our team members at every level, DLH would not be the leading technology solutions and services provider that it is today. In all three channels, our digital transformation and cybersecurity, our science and research and development, and our systems engineering integration, all of our members have really shined, so thank you. Now turning to slide four, I'll first provide a high-level overview of the financial highlights for the quarter and the fiscal 2023. Fourth quarter revenue was $101.5 million, reflecting the impact of our acquisition as well as organic growth across our existing business. For the full year, revenue rose nearly $376 million from an adjusted $269 million in fiscal 2022, which of course excludes the short-term turnkey contract with FEMA to support Alaska's response to COVID-19. Given our sizable backlog, increased addressable market, and access to bid on various task orders, through our several large contracts, we believe that the future continues to look bright for DLH. Adjusted operating income was $7.8 million for the quarter and $26.5 million for the fiscal 2023, while adjusted EBITDA rose to $12.1 million for Q4 and $42.1 million for the year. In addition, we generated $31 million in cash from operations over the past 12 months and exited a quarter with an approximate $179.4 million in debt. That is down $207.6 million after our December 22 acquisition. As Catherine will discuss further in a moment, we plan to continue using our company's strong cash flow generation to reduce debt in the coming year as we work towards further delivering our balance sheet. Our adjusted EPS was 16 cents per diluted share for the quarter and 55 cents for the full year. And our backlog as of September 30th, 2023 was just under 705 million. We continue to operate in an active bid environment even as the government still works its way through the current continuing resolution circumstance. We remain very upbeat about the opportunities ahead and the path to accelerate top-line growth forward organically. On that point, slide five provides an update on certain key market conditions and metrics that have the potential to impact the company in the quarters to come. First, the company has worked diligently to align our business structure with our expanded capabilities and technology-based go-to-market strategy. Our highly credentialed staff are dedicated to providing the most advanced solutions that address the needs of each of our clients, positioning us to compete for more higher-value opportunities going forward. As customers continue utilizing the professional services contractors, we can leverage our expertise, our experience, and applications to further penetrate agencies and to add to our book of business and accelerated growth. Second, the federal government remains committed to expanding the role of cybersecurity, given the crucial ongoing need to protect sensitive information and big data networks as well as the personal records of millions of Americans. The use of cloud-based computing only increases cybersecurity's criticality and importance to protecting sensitive government systems and data. This aligns well with our intellectual property, our secure data platforms, and technology-driven solutions. Third, as I mentioned a moment ago, the federal government continues to operate under a continuing resolution, with certain agencies funded through January 19th and others through February 2nd. While this does at times restrict and hamper certain decision-making across some of the federal agencies, particularly with regard to awarding of new contracts, it is not expected to materially impact DLH's current book of business, nor the near-term outlook. Our wide array of programs and services provide a solid bedrock for the company's top line over the coming months. In addition, the core agencies which we support, those include, of course, the Department of Defense, including its DHA, Defense Health Agency, Veteran Affairs, and the Health and Human Services Organizations, they typically receive broad bipartisan support which we anticipate will continue. The White House, in its fiscal 2024 preliminary budget, called for historic investments in research, artificial intelligence, machine language, and digital transformation, which would all play very well to our, you know, growing and somewhat unique capabilities and increase the opportunity for further top-line expansion along strong underlying And lastly, our expanded capabilities and expertise provide the opportunity for us to bid on task orders from several new large IDIQ contracts and those that remain on the horizon. There's every indication that the government will continue to award a growing volume of work through these pre-screened arrangements. Strategic contracts that are under consideration applicable to us include our CBITS contract, relatively recently announced, the major CIO SB4, supporting biomedical research coming out of National Institute of Health, OASIS, and several other highly, very large ceiling multi-year contract vehicles. These multiple award IDIQ contracts offer numerous opportunities for high-value work over the coming years that can substantially raise the revenue base of the company and task orders as they are awarded. We're confident in our ability to win task orders on these vehicles, which we expect to impact the company's growth trajectory for years to come. Given our advanced solutions, highly engaged customer relationships, and the unparalleled expertise of our amazing staff, We're very optimistic for FY24 and beyond. With that, I'd now like to turn the call over to our Chief Financial Officer, Catherine Johnbo. Catherine.