DLH Holdings Corp.

Hello and welcome to the DLH Holding Corp Fiscal 2024 Second 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 hand the call 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 John Bull, 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 presentation. This call may include forelooking statements that relate to the company's outlook for fiscal 2024 and beyond. These statements are subject to various risks and uncertainties, which could cause actual results and events to differ materially from such 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 statement. 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 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 2024 second quarter conference call. We remain on track for solid performance midway through the fiscal year. We would not be where we are today without the tremendous support and passion of our strong workforce who remain laser focused on serving our customers and they are dedicated to growing the company and instilling excellence in everything that they do. I would once again like to thank them for executing in a way that led to another great quarter of operating results, setting the stage for a bright future for DLH. Turning to slide four, I'll provide an overview of our financial results. We reported second quarter revenue of $101 million and EBITDA of $10.2 million, while generating operating cash of $5.2 million during the period. which translates to more than 10 million of cash flow year to date. This serves to underscore the cash generating ability of our enterprise, as well as the sound working capital management, as Catherine will review in a moment. We also continued to deliver the company, paying down 3.6 million of debt and ending the period with 170.8 million of total debt outstanding. Overall, we had a sound financial quarter that showed growth in key strategic markets and strong cash generation laying the foundation for solid results going forward. Turning to slide five, I'd like to summarize important elements of our current positioning and outlook. First, we increased our backlog sequentially from the end of Q1 up over 80 million to 736 million. We won several awards this past quarter, including two key re-competes that bolster our technology front at the National Institute of Health and provide an ample opportunity to expand our presence with this and other customers. The first provides IT services at the National Institute on Drug Abuse the leading federal agency supporting scientific research on drug use and addiction, a growing problem in the United States and a priority for our federal government. This award extends a partnership that began with our first contract with that customer in 2014. The contract value is approximately $23 million, of which approximately $10 million is for recurring services and the balance of $13 million for potential service expansions. Through the contract, we will help manage the agency's advanced clinical research informatics system, enabling sharing of data and resources in real time, a competency which we look to expand into adjacent markets. In addition, we want a contract to expand our IT services with the National Cancer Institute, the largest organization within the National Institute of Health, and the government's principal agency for cancer research, training, and health information dissemination. This award utilized the contract which we announced last year with the Center for Biomedical Informatics and Information Technology, a multiple award, highly-competed contract. We are providing scientific, computing, and data analytics services to support the agency's research mission. The contract has a base value, including all option periods, of approximately $52 million over five and a half years, but it also has provisions for an additional $86 million in optional IT services, which, if fully exercised, will bring the total value to $138 million. This award is a great example of the ongoing demand for our company's unique skill sets and integrated services as we'll be handling a broad range of requirements from hardware configuration, software management strategies, network connectivity, platform integration, engineering, and much more. We look forward to continuing our support of these and other NIH programs for years to come. These contract wins are illustrative of the value DLH brings to our customers, and we expect similar momentum during the second half of fiscal 2024 as we continue to invest and reshape our portfolio with business development activities and respond to a variety of active pipeline opportunities. I'd also like to comment on our legacy VA CMOP contracts, which are currently proceeding through the procurement process. As previously announced, the VA issued RFPs for medical logistics and pharmacy services, for the eight CMOP bids and these procurements were set aside for prime contractors that were service-disabled, veteran-owned small businesses. As such, we partnered with a highly qualified small business to bid this work as part of a joint venture. While these bids are evaluated, we continue to operate as the prime contractor for all CMOP locations. In late February, we were informed that the VA had made an initial award decision for one of the eight to the Chelmsford location, awarding the contract to a small business that is unaffiliated with our joint venture. However, that award remains subject to the completion of the VA's acquisition process, and I believe that our joint venture remains a viable contender for that work. While the VA continues to evaluate the eight separate procurements, we have been awarded a sole source IDIQ contract with a $200 million ceiling value to continue the VA CMOP operations at all locations. This remains dynamic with the initial tasking having a period of performance through July 31st of this year with a potential for additional orders beyond with the, beyond the initial tasking. Overall, we see a wide array of opportunities across our core targeted markets in the coming quarters, including through the multi-year large IDIQ contracts that we've discussed in the past, some of which are now starting to define specific task orders, and some of which we expect the government to make decisions on later this year. Given the government is fully funded now through the remainder of the fiscal year, it is a time of healthy and heightened bid activity across the agencies that we serve. Our wide array of applications, research and development, digital transformation capabilities, and our highly credentialed workforce, along with our strong agency relationships, are anticipated to drive continued growth this year and beyond. Even with the CMOP uncertainty, the future of DLH looks tremendously bright. We have continued to build our new business pipeline, which aligns with federal budget priorities, and our expanded capabilities in digital transformation and cybersecurity, and its role, their role, in enhancing science, research and development, and readiness activities. With that, I'd now like to turn the call over to our Chief Financial Officer, Catherine Johnville. Catherine?