DLH Holdings Corp.

Good day and welcome to the DLH Holdings Fiscal 2024 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 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 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 PowerPoint presentation are available on our website under the Investor page. I would now like to provide a brief State of Harbor statement, which is also shown on slide three of the presentation. This call may include forward-looking statements that relate to the company's outlook for fiscal 2025 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 statements. On today's call, we will be referencing both GAAP and non-GAAP financial measures. The reconciliation of our non-GAAP results through 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 the CFO, Catherine Johnbull, 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 very much, Chris, and welcome to everyone here for joining us on the fourth quarter of communication. I'd like to take a moment to once again express our appreciation to the tremendous commitment that our workforce has given during this quarter to be able to deliver great results. It happens to be a very, very strong end of the year, and we really are truly blessed to have a strongly committed a team of scientists, technologists, and subject matter experts delivering every day for our customers, and we really, really appreciate that. In addition, we're going to cover a number of things on today's call as we want to really give some highlights around our differentiating capabilities. But our troops have really done a tremendous job, and I know we'll continue to do so in the quarters to come. Now turning to slide four, I'll provide an overview of our financial results. We reported fourth quarter revenue of $96.4 million and for the full year revenue increased to nearly $396 million, surpassing our previous record results. Our EBITDA for the fourth quarter was $10.7 million and $42 million for the fiscal year. We generated operating cash of $12.5 million during the period, equating to $27.4 million of operating cash flow for the fiscal year. This cash-generating ability allowed us to pay down debt by $11.9 million in the fourth quarter, ending the fiscal year with $154.6 million in total debt outstanding. Catherine will review our results further in a moment. If you would turn to slide five, I'd like to give you an update on our near-term outlook as we move into a new year and soon a new administration. We're very pleased to announce a new $76 million contract award with the United States Navy at the tail end of the quarter. This highly competitive award was won through a competitive procurement process unseating a long-term incumbent. Under this contract, we will provide critical systems engineering and integrated logistics support to support our fleet's C5ISR missions. Wins such as this illustrate the newly positioned DLH organic growth posture as we go forward. With a focus on leveraging now our technology-enabled solutions, the implementations of strategically new business organic development capabilities in order to win contracts from across our client base. Turning to broader industry trends, we're operating, of course, under another continuing resolution, which, when combined with an election year with changing priorities of the new presidential administration, is expected to have a substantial reshaping, we believe, of the federal government procurement landscape. Changes developed by traditional cabinet secretaries as well as other advisory organizations such as commissions, if you would, such as Department of Government Efficiency, DOGE as we refer to it, will likely emerge in our fiscal 25 second and third quarters. As we remain very close to the administration's transition team, it's important that we keep a focus on how we see it impacting our addressable market as DLH. I'm happy to tell you that at this stage, despite a lot of the headlines, we see it as neutral to slightly positive over the long haul with regard to our addressable market and growth forecast. to support our growth plan for fiscal 25. We recently amended our credit facility to provide flexibility while navigating small business conversion headwinds that we've talked about previously, most notable of those, of course, being our CMOP. And with regard to our CMOP portfolio, we're operating under new task orders that currently extend into our services into the second quarter of fiscal 2025 as the VA continues to try to work through its procurement process. we continue to expect that the VA will conclude these procurements and make award decisions within fiscal 2025. In our last discussion during the previous quarter, we indicated that we're evaluating our CMOP proposal strategy in response to what then were some new amendments to the procurement process that were issued by the VA. In short, We have not continued our joint venture bids in response to all of those VA acquisition changes. We believe those changes will further dilute the performance standards or serve to dilute the performance standards required, which typically results in low bidder awards. These, however, we believe will also be concluded during the year. Having said that, We have selectively participated in some of the sites as a value-added subcontractor. Turning to slide six, let me provide further detail into how we see the future of the company evolving. As you may recall, over eight years ago, Catherine and I began communicating and implementing an acquisition strategy that was designed to deliver on our strategy. which was to expand in very specific technology and scientific capabilities and to diversify into selected markets beyond the VA. The DLH that you see today is the result of that strategy having unfolded successfully to assemble a dynamic science and technology-based enterprise with a broad set of capabilities and customers to create an enterprise that was greater than the sum of its parts. We are now taking that organization for a spin for organic growth and we're excited about the added business development engines that we have put into place. We were intentional about building a company that was capable to addressing the full range of our targeted customers' requirements in a way that offers an agile, best practice based, high tech solutioning company to compete favorably in the in the organic space. We think about our differentiating capabilities in three primary components, digital transformation and cybersecurity, science research and development, and systems engineering and integration. We internally refer to those as DTC, SRD, and SE&I. The main reason for having built this capability over the years has been to strengthen these service offerings with regard to these key agencies that have demonstrated strategically a strong interest in those capabilities. These happen to be the channels in which we provide our strong capabilities in artificial intelligence, and we've talked about machine language and large language systems. We've talked about robotics engineering and telehealth tools and technologies, the application of modeling and simulation, you know, specialized engineering and the like. And those are the powerful capabilities that we're able to leverage in developing winning solutions, much like on the recent award. Now, with these fully assembled capabilities, we're pursuing a nearly $4 billion pipeline, new business pipeline, of opportunities for which we have substantially elevated win probabilities. As our investors know, we already have a seat at the table for many relevant future task orders through existing long-term IDIQ contract vehicles, and we are continuing to seek more. But we are also using our organic growth engine to go after larger, broader contracts that again look very much like our most recent win with the Navy. These services are in high demand because the federal government is looking to drive efficiencies. They're also looking to partner with organizations much like us, a company that in its DNA has been rooted on driving efficiencies, delivering best value, and reducing costs to our clients. These require more complex answers, how to get things done, how to do things more differently and more efficiently, leveraging tools such as AI and ML, and supportive data analytics, how to leverage digital transformation, cloud-based secure computing in order to improve systems performance, and to pursue capabilities such as achieving precision medicine in the out years. We also look at how to offer to the customer how to ensure that their networks are safe from cybersecurity attacks, how to tackle and address the healthcare challenges of today and most notably for tomorrow. Our highly credentialed staff, including our health IT professionals, a world-class team of experts, deliver these mission-critical solutions and services to our customers every day. The DLH team is recognized as thought leaders within the health and defense markets more and more, where we're pursuing major organic growth opportunities. This is where we are, and we are looking forward to the future. Given our expanded capabilities and focus on these end markets, I believe that we're at a precipice of a new day at DLH, which will take us to much higher levels and stronger values as we achieve top-line growth and operating performance. This is clearly an exciting time as we navigate through some of these administrative and other near-term challenges. We really appreciate all of our investors who have joined us through this journey, and we're even more excited about continuing the successful strategy unfolding that we have shared with you over the last decade. We're excited about what the future holds from a shareholder value for DLH. With that, I'd like to turn the call over to our Chief Financial Officer, Catherine Johnville. Catherine.