DLH Holdings Corp.

Good morning and welcome to the DLH Holdings Fiscal 2026 Third 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 1 on a touch tone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Chris Witte, the Investor Relations Advisor. Please go ahead.

Thank you and good morning, everyone. On the call with me today is Kathryn JohnBull, President and Chief Executive Officer and Steve Oroho, 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 forward-looking statements that relate to the company's outlook for fiscal 2026 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'll be referencing both GAAP and non-GAAP financial measures. A reconciliation of our non-GAAP results to our reported GAAP result is included in our earnings release and in the investor presentation on DLH's website. President and CEO Kathryn JohnBull will speak next, followed by CFO Steve Oroho. After which, we'll open it up for questions. With that, I'd like to now turn the call over to Kathryn. Please go ahead, Kathryn.

Thank you, Chris, and good morning, everyone. I'm pleased to discuss our third quarter results, the current operating environment, and our outlook in my new role as CEO. Turning to slide four, I'll begin with an overview of the quarter and our priorities going forward. On June 30, the company announced a series of planned leadership transitions. We thank Zach Parker for his 16 years of leadership and are grateful that DLH will continue to benefit from his industry knowledge, strategic perspective, and longstanding relationships through his service on the board and as a consultant supporting selected strategic growth pursuits. Steve and I are honored to lead DLH in our new roles, Our priorities to investors, customers, and employees are clear. Disciplined execution for our customers, organic growth, and employee development. We believe the leadership team is well positioned to advance the company's strategy and create value for customers and shareholders alike. Our success in the current market will rely on our highly credentialed workforce and technical capabilities. I'll expand on these priorities later in the presentation. Organic growth continues to be our number one corporate priority. As we discussed last quarter, we believe that the government procurement markets have demonstrated improved clarity and stability in recent months. This marks a significant improvement to the contracting environment through fiscal 2025 and earlier in the year. When government shutdowns, budget uncertainty, and large reductions to federal agency contracting departments significantly slowed procurement activity across government agencies. Numerous key deals and large procurements that we had been tracking for fiscal 25 are just now coming up for bid. We are encouraged by the increase in bidding activity and are experiencing a busy end to the fiscal year, responding to procurement requests. We expect certain award decisions over the coming quarters subject to customer timelines and procurement processes. The growth opportunities available to DLH are exemplified by the multiple award indefinite delivery indefinite quantity or IDIQ contract to provide a full range of logistics information technology services to the U.S. Navy, which was awarded to the company in June. Through task orders to be competed under this contract, DLH will have the opportunity to implement agile development processes and adaptable architecture to enable continuous systems modernization, integration, sustainment, and migration for Naval Air Systems Command, known as NAVAIR, a new customer for DLH. As we discussed at our annual meeting in March, maintaining a robust suite of IDIQ vehicles is vital for our company as government procurement strategies evolve. These vehicles give our customers flexible, streamlined contracting options. Our proposal-ready posture and agile response capabilities enable the company to compete effectively in accelerated procurement environments. This quarter, the VA CMOP program completed its transition to small business set-aside contractors. With the conclusion of this legacy program, we expect revenue moving forward will be generated exclusively through our technology-powered solutions. Accordingly, the company completed its cost scaling initiatives at the end of the quarter. As Steve will discuss in more detail shortly, Adjusted EBITDA reflects the impact of those initiatives had they been realized for the full 90-day period. By aligning indirect costs with expected revenue volumes, we believe DLH is well positioned to compete for organic growth opportunities. We continue to prioritize deleveraging our balance sheets. Total debt was reduced to $128.7 million, aligned with our debt reduction plans for fiscal 2026, as outlined in previous quarters. Mandatory payments are nearly nine months ahead of schedule. Turning to slide five, I would like to provide further color on our leadership transition and how the management team intends to advance the company's strategy and compete for new business opportunities. all in service of creating value for our shareholders. This transition will be marked not by overhaul, but by clarity and sharp focus on what DLH does best. Growth remains priority number one for our leadership team with near-term focus on contract expansion and smaller singles and doubles level opportunities. We intend to aggressively compete for contract opportunities while keeping a disciplined new business pipeline. We will continue to lean on our technical expertise to execute on our government customers' crucial missions. For this, we rely on our deep and highly credentialed talent pool, which spans each of our capability areas and includes hundreds of technologists and researchers. For decades, government agencies have come to DLH in search of innovation, cost savings, scientific excellence, and mission know-how. That has not changed. Of course, financial strength is the basis on which our platform can grow. DLH will continue to emphasize deleveraging the balance sheet and strengthening operating performance. Re-establishing a competitive cost structure, which reflects the scale of our current business, was key to these efforts. At this time, cost reductions are materially complete, and we expect that the company is competitive at its current scale. A simplified enterprise built on execution and value is one that we believe will serve us well in our strategic initiatives. Overall, we remain competitively positioned to succeed over the coming years, and we expect to vie for the high-value organic growth opportunities that our company was assembled to compete for. With that, I'd now like to turn the call over to our Chief Financial Officer, Steve Oroho. Steve.