-
Revenue grew
21% for the quarter and 17% for the full fiscal year versus prior
fiscal year periods
-
Gross profit
decreased 27% for the quarter and 5% for the full fiscal year
versus prior fiscal year periods
-
Management
initiative in FY2013 to achieve profitability
-
Balance
sheet and liquidity significantly improved
-
Key company
transformation milestones completed
-
Management
to conduct conference call/webcast on December 14, 2012 at 11:00
a.m. ET
Atlanta,
Georgia - December 14, 2012 -DLH
Holdings Corp. (NASDAQ: DLHC), a leading healthcare and
logistics services provider to the Federal Government, including
the Departments of Defense and Veterans Affairs, announced today
financial results for its fourth quarter and fiscal year ended
September 30, 2012.
| Financial Highlights |
|
|
|
|
|
|
For the
Three Months
Ended |
|
For the
Year
Ended |
|
|
|
|
|
September 30, |
|
September 30, |
| ($ in thousands, except per share
amounts) |
|
|
2012 |
|
|
2011 |
|
|
2012 |
|
|
2011 |
| Operating revenues |
|
$ |
12,461 |
|
$ |
10,325 |
|
$ |
49,193 |
|
$ |
41,923 |
| Gross profit |
|
$ |
1,142 |
|
$ |
1,559 |
|
$ |
5,597 |
|
$ |
5,898 |
| Gross profit percentage |
|
|
9.2% |
|
|
15.1% |
|
|
11.4% |
|
|
14.1% |
| Loss from operations |
|
|
(752) |
|
|
(3,592) |
|
|
(2,151) |
|
|
(4,223) |
| Loss from continuing operations |
|
|
(354) |
|
|
(3,660) |
|
|
(2,026) |
|
|
(4,590) |
|
Gain/(Loss) from discontinued operation |
|
|
- |
|
|
- |
|
|
- |
|
|
270 |
| Net Income/(Loss) |
|
$ |
(354) |
|
$ |
(3,660) |
|
$ |
(2,026) |
|
$ |
(4,320) |
|
EPS (Loss) from continuing operations -
basic |
|
$ |
(0.04) |
|
$ |
(0.62) |
|
$ |
(0.29) |
|
$ |
(0.84) |
|
EPS (Loss) from discontinued operation - basic |
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
0.05 |
| Loss earnings per
share - basic and diluted |
|
$ |
(0.04) |
|
$ |
(0.62) |
|
$ |
(0.29) |
|
$ |
(0.79) |
| Other Data |
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA (1) |
|
$ |
(676) |
|
$ |
(644) |
|
$ |
(1,678) |
|
$ |
(1,083) |
Commenting on the Company's
results, President and Chief Executive Officer of DLH, Mr. Zachary
Parker stated: "During FY12, DLH completed several key milestones
which required an initial expenditure of capital but will provide
benefit in the coming fiscal year. These included the recruitment
of our new Chief Financial Officer, Kathryn JohnBull, as well as
severance paid to the exiting CFO; program management training
provided to leadership across the organization; and the final phase
of an implementation of an Enterprise Resource Planning (ERP)
system that was recently approved by the DCAA for award of cost
reimbursable contracts."
Mr. Parker added, "Market
conditions in FY12 were quite challenging as the nation's slow
economic recovery and continued defense order delays impacted our
revenue growth and profitability. However, I am extremely pleased
with the way our people managed the business through these periods
of uncertainty. Despite these obstacles, we were still able to
generate increased revenues for the full fiscal year and fourth
fiscal quarter, as compared to last year."
The Company closed fiscal 2012
with a backlog of firm orders at $153 million, as well as a strong
qualified pipeline of opportunities for potential revenue growth in
the future. DLH believes that its primary markets of healthcare and
logistics will be relatively protected during the current federal
government budget negotiations, particularly given the strong
bipartisan commitment to funding its primary current customer, the
Department of Veterans Affairs. While the Company expects
continued growth in 2013, the challenges in the defense business
will remain, including the potentially dramatic cuts to U.S.
defense spending that may go into effect in January.
Looking forward to fiscal 2013,
Mr. Parker expressed: "Our executive team has now sharpened
our focus on delivering profitability and shareholder value
consistent with our strategic plan. We will continue to take
the necessary actions to manage our business efficiently in these
dynamic market conditions."
Chief Financial Officer, Kathryn
JohnBull added, "In fiscal 2012, we strengthened our balance sheet
and improved liquidity through the completion of our rights
offering, expansion of our credit facility, and satisfaction of the
guarantees related to the notes payable. In fiscal 2013, our
primary focus is on delivering profitability on our current
business base, through effective contract performance and cost
control. Although there are numerous risk factors facing us,
as described below, we currently expect gross margins in fiscal
2013 to be more consistent with historical levels, as new contracts
from fiscal 2012 mature and we drive further efficiencies.
Additionally, we intend to manage our operations to derive further
cost savings in our G&A functions. Based on our actions
underway in fiscal 2013, we believe we are well positioned to drive
profitable growth in the future."
Results for
Three Months Ended September 30, 2012
Revenue for the three months ended
September 30, 2012 increased 21% to $12.5 million compared to $10.3
million in the same period in fiscal 2011. Gross profit decreased
from $1.6 million to $1.1 million in fiscal 2011 and 2012,
respectively, due to competitive pressures on gross margins overall
and to additional health and welfare benefits accrued during the
three months ended September 30, 2012.
Total G&A costs for the three
months ended September 30, 2012, excluding a $2.6 million
impairment charge taken in 2011, decreased 27% to $1.9 million,
compared to $2.6 million in the same period in fiscal 2011.
Loss from operations for the three
months ended September 30, 2012 improved to $0.8 million compared
to $3.6 million in the same period in fiscal 2011, due to the
one-time nature of the impairment charge in 2011 and to reduced
year over year G&A expenses, offset by the impact of softening
gross margins.
Loss from continuing operations
and net loss was $0.4 million in the three months ended September
30, 2012, an improvement of $3.3 million over the comparable period
in fiscal 2011, due to the same factors impacting loss from
operations, plus a gain recognized in fiscal 2012 related to
satisfaction of the guarantees related to notes payable.
Adjusted EBITDA for the three
months ended September 30, 2012 and 2011 decreased to ($0.7)
million from ($0.6) million, respectively, due to the same factors
impacting loss from operations, adjusted for the impairment
charge.
Results for
Fiscal Year Ended September 30, 2012
Revenue for fiscal year ended
September 30, 2012 increased 17% to $49.2 million compared to $41.9
million in fiscal 2011. Gross profit for fiscal 2012 was $5.6
million, compared to $5.9 million for fiscal 2011. While
gross profit benefited from the additional volume of revenue, the
average unit price of hours delivered decreased year over year,
reflecting the competitive marketplace.
Total G&A costs for the fiscal
year ended September 30, 2012, excluding a $2.6 million impairment
charge taken in 2011, increased 3% to $7.7 million from $7.5
million in fiscal 2011, due principally to the previously mentioned
CFO transition expenses.
Loss from operations for fiscal
2012 improved to $2.2 million compared to $4.2 million in fiscal
2011, due to the one-time nature of the impairment charge in 2011,
offset by the impact of softening gross margins.
Loss from continuing operations
and net loss was $2.0 million in fiscal 2012, an improvement of
$2.6 million and $2.3 million in loss from continuing operations
and net loss, respectively, in fiscal 2011 due to the same factors
impacting loss from operations, plus a gain from satisfaction of
guarantees related to notes payable in fiscal 2012 and a gain from
discontinued operations in fiscal 2011.
Adjusted EBITDA for the fiscal
year ended September 30, 2012 was ($1.7) million and for fiscal
2011 was ($1.1) million, with the decrease due to the same factors
impacting loss from operations, adjusted for the impairment charge
in fiscal 2011.
Conference
Call and Webcast Details
DLH's management team will host a
conference call for the investment community on Friday, December
14, 2012 at 11:00 AM ET. Interested parties may participate
in the call by dialing (800) 237-9752; international callers dial
(617) 847-8706 (passcode: 17636760) about 5 - 10 minutes prior to
11:00 AM EDT. The conference call will also be available on
replay starting at 1:00 PM ET on December 14, 2012 and ending on
December 21, 2012. For the replay, please dial (888) 286-8010
(passcode: 97601044). The access number for the replay for
international callers is (617) 801-6888 (passcode: 97601044).
About
DLH
DLH Holdings Corp. (NASDAQ: DLHC)
serves clients throughout the United States as a full-service
provider of healthcare, logistics, and technical support services
to DoD and Federal agencies. For more information, visit the
corporate web site at www.dlhcorp.com.
Reconciliation of Adjusted EBITDA
(a non-GAAP financial measure) to net loss from continuing
operations
-
We present Adjusted EBITDA as a
supplemental non-GAAP measure of our performance. We define
Adjusted EBITDA as net loss from continuing operations plus
(i) interest and other income/expenses, net,
(ii) provision for or benefit from income taxes, if any,
(iii) depreciation and amortization, (iv) G&A
expenses - equity grants, and (v) impairment charges. This
non-GAAP measure of our performance is used by management to
conduct and evaluate its business during its regular review of
operating results for the periods presented. Management and the
Company's Board utilize this non-GAAP measure to make decisions
about the use of the Company's resources, analyze performance
between periods, develop internal projections and measure
management performance. We believe that this non-GAAP measure is
useful to investors in evaluating the Company's ongoing operating
and financial results and understanding how such results compare
with the Company's historical performance. By providing this
non-GAAP measure, as a supplement to GAAP information, we believe
we are enhancing investors' understanding of our business and our
results of operations. This non-GAAP financial measure is limited
in its usefulness and should be considered in addition to, and not
in lieu of, US GAAP financial measures. Further, this non-GAAP
measure may be unique to the Company, as it may be different from
the definition of non-GAAP measures used by other companies. A
reconciliation of Adjusted EBITDA with net loss from continuing
operations is as follows:
|
For the Three Months
Ended |
|
For the Year
Ended |
|
September 30, |
|
September 30, |
|
2012 |
2011 |
|
2012 |
2011 |
| Net loss from continuing operations |
$ (354) |
$ (3,660) |
|
$ (2,026) |
$ (4,590) |
| (i) Interest and other expenses (net) |
(398) |
68 |
|
(125) |
367 |
| (ii) provision for taxes |
- |
- |
|
- |
- |
| (iii) amortization and depreciation |
33 |
26 |
|
121 |
113 |
| (iv) G&A expenses -equity grants |
43 |
339 |
|
352 |
444 |
| (v) impairment charges |
- |
2,583 |
|
- |
2,583 |
| Adjusted EBITDA |
$ (676) |
$ (644) |
|
$ (1,678) |
$ (1,083) |
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995:
This press release may contain forward-looking
statements. These statements relate to future events or DLH`s
future financial performance. Any statements that are not
statements of historical fact (including without limitation
statements to the effect that the Company or its management
"believes", "expects", "anticipates", "plans" (and similar
expressions) should be considered forward looking statements. There
are a number of important factors that could cause DLH`s actual
results to differ materially from those indicated by the forward
looking statements. Such risks and
uncertainties include, among other things our ability to secure
contract awards, including the ability to secure renewals of
contracts under which we currently provide services; our ability to
enter into contracts with United States Government facilities and
agencies on terms attractive to us and to secure orders related to
those contracts; changes in the timing of orders for and our
placement of professionals and administrative staff; the overall
level of demand for the services we provide; the variation in
pricing of the contracts under which we place professionals;
government contract procurement (such as bid protest, small
business set asides, loss of work due to organizational conflicts
of interest, etc.) and termination risks; the results of government
audits and reviews; our ability to manage growth effectively; the
performance of our management information and communication
systems; the effect of existing or future government legislation
and regulation; changes in government and customer priorities and
requirements (including changes to respond to the priorities of
Congress and the Administration, budgetary constraints, and
cost-cutting initiatives); economic, business and political
conditions domestically (including the impact of uncertainty
regarding U.S. debt limits and actions taken related thereto); the
impact of medical malpractice and other claims asserted against us;
the disruption or adverse impact to our business as a result of a
terrorist attack; the loss of key officers, and management
personnel; the competitive environment for our services; the effect
of recognition by us of an impairment to goodwill and intangible
assets; other tax and regulatory issues and developments; the
effect of adjustments by us to accruals for self-insured
retentions; our ability to obtain any needed financing; and the
effect of other events and important factors disclosed previously
and from time-to-time in our filings with the U.S. Securities
Exchange Commission. For a discussion of such risks and
uncertainties which could cause actual results to differ from those
contained in the forward-looking statements, see "Risk Factors" in
the company's periodic reports filed with the SEC, including our
Annual Report on Form 10-K for the fiscal year ended September 30,
2012. Given these risks and uncertainties,
you are cautioned not to place undue reliance on forward-looking
statements. DLH undertakes no obligation to publicly update or
revise any forward-looking statement as a result of new
information, future events, changes in expectation or otherwise,
except as required by law.
|
TABLES
TO FOLLOW
DLH HOLDINGS CORP. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS) |
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2012 |
|
2011 |
|
|
|
|
|
|
|
REVENUES |
$ 12,461 |
|
$ 10,325 |
|
|
|
|
|
|
|
DIRECT
EXPENSES |
11,319 |
|
8,766 |
|
GROSS
PROFIT |
1,142 |
|
1,559 |
|
GENERAL
AND ADMINISTRATIVE EXPENSES |
1,830 |
|
2,542 |
|
SEVERANCE |
31 |
|
- |
|
IMPAIRMENT CHARGE - INTANGIBLE ASSETS |
- |
|
2,583 |
|
|
|
|
|
|
|
DEPRECIATION AND AMORTIZATION |
33 |
|
26 |
|
|
Loss from operations |
(752) |
|
(3,592) |
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE) |
|
|
|
|
|
Interest income |
- |
|
1 |
|
|
Interest expense |
(52) |
|
(73) |
|
|
Amortization of deferred financing costs |
(52) |
|
(42) |
|
|
Change in fair value of financial instruments |
3 |
|
107 |
|
Loss on retirement
of assets |
- |
|
(45) |
|
|
Settlement of notes payable |
486 |
|
- |
|
|
Other income, net |
13 |
|
2 |
|
|
|
|
|
|
|
|
Legal expense related to pre-acquisition activity of
acquired company |
- |
|
(18) |
|
|
|
398 |
|
(68) |
|
|
|
|
|
|
|
|
Loss from continuing operations
before income taxes |
(354) |
|
(3,660) |
|
|
|
|
|
|
|
INCOME
TAX EXPENSE |
- |
|
- |
|
|
|
|
|
|
|
|
Loss from continuing
operations |
(354) |
|
(3,660) |
|
|
|
|
|
|
|
GAIN
FROM DISCONTINUED OPERATION |
- |
|
- |
|
|
|
|
|
|
|
NET
LOSS |
$ (354) |
|
$ (3,660) |
|
|
|
|
|
|
|
NET GAIN
(LOSS) PER SHARE - BASIC AND DILUTED |
|
|
|
|
|
Loss from continuing operations |
$ (0.04) |
|
$ (0.62) |
|
|
Gain from discontinued operation |
- |
|
- |
|
|
|
|
|
|
|
|
Net loss per share |
$ (0.04) |
|
$ (0.62) |
|
|
|
|
|
|
|
WEIGHTED
AVERAGE BASIC AND DILUTED SHARES |
|
|
|
|
OUTSTANDING |
9,306 |
|
5,921 |
|
DLH
HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS) |
|
|
|
|
|
|
|
|
|
|
|
For the
Year Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2012 |
|
2011 |
|
|
|
|
|
|
|
REVENUES |
$ 49,193 |
|
$ 41,923 |
|
|
|
|
|
|
|
DIRECT
EXPENSES |
43,596 |
|
36,025 |
|
GROSS
PROFIT |
5,597 |
|
5,898 |
|
GENERAL
AND ADMINISTRATIVE EXPENSES |
7,361 |
|
7,425 |
|
SEVERANCE |
267 |
|
- |
|
IMPAIRMENT CHARGE - INTANGIBLE ASSETS |
- |
|
2,583 |
|
|
|
|
|
|
|
DEPRECIATION AND AMORTIZATION |
120 |
|
113 |
|
|
Loss from operations |
(2,151) |
|
(4,223) |
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE) |
|
|
|
|
|
Interest income |
13 |
|
8 |
|
|
Interest expense |
(298) |
|
(291) |
|
|
Amortization of deferred financing costs |
(195) |
|
(56) |
|
|
Change in fair value of financial instruments |
105 |
|
107 |
|
Loss on retirement
of assets |
(2) |
|
(45) |
|
|
Settlement of notes payable |
486 |
|
- |
|
|
Other income, net |
16 |
|
6 |
|
|
Legal expense related to pre-acquisition
activity of |
|
|
|
|
|
acquired company |
- |
|
(96) |
|
|
|
125 |
|
(367) |
|
|
|
|
|
|
|
|
Loss from continuing operations
before income taxes |
(2,026) |
|
(4,590) |
|
|
|
|
|
|
|
INCOME
TAX EXPENSE |
- |
|
- |
|
|
|
|
|
|
|
|
Loss from continuing
operations |
(2,026) |
|
(4,590) |
|
|
|
|
|
|
|
GAIN
FROM DISCONTINUED OPERATION |
- |
|
270 |
|
|
|
|
|
|
|
NET
LOSS |
$ (2,026) |
|
$ (4,320) |
|
|
|
|
|
|
|
NET GAIN
(LOSS) PER SHARE - BASIC AND DILUTED |
|
|
|
|
|
Loss from continuing operations |
$ (0.29) |
|
$ (0.84) |
|
|
Gain from discontinued operation |
- |
|
0.05 |
|
|
|
|
|
|
|
|
Net loss per share |
$ (0.29) |
|
$ (0.79) |
|
|
|
|
|
|
|
WEIGHTED
AVERAGE BASIC AND DILUTED SHARES |
|
|
|
|
OUTSTANDING |
7,026 |
|
5,460 |
DLH
HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(AMOUNTS IN THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
September 30, |
| ASSETS |
2012 |
|
2011 |
|
|
|
|
|
| CURRENT
ASSETS: |
|
|
|
|
Cash and cash equivalents |
$ 3,089 |
|
$ 763 |
|
Accounts receivable, net of allowance
for doubtful accounts |
|
|
|
|
of $0 as of September 30, 2012
and September 30, 2011 |
13,028 |
|
11,112 |
|
Prepaid workers' compensation |
516 |
|
513 |
|
Other current assets |
133 |
|
184 |
|
Total
current assets |
16,766 |
|
12,572 |
|
|
|
|
|
| EQUIPMENT AND IMPROVEMENTS: |
|
|
|
|
Furniture and equipment |
139 |
|
177 |
|
Computer equipment |
126 |
|
102 |
|
Computer software |
408 |
|
260 |
|
Leasehold improvements |
24 |
|
21 |
|
|
697 |
|
560 |
|
|
|
|
|
|
Less accumulated depreciation and amortization |
(429) |
|
(346) |
|
Equipment and improvements,
net |
268 |
|
214 |
|
|
|
|
|
| GOODWILL |
8,595 |
|
8,595 |
|
|
|
|
|
| OTHER
ASSETS |
|
|
|
|
Deferred financing costs, net |
9 |
|
26 |
|
Other assets |
784 |
|
510 |
|
Total
other assets |
793 |
|
536 |
|
|
|
|
|
| TOTAL
ASSETS |
$ 26,422 |
|
$ 21,917 |
DLH
HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(AMOUNTS IN THOUSANDS EXCEPT PAR VALUE OF
SHARES) |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
September 30, |
| LIABILITIES AND SHAREHOLDERS' EQUITY |
2012 |
|
2011 |
|
|
|
|
|
|
|
|
|
|
| CURRENT
LIABILITIES: |
|
|
|
|
Bank loan payable |
$ 2,363 |
|
$ 740 |
|
Notes payable |
- |
|
711 |
|
Current portion of capital lease obligations |
51 |
|
8 |
|
Accrued payroll |
10,555 |
|
10,318 |
|
Accounts payable |
2,296 |
|
1,983 |
|
Accrued expenses and other current liabilities |
2,817 |
|
2,134 |
|
Liabilities from discontinued operation |
185 |
|
235 |
|
Total
current liabilities |
18,267 |
|
16,129 |
|
|
|
|
|
| LONG
TERM LIABILITIES |
|
|
|
|
Convertible debenture, net |
202 |
|
46 |
|
Derivative financial instruments, at fair value |
119 |
|
182 |
|
Other long term liability |
84 |
|
6 |
|
Total
long term liabilities |
405 |
|
234 |
|
|
|
|
|
|
Total
liabilities |
18,672 |
|
16,363 |
|
|
|
|
|
| COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
| SHAREHOLDERS' EQUITY: |
|
|
|
|
Preferred stock, $.10 par value; authorized 5,000
shares; |
|
|
|
|
none issued and
outstanding |
- |
|
- |
|
Common stock, $.001 par value; authorized 40,000
shares; |
|
|
|
|
issued 9,266 at September 30, 2012 and 6,023 at |
|
|
|
|
September 30, 2011, outstanding 9,264 at |
|
|
|
|
September 30, 2012 and 6,021 at September 30, 2011 |
9 |
|
6 |
|
Additional paid-in capital |
75,207 |
|
70,988 |
|
Accumulated deficit |
(67,442) |
|
(65,416) |
|
Treasury stock, 2 shares at cost at September 30, 2012
and |
|
|
|
|
2 shares at September 30, 2011 |
(24) |
|
(24) |
|
Total shareholders'
equity |
7,750 |
|
5,554 |
|
|
|
|
|
| TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY |
$ 26,422 |
|
$ 21,917 |
CONTACTS:
Zachary C. Parker, President and Chief Executive
Officer
Kathryn M. JohnBull, Chief Financial Officer
DLH
1776 Peachtree Street, NW
Atlanta, GA 30309
866-952-1647
Christy N. Buechler, Marketing
& Communications Manager (Media)
DLH
404-985-8818
christy.buechler@dlhcorp.com
(Investor Relations)
Donald C. Weinberger/Adam Lowensteiner
Wolfe Axelrod Weinberger Associates,
LLC
212-370-4500
don@wolfeaxelrod.com
adam@wolfeaxelrod.com
###
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announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: DLH Holdings Corp. via Thomson Reuters ONE
HUG#1664913
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