New Jersey | 22-1899798 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
3565 Piedmont Road, NE |
Atlanta, GA 30305 |
(Address and zip code of principal executive offices) |
CHECK THE APPROPRIATE BOX BELOW IF THE FORM 8-K FILING IS INTENDED TO SIMULTANEOUSLY SATISFY THE FILING OBLIGATION OF THE REGISTRANT UNDER ANY OF THE FOLLOWING PROVISIONS: ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition | |
On December 13, 2018, DLH Holdings Corp. announced by press release its financial results for its fourth fiscal quarter and fiscal year ended September 30, 2018. A copy of the press release is attached hereto as Exhibit 99.1. The information in Item 2.02 of this Current Report shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in Item 2.02 of this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. | ||
Item 9.01 | Financial Statements and Exhibits | |
Exhibit Number | Exhibit Title or Description | |
DLH Holdings Corp. | ||
By: /s/ Kathryn M. JohnBull | ||
Name: Kathryn M. JohnBull | ||
Title: Chief Financial Officer | ||
Date: December 13, 2018 |
Exhibit Number | Description |
• | Fiscal fourth quarter revenue was $32.5 million, up 6.9% over the fourth quarter of fiscal 2017 |
• | Income from operations was $2.8 million for the quarter versus $2.1 million last year |
• | Diluted earnings per share were $0.14 for the quarter versus $0.08 per share in the prior-year period |
• | DLH generated operating cash flow of $6.1 million for the quarter and $14.1 million for the fiscal year |
• | The Company reduced its senior debt to $7.7 million as of September 30, 2018, with a cash balance of $6.4 million |
INVESTOR RELATIONS |
Contact: Chris Witty |
Phone: 646-438-9385 |
Email: cwitty@darrowir.com |
(unaudited) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenue | $ | 32,489 | $ | 30,390 | $ | 133,236 | $ | 115,662 | ||||||||
Direct expenses (exclusive of depreciation and amortization shown below) | 24,604 | 23,137 | 103,034 | 89,812 | ||||||||||||
Gross margin | 7,885 | 7,253 | 30,202 | 25,850 | ||||||||||||
General and administrative expenses | 4,478 | 4,615 | 19,178 | 17,466 | ||||||||||||
Depreciation and amortization | 588 | 489 | 2,242 | 1,754 | ||||||||||||
Income from operations | 2,819 | 2,149 | 8,782 | 6,630 | ||||||||||||
Interest expense, net | 315 | 340 | 1,116 | 1,228 | ||||||||||||
Income before income taxes | 2,504 | 1,809 | 7,666 | 5,402 | ||||||||||||
Income tax expense, net | 747 | 769 | 5,830 | 2,114 | ||||||||||||
Net income | $ | 1,757 | $ | 1,040 | $ | 1,836 | $ | 3,288 | ||||||||
Net income per share - basic | $ | 0.15 | $ | 0.09 | $ | 0.15 | $ | 0.29 | ||||||||
Net income per share - diluted | $ | 0.14 | $ | 0.08 | $ | 0.14 | $ | 0.27 | ||||||||
Weighted average common shares outstanding | ||||||||||||||||
Basic | 11,899 | 11,502 | 11,881 | 11,345 | ||||||||||||
Diluted | 12,873 | 12,528 | 12,873 | 12,352 |
September 30, 2018 | September 30, 2017 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 6,355 | $ | 4,930 | ||||
Accounts receivable | 10,280 | 11,911 | ||||||
Other current assets | 760 | 598 | ||||||
Total current assets | 17,395 | 17,439 | ||||||
Equipment and improvements, net | 1,566 | 1,391 | ||||||
Deferred taxes, net | 4,137 | 9,639 | ||||||
Goodwill | 25,989 | 25,989 | ||||||
Intangible assets, net | 13,365 | 15,127 | ||||||
Other long-term assets | 89 | 139 | ||||||
Total assets | $ | 62,541 | $ | 69,724 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Debt obligations - current | $ | — | $ | 6,518 | ||||
Derivative financial instruments, at fair value | — | 306 | ||||||
Accrued payroll | 4,983 | 3,723 | ||||||
Accounts payable, accrued expenses, and other current liabilities | 10,950 | 10,895 | ||||||
Total current liabilities | 15,933 | 21,442 | ||||||
Total long term liabilities | 7,190 | 12,427 | ||||||
Total liabilities | 23,123 | 33,869 | ||||||
Commitments and contingencies | ||||||||
Shareholders' equity: | ||||||||
Common stock, $.001 par value; authorized 40,000 shares; issued and outstanding 11,899 and 11,767 at September 30, 2018 and 2017, respectively. | 12 | 12 | ||||||
Additional paid-in capital | 84,285 | 82,687 | ||||||
Accumulated deficit | (44,879 | ) | (46,844 | ) | ||||
Total shareholders’ equity | 39,418 | 35,855 | ||||||
Total liabilities and shareholders' equity | $ | 62,541 | $ | 69,724 |
Year Ended | ||||||||
September 30, | ||||||||
2018 | 2017 | |||||||
Operating activities | ||||||||
Net income | $ | 1,836 | $ | 3,288 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization expense | 2,242 | 1,724 | ||||||
Amortization of debt financing costs as interest expense | 275 | 268 | ||||||
Change in fair value of derivative financial instruments | — | 102 | ||||||
Stock based compensation expense | 1,375 | 662 | ||||||
Loss on retirement of equipment | — | 31 | ||||||
Deferred taxes, net | 5,502 | 1,776 | ||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | 1,631 | (5,274 | ) | |||||
Other current assets | (162 | ) | (56 | ) | ||||
Accounts payable, accrued payroll, accrued expenses and other current liabilities | 1,314 | 3,945 | ||||||
Other long term assets/liabilities | 64 | 58 | ||||||
Net cash provided by operating activities | 14,077 | 6,524 | ||||||
Investing activities | ||||||||
Acquisition, net of cash acquired | — | (250 | ) | |||||
Purchase of equipment and improvements | (654 | ) | (1,064 | ) | ||||
Net cash used in investing activities | (654 | ) | (1,314 | ) | ||||
Financing activities | ||||||||
Repayments on senior debt | (11,979 | ) | (3,750 | ) | ||||
Repayments of capital lease obligations | — | (86 | ) | |||||
Payment of deferred financing costs | (65 | ) | — | |||||
Proceeds from stock option exercise | 46 | 129 | ||||||
Net cash used in financing activities | (11,998 | ) | (3,707 | ) | ||||
Net change in cash and cash equivalents | 1,425 | 1,503 | ||||||
Cash and cash equivalents at beginning of year | 4,930 | 3,427 | ||||||
Cash and cash equivalents at end of year | $ | 6,355 | $ | 4,930 | ||||
Supplemental disclosures of cash flow information | ||||||||
Cash paid during the period for interest | $ | 800 | $ | 883 | ||||
Cash paid during the period for income taxes | $ | 876 | $ | 337 | ||||
Non-cash issuance of stock upon exercise of options | $ | 25 | $ | — | ||||
Derivative warrant liability reclassified as equity | $ | (306 | ) | $ | — |
Three months ended | Year Ended | |||||
September 30, | September 30, | |||||
2018 | 2018 | |||||
Market Mix: | ||||||
Defense/VA | 69 | % | 65 | % | ||
Human Services and Solutions | 26 | % | 31 | % | ||
Public Health/Life Sciences | 5 | % | 4 | % | ||
Contract Mix: | ||||||
Time and Materials | 93 | % | 95 | % | ||
Cost Plus Fixed Fee | 5 | % | 3 | % | ||
Firm Fixed Price | 2 | % | 2 | % | ||
Prime vs Sub: | ||||||
Prime | 100 | % | 99 | % | ||
Subcontracts | — | % | 1 | % |
Three Months Ended | Year Ended | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||||||||||
Net income | $ | 1,757 | $ | 1,040 | $ | 717 | $ | 1,836 | $ | 3,288 | $ | (1,452 | ) | |||||||||||
(i) Interest expense | 315 | 340 | (25 | ) | 1,116 | 1,228 | (112 | ) | ||||||||||||||||
(ii) Provision for taxes | 747 | 769 | (22 | ) | 5,830 | 2,114 | 3,716 | |||||||||||||||||
(iii) Depreciation and amortization | 588 | 489 | 99 | 2,242 | 1,754 | 488 | ||||||||||||||||||
EBITDA | $ | 3,407 | $ | 2,638 | $ | 769 | $ | 11,024 | $ | 8,384 | $ | 2,640 |
Three Months Ended | Year Ended | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||||||||||
Net income | $ | 1,757 | $ | 1,040 | $ | 717 | $ | 1,836 | $ | 3,288 | $ | (1,452 | ) | |||||||||||
Write-down of deferred tax assets | — | — | — | 3,365 | — | 3,365 | ||||||||||||||||||
Pro-forma impact of tax rate change | — | 145 | (145 | ) | 527 | (527 | ) | |||||||||||||||||
Net income, adjusted for the effect of the 2017 Tax Act | $ | 1,757 | $ | 1,185 | $ | 572 | $ | 5,201 | $ | 3,815 | $ | 1,386 | ||||||||||||
Net income per diluted share | $ | 0.14 | $ | 0.08 | $ | 0.06 | $ | 0.14 | $ | 0.27 | $ | (0.13 | ) | |||||||||||
Impact of write-down of deferred tax asset | — | — | — | 0.26 | — | 0.26 | ||||||||||||||||||
Pro-forma impact of tax rate change | — | 0.01 | (0.01 | ) | — | 0.04 | (0.04 | ) | ||||||||||||||||
Net income per diluted share, adjusted for the effect of the 2017 Tax Act | $ | 0.14 | $ | 0.09 | $ | 0.05 | $ | 0.40 | $ | 0.31 | $ | 0.09 |
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