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DLH Holdings Corp. : DLH REPORTS FIRST QUARTER 2013 RESULTS



         DLH Holdings Corp. : DLH REPORTS FIRST QUARTER 2013 RESULTS

  * Revenue grew 13.0% for the quarter versus the prior year 

  * Gross profit increased 14.1% for the quarter versus the prior year 

  * Company achieved positive adjusted EBITDA  for the quarter ended  December 
    31, 2012 

  * Management to  conduct conference  call/webcast on  February 13,  2013  at 
    11:00 a.m. ET 

Atlanta, Georgia  - February  13, 2013-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 first quarter ended December 31, 2012.

 Financial Highlights
                                                For the Three Months Ended
                                                        December 31,
 ($ in thousands, except per share amounts)        2012             2011
 Operating revenues                          $        12,994  $        11,495
 Gross profit                                $         1,788  $         1,567
 Gross profit percentage                               13.8%            13.6%
 Loss from operations                                   (94)            (210)
 Net loss                                              (128)            (389)
 Loss per share - basic and diluted          $        (0.01)  $        (0.06)
 Other Data
 Adjusted EBITDA ^(1)                        $            29  $          (16)

Commenting on the Company's results, President and Chief Executive Officer  of 
DLH,  Zachary  Parker  stated:   "DLH's  first  quarter  results   demonstrate 
continued progress in executing our strategy  and driving value back into  the 
company.  During the quarter we delivered solid revenue and generated positive
cash flow from operations even as revenue growth drove greater working capital
needs . In addition, our margins have  improved as a function of our  enhanced 
program management and performance excellence initiatives that we  implemented 
towards the end of Fiscal 2012."

Parker added, "We began our fiscal  year 2013 (FY13) with the assumption  that 
the federal government would  continue to operate  on a continuing  resolution 
(CR) rather than an approved budget for  our entire fiscal year, which has  so 
far been the  outcome.  As  such, we  have assumed  that government  customers 
would have  no  new  funding  for new  contract  awards.   Combined  with  the 
uncertainties around "sequestration" we  anticipated continued paralysis  with 
regard to new business awards within  DoD and most federal agencies.  However, 
we remain confident in  our strategy to focus  on our country's high  priority 
mission programs and agencies.  We continue to see new business  opportunities 
and maintain a healthy pipeline for the future growth of the company."

Parker concluded: "Looking ahead, we continue to be sharply focused on Project
LEAN, which drives  structural costs out  of the business,  and enhancing  our 
competitiveness for the future.   These changes to the  business are not  only 
essential at this  stage of the  company's transformation, but  also are  well 
suited during  this  period of  fiscal  uncertainty for  our  government. With 
Project LEAN well underway, we expect that its full effects should be seen  in 
the coming quarters. This  gives us the  confidence that we  are on the  right 
track towards reaching our goal of delivering profitability in fiscal 2013 and
beyond."

Chief Financial Officer,  Kathryn JohnBull  commented:  "As  Zach stated,  the 
Company always  strives to  attain the  most cost  efficient environment  both 
internally and externally.  Although there  are numerous risks  facing us,  as 
described below, we believe the Company  is on track to achieve our  financial 
goals and objectives  for FY13 and  we will remain  focused on sustaining  our 
improvements, including  positive  adjusted EBITDA,  throughout  the  upcoming 
quarters."

Results for Three Months Ended December 31, 2012

Revenue for the three months ended December 31, 2012 increased 13.0% to  $13.0 
million compared to $11.5  million in the  same period in  fiscal 2012.    The 
increase in revenue is due primarily to expansion on current programs, as well
as the full quarter  impact of new business  awards received during the  first 
quarter of fiscal 2012.

Gross profit increased 14.1%, from $1.6 million to $1.8 million in fiscal 2012
and 2013, respectively, due largely to improved contract performance.

G&A expenses  for the  three months  ended  December 31,  2012 and  2011  were 
$1.85 million and  $1.76 million, respectively,  an  increase of  5.4%.   This 
increase is principally due to the timing of expenses for outside professional
services in the respective periods.  

Loss from  operations  for  the  three months  ended  December  31,  2012  was 
$0.1 million as compared to  loss from operations for  the three months  ended 
December 31, 2011 of $0.2 million.

Adjusted EBITDA for the  three months ended December  31, 2012 was $29,000  as 
compared to  ($16,000) for  the  three months  ended  December 31,  2011,  due 
principally to the increased gross profit described above.

Reconciliation of Adjusted EBITDA (a  non-GAAP financial measure) to net  loss 
from continuing operations

 1. 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
                                                   December 31,
                                                    2012                2011
 Net loss                               $          (128)   $           (389)
 (i) interest and other expenses (net)                34                 179
 (ii) provision for taxes                              -                   -
 (iii) amortization and depreciation                  33                  23
 (iv) G&A expenses - equity grants                    90                 171
 Adjusted EBITDA                       $              29  $             (16)

Conference Call and Webcast Details

Interested parties may participate in the conference call on Wednesday,
February 13, 2013 at 11:00 AM EST by dialing into the conference call line at
1-888-396-2298; international callers dial 1-617-847-8708 (passcode 52360375)
approximately five to ten minutes prior to 11:00 AM EST. The conference call
will also be available on replay starting at 1:00 PM EST on February 13, 2013
and ending on February 20, 2013. For the replay, please dial
1-888-286-8010(passcode 73675690) or 1-617-801-6888 for international callers.

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.

"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
                                        December 31,          December 31,
                                            2012                  2011
                                                            $            
REVENUES                             $             12,994  11,495
                                                                            
DIRECT EXPENSES                     11,206                 9,928
                                                                          
GROSS PROFIT                                        1,788  1,567
                                                                            
GENERAL AND ADMINISTRATIVE EXPENSES 1,849                  1,754
                                                                              
DEPRECIATION AND AMORTIZATION        33                       23
                                                                            
   Loss from operations             (94)                   (210)
OTHER INCOME (EXPENSE)
                                                                              
   Interest expense                  (46)                   (77)
   Amortization of deferred                                                   
   financing costs                   (52)                   (46)
   Change in fair value of                                                    
   financial instruments             61                     (56)
                                                                              
   Other income, net                   3                      -  
                                                                            
                                     (34)                   (179)
   Loss from continuing operations                                          
   before income taxes              (128)                  (389)
                                                                              
INCOME TAX EXPENSE                   -                        -  
                                     $                      $              
NET LOSS                            (128)                  (389)
NET GAIN (LOSS) PER SHARE - BASIC
AND DILUTED
                                     $                      $              
   Net loss per share               (0.01)                 (0.06)
WEIGHTED AVERAGE BASIC AND DILUTED
SHARES
                                                                            
      OUTSTANDING                   9,286                  6,070

 

                      DLH HOLDINGS CORP. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                            (AMOUNTS IN THOUSANDS)
                                       December 31,          September 30
 ASSETS                                    2012                  2012
 CURRENT ASSETS:
                                    $                     $                  
  Cash and cash equivalents         3,239                 3,089
  Accounts receivable, net of
  allowance for doubtful accounts
   of $0 as of December 31, 2012                                            
  and September 30,  2012           12,097                13,028
                                                                              
  Prepaid workers' compensation          516                 516
                                                                              
  Other current assets                   357                 133
                                                                          
       Total current assets         16,209                16,766
 EQUIPMENT AND IMPROVEMENTS:
                                                                              
  Furniture and equipment                139                 139
                                                                              
  Computer equipment                     126                 126
                                                                              
  Computer software                      417                 408
                                                                              
  Leasehold improvements                   24                  24
                                                                              
                                         706                 697
  Less accumulated depreciation                                               
  and amortization                     (462)               (429)
      Equipment and improvements,                                             
  net                                   244                 268
                                                                            
 GOODWILL                           8,595                 8,595
 OTHER ASSETS
                                                                              
  Deferred financing costs, net              5                   9
                                                                              
  Other assets                           775                 784
                                                                              
       Total other assets               780                 793
                                    $                     $              
 TOTAL ASSETS                       25,828                26,422

                      DLH HOLDINGS CORP. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
               (AMOUNTS IN THOUSANDS EXCEPT PAR VALUE OF SHARES)
                                      December 31,           September 30,
 LIABILITIES AND SHAREHOLDERS'
 EQUITY                                   2012                   2012
 CURRENT LIABILITIES:
                                   $                      $                  
  Bank loan payable                1,816                  2,363
  Current portion of capital                                                  
  lease obligations                     52                     51
                                                       
  Convertible debenture, net          241
  Derivative financial                                 
  instruments, at fair value            58
                                                                            
  Accrued payroll                  10,633                 10,555
                                                                              
  Accounts payable                 2,468                  2,296
  Accrued expenses and other                                                  
  current liabilities              2,646                  2,817
  Liabilities from discontinued                                               
  operation                           178                    185
                                                                          
       Total current liabilities   18,092                 18,267
 LONG TERM LIABILITIES
                                                                              
  Convertible debenture, net                          -      202
  Derivative financial                                                        
  instruments, at fair value                          -      119
                                                                              
  Capital Lease Obligations               9                    22
                                                                              
  Other long term liability             21                     62
       Total long term                                                        
  liabilities                           30                   405
                                                                          
       Total liabilities           18,122                 18,672
 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 9,320 at December 31,
  2012 and 9,268 at
  September 30, 2012, outstanding
  9,318 at
  December 31, 2012 and 9,266 at                                              
  September 30, 2012                      9                      9
                                                                            
  Additional paid-in capital       75,291                 75,207
                                                                          
  Accumulated deficit              (67,570)               (67,442)
  Treasury stock, 2 shares at
  cost at December 31, 2012 and
                                                                              
     September 30, 2012               (24)                   (24)
                                                                              
       Total shareholders' equity  7,706                  7,750
                                                            
 TOTAL LIABILITIES AND             $                      $              
  SHAREHOLDERS' EQUITY             25,828                 26,422

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  
678-935-1531
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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Source: DLH Holdings Corp. via Thomson Reuters ONE
HUG#1677183
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