DLH Holdings Corp. : DLH REPORTS SECOND QUARTER FISCAL 2013 RESULTS

     DLH Holdings Corp. : DLH REPORTS SECOND QUARTER FISCAL 2013 RESULTS

  *Quarterly revenues increased 3.1% for the quarter versus the prior year

  *Gross profit improved 36.4% for the quarter versus the prior year 

  *Company achieved income from operations in the quarter

  *Company delivered  positive adjusted  EBITDA  for the  second  consecutive 
    quarter

  *Management to  conduct conference  call/webcast today,  May 15,  2013,  at 
    11:00 a.m. ET

Atlanta, Georgia - May 15, 2013-DLH Holdings Corp. (NASDAQ: DLHC), a technical
services provider to Federal  government agencies specializing in  healthcare, 
logistics, and contingency response announced today financial results for  its 
second quarter ended March 31, 2013.

Table 1 - Financial Highlights

                          Three Months Ended            Six Months Ended
                               March 31,                    March 31,
($ in thousands,
except per share
amounts)                   2013          2012          2013           2012
                                             
Operating revenues    $    13,007  $   12,619  $    26,002  $    24,114
                                            
Gross profit          $    1,771  $    1,298  $    3,560  $    2,865
Gross profit
percentage                    13.6%        10.3%          13.7%          11.9%
Income (loss) from                              
operations                       9        (564)          (84)       (774)
                                                
Net loss              $    (109)     $   (715)    $   (237)     $  (1,104)
Loss per share -                                     
basic and diluted     $     (0.01)  $   (0.12)  $      (0.03)  $   (0.18)
Other Data
                                      
Adjusted EBITDA ^(1)  $         80  $     (487)  $     109  $    (503)

Management Discussion

Commenting on the Company's results, President and Chief Executive Officer  of 
DLH, Zachary Parker stated: "The turnaround to becoming a profitable  company 
remains on track as  evidenced by our second  quarter results.  DLH  achieved 
positive adjusted EBITDA  levels for  the second consecutive  quarter and  had 
sequential quarterly improvement attributed largely to gross margin  expansion 
from improved contract performance. In addition, despite government  gridlock, 
the Company was able to modestly grow revenues."

Chief Financial  Officer,  Kathryn  JohnBull commented,  "The  second  quarter 
results were  a  marked improvement  on  many  fronts. Our  gross  margin  has 
improved through a combination of  closely monitoring contract performance  as 
well as  stringent  cost  controls. Additionally,  these  same  measures  have 
allowed us to deliver  positive adjusted EBITDA for  the quarter ended  March 
31, 2013,  which  we  believe  will  be  sustainable.  This  strong  operating 
structure is necessary  as we  begin implementing  new awards  as they  become 
available."

Results for Three Months Ended March 31, 2013

Revenues for the three months ended March 31, 2013 and 2012 were $13.0 million
and $12.6 million, respectively, which represents an increase of $0.4  million 
or 3.1%, despite extended government delays  in major awards. The increase  in 
revenue is due primarily to expansion on current programs. 

Gross profit for the three months ended March 31, 2013 and 2012 was $1.8
million and $1.3 million, respectively, which represents an increase of $0.5
million or 36.4%. As a percentage of revenue, gross profit was 13.6% and
10.3%, for the three months ended March 31, 2013 and 2012, respectively. The
gross profit rate benefited from improved contract performance and cost
management. 

General and administrative ("G&A") expenses  for the three months ended  March 
31, 2013 and 2012 were $1.7 million and $1.8 million, respectively, a decrease
of $0.1 million or 5.8%. As a percent of revenue, G&A expenses were 13.3% and
14.5% for the three months ended  March 31, 2013 and 2012, respectively.  This 
improvement was due to cost reduction initiatives to allow greater leverage of
administrative resources as revenue grew.

Income from operations for the three months ended March 31, 2013 was $9,000 as
compared to loss from operations for the three months ended March 31, 2012  of 
$564,000. The improvement  in income  from operations  results from  improved 
gross margin and decreased non-strategic general and administrative expenses.

Net loss  for the  three months  ended March  31, 2013  was $0.1  million,  or 
($0.01) per  basic and  diluted share,  as compared  to loss  from  continuing 
operations of $0.7  million, or ($0.12)  per basic and  diluted share for  the 
three months ended March 31, 2012. This improvement is due to increased  gross 
profit, constraints on spending, and a reduction of other expenses.

Earnings (Loss) Before Interest  Tax Depreciation and Amortization  ("EBITDA") 
adjusted for  other non-cash  charges ("Adjusted  EBITDA"^(1)) for  the  three 
months ended March  31, 2013  was $80,000 as  compared to  ($487,000) for  the 
three months ended  March 31,  2012, due  principally to  the increased  gross 
profit and reduced expenses.

Results for Six Months Ended March 31, 2013

Revenues for the six months ended March  31, 2013 and 2012 were $26.0  million 
and $24.1 million respectively, which  represents an increase of $1.9  million 
or 7.8% over the prior fiscal period. The increase in revenue is due primarily
to expansion on current programs as well  as having the full six month  impact 
of new business awards received during the prior year period.

Gross profit for the six months ended March 31, 2013 and 2012 was $3.6 million
and $2.9 million, respectively, which  represents an increase $0.7 million  or 
24.3% over the  prior fiscal year  period. As a  percentage of revenue,  gross 
profit was 13.7% and 11.9% for the  six months ended March 31, 2013 and  2012, 
respectively. The gross profit rate benefited from increased revenue, improved
contract performance, and cost management.

G&A expenses for the  six months ended  March 31, 2013 and  2012 were flat  at 
$3.6 million. As a percent of revenue, G&A expenses were 13.8% and 14.9%  for 
the six months ended March 31,  2013 and 2012, respectively. This  improvement 
was  due  to  cost  reduction   initiatives  to  allow  greater  leverage   of 
administrative resources as revenue grew.

Loss from operations  for six months  ended March 31,  2013 was  approximately 
$84,000 as compared to loss from operations for the six months ended March 31,
2012 of  approximately $774,000.  The improvement  in income  from  operations 
results from improved  gross margin  and decreased  non-strategic general  and 
administrative expenses.

Net loss for the six months ended March 31, 2013 was $0.2 million, or  ($0.03) 
per basic and  diluted share,  as compared  to net  loss of  $1.1 million,  or 
($0.18) per basic and diluted share for  the six months ended March 31,  2012. 
This improvement is due to  increased gross profit, constraints on  spending, 
and a reduction in non-strategic other expenses.

EBITDA adjusted for other non-cash charges for the six months ended March  31, 
2013 was $109,000 as compared to ($503,000) for the six months ended March 31,
2012, due principally to the increased gross profit and reduced expenses.

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 plus (i)interest  and 
    other income/expenses,  net, (ii)provision  for  or benefit  from  income 
    taxes, if any, (iii)depreciation and amortization, and (iv)G&A  expenses 
    - equity  grants. 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, 
    USGAAP 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 is as follows:

                        For the three months ended   For the six months ended
                                March 31,                   March 31,
                                 2013         2012         2013           2012
Net loss                $    (109)  $          $           $        
                                            (715)       (237)       (1,104)
(i)Interest and other       118                       
expenses (net)                                 153          152          332
(ii)provision for                 -           -           -             -
taxes
(iii)amortization and                               
depreciation,                      33          27           66          50
(iv)G&A expenses -                                   
equity grants                      38          48          128          219
EBITDA adjusted for     $           $           $            $      
other non-cash charges            80       (487)         109          (503)

Conference Call and Webcast Details

Interested parties may participate  in the conference  call on Wednesday,  May 
15, 2013  at  11:00  AM EST  by  dialing  into the  conference  call  line  at 
1-866-515-2912; international callers dial 1-617-399-5126 (passcode  59978448) 
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 May 15, 2013  and 
ending on May 22, 2013. For  the replay, please dial 1-888-286-8010  (passcode 
32738524) 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 within the  meaning 
of the  Private Securities  Litigation Reform  Act of  1995. 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", "intends"  and similar expressions)  should 
be considered forward looking statements that involve risks and  uncertainties 
which could cause actual events or  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.  In light  of  the 
significant risks and uncertainties inherent in the forward-looking statements
included herein, the inclusion of such statements should not be regarded as  a 
representation by the  Company or  any other  person that  the objectives  and 
plans  of  the  Company  will  be  achieved.  The  forward-looking  statements 
contained in this press release are made as of the date hereof and may  become 
outdated over  time.  The  Company  does not  assume  any  responsibility  for 
updating any forward-looking statements.
TABLES TO FOLLOW
DLH HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                            For the Three Months Ended
                                         March 31,             March 31,
                                            2013                  2012
 REVENUES                                 $   13,007        $   12,619
 DIRECT EXPENSES                             11,236           11,321
 GROSS PROFIT                                 1,771            1,298
 GENERAL AND ADMINISTRATIVE
 EXPENSES                                    1,729           1,835
 DEPRECIATION AND AMORTIZATION                33            27
    Income (loss) from operations             9           (564)
 OTHER INCOME (EXPENSE)
    Interest expense                         (47)           (85)
    Amortization of deferred
    financing costs                          (52)           (40)
    Change in value of financial
    instruments                              (20)           (28)
    Other income, net                         1            2
                                             (118)           (151)
    Loss before income taxes                 (109)           (715)
 INCOME TAX EXPENSE                         -           - 
 NET LOSS                                $    (109)       $    (715)
 NET LOSS PER SHARE - BASIC AND
 DILUTED
    Net loss per share                  $    (0.01)      $    (0.12)
 WEIGHTED AVERAGE BASIC AND DILUTED
 SHARES
    OUTSTANDING                           9,318           6,077

                     DLH HOLDINGS CORP. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
               (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                             For the Six Months Ended
                                         March 31,             March 31,
                                            2013                  2012
 REVENUES                                 $   26,002      $    24,114
 DIRECT EXPENSES                             22,442          21,249
 GROSS PROFIT                                 3,560           2,865
 GENERAL AND ADMINISTRATIVE
 EXPENSES                                    3,578          3,589
 DEPRECIATION AND AMORTIZATION                66           50
    Loss from operations                     (84)          (774)
 OTHER INCOME (EXPENSE)
    Interest expense                         (93)         (162)
    Amortization of deferred                                          
    financing costs                          (106)                 (86)
    Change in value of financial                                      
    instruments                               41                 (84)
                                                                    
    Other income, net                         5                     2
                                             (153)         (330)
    Loss before income taxes                 (237)          (1,104)
                                                                   -
 INCOME TAX EXPENSE                         -                      
 NET LOSS                                $    (237)      $    (1,104)
 NET LOSS PER SHARE - BASIC AND
 DILUTED
    Net loss per share                  $    (0.03)   $      (0.18)
 WEIGHTED AVERAGE BASIC AND DILUTED
 SHARES
    OUTSTANDING                           9,301          6,072

                     DLH HOLDINGS CORP. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                            (AMOUNTS IN THOUSANDS)

                                        March 31,            September 30,
 ASSETS                                    2013                  2012
 CURRENT ASSETS:
                                   $            $         
  Cash and cash equivalents                       3,196                  3,089
  Accounts receivable, net of
  allowance for doubtful accounts
  of $0 as of March 31, 2013 and                        
  September 30, 2012                            12,990                 13,028
                                                         
  Prepaid workers' compensation                  462                  516
                                                         
  Other current assets                           384                  133
                                                            
    Total current assets                     17,032                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                              (495)                 (429)
    Equipment and improvements,                        
  net                                             211                   268
                                                          
 GOODWILL                                        8,595                 8,595
 OTHER ASSETS
                                                         
  Deferred financing costs, net                  1                  9
                                                         
  Other assets                                   766                  784
                                                         
    Total other assets                         767                   793
                                       $              $       
 TOTAL ASSETS                                    26,605                 26,422

                     DLH HOLDINGS CORP. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
              (AMOUNTS IN THOUSANDS EXCEPT PAR VALUE OF SHARES)

                                        March 31,            September 30,
 LIABILITIES AND SHAREHOLDERS'
 EQUITY                                   2013                   2012
 CURRENT LIABILITIES:
                                   $            $         
  Bank loan payable                               2,476                  2,363
  Current portion of capital                            
  lease obligations                               48                  51
                                                        
  Convertible debenture, net                      280                 - 
  Derivative financial                                  
  instruments, at fair value                      78                 - 
                                                          
  Accrued payroll                                10,589                 10,555
                                                        
  Accounts payable                                2,333                  2,296
  Accrued expenses and other                            
  current liabilities                             2,970                  2,817
  Liabilities from discontinued                         
  operation                                       178                  185
                                                            
    Total current liabilities                18,952                18,267
 LONG TERM LIABILITIES
                                                        
  Convertible debenture, net                     -                   202
  Derivative financial                                  
  instruments, at fair value                     -                   119
                                                        
  Capital lease obligations                      -                   22
                                                        
  Other long term liability                       20                  62
    Total long term                                  
  liabilities                                     20                  405
                                                            
    Total liabilities                        18,972                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 March 31, 2013
  and 9,268 at
  September 30, 2012, outstanding
  9,318 at March 31,
  2013 and 9,266 at September 30,                       
  2012                                            9                  9
                                                          
  Additional paid-in capital                     75,327                 75,207
                                                            
  Accumulated deficit                         (67,679)              (67,442)
  Treasury stock, 2 shares at
  cost at March 31, 2013 and
                                                        
   September 30, 2012                          (24)                 (24)
                                                        
    Total shareholders' equity                 7,633                  7,750
                                                                          
 TOTAL LIABILITIES AND                 $              $       
 SHAREHOLDERS' EQUITY                           26,605                 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
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