DLH Holdings Corp.
For the period ended Dec 31, 2024. Filed Feb 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 5, 2025
DLHC$3.61-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0000785557-24-000050
ITEM 2. : MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-05.
0000785557-25-000016
ITEM 2. : MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 98 previous paragraphs and 91 current paragraphs.
54 unchanged; 25 reworded; 12 added; 15 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
•For the quarter, we operated under the task orders issued at the close of fiscal 2024. Those task orders had varying durations up to four months. The task order for our Hines, Illinois location ended on January 31, 2025 as the site transitions to a new service-disabled veteran owned small business (“SDVOSB”) prime contractor. The task orders for the remaining six sites are expected to be extended to April 30, 2025. As discussed below, further extensions may be requested by the VA.
Current report
In connection with DLH’s continuing performance as the prime contractor during the VA's ongoing acquisition evaluation, the VA awarded us a sole-source Indefinite Quantity/Indefinite Delivery ("IDIQ") contract effective May 1, 2024. The IDIQ has a ceiling value of $200.0 million and a maximum period of performance through April 30, 2025, with the potential for orders placed within that period to extend performance beyond April 2025. The seven locations where we continue to provide services are under task orders awarded through this vehicle.
Current report
Proposals were due for four of the seven locations during the quarter ended September 30, 2024. The remaining three locations have not yet had their proposal due dates assigned. While the acquisition and transition process is being conducted, DLH continues to operate as the prime contractor for all seven CMOP locations that it currently manages. DLH intends to provide additional updates to the progression of these solicitations as a part of its regular quarterly and annual filings.
Current report
Our mission is to expand our position as a trusted provider of technology-powered health and readiness services and solutions to active duty personnel, veterans, and civilian populations and communities. These services and solutions are derived from three capabilities sets: Digital Transformation and Cybersecurity, Systems Engineering and Integration and Science Research and Development. Within these capabilities, our scientists and technology professionals provide solutions spanning robotic process automation, cloud migration and computing, enterprise IT systems management, modeling & simulation, data analytics and scientific research. We believe business development priorities in these areas will position the Company to expand within top national priority programs and funded areas.
Current report
Federal budget outlook for fiscal year 2025:
Current report
On December 20, the U.S. House and Senate passed a Continuing Resolution ("CR") to extend federal spending through March 14, 2025. Under this CR, Federal agencies will continue to operate at fiscal 2024 levels. When a CR expires, unless new appropriations bills have been passed by Congress and signed by the President, or a new CR is passed and signed into law, the government must cease operations, or shutdown, except in certain emergency situations or when the law authorizes continued activity. We are monitoring the impact the new Presidential Administration will have on government funding negotiations as their legislative and political priorities. We continuously review our operations in an attempt to identify programs potentially at risk from CRs so that we can consider appropriate contingency plans. Historically, our customers’ missions have received bipartisan support from the legislative and executive branches of the federal government. However, as the new administration and new Congress will seek to implement their budget priorities, and policies, we will continue to monitor the process for opportunities and impacts to our customers’ projects and budgets.
Current report
During the quarter ended December 31, 2024, we generated revenues of approximately $34.1 million from our set of contracts in support of the VA's CMOP program. As previously reported, the VA has been soliciting proposals for new contracts covering this work with a preference for a Service-Disabled Veteran Owned Small Business, or SDVOSB, to perform as the prime contractor. To date, the VA has awarded two locations to a new SDVOSB prime contractor. The remaining six locations continue to be operated by DLH as the prime contractor. Should awards for the locations for which we have submitted a proposal be offered to a partner of DLH, we expect to continue to perform a significant amount of those contracts' volume of business as a subcontractor.
Current report
Revenue decreased $7.1 million for the three months ended December 31, 2024 over 2023, primarily reflecting the conversion of certain contracts in our VA and DOD portfolios to small business contractors.
Current report
On a non-GAAP basis, EBITDA for the three months ended December 31, 2024 and 2023 was approximately $9.9 million and $11.1 million, respectively. The decrease was primarily due to the decrease in revenue volume driven by conversion of certain VA and DoD contracts to small business contractors.
Current report
Cash was approximately $0.5 million and $0.3 million for the period ended December 31, 2024 and September 30, 2024, respectively.
Current report
Cash flows used in and provided by operating activities totaled approximately $(11.5) million and $5.1 million for the three months ended December 31, 2024 and 2023, respectively. The decrease in cash from operations was principally due to an increase in accounts receivable due to a short-term decrease in collections.
Current report
(a) The increase in facility operating lease obligations was due to an extension executed during the period to an existing lease.
Removed paragraphs (15)
Previous report
•Logistics services represents approximately $46.3 million and $43.7 million of revenues for the nine months ended June 30, 2024 and 2023, respectively, and operated under task orders effective through July 31, 2024.
Previous report
In April 2024, the Company received a new Indefinite-Delivery Indefinite-Quantity ("IDIQ") contract to continue providing prime contractor services at all CMOP locations while the pending procurements are evaluated. The ceiling value of the IDIQ contract is $200.0 million with the initial tasking through July 31, 2024. The customer has indicated their intention to extend the current task orders to October 31, 2024 with the exception of the Chelmsford CMOP location. During the quarter, we were notified that the VA's decision to award the task order for the Chelmsford location to a service-disabled veteran owned small business (“SDVOSB”) that is unaffiliated with DLH has withstood a protest and has been formally awarded. As a result, for the Chelmsford location, the SDVOSB is expected to begin performing services on August 1, 2024. The revenue derived by DLH from its current prime contracts to perform services at this location represents less than 3% of its consolidated revenue for the nine months ended June 30, 2024.
Previous report
Should the new contracts for performance of these services be awarded to a partner of DLH, the Company expects to continue to perform a significant amount of the contract’s volume of business as a subcontractor. Should the VA conclude that an award to an SDVOSB prime contractor is not in the best interest of the government, they may reissue a solicitation in an unrestricted competition. DLH believes that its service excellence over many years on the program continues to provide the company and its partners with competitive advantages in the ongoing solicitation.
Previous report
Our mission is to expand our position as a trusted provider of technology-enabled healthcare and public health services, medical logistics, and readiness enhancement services to active duty personnel, veterans, and civilian populations and communities. Our primary focus within the defense agency markets includes cyber security, military service members' and veterans' requirements for telehealth services, behavioral healthcare, medication therapy management, process management, clinical systems support, and healthcare delivery. Our primary focus within the civilian agency markets includes digital transformation, IT modernization, healthcare and social programs delivery and readiness. These include compliance monitoring on large scale programs, technology-enabled program management, consulting, and digital communications solutions ensuring that education, health, and social standards are being achieved within underserved and at-risk populations. We believe these business development priorities will position the Company to expand within top national priority programs and funded areas.
Previous report
Revenue decreased $1.5 million for the three months ended June 30, 2024 over 2023, reflecting growth across the Company's programs, particularly in public health and IT services, offset by contracts converting to small business set-aside companies.
Previous report
Revenue
Previous report
Revenue increased $25.2 million for the nine months ended June 30, 2024 over 2023, principally due to the December 2022 acquisition.
Previous report
Cost of Operations
Previous report
For the nine months ended June 30, 2024, depreciation and amortization expense were approximately $0.4 million and $12.3 million, respectively, as compared to approximately $0.6 million and $10.7 million for the nine months ended June 30, 2023, respectively.
Previous report
Interest Expense, net
Previous report
Provision for Income Tax Expense
Previous report
Provision for income tax expense decreased $0.9 million for the nine months ended June 30, 2024 over 2023. The effective tax rate for the nine months ended June 30, 2024 and 2023 was 7.8% and 24.4%, respectively. The decrease in the effective tax rate in the current fiscal year is primarily due to the beneficial impact of stock based compensation expense as options are exercised.
Previous report
On a non-GAAP basis, Earnings Before Interest, Tax, Depreciation, and Amortization ("EBITDA") for the nine months ended June 30, 2024 and 2023 was approximately $31.3 million and $28.2 million, respectively. The increase was principally due to the contribution of the December 2022 acquisition.
Previous report
Cash is approximately $0.4 million and $0.2 million for the period ended June 30, 2024 and September 30, 2023, respectively.
Previous report
Cash flows provided by operating activities totaled approximately $14.9 million and $15.0 million for the nine months ended June 30, 2024 and 2023, respectively.
Reworded paragraphs (25)
Previous wording
You should read the following discussion in conjunction with the Consolidated Financial Statements and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the year ended September 30, 2023, and in other reports we have subsequently filed with the SEC. This Quarterly Report on Form 10-Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements contained in this Management’s Discussion and Analysis are forward-looking statements that involve risks and uncertainties. Any statements that refer to expectations, projections or other characterizations of future events or circumstances or 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. Forward-looking statements in this report include, among others, statements regarding benefits of the acquisition, estimates of future revenues, operating income, earnings, earnings per share, backlog, and cash flows. These statements reflect our belief and assumptions as to future events that may not prove to be accurate. Our actual results may differ materially from such forward-looking statements made in this report due to a variety of factors, including: the failure to achieve the anticipated benefits of any future acquisition (including anticipated future financial operating performance and results); the diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations; the inability to retain employees and customers; contract awards in connection with re-competes for present business and/or competition for new business; our ability to manage our increased debt obligations; compliance with bank financial and other covenants; changes in client budgetary priorities; government contract procurement (such as bid and award protests, small business set asides, loss of work due to organizational conflicts of interest, etc.) and termination risks; the impact of inflation and higher interest rates; and other risks described in our SEC filings. 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, 2023, as well as interim quarterly filings thereafter. The forward-looking statements contained herein are not historical facts, but rather are based on current …
Excerpt shortened here; the source contains the full paragraph.
Current wording
You should read the following discussion in conjunction with the Consolidated Financial Statements and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the year ended September 30, 2024, and in other reports we have subsequently filed with the SEC. This Quarterly Report on Form 10-Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements contained in this Management’s Discussion and Analysis are forward-looking statements that involve risks and uncertainties. Any statements that refer to expectations, projections or other characterizations of future events or circumstances or 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. Forward-looking statements in this report include, among others, statements regarding benefits of acquisitions, estimates of future revenues, operating income, earnings, earnings per share, backlog, and cash flows. These statements reflect our belief and assumptions as to future events that may not prove to be accurate. Our actual results may differ materially from such forward-looking statements made in this report due to a variety of factors, including: the failure to achieve the anticipated benefits of any future acquisition (including anticipated future financial operating performance and results); the diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations; the inability to retain employees and customers; contract awards in connection with re-competes for present business and/or competition for new business; our ability to manage our increased debt obligations; compliance with bank financial and other covenants; changes in client budgetary priorities; government contract procurement (such as bid and award protests, small business set asides, loss of work due to organizational conflicts of interest, etc.) and termination risks; the impact of inflation and higher interest rates; and other risks described in our SEC filings. 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, 2024, as well as interim quarterly filings thereafter. The forward-looking statements contained herein are not historical facts, but rather are based on current exp…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
DLH Holdings Corp. ("DLH") delivers improved health and cyber readiness solutions for federal government customers through digital transformation, science research and development, and systems engineering and integration. We bring a unique combination of government sector experience, proven methodology, and unwavering commitment to solve the complex problems faced by civilian and military customers alike, doing so by leveraging multiple capabilities, including cyber technology, artificial intelligence, advanced analytics, cloud-based applications, and telehealth systems.
Current wording
DLH Holdings Corp. ("DLH") delivers improved health and readiness solutions for federal government customers through digital transformation, science research and development, and systems engineering and integration. We bring a unique combination of government sector experience, proven methodology, and unwavering commitment to solve the complex problems faced by civilian and military customers alike, doing so by leveraging multiple capabilities, including cyber technology, artificial intelligence, advanced analytics, cloud-based applications, and telehealth systems.
Previous wording
We primarily focus on improved deployment of large-scale health and defense initiatives for multiple agencies within the federal government, including the Department of Health and Human Services ("HHS"), the Department of Veterans Affairs ("VA"), Department of Defense ("DoD"), and many of their sub-agencies.
Current wording
We primarily focus on improved deployment and efficiency of large-scale health and defense initiatives for multiple agencies within the federal government, including the Department of Health and Human Services ("HHS"), the Department of Veterans Affairs ("VA"), Department of Defense ("DoD"), and many of their sub-agencies.
Previous wording
We deliver services primarily through prime contracts awarded by the federal government through competitive bidding processes. We have a diverse mix of contract vehicles with various agencies of the federal government, which supports our overall corporate growth strategy. Our revenue is distributed to time and materials contracts (55.1%), firm fixed price contracts (24.7%), and cost reimbursable contracts (20.1%).
Current wording
We deliver services primarily through prime contracts awarded by the federal government through competitive bidding processes. We have a diverse mix of contract vehicles with various agencies of the federal government, which supports our overall corporate growth strategy. Our revenue is distributed to time and materials contracts (54.4%), firm fixed price contracts (25.6%), and cost reimbursable contracts (20.0%).
Previous wording
We provide critical digital transformation and cyber security solutions across the federal civilian and cyber defense communities, leveraging advanced technology to modernize obsolete systems, protect sensitive information, manage large datasets, and enhance operational efficiency. Our suite of tools includes artificial intelligence and machine learning, cloud enablement, cybersecurity ecosystem, big data analytics, and modeling and simulation.
Current wording
We provide critical digital transformation and cyber security solutions across the federal civilian and cyber defense communities, leveraging advanced technology to modernize obsolete systems, protect sensitive information, manage large datasets, enhance operational efficiency and implement robotic process automation. Our suite of tools includes artificial intelligence and machine learning, cloud enablement, cybersecurity ecosystem, big data analytics, and modeling and simulation.
Previous wording
IT modernization and cyber security maturity are priority initiatives throughout our customer set. Our customers, including numerous institutes and centers within the National Institutes of Health ("NIH"), the Defense Health Agency ("DHA"), Telemedicine and Advanced Technology Research Center ("TATRC"), and US Navy Naval Information Warfare Center ("NIWC"), rely on our information technology support to enable their vital missions. We work with these customers to reduce risk and build resilience to cyber and physical threats to the federal government’s infrastructure, providing the full spectrum of cyber capabilities, cryptographic and true cyber engineering, Certified Information Security Officer ("CISO") / Information System Security Officer ("ISSO") support, risk management frameworks, Continuity of Operations ("COOP") / Disaster Recovery, and enterprise infrastructure and cloud governance focused on designing and implementing zero trust architecture.
Current wording
IT modernization and cyber security maturity are priority initiatives throughout our customer set. Our customers, including numerous institutes and centers within the National Institutes of Health ("NIH"), the Defense Health Agency ("DHA"), Telemedicine and Advanced Technology Research Center ("TATRC"), and US Navy, rely on our information technology support to enable their vital missions. We work with these customers to reduce risk and build resilience to cyber and physical threats to the federal government’s infrastructure, providing the full spectrum of cyber capabilities, cryptographic and true cyber engineering, Certified Information Security Officer ("CISO") / Information System Security Officer ("ISSO") support, risk management frameworks, Continuity of Operations ("COOP") / Disaster Recovery, and enterprise infrastructure and cloud governance focused on designing and implementing zero trust architecture.
Previous wording
Our employees specialize in delivering engineering solutions that support our customers' evolving needs by rapidly deploying resources, solutions, and services. This includes specialized engineering expertise, encompassing areas of pharmaceutical delivery logistics, fire protection engineering, biomedical equipment, and technology engineering on behalf of the VA, NIWC, HHS and other federal customers.
Current wording
Our employees specialize in delivering engineering solutions that support our customers' evolving needs by rapidly deploying resources, solutions, and services. This includes specialized engineering expertise, encompassing areas of Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance, and Reconnaissance ("C5ISR"), modeling, simulation & training, performance based logistics, system modernization, technology-enabled health solutions and software engineering on behalf of the US Navy, HHS, VA, and other federal customers.
Previous wording
The revenue attributable to the VA was derived from 8 separate task orders covering the Company's performance of pharmacy and logistics services in support of the VA's Consolidated Mail Outpatient Pharmacy ("CMOP") program.
Current wording
The revenue attributable to the VA was derived from separate task orders covering the Company's performance of pharmacy and logistics services at various regional locations, in support of the VA's Consolidated Mail Outpatient Pharmacy ("CMOP") program.
Previous wording
•Pharmacy services represents approximately $59.5 million and $60.6 million of revenues for the nine months ended June 30, 2024 and 2023, respectively, and operated under task orders effective through July 31, 2024.
Current wording
•CMOP pharmacy and logistic services represent approximately $34.1 million and $34.7 million of revenues for the quarter ended December 31, 2024 and 2023, respectively.
Previous wording
During the quarter ended June 30, 2024, the VA issued amendments to the requests for proposals for the seven remaining CMOP locations. The amendments require a current or potentially new bidder to respond to the solicitations' changes with a compliant proposal. Due dates for the proposals have not yet been assigned; once submitted, each procurement will be evaluated separately which may result in differing timelines for releasing an award decision. The solicitations remain set aside for an SDVOSB to perform as the prime contractor. DLH intends to submit revised proposals with our SDVOSB partner as prime contractor. While the acquisition process is being conducted, DLH continues to operate as the prime contractor for all CMOP locations other than the Chelmsford location.
Current wording
During the quarter ended June 30, 2024, the VA issued amendments to the requests for proposals for the seven remaining CMOP locations, which continue to give preference to an SDVOSB as a prime contractor. The amendments required a current or potentially new bidder to respond to the solicitations' changes with a compliant proposal. As with all proposal opportunities, DLH evaluated the revised CMOP requests for proposal for suitability of terms and conditions. As a result, we elected to not pursue certain opportunities at select locations.
Previous wording
At June 30, 2024, our backlog was approximately $670.5 million of which $141.5 million was funded backlog. At September 30, 2023, our backlog was approximately $704.8 million, of which $169.9 million was funded backlog.
Current wording
At December 31, 2024, our backlog was approximately $665.3 million of which $135.2 million was funded backlog. At September 30, 2024, our backlog was approximately $690.3 million, of which $155.1 million was funded backlog.
Previous wording
We define backlog as our estimate of remaining future revenue from existing signed contracts, assuming the exercise of all options relating to such contracts and including executed task orders issued under Indefinite Quantity/Indefinite Delivery ("IDIQ") contracts or if the contract is a single award IDIQ contract.
Current wording
We define backlog as our estimate of remaining future revenue from existing signed contracts, assuming the exercise of all options relating to such contracts and including executed task orders issued under IDIQ contracts or if the contract is a single award IDIQ contract.
Previous wording
Contract costs primarily include the costs associated with providing services to our customers. These costs are generally comprised of direct labor and associated fringe benefit costs, subcontract cost, other direct costs, and the related management and infrastructure costs. Contract costs increased $0.7 million for the three months ended June 30, 2024 over 2023; the increase was primarily due to an increase in non-labor costs.
Current wording
Contract costs primarily include the costs associated with providing services to our customers. These costs are generally comprised of direct labor and associated fringe benefit costs, subcontract cost, other direct costs, and the related management and infrastructure costs. Contract costs decreased $6.7 million for the three months ended December 31, 2024 over 2023; the decrease was primarily due to a decrease in revenue volume from low margin non-labor costs and a decrease in our overhead costs.
Previous wording
General and administrative costs are for those employees not directly providing services to our customers, to include but not limited to executive management, business development, accounting, and human resources. These costs increased $0.8 million for the nine months ended June 30, 2024 over 2023. As a percentage of revenue, general and administrative costs decreased to 9.5% from 10.1%. The decrease was primarily due to increased operating leverage.
Current wording
General and administrative costs are for those employees not directly providing services to our customers, to include but not limited to executive management, business development, accounting, and human resources. These costs increased $0.8 million for the three months ended December 31, 2024 as compared to 2023. As a percentage of revenue, general and administrative costs increased to 9.3% from 7.9%, with the increase being primarily due to an increase in business development expenses.
Previous wording
For the three months ended June 30, 2024, depreciation and amortization expense were approximately $0.2 million and $4.1 million, respectively, as compared to approximately $0.2 million and $4.1 million for the three months ended June 30, 2023, respectively.
Current wording
For the three months ended December 31, 2024, depreciation and amortization expense were approximately $0.2 million and $4.1 million, respectively, as compared to approximately $0.1 million and $4.1 million for the three months ended December 31, 2023, respectively.
Previous wording
Interest expense, net, includes interest expense on the Company's term loan and amortization of deferred financing costs on debt obligations. Interest expense decreased $0.8 million for the three months ended June 30, 2024 over 2023, primarily due to the prepayment of debt resulting in reduced interest payments.
Current wording
Interest expense, net, includes interest expense on the Company's term loan and amortization of deferred financing costs on debt obligations. Interest expense decreased $0.5 million for the three months ended December 31, 2024 over 2023, primarily due to the prepayment of debt and a decrease in the floating interest rate.
Previous wording
Provision for income tax expense increased $29.0 thousand for the three months ended June 30, 2024 over 2023. The effective tax rate for the three months ended June 30, 2024 and 2023 was 29.7% and 20.6%, respectively. The increase in the effective tax rate in the current fiscal quarter is primarily due to the beneficial impact of stock-based compensation expense as options were exercised in the same quarter in the prior fiscal year.
Current wording
Provision for income tax expense increased $379.0 thousand for the three months ended December 31, 2024 over 2023. The effective tax rate for the three months ended December 31, 2024 and 2023 was 25.9% and 0.4%, respectively. The tax provision from the prior year period was positively impacted by the exercise of non-qualifying stock options.
Previous wording
The Company uses EBITDA as a supplemental non-GAAP measure of our performance. DLH defines EBITDA as net income excluding (i) interest expense, (ii) income tax expense and benefit, and (iii) depreciation and amortization.
Current wording
The Company uses Earnings Before Interest, Tax, Depreciation, and Amortization ("EBITDA") as a supplemental non-GAAP measure of our performance. DLH defines EBITDA as net income excluding (i) depreciation and amortization, (ii) interest expense, and (iii) provision for income tax expense.
Previous wording
Credit facility is total approximately $24.0 million and $32.0 million for the period ended June 30, 2024 and September 30, 2023, respectively. The decrease is primarily due to increased collections which reduce accounts receivable, thereby reducing the collateral available for the revolving credit facility.
Current wording
Available borrowings under our revolving credit facility was approximately $11.8 million and $18.1 million for the period ended December 31, 2024 and September 30, 2024, respectively. The decrease is primarily due to increased borrowing under the revolving credit facility for the period ended December 31, 2024.
Previous wording
Cash used in investing activities totaled $0.6 million and $181.3 million for the nine months ended June 30, 2024 and 2023, respectively. The cash utilized in the prior fiscal year period was predominantly due to the December 2022 acquisition.
Current wording
Cash used in investing activities totaled $(0.6) million and $(0.2) million for the three months ended December 31, 2024 and 2023, respectively. The cash utilized was predominantly due capital expenditures in the three months ended December 31, 2024 and 2023, respectively.
Previous wording
Cash used in and provided by financing activities during the nine months ended June 30, 2024 and 2023 were approximately $14.1 million and $166.6 million, respectively. The cash used by financing activities was principally due to retiring of outstanding term debt in the nine months ended June 30, 2024. The cash provided financed the December 2022 acquisition in the nine months ended June 30, 2023.
Current wording
Cash provided by and used in financing activities during the three months ended December 31, 2024 and 2023 were approximately $12.2 million and $(5.0) million, respectively. The cash provided by financing activities was principally to satisfy short-term working capital needs for the three months ended December 31, 2024.
Previous wording
As of June 30, 2024, our immediate sources of liquidity include cash of approximately $0.4 million, accounts receivable, and access to our secured revolving line of credit facility. This credit facility provides us with access of up to $70.0 million, subject to certain conditions including eligible accounts receivable. As of June 30, 2024, we had unused borrowing capacity of $24.0 million, which is net of outstanding letters of credit. The Company's present operating liabilities are largely predictable and consist of vendor and payroll related obligations. We believe that our current investment and financing obligations are adequately covered by cash generated from profitable operations and that planned operating cash flow should be sufficient to support our operations for twelve months from the date of issuance of these consolidated financial statements.
Current wording
As of December 31, 2024, our immediate sources of liquidity include cash of approximately $0.5 million, accounts receivable, and access to our secured revolving line of credit facility. This credit facility provides us with access of up to $50.0 million, subject to certain conditions including eligible accounts receivable. As of December 31, 2024, we had unused borrowing capacity of $11.8 million, which is net of outstanding letters of credit. The Company's present operating liabilities are largely predictable and consist of vendor and payroll related obligations. We believe that our current investment and financing obligations are adequately covered by cash generated from profitable operations and that planned operating cash flow should be sufficient to support our operations for twelve months from the date of issuance of these consolidated financial statements.
Previous wording
1 Secured Overnight Financing Rate ("SOFR") as of June 30, 2024 was 5.3%.
Current wording
1 Secured Overnight Financing Rate ("SOFR") as of December 31, 2024 was 4.6%.
Previous wording
On January 31, 2023, we executed a floating-to-fixed interest rate swap with FNB which has a notional amount of$80.0 million at June 30, 2024, a fixed interest rate is 4.10% and a maturity date of January 31, 2026. As a result of entering these agreements, for the nine months ended June 30, 2024, interest expense has been decreased by approximately $1.0 million.
Current wording
On January 31, 2023, we executed a floating-to-fixed interest rate swap with FNB which has a notional amount of$80.0 million at December 31, 2024, a fixed interest rate of 4.10% and a maturity date of January 31, 2026. As a result of entering these agreements, for the three months ended December 31, 2024, interest expense has been decreased by approximately $0.1 million.
Previous wording
(b) The secured revolving line of credit has a ceiling of up to $70.0 million and a maturity date of December 8, 2027. The Company has accessed funds from the revolving credit facility during the quarter and has a balance outstanding at June 30, 2024 of $14.5 million
Current wording
(b) As amended, the secured revolving line of credit has a ceiling of up to $50.0 million and a maturity date of December 8, 2027. The Company has accessed funds from the revolving credit facility during the quarter and has a balance outstanding at December 31, 2024 of$24.5 million.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
General and administrative costs are for those employees not directly providing services to our customers, to include but not limited to executive management, business development, accounting, and human resources. These costs decreased $0.9 million for the three months ended June 30, 2024 as compared to 2023. As a percentage of revenue general and administrative costs decreased to 9.0% from 9.7%, the decrease was primarily due to a decrease in episodic legal costs.
Previous report — wording carried elsewhere
The following table summarizes results of operations for the nine months ended June 30, 2024 and 2023 (in thousands except for per share amounts, and percentage of revenue):
Previous report — wording carried elsewhere
Contract costs primarily include the costs associated with providing services to our customers. These costs are generally comprised of direct labor and associated fringe benefit costs, subcontract cost, other direct costs, and the related management and infrastructure costs. Contract costs increased $23.1 million for the nine months ended June 30, 2024 over 2023. The increase in costs is primarily due to increased revenue.
Previous report — wording carried elsewhere
Interest expense, net, includes interest expense on the Company's term loan and amortization of deferred financing costs on debt obligations. Interest expense increased $1.5 million for nine months ended June 30, 2024 over 2023, primarily due to the borrowing required to finance the December 2022 acquisition.