Good day ladies and gentlemen, and welcome to the DLH First Quarter Earnings Conference Call. My name is Tatiana and I will be the operator for today. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session [Operator Instructions]. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Casey Stegman with Investor Relations. Please proceed, sir.

Thank you, Tatiana. And good morning everyone, thank you for joining us on today's conference call. I’m Casey Stegman of Stonegate Capital Partners, Investor Relations Advisor to DLH Holdings Corp. On the call with me today is Zach Parker, President and Chief Executive Officer of DLH; and Kathryn Johnbull, Chief Financial Officer of DLH. Earlier today, the Company posted its earnings release, which outlines the topics that management, intends to discuss today. Should you have missed that release, it can be found on the investor page of DLH's corporate website at www.dlhcorp.com. As a part of today's call, we have provided a slide show presentation that can be accessed on the DLH website. Go to the Investor Relations tab towards the right side of the page and click Presentations under the drop down menu. We are also providing a simultaneous webcast of today's call with a replay available later today on our website. Please note that this conference call may contain Forward-Looking Statements as defined by the Federal Securities Laws. Statements in this call regarding DLH Holding Corp's business, which are not historical facts are forward-looking statements that involve risks and uncertainties. While these statements reflect DLH's current views and outlook, they are subject to factors that could cause its future results to differ materially. These risks and uncertainties are discussed in detail in our documents filed with the SEC, specifically, the most recent reports on Form 10-Q and 10-K. On today's call, we will be referencing both GAAP and non-GAAP financial measures. A reconciliation of our non-GAAP results to our reported GAAP results is included in our earnings release and in the Investor Presentation on DLH's website. All comparisons throughout this call will be on a year-over-year basis unless stated otherwise. With that said, it's my pleasure to turn the call over to Zach Parker, President and Chief Executive Officer of DLH. Zach?

Thank you Casey. Good morning welcome and welcome to our shareholders and other interested parties. We appreciate your participation in this conference call and webcast. As Casey indicated, earlier today we posted our first quarter fiscal year 2016 financial results. We are pleased to be off to a very good start to 2016. We achieved a 5.6% revenue growth and a 15.2% gross margin expansion over the prior year quarter. Our sustained positive financial performance has enabled us to strengthen our balance sheet and invest in our strategic growth plan which we previously disclosed would include a possible joint venture or acquisition. While we have no specifics to report today on that, we will keep you updated as circumstances warrant and as we move forward. We believe that we are now well positioned to capitalize on what we foresee to be a growing federal healthcare market with bipartisan support in the years ahead. DHL continues to see the critical need for expanded healthcare solutions within our sector of the federal health market. Just last week, we announced the nomination of Dr. Francis Murphy to our board of directors. Our management team and my fellow directors are excited about what Dr. Murphy adds to our board of directors and to the strategic transformation of DLH. Having served as the principal deputy under secretary for health in VA and having led the inter agency coordination between the VA and health and human services agency makes us particularly well suited for the position and highly aligned with the strategic direction of the company. My compliments to the Chairman, our Chairman Rick Wasserman, and the nomination and governance committee Chairman Mr. Austin Yerks. Just yesterday, the President released his proposed budget for FY’17 which is his last. In it, both Department of Veterans Affairs…

Thank you, Zach and good morning everyone. We are pleased with our earnings and financial position we are reporting to you today. Our first quarter results continue our trend of improving our key metrics as we delivered growth in revenue, gross margin and adjusted EBITDA compared to the prior year quarter. We continue to generate strong operating cash flow ending first quarter 2016 with a net cash position of approximately $6 million. Consistent with our strategic growth plan that we have shared with you often including during our fourth quarter earnings call, we began to leverage our strong cash position to pursue potential business acquisition opportunities. During the quarter ended December 31, we expanded approximately $600,000 in non-operational expenses related to potential business acquisition activities. While this investment has impacted our net income for the quarter, our business base is solid and performing well and we’ve looked to maximize our investment by expanding upon our capabilities in the near and longer term. Detailed financial results for the first quarter ended December 31, versus prior year first quarter are as follows; revenues for the three months ended December 31, 2015 were $16.6 million, an increase of $0.9 million or 5.6% over the prior year quarter. The increase in revenue is due primarily to program management initiatives and expansion on existing contracts. Gross margin for the three months ended December 31, 2015 was approximately $2.9 million, an increase of approximately $0.4 million or 15.2% over the prior year quarter on higher revenue and improved performance on contracts. As a percentage of revenue, first quarter gross margin rate of 17.6% increased by 1.4% over the prior year first quarter. Favorable margin results are due principally to increased contribution from more complex contracts, and effective assignment of staff to deliver strong contract performance, with…

Yes, Ma’am. [Operator Instructions] And you first question comes from the line of Laura Engel with Stonegate Capital Partners. Please proceed.

Good morning and thanks for the…

Hi, Laura.

Hi. How are you?

Fine. Thank you. How you are doing?

Good. It sounds like you’re off to great start. I wanted to see it first -- I’ve two questions. First, if you could tell us on acquisition expense which you talked a lot about. Does that relate to something specific or these general acquisitions that you’re looking at and if its something specific can you comment maybe on what competency [ph] might be adding, what it might do if its geared toward the specific client extra? So I just kind of what that expense went towards this past quarter?

Sure. Welcome to the team. We’ve been talking for sometime about stimulating some deal flow considerations as M&A has now become part of growth game plan and we’ll be adding more color to that, but we did not give specifics, have not refer for nine months or and at the appropriate time we would certainly give any specifics. It is safe to say that at any given time of the course over the last few quarters we’ve had a variety of deals from which we put on the shelf and others have heated up. And they are just generally those that move further along that cycle that Kathryn refers to where we would go outside and retain external services. Last part of that now I’ll let Kathryn add to it. Last part of your question has to do strategically what make sense for us. We talked a fair amount of that. We really believe that adjacent market or something we talked quite a bit about adjacencies along the VA side of course or some of the other sectors that generally have higher composition of health capabilities and core competences. So to that end organizations such as Health and Human Services to some extent FEMA and other agencies within individuals within HHS, which includes Center for Disease Control, CMS etcetera. Certainly adjacent markets with some of our recent within DHA, Defense Health Agency, we’re going to continue to expand and support of our service members and we’ll stay tuned for some announcements there as well. But we really think that expanding within the federal space, expanding with our customer base within the DA while also moving into those sort of adjacent markets really will help our portfolio as well as looking at certain function of capabilities that’s tuck-in. we’ve got some really strong competencies and we’re monitoring an evaluation, things of that nature. We are moving towards developing more tools in the case management systems arena. So, as we look and make buy decisions there companies generally start to take on greater strategic ties with us.

Okay, great. Well, and I think you covered a lot of my second question which was further market share within your current customers, perhaps any recent wins or I guess additions to your -- I think you’re qualified business opportunity pipeline that you wanted to share with us?

Well, I can tell you we’ve just begin work recently that we’re really excited about that supports during a range of examinations, case management support for veterans and army personnel. We’ll talk a little bit more about that in the not too distant future. We’re really excited about that work which is coming to fruition, standing up a real good capability that we’ve been looking forward to and we hope to start seeing some of the benefits of that by next quarter. But we’ll generally announce our major contract wins through these press releases and we’re going to continue to use that as our primary vessel for housing major new contract awards.

Okay. Well, thank you for…

Kathryn, do you like to add to it.

I think that’s exactly right. We of course are not in a position to share details on a particular transaction, but as Zach indicated, the engagement external resources is a indication of maturity of the opportunity and those opportunities will continue to evolve from those adjacent markets within the Health and Human services umbrella of complementary agencies that we talked about before. Its really being strategically aligned with our past performance credentials, our capabilities and also tend to be markets on which there is byproduct and strong byproduct and something commitment. So we think that’s right way to align. Those are the right places for us to pursue and acquisitions will fall within that overall strategy.

Okay. Thank you for taking my questions.

Thanks Laura.

[Operator Instructions] And your next question comes from the line of Richard Greulich with REG Capital Advisors. Please proceed.

Hi, Rich.

Hi, Zack, hi Kathryn.

Good morning, Richard.

Have you started to look at expanding your credit availability, your credit line availability larger than what it is currently?

Naturally that’s a part of the overall exercise in preparing for acquisition activity.

Do you think you’ll be able to expand it above the levels?

We certainly do expect to.

Okay. Thank you.

There are no further in the queue at this time.

All right. Great. Thank you, Tatiana and I’d like to thank you all again for participating in today’s conference call. If you have any additional questions please feel free to contact either myself or Kathryn. We thank you for your interest and continued support and look forward to speaking with you again in May as we’ll report on our second quarter fiscal year 2016 results. Have a blessed day. Bye for now.

Ladies and gentlemen that concludes today’s conference. Thank you for participation. You may now disconnect and have a great day.