Good morning, and welcome to the DLH Holdings Corp. Fiscal 2023 Fourth Quarter Earnings Conference Call. All participants are in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Chris Witty, Investor Relations Adviser. Please go ahead.

Thank you, and good morning, everyone. On the call with me today is Zach Parker, President and Chief Executive Officer; and Kathryn JohnBull, Chief Financial Officer. The Company's earnings release and presentation are available on our website under the Investor page. I would now like to provide a brief safe harbor statement, which is also shown on Slide 3 of the presentation. This call may include forward-looking statements that relate to the Company's outlook for fiscal 2024 and beyond. These forward-looking statements are subject to various risks and uncertainties that could cause actual results and events to differ materially from these statements. Please refer to the risk factors contained in the Company's annual report on Form 10-K and in our other filings with the SEC. We do not undertake any duty to update any forward-looking statements. 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. President and CEO, Zach Parker, will speak next; followed by CFO, Kathryn JohnBull, after which we'll open it up for questions. With that, I'd now like to turn the call over to Zach. Please go ahead, Zach.

Thank you, Chris, and good morning, everyone. Welcome to our 2023 fourth quarter conference call. I am very pleased with the way that we have finished the year and with our strong position heading into fiscal 2024. But first, let me take a minute to once again thank our dedicated employees for their passion, the commitment and the performance excellence that they have delivered in support of all of our customers' missions and to our corporation. This has been a transformative year for our company and without the steadfast contribution of our team members at every level, DLH would not be the leading technology solutions and services provider that it is today. In all three channels, our digital transformation and cybersecurity, our science and research and development and our systems engineering integration, all of our members have really shined. So thank you. Now turning to Slide 4. I'll first provide a high-level overview of the financial highlights for the quarter and the fiscal 2023. Fourth quarter revenue was $101.5 million, reflecting the impact of our acquisition as well as organic growth across our existing business. For the full year, revenue rose nearly $376 million from an adjusted $269 million in fiscal 2022, which, of course, excludes the short-term turnkey contract with FEMA to support Alaska's response to COVID-19. Given our sizable backlog, increased addressable market and access to bid on various task orders through our several large contracts, we believe that the future continues to look bright for DLH. Adjusted operating income was $7.8 million for the quarter and $26.5 million for the fiscal 2023, while adjusted EBITDA rose to $12.1 million for Q4 and $42.1 million for the year. In addition, we generated $31 million in cash from operations over the past 12 months and exited the quarter with…

Thank you, Zach, and good morning, everyone. We're pleased to report our fiscal -- final results for fiscal 2023, and we believe these results demonstrate how our broad capabilities, employee expertise and delivery execution produced consistently strong financial performance. Starting with Slide 7. We provide a high-level overview of our results for Q4 of FY '23 compared to the same quarter of FY '22 on both a GAAP and adjusted basis. The fiscal '23 adjusted EBITDA and adjusted operating income figures exclude the previously announced $7.7 million impairment charge related to real estate assets as we consolidated underutilized premises as part of an ongoing facility rationalization effort. Walking from operating to net income, interest expense was $4.8 million in the fiscal fourth quarter of '23, reflecting higher debt outstanding due to the acquisition and increased interest rates. DLH recorded a tax benefit of $2 million during the fourth quarter of fiscal '23 versus an expense of $0.8 million last year. As a result, we reported a net loss in the fourth quarter of approximately $2.6 million or $0.18 per diluted share. By comparison, the prior year fourth quarter adjusted results exclude $0.4 million of corporate development costs related to the December '22 acquisition from operating income. Interest expense was $0.5 million in the period, and we reported net income of $3.4 million or $0.24 a share. A full reconciliation of this information is also included in the back of the presentation as well as in our press release and associated filings. Slide 8 shows these details in graphic form. Adjusted revenue rose 51% to roughly $102 million this quarter from $67 million last year, reflecting both organic and acquisition-related growth. Adjusted EBITDA for the three months ended September 30, '23, was approximately $12.1 million versus $7 million in the prior…

[Operator Instructions] And our first question will come from Joe Gomes of NOBLE Capital Markets. Please go ahead.

This is Justin filling up for Joe. So, I just wanted to start off with just looking at the IDIQ contract. Obviously, in the presentation, you guys having some priority IDIQs remain pending. I just want to ask, like, is the Company starting to see this opportunity sort of bidding on new awards like as the environment has gotten better from what it was the previous quarters?

I missed. You were breaking up on the last part there with regard to -- before the environment, what was that, Justin?

I was saying is the environment gotten better from the previous quarter?

Yes, a little bit. We're seeing signs that -- our biggest one that's pinning for us is one we refer to as CIO-SP4. We've had probably eight or nine opportunities over the last 1.5 years that we've been looking at that were -- we had earmarked for post-CLS award and so time has not been helping. But we are seeing some indications that the government is working their way through all of the protest information. We're hearing good signs just as recently as the last 1.5 weeks that they may finally get off top dead sooner and get an award in the near term. So that will bode well. We obviously have missed some opportunities. But we also have been looking strategically ahead, and we think there are still several opportunities that could be early part of this fiscal in '24. They could still yield some bookings during this fiscal. So yes, that big one is really looking like we're expecting to see. And we currently do not have a prime seat in the unrestricted CIO-SP3.

Right.

This bid went in over a year ago and government was really conveying that they were going to have an award quite some time ago. So, we would have those task orders being bid again. So, it's taken a while, but the tea leaves are looking better this quarter than last quarter.

Yes. Great. Can you just provide us a little update just on the VA contract side? I know last quarter, you guys -- nothing really seems have changed, but you guys were a little optimistic. Any update, any color on that would be great?

Which contract was that our VA contract?

The VA side.

Yes, there's been very little activity still. We continue to be the incumbent. We are continuing to be very excited around the opportunity to work and to continue doing this period while they're still making acquisition decisions. Our best estimate is that we do not see a material effect even if they progress with their decisions -- we did not see a material effect this fiscal could be subject to change. But we've continued to really work very closely, continue to deliver the results. And our workforce is doing a tremendous job in not getting too distracted with the acquisition side.

Great. And then last one, if I may. Last quarter in regards to the proposal backlog, you guys mentioned that the non-IDIQ area was kind of trending positively. Can you kind of see that going into the new year?

Yes. We do -- the biggest wildcard on that from -- is really how agencies respond to that CR decision the last one, of course, being February 1. There are some agencies that have been reluctant to put new contracts in place largely because of uncertainty about their full year budget impact. But our leadership team has been really working very hard to work with those customers, encourage them to issue those task orders on our current work, the National Cancer Institute. We're starting to see some signs that they may start to leverage the multiple award IDIQ we have there. We're starting to see signs that the Defense Health Agency also is moving forward. They've got -- in our minds, they've got a lot more budget certainty than some of the other agencies as it relates to the non-weapons and systems. So, we're really optimistic that we'll see some more base flow come through over the next quarter, and we'll get our share.

[Operator Instructions] Seeing no further questions at this time, this concludes our question-and-answer session. I would like to turn the conference back over to Mr. Zach Parker for any closing remarks.

Thank you, Andrea, and thank you all for your participation and steadfast support of DLH. We're really, really pleased as we closed the year that we are so well positioned to now execute that next leg of our strategy with respect to both organic growth and performance excellence. So thank you for your participation. Of course, next calendar quarter, we will be having our annual meeting with shareholders. So, we look forward to having a little deeper dive and some further engagement with you all. So, thank you. Have a blessed day, and we'll chat with you soon. Bye for now.

The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.