dlhc-20250630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 0-18492

DLH HOLDINGS CORP.

(Exact name of registrant as specified in its charter)

New Jersey

22-1899798

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

3565 Piedmont Road,

Building 3,

Suite 700

30305

Atlanta,

Georgia

(Zip code)

(Address of principal executive offices)

(770) 554-3545

(Registrant’s telephone number, including area code)

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	DLHC	Nasdaq	Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller Reporting Company

☒

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 14,386,468 shares of Common Stock, par value $0.001 per share, were outstanding as of August 4, 2025.

DLH HOLDINGS CORP.

FORM 10-Q

TABLE OF CONTENTS

Page No.



PART I FINANCIAL INFORMATION			3
ITEM I: FINANCIAL STATEMENTS (UNAUDITED)			3
CONSOLIDATED STATEMENTS OF OPERATIONS			3
CONSOLIDATED BALANCE SHEETS			4
CONSOLIDATED STATEMENTS OF CASH FLOWS			5
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY			6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			7
ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			22
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			31
ITEM 4: CONTROLS AND PROCEDURES			31
PART II OTHER INFORMATION			32
ITEM 1: LEGAL PROCEEDINGS			32
ITEM 1A: RISK FACTORS			32
ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			32
ITEM 3: DEFAULTS UPON SENIOR SECURITIES			32
ITEM 4: MINE SAFETY DISCLOSURES			32
ITEM 5: OTHER INFORMATION			32
ITEM 6: EXHIBITS			33
SIGNATURE			34

PART I FINANCIAL INFORMATION

ITEM I: FINANCIAL STATEMENTS (UNAUDITED)

DLH HOLDINGS CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share amounts)


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Revenue	$	83,343	$	100,694	$	263,337	$	299,551
Cost of operations:
Contract costs	67,420		81,646		211,012		239,839
General and administrative costs	7,860		9,013		24,939		28,420


Depreciation and amortization	4,308		4,272		12,880		12,769
Total operating costs	79,588		94,931		248,831		281,028
Income from operations	3,755		5,763		14,506		18,523
Interest expense	3,540		4,143		11,549		12,991
Income before provision for income tax	215		1,620		2,957		5,532
Provision for income tax (benefit) expense	(74)		481		676		430
Net income	$	289	$	1,139	$	2,281	$	5,102

Net income per share - basic	$	0.02	$	0.08	$	0.16	$	0.36
Net income per share - diluted	$	0.02	$	0.08	$	0.16	$	0.35

Weighted average common stock outstanding
Basic	14,386		14,232		14,386		14,156
Diluted	14,450		14,704		14,458		14,716

The accompanying notes are an integral part of these consolidated financial statements.

DLH HOLDINGS CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value of shares)


	June 30, 2025		September 30, 2024
	Unaudited
ASSETS
Current assets:
Cash	$	194	$	342
Accounts receivable	44,916		49,849
Other current assets	4,477		2,766
Total current assets	49,587		52,957
Goodwill	138,161		138,161
Intangible assets, net	95,979		108,321
Operating lease right-of-use assets	9,259		6,681
Deferred income taxes, net	4,808		6,245
Equipment and improvements, net	1,432		1,830
Other long-term assets	115		186
Total assets	$	299,341	$	314,381
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	13,676	$	25,290
Debt obligations - current, net of deferred financing costs	14,039		12,058
Accrued payroll	15,022		12,848
Operating lease liabilities - current	2,711		2,652
Other current liabilities	375		394
Total current liabilities	45,823		53,242
Long-term liabilities:
Debt obligations - long-term, net of deferred financing costs	124,309		137,316
Operating lease liabilities - long-term	14,829		12,789
Other long-term liabilities	682		902
Total long-term liabilities	139,820		151,007
Total liabilities	185,643		204,249
Shareholders' equity:
Common stock, $0.001 par value; 40,000 shares authorized; 14,386 and 14,386 shares issued and outstanding at June 30, 2025 and September 30, 2024, respectively	14		14
Additional paid-in capital	101,555		100,270
Retained earnings	12,129		9,848
Total shareholders’ equity	113,698		110,132
Total liabilities and shareholders' equity	$	299,341	$	314,381

The accompanying notes are an integral part of these consolidated financial statements.

DLH HOLDINGS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)


	Nine Months Ended
	June 30,
	2025		2024
Operating activities
Net income	$	2,281	$	5,102
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	12,880		12,769
Amortization of deferred financing costs charged to interest expense	1,309		1,437
Stock-based compensation expense	1,284		2,290
Deferred income taxes, net	1,437		(311)


Changes in operating assets and liabilities:
Accounts receivable	4,933		778
Other assets	(4,216)		2,484
Accounts payable and accrued liabilities	(11,614)		(6,515)
Accrued payroll	2,175		437
Other liabilities	2,067		(3,540)
Net cash provided by operating activities	12,536		14,931
Investing activities

Purchase of equipment and improvements	(213)		(627)
Net cash used in investing activities	(213)		(627)
Financing activities
Proceeds from revolving line of credit	172,056		257,067
Repayment of revolving line of credit	(170,075)		(252,123)

Repayments of debt obligations	(14,250)		(17,813)
Payments of deferred financing costs	(202)		—
Proceeds from issuance of common stock upon exercise of options and warrants	—		261
Payment of tax obligations resulting from net exercise of stock options	—		(1,488)
Net cash used in financing activities	(12,471)		(14,096)
Net change in cash	(148)		208
Cash - beginning of period	342		215
Cash - end of period	$	194	$	423
Supplemental disclosure of cash flow information
Cash paid during the period for interest	$	10,415	$	11,656
Cash paid during the period for income taxes	$	563	$	2,280
Supplemental disclosure of non-cash activity
Common stock surrendered for the exercise of stock options	$	—	$	2,432
Lease liability recognized to acquire a right-of-use asset	$	4,187	$	—

The accompanying notes are an integral part of these consolidated financial statements.

DLH HOLDINGS CORP.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited, in thousands)


	Common Stock			Additional Paid-In Capital		Retained Earnings		Total Shareholders' Equity
	Shares	Amount
Balance at March 31, 2025	14,386	$	14	$	100,995	$	11,840	$	112,849

Expense related to director restricted stock units	—	—		155		—		155
Expense related to employee stock-based compensation	—	—		405		—		405


Net income	—	—		—		289		289
Balance at June 30, 2025	14,386	$	14	$	101,555	$	12,129	$	113,698


	Common Stock			Additional Paid-In Capital		Retained Earnings		Total Shareholders' Equity
	Shares	Amount
Balance at September 30, 2024	14,386	$	14	$	100,270	$	9,848	$	110,132

Expense related to director restricted stock units	—	—		464		—		464
Expense related to employee stock-based compensation	—	—		821		—		821


Net income	—	—		—		2,281		2,281
Balance at June 30, 2025	14,386	$	14	$	101,555	$	12,129	$	113,698


	Common Stock			Additional Paid-In Capital		Retained Earnings		Total Shareholders' Equity
	Shares	Amount
Balance at March 31, 2024	14,230	14		$	100,322	$	6,414	$	106,750

Expense related to director restricted stock units	—	—		180		—		180
Expense related to employee stock-based compensation	—	—		537		—		537

Common stock surrendered for the exercise of stock options	(47)	—		(1)		—		(1)
Net income	—	—		—		1,139		1,139
Balance at June 30, 2024	14,183	$	14	$	101,038	$	7,553	$	108,605


	Common Stock			Additional Paid-In Capital		Retained Earnings		Total Shareholders' Equity
	Shares	Amount
Balance at September 30, 2023	13,950	$	14	$	99,974	$	2,451	$	102,439

Expense related to director restricted stock units	—	—		439		—		439
Expense related to employee stock-based compensation	—	—		1,851		—		1,851
Exercise of stock options	535	—		261		—		261
Common stock surrendered for the exercise of stock options

SEC Form 10-Q filed by DLH Holdings Corp.