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DLH Business Overview Midwest IDEAS Investor Conference | August 26, 2015| Chicago
Zachary Parker | President & Chief Executive Officer
Kathryn JohnBull | Chief Financial Officer
“Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995:
Please note that this presentation contains "forward-looking statements" as defined by
the Federal Securities Laws. Statements in this presentation 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.
Forward Looking Statement
© 2015 | DLH | Proprietary | Business Overview 08-26-15 2
• Roots date back to 1969
• Became pure-play government services 2010
– Trend of large annual losses and revenue erosion
– Board engaged independent firm for assessment
– Divested commercial healthcare businesses
– Retained ~ $40M revenue government operation
• Changed out Leadership Team (2010-2012)
• Publicly traded since 1986
• Over 1,200 employees nationwide
• Turnaround and “transformation” in motion…
© 2015 | DLH | Proprietary | Business Overview 08-26-15 3
45 Year-old “Start-up”
© 2015 | DLH | Proprietary | Business Overview 08-26-15 4
Strategic Governance and Leadership Team
Dr. Elder Granger, MD
(General, US Army Ret.)
Board Director
Rick Wasserman
Chairman of Board
Board Director
Building a Board of Directors with relevant industry experience
William Alderman
A&D Investment Banker
Board Director
Zachary Parker, President & Chief Executive Officer
John Armstrong, Executive Vice President, FACHE
Kathryn JohnBull, Chief Financial Officer
Kevin Wilson, President DLH Solutions
Executive Leadership Team
Austin Yerks
Fmr Industry Leader
Board Director
Zach Parker
President &CEO
Board Director(FY2010)(FY2015)(FY2013)
• Each with over 20 years government experience
• Successful track records in the industry
© 2015 | DLH | Proprietary | Business Overview 08-26-15 5
Key Company Turnaround Milestones
FY2010-2012: Changed Corporate Leadership
FY2011: Long Range Strategic Plan (LRSP) Developed
FY2012: Create Stability and Backlog
FY2013: Project L.E.A.N. Cost Realignment
FY2014-15: Financial Health and Business Development
FY2016: Technology leverage and Strategic Growth
© 2015 | DLH | Proprietary | Business Overview 08-26-15 6
Value-focused Strategy
What We Do
Primary DLH business areas
Healthcare
Delivery and
Technology
• Clinical device research and
development
• Medication Therapy
Management (pharma)
• Access to care (behavioral and
meds)
• Case management tools and
services
• Lifecycle management of
medical devices
• Analytics and decision support
systems
• Supply chain and inventory
management
© 2015 | DLH | Proprietary | Business Overview 08-26-15 7
Medical
Logistics
Solutions
© 2015 | DLH | Proprietary | Business Overview 08-26-15 8
Planned growth in current and adjacent markets
1. Current and emerging DLH market differentiators
2. Existing core competencies and agency-specific value propositions
3. FY15 and on-going health information systems investments
4. Strategic IT and technology partnerships
Leveraging:
So how do we get there…
ST
RA
TE
GIC
M
OD
EL
PO
SIT
ION
ING
K
EY
S
DRIVE PERFORMANCE
EXCELLENCE
BUILD UPON CURRENT
DIFFERENTIATORS
BUILD POWERHOUSE
MARKETING POSITION
DEPLOY CAPITAL
FOR GROWTH
NAVIGATE POLITICAL
ENVIRONMENT ISSUES
DLH
P
LA
YB
OO
K
Organic Growth Acquisitions Margin Expansion Shareholder Value
Leverage outstanding performance track record that has resulted
JD Power award for Veterans Affairs client to expand within the VA
and adjacent federal health oriented markets (including DoD)
GAMEPLAN
GROWTH
Build upon current
market leading
customer satisfaction
Instill continuous
improvement culture
throughout operations
Accelerate technology
refresh cycle time
Prioritize healthcare
COTS solutions where
feasible
Deliver strategically
aligned and robust
“Qualified NB Pipeline”
Expand and align
business development
resources
Make acquisitions
consistent with growth
strategy
Solidify financing
capacity
Ensure adequate and
scaled “Deal Flow”
Increase connectivity
to market “Shapers”
Engage trade
associations & capital
market affiliations
Align composition of
board of directors to fit
Focus growth where government decision makers prioritize “best
value” over “lowest and cheapest price”
Shape new business pursuits around greater complexity work
requirements which typically yield higher gross margins
Use dramatically improved company financial health posture to add
appropriately scaled acquisition to the DLH playbook
Key Financial Facts
© 2015 | DLH | Proprietary | Business Overview 08-26-15 10
Share Statistics
Trading Symbol (Nasdaq)...........................DLHC
Stock Price (8-4-2015)...................................$2.77
52wk Range ...................................$1.70 - $3.65
3 Month Avg. Volume ............................... 37,379
Shares Outstanding ………………...............9.6M
Management Options ................……………2.3M
Fully Diluted Shares ................................. 11.9M
Insider Ownership, fully diluted.................. 24.1%
Market Capitalization (8-4-2015)...............$26.46M
Financials (TTM) (1)
Revenue ..................................................$63.9M
Adjusted EBITDA (2).................................. $2.3M
Operating Cash Flow ................................ $1.3M
Pro Forma EPS (2) .….................................$0.23
Cap Structure (1)
Cash on Hand .......................................... $4.7M
Total Debt.................................................. $0.0M
Shareholder Equity ................................. $14.6M
Other
Full-time Employees .................................. 1,200
Fiscal Year Ends ............................... September
Public Acctng Firm………Withum Smith & Brown
Website ................................ www.dlhcorp.com
Corporate HQ ................................... Atlanta, GA
(1) Financial data as of FY2015 3rd quarter ended June 30, 2015
(2) A non-GAAP financial measure. See reconciliation to GAAP in back up
slides
© 2015 | DLH | Proprietary | Business Overview 08-26-15 11
Hypothetical Growth Income Statements w/Pro forma EPS
• Scenarios do not represent forecasts and are not related to a defined time
• Scenarios presented solely to demonstrate potential margin improvement and operating leverage
• Revenue growth via organic & acquisitive means dilutes legacy work to 70/60/50% of total revenue
• Legacy business GM continues at 17-18% range, new business at 25-30%
• Combined operating expense rate, trending down as operating leveraged derived
• Increased borrowing/interest expense to achieve growth
Growth Game Plan Hypothetical Scenarios
12
Current business contribution
Organic and acquisitive new
business contribution
Revenue $100M $150M $200M
Gross margin $20 $31 $44
Income from ops $ 6 $11 $18
Net income $ 2 $ 5 $ 9
Adjusted EBITDA $ 7 $13 $20
Pro Forma EPS $0.50 $0.93 $1.43
($ in million, except per share amounts)
• Scenarios do not represent forecasts and are not related to a defined time
• Scenarios presented solely to demonstrate potential margin improvement and operating leverage
• Revenue growth via organic & acquisitive means dilutes legacy work to 70/60/50% of total revenue
• Legacy business GM continues at 17-18% range, new business at 25-30%
• Combined operating expense rate, trending down as operating leveraged derived
• Increased borrowing/interest expense to achieve growth
13 © 2015 | DLH | Proprietary | Business Overview 08-26-15
Q&A
14 © 2015 | DLH | Proprietary | Business Overview 08-26-15
Backup Slides
© 2015 | DLH | Proprietary | Business Overview 08-26-15 15
FY15 Q3 Key Trends for Past Five Quarters
© 2015 | DLH | Proprietary | Business Overview 08-26-15 16
FY15 Q3 over PY Q3 – Three Months
© 2015 | DLH | Proprietary | Business Overview 08-26-15 17
FY15 Q3 YTD over PYTD – Nine Months
© 2015 | DLH | Proprietary | Business Overview 08-26-15 18
Historical Income Statement Trends
© 2015 | DLH | Proprietary | Business Overview 08-26-15 19
Reconciliation of non-GAAP measures
© 2015 | DLH | Proprietary | Business Overview 08-26-15 20
Balance Sheet Trends
© 2015 | DLH | Proprietary | Business Overview 08-26-15 21
Cash Flow Trends
© 2015 | DLH | Proprietary | Business Overview 08-26-15 22
Expertise And What We Do In Healthcare…
Health Delivery and Technology
Enhance “Medically Ready” status of service-members in theater through medical device RDT&E and biomedical engineering services
Health and pharmacy management systems integration testing and IV&V covering a range of client and new vendor hardware and software systems
Combat trauma care systems and services; healthcare provider examinations and administrative services including use of CHCS, AHLTA, and ICD-B systems at DoD’s MTFs
Provide variety of allied, specialty and general medical services to VA Medical Centers, Community-based Outpatient Clinics, transitional housing and medical home centers including VistA systems
Laboratory and field research studies and services including surveys, sampling, and data collection/recording
© 2015 | DLH | Proprietary | Business Overview 08-26-15 23
Unique Breadth And Depth In Pharmacy Area
Coverage ranging from single clinic to operating in high-volume
automated prescription production and distribution system environments.
• Virtual / Tele-pharmacy services
• Pharmacy systems automation (including robotics),
implementation, and testing
• Bio-hazards management; Med/Surg systems and
equipment
• Cold storage systems; Specialty-meds
• Controlled substance management
• Prescription servicing and Quality Assurance (out-
patient and in-patient)
• Medical warehouse supply chain management
DLH delivers high-value performance in partnership with and in support
of customers, teams, and end-users as measured by….
© 2015 | DLH | Proprietary | Business Overview 08-26-15 24
Differentiation- Values, Tools & Technology
DLH’s ePRAT provides a web-based, open-architecture,
secure system to manage expert delivery and
resourcing of the “continuum of care requirements”
for combatants, veterans, and retirees
Designed for HIPAA, CCAC, CARF, FISMA, NIST requirements
DLH’s unique approach to integration of people,
processes, and technology tools to measure,
manage and optimize our performance at project or
enterprise levels.
© 2015 | DLH | Proprietary | Business Overview 08-26-1525
3564 Piedmont Road NE
Building 3, Suite 700
Atlanta, GA 30305
www.DLHCorp.com