DLH Holdings Corp. (NASDAQ:DLHC) Q1 2023 Earnings Call Transcript

Kathryn JohnBull: Well, with respect to the headstart, specifically, that program specifically, it’s really more a case of returning to norm, if you’ll remember, and boy, I’m happy to be among those who has put COVID way in the rearview mirror. But it hasn’t been that long ago, it was just this time last year that dealing with Omicron caused a significant realignment of the schedule. And so some things that traditionally would have happened in our Q1 moved into Q2 and three. So this year is performing much more to the norm. So I think programmatically the program while we have had some nice opportunities to continue to grow our reach there, largely the volume on that program is going to be pretty consistent year-on-year. It’s just a matter of which quarter it’ll roll out in.

In contrast, as you probably remember in the successive quarters of €˜22, the pharmacy program and both besides that VA program grew pretty significantly over the course of the year, as the VA really took some operational changes to redirect work and really kind of rethink their business model using again COVID as kind of an excuse to kind of do some, make some efficiency gains that were probably long overdue, and steering work through that automated distribution center that they have previously held at their locations. And so are those came on largely throughout Q2 last year. And so they’re kind of catching up in Q1 this year, as compared to Q1 last year. But we think that Q1 volume kind of represents the norm of that programs going forward.

Joe Gomes: Great, thanks for that insight. I’ll stick to two questions and pass it on. Thanks, Zach, and Kathryn.

Kathryn JohnBull: Grate talking to you Joe, and thanks for being a straight man on the revenue synergies. As you can tell, we’re extremely excited about that.

Operator: The next question comes from Brian Kinstlinger with Alliance Global Capitals. Please go ahead.

Unidentified Analyst: Hi, there, this is Jerome on for Brian, good quarter guys. Can you just piggybacking of the ultimate integration question, should we expect the LHC personnel to focus more on BPO RFPs whereas GRSi person will focus on the IP opportunities?

Kathryn JohnBull: Well, we’re not going to operate that way. I think it’s the real thing that we should expect each of us brings our strengths but really, the opportunity is in driving convergence on those pursuits. We know each of us has our strength and expertise that we bring to it. And while each group will continue to leverage its expertise and capabilities. Really, the homerun for us are really the icing on the cake, or whatever cliche you want to use, in that scenario, where we take the expertise that both of us bring together both in terms of capabilities, as Zach described in in terms of business models, from a customer perspective, and really driving convergence on those to drive those revenue synergies that we talked about.

Zach Parker: Yes, and I’d say our vision a lot as it aligned with the priority of this deal, was to really be able to make this be a one plus one equals three. I know you hear that often and some of these kinds of deals. But in this particular case, it isn’t really just having two separate channels, as Kathryn has indicated, we really believe there’s really great value creation that’s going to come from positioning us in in spaces that neither one has been before or would have been able to drive before. And we’re starting to see that with some of our opportunities now. If you think about some of the opportunities, for instance, we bid in one, an IDIQ, where the VA wants to do more innovation, and drive more innovation in their systems development.