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DLH Reports Q3 Double-Digit Revenue Growth; Zach Parker on GRSi Integration, IT BPA With NIH Heart Institute

DLH Holdings (Nasdaq: DLHC) posted fiscal 2023 third-quarter revenue of$102.2 million, up 54 percent from the prior-year period’s $66.4 million.

The Atlanta-based company said Wednesday it ended the quarter with a contract backlog of $817.8 million, of which about $147.3 million was funded.

The federal digital transformation and systems engineering services contractor reported $1.7 million in Q3 net income and earnings before interest, taxes, depreciation and amortization of $11.4 million, up from $9 million from the same period the previous year.

Operating income for the quarter reached $7.1 million and Q3 adjusted EBITDA was $11.4 million, reflecting a nearly 36 percent jump from the prior-year period’s figure of $8.4 million.

At the earnings call Thursday, DLH President and CEO Zach Parker provided updates on the integration of Grove Resource Solutions Inc. into the company.

In December, DLH acquired GRSi as part of a push to expand its information technology modernization and cybersecurity offerings for federal government customers. 

“Our integration of GRSi is also on track, and we are continuing to achieve, anticipate the anticipated enterprise results since the deal’s announcement. The transition of GRSi to key DLH business systems, such as our Enterprise Resource Planning, ERP and our Human Resource Information Systems – Human Resource Information Systems is complete leading to greater operational efficiencies across the board,” Parker told analysts.

“Our expanded go-to-market strategy is evolving as the teams pull together and demonstrate the full range of the DLH enterprise capabilities to our customers,” he added.

The chief executive also mentioned the position awarded to DLH on a potential five-year, $85 million blanket purchase agreement for cybersecurity, digital transformation and other IT services in support of the National Institutes of Health’s National Heart, Lung and Blood Institute.

DLH inherited the contract from GRSi, which officially won the spot on the BPA.

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