0000785557-24-000050 | 10-Q | XBRL Viewer

Print Document

Significant Accounting Policies (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Sep. 30, 2023
Acquired Indefinite-lived Intangible Assets [Line Items]
Estimated useful live of intangible assets	10 years
Uncertain tax positions	$ 0		$ 0
Income tax interest expense	0	$ 0
Income tax penalties expense	0	$ 0
Cash, FDIC insured amount	$ 250
Treasury stock held (in shares)	0		0
Preferred shares authorized (in shares)	5,000,000
Preferred stock issued (in shares)	0		0
Employee Stock Option \| Omnibus Equity Incentive Plan 2016
Acquired Indefinite-lived Intangible Assets [Line Items]
Expiration term of share-based compensation plan awards	10 years
Minimum
Acquired Indefinite-lived Intangible Assets [Line Items]
Estimated useful of long-lived assets	3 years
Maximum
Acquired Indefinite-lived Intangible Assets [Line Items]
Estimated useful of long-lived assets	7 years

Leases

9 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

The following table summarizes lease balances presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Operating lease right-of-use assets	$	7,498	$	9,656

Operating lease liabilities, current	$	2,889	$	3,463
Operating lease liabilities - long-term	13,521		15,908
Total operating lease liabilities	$	16,410	$	19,371

As of June 30, 2024, operating leases for facilities and equipment have remaining lease terms of less than 1 year to 7.5 years.

Total lease costs for our leases were as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Operating	$	883	$	1,097	$	4,915	$	2,921
Short-term	50		83		298		225
Variable	37		47		179		63
Sublease income (a)	(67)		(71)		(339)		(214)
Total lease costs	$	903	$	1,156	$	5,053	$	2,995

(a) The Company subleases a portion of one of its leased facilities. The sublease is classified as an operating lease with respect to the underlying asset. The sublease term is 5 years and includes two additional 1 year term extension options.

The Company's future minimum lease payments as of June 30, 2024 were as follows (in thousands):


Fiscal year ending:
2024 (remaining)	$	1,108
2025	3,572
2026	3,350
2027	2,751
2028	2,602
Thereafter	6,546
Total future lease payments	19,929
Less: imputed interest	(3,519)
Present value of future minimum lease payments	16,410
Less: current portion of operating lease liabilities	(2,889)
Long-term operating lease liabilities	$	13,521

At June 30, 2024, the weighted-average remaining lease term and weighted-average discount rate were 6.0 years and 6.1%, respectively. The calculation of the weighted-average discount rate was determined based on borrowing terms from our secured term loan.

Other information related to our leases for the nine months ended June 30, 2024 and 2023 was as follows (in thousands):


	2024		2023
Cash paid for amounts included in the measurement of lease liabilities	$	3,233	$	3,317
Lease liabilities arising from obtaining right-of-use assets	—		2,052
Other lease information	$	3,233	$	5,369

Cover - $ / shares	9 Months Ended
Cover - $ / shares	Jun. 30, 2024	Jul. 30, 2024	Sep. 30, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	0-18492
Entity Registrant Name	DLH HOLDINGS CORP.
Entity Incorporation, State or Country Code	NJ
Entity Tax Identification Number	22-1899798
Entity Address, Address Line One	3565 Piedmont Road,
Entity Address, Address Line Two	Building 3,
Entity Address, Address Line Three	Suite 700
Entity Address, City or Town	Atlanta,
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30305
City Area Code	770
Local Phone Number	554-3545
Title of 12(b) Security	Common Stock
Trading Symbol	DLHC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		14,182,891
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Entity Central Index Key	0000785557
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--09-30

Supporting Financial Information - Estimated Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
2024 (remaining)	$ 4,114
2025	16,456
2026	15,722
2027	14,694
2028	14,694
Thereafter	46,755
Intangible assets, net	$ 112,435	$ 124,777

Supporting Financial Information - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangible assets	$ 4.1	$ 4.1	$ 12.3	$ 10.7
Intangible assets, remaining amortization period	7 years 7 months 6 days		7 years 7 months 6 days
Depreciation	$ 0.2	$ 0.2	$ 0.4	$ 0.6
Customer contracts and related customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets, remaining amortization period	7 years 6 months		7 years 6 months
Backlog
Finite-Lived Intangible Assets [Line Items]
Intangible assets, remaining amortization period	7 years 9 months 18 days		7 years 9 months 18 days
Trade name
Finite-Lived Intangible Assets [Line Items]
Intangible assets, remaining amortization period	8 years		8 years
Covenants not to compete
Finite-Lived Intangible Assets [Line Items]
Intangible assets, remaining amortization period	5 years 7 months 6 days		5 years 7 months 6 days

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Credit Facilities

9 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Credit Facilities

A summary of our credit facilities as presented on our consolidated balance sheets as follows (in millions):

June 30, 2024

September 30, 2023

Arrangement

Loan Balance

Interest

Arrangement

Loan Balance

Interest

Secured term loan (a) due December 8, 2027

152,000

SOFR1 + 4.1%

Secured term loan (a) due December 8, 2027

169,813

SOFR1 + 4.1%

Secured revolving line of credit (b) due December 8, 2027

14,490

SOFR1 + 4.1%

Secured revolving line of credit (b) due December 8, 2027

9,546

SOFR1 + 4.1%

1Secured Overnight Financing Rate ("SOFR") as of June 30, 2024 and September 30, 2023 were 5.3% and 5.3% respectively.

(a) Represents the principal amounts payable on our term loan, which is secured by liens on substantially all of the assets of the Company. The principal of the term loan is payable in quarterly installments with the remaining balance due on December 8, 2027.

On January 31, 2023, we executed a floating-to-fixed interest rate swap with FNB which has a notional amount of $80.0 million at June 30, 2024, a fixed interest rate of 4.10% and a maturity date of January 31, 2026. As a result of entering these agreements, for the three and nine months ended June 30, 2024, interest expense has been decreased by approximately $0.3 million and $1.0 million, respectively.

The Credit Agreement requires compliance with a number of financial covenants and contains restrictions on our ability to engage in certain transactions. Among other matters, we must comply with limitations on: granting liens; incurring other indebtedness; maintenance of assets; investments in other entities and extensions of credit; mergers and consolidations; and changes in nature of business. The loan agreement also requires us to comply with certain quarterly financial covenants including: (i) a minimum fixed charge coverage ratio of at least 1.25 to 1.00, and (ii) a total leverage ratio not exceeding the ratio of 4.50:1.00 to 2.00:1.00 through maturity. The total leverage ratio is calculated by dividing the Company's total interest-bearing debt by net income adjusted to exclude (i) interest and other expenses, (ii) provision for income taxes (benefit) expense, if any, (iii) depreciation and amortization, and (iv) non-cash charges, losses or expenses, including stock-based compensation, and (v) non-recurring charges, losses or expenses to include transaction and non-cash equity expense. We are in compliance with all loan covenants and restrictions as of June 30, 2024 and September 30, 2023.

We are required to pay quarterly amortization payments, which commenced in December 2022. The annual amortization amounts are $14.3 million for fiscal year 2024, $19.0 million each for fiscal years 2025 and 2026, and $23.75 million for fiscal year 2027, with the remaining unpaid loan balance due at maturity in December 2027. The quarterly payments are equal installments. The Company made voluntary prepayments of $7.1 million during nine months ended June 30, 2024 bringing the outstanding principal balance on the secured term loan to $152.0 million. We have satisfied the mandatory principal payments through March 31, 2025.

In addition to quarterly payments of the outstanding indebtedness, the loan agreement also requires annual payments of a percentage of excess cash flow, as defined in the loan agreement. The loan agreement states that an excess cash flow recapture payment must be made equal to (a) 75% of the excess cash flow for the immediately preceding fiscal year in which indebtedness to consolidated EBITDA ratio is greater than or equal to 2.5:1; (b) 50% of the excess cash flow for the immediately preceding fiscal year in which the funded indebtedness to consolidated EBITDA Ratio is less than 2.5:1 but greater than or equal to 1.5:1; or (c) 0% of the excess cash flow for the immediately preceding fiscal year in which the funded indebtedness to consolidated EBITDA Ratio is less than 1.5:1. In addition, the Company must make additional mandatory prepayment of amounts outstanding based on proceeds received from asset sales and sales of certain equity securities or other indebtedness. Due to the voluntary prepayment of term debt, there was no excess cash flow payment required. For additional information regarding the schedule of future payment obligations, please refer to Note 10. Commitments and Contingencies.

(b) The secured revolving line of credit has a ceiling of up to $70.0 million; as of June 30, 2024, we had unused borrowing capacity of $24.0 million, which is net of outstanding letters of credit. Borrowing on the secured revolving line of credit is secured by liens on substantially all of the assets of the Company. The Company accessed funds from the secured revolving line of credit during the year, which had a $14.5 million outstanding balance at June 30, 2024. As part of the secured revolving line of credit, the lenders agreed to a sublimit of $10.0 million for letters of credit for the account of the Company, subject to applicable procedures.

Commitment and Contingencies

9 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Contractual obligations as of June 30, 2024 are as follows (in thousands):


			Payments Due Per Fiscal Year
			(Remaining)
	Total		2024		2025		2026		2027		2028		Thereafter
Debt obligations	$	166,490	$	14,490	$	9,500	$	19,000	$	23,750	$	99,750	$	—
Facility operating leases	19,929		1,108		3,572		3,350		2,751		2,602		6,546

Total contractual obligations	$	186,419	$	15,598	$	13,072	$	22,350	$	26,501	$	102,352	$	6,546

Legal proceedings

As a commercial enterprise and employer, the Company is subject to various claims and legal actions in the ordinary course of business. These matters can include professional liability, employment-relations issues, workers’ compensation, tax, payroll and employee-related matters, other commercial disputes arising in the course of its business, and inquiries and investigations by governmental agencies regarding our employment practices or other matters. The Company is not aware of any pending or threatened litigation that it believes is reasonably likely to have a material adverse effect on its results of operations, financial position or cash flows.

Revenue Recognition

9 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue Recognition

The following table summarizes the contract balances recognized on the Company's consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Contract assets	$	23,061	$	20,542

Contract assets are included as part of the accounts receivable on the consolidated balances sheets. Contract liabilities had no balance as of June 30, 2024 and September 30, 2023.

Disaggregation of Revenue from Contracts with Customers

We disaggregate our revenue from contracts with customers by customer, contract type, as well as whether the Company acts as prime contractor or subcontractor. We believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following series of tables present our revenue disaggregated by these categories:

Revenue by customer was as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Department of Health and Human Services	$	48,301	$	44,536	$	139,937	$	115,528
Department of Veterans Affairs	35,492		35,898		105,788		104,489
Department of Defense	15,175		21,003		48,458		50,802

Other	1,726		804		5,368		3,566
Total	$	100,694	$	102,241	$	299,551	$	274,385

Revenue by contract type was as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Time and Materials	$	54,978	$	51,572	$	165,260	$	154,366
Cost Reimbursable	19,513		29,110		60,166		58,951
Firm Fixed Price	26,203		21,559		74,125		61,068
Total	$	100,694	$	102,241	$	299,551	$	274,385

Revenue by whether the Company acts as a prime contractor or a subcontractor was as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Prime Contractor	$	90,791	$	97,885	$	269,109	$	259,692
Subcontractor	9,903		4,356		30,442		14,693
Total	$	100,694	$	102,241	$	299,551	$	274,385

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

Supporting Financial Information (Tables)

9 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Accounts Receivable

The following table summarizes accounts receivable presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Billed receivables	$	35,280	$	38,577
Contract assets	23,061		20,542

Accounts receivable	$	58,341	$	59,119

Schedule of Other Current Assets

The following table summarizes other current assets presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Prepaid licenses and other expenses	$	1,426	$	1,330
Prepaid insurance and benefits	856		743
Other receivables	460		994
Other current assets	$	2,742	$	3,067

Schedule of Intangible Assets

The following table summarizes intangible assets, net presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Intangible assets
Customer contracts and related customer relationships	$	113,622	$	113,622
Covenants not to compete	637		637
Trade name	13,034		13,034
Backlog	37,249		37,249
Total intangible assets	164,542		164,542
Less: accumulated amortization
Customer contracts and related customer relationships	(38,455)		(29,929)
Covenants not to compete	(426)		(378)
Trade name	(3,162)		(2,185)
Backlog	(10,064)		(7,273)
Total accumulated amortization	(52,107)		(39,765)
Intangible assets, net	$	112,435	$	124,777

Schedule of Estimated Amortization of Intangible Assets

As of June 30, 2024, the estimated amortization expense per fiscal year was as follows (in thousands):


Fiscal year ending:
2024 (remaining)	$	4,114
2025	16,456
2026	15,722
2027	14,694
2028	14,694
Thereafter	46,755
Total amortization expense	$	112,435

Schedule of Equipment and Improvements, Net

The following table summarizes equipment and improvements, net presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Furniture and equipment	$	1,824	$	1,790
Computer equipment and software	7,072		6,479
Leasehold improvements	1,614		1,614
Total equipment and improvements	10,510		9,883
Less: accumulated depreciation	(8,720)		(8,293)
Equipment and improvements, net	$	1,790	$	1,590

Schedule of Accounts Payable, Accrued Expenses, and Other Current Liabilities

The following table summarizes accounts payable and accrued liabilities presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Accounts payable	$	12,513	$	12,603
Accrued benefits	5,111		6,414
Accrued workers' compensation insurance	1,828		2,369
Accrued bonus and incentive compensation	2,282		4,719
Accrued interest	1,241		1,309
Other accrued expenses	214		2,290
Accounts payable and accrued liabilities	$	23,189	$	29,704

Schedule of Accrued Payroll

The following table summarizes accrued payroll presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Accrued leave	$	7,718	$	9,621
Accrued payroll	5,277		2,487
Accrued payroll taxes	1,115		1,173
Accrued severance	122		513
Total accrued payroll	$	14,232	$	13,794

Schedule of Debt Obligations

The following table summarizes debt obligations presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Secured term loan	$	152,000	$	169,813
Secured revolving line of credit	14,490		9,546

Less: unamortized deferred financing costs	(5,586)		(7,024)
Net bank debt obligations	160,904		172,335
Less: current portion of debt obligations, net of deferred financing costs (a)	(17,646)		(17,188)
Long-term portion of debt obligations, net of deferred financing costs	$	143,258	$	155,147

As of June 30, 2024, we have satisfied quarterly minimum principal payments on our secured term loan through March 31, 2025.

(a) As of June 30, 2024, the current portion comprises term loan amortization of $4.8 million and the $14.5 million outstanding balance on the secured revolving line of credit, net of $1.6 million of unamortized deferred financing costs.

Schedule of Interest Expense

The following table summarizes interest expense presented on our consolidated statements of operations as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Interest expense (a)	$	3,756	$	4,282	$	11,588	$	9,972
Interest income (b)	(10)		—		(34)		—
Amortization of deferred financing costs (c)	397		635		1,437		1,540
Interest expense	$	4,143	$	4,917	$	12,991	$	11,512

(a) Interest expense on borrowing.

(b) Interest earned from customer payments received after the due date.

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Numerator:
Net income	$ 1,139	$ 1,738	$ 5,102	$ 4,090
Denominator:
Denominator for basic net income (loss) per share - weighted-average outstanding shares (in shares)	14,232	13,854	14,156	13,638
Effect of dilutive securities:
Stock options and restricted stock (in shares)	472	685	560	783
Denominator for diluted net income (loss) per share - weighted-average outstanding shares (in shares)	14,704	14,539	14,716	14,421
Net income per share - basic (in dollars per share)	$ 0.08	$ 0.13	$ 0.36	$ 0.30
Net income per share - diluted (in dollars per share)	$ 0.08	$ 0.12	$ 0.35	$ 0.28

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

+ Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-9

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 805
-SubTopic 60
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147476176/805-60-65-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 323
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (g)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478666/740-323-65-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481687/323-10-50-3

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482907/825-10-50-28

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480175/815-40-65-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-8

Reference 11: http://www.xbrl.org/2003/role/exampleRef
-Topic 946
-SubTopic 830
-Name Accounting Standards Codification
-Section 55
-Paragraph 11
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479168/946-830-55-11

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 205
-Name Accounting Standards Codification
-Section 45
-Paragraph 3
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478009/946-205-45-3

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section 45
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479105/946-220-45-7

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(16))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477250/944-220-S99-1

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(9))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(1)(d))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-3

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 810
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 19
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481231/810-10-45-19

Reference 18: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482765/220-10-50-6

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1A

Reference 20: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(ii))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1A

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(A))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1A

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1A

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1A

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

Reference 29: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 235
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477314/942-235-S99-1

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
-Topic 205
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483499/205-20-50-7

Reference 31: http://www.xbrl.org/2003/role/exampleRef
-Topic 810
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 4J
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481175/810-10-55-4J

Reference 32: http://www.xbrl.org/2003/role/exampleRef
-Topic 810
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 4K
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481175/810-10-55-4K

Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482790/220-10-45-1A

Reference 34: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482790/220-10-45-1B

Reference 35: http://www.xbrl.org/2003/role/disclosureRef
-Topic 230
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482740/230-10-45-2

Reference 36: http://www.xbrl.org/2003/role/disclosureRef
-Topic 810
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1A
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481203/810-10-50-1A

Reference 37: http://www.xbrl.org/2003/role/disclosureRef
-Topic 810
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1A
-Subparagraph (c)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481203/810-10-50-1A

+ Details

Supporting Financial Information - Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2024	Jun. 30, 2024	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Goodwill, Period Increase (Decrease)	$ 0	$ 0
Goodwill	$ 138,161	$ 138,161	$ 138,161

- Definition

Amount, after accumulated impairment loss, of asset representing future economic benefit arising from other asset acquired in business combination or from joint venture formation or both, that is not individually identified and separately recognized.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 49
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482785/280-10-55-49

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482548/350-20-55-24

Reference 3: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 100
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 4: http://www.xbrl.org/2003/role/exampleRef
-Topic 852
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481372/852-10-55-10

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(15))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 45
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482598/350-20-45-1

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03(10)(1))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478546/942-210-S99-1

+ Details

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Operating activities
Net income	$ 5,102	$ 4,090
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	12,769	11,281
Amortization of deferred financing costs charged to interest expense	1,437	1,540
Stock-based compensation expense	2,290	2,020
Deferred taxes, net	(311)	0
Changes in operating assets and liabilities:
Accounts receivable	778	(1,918)
Other assets	2,484	130
Accounts payable and accrued liabilities	(6,515)	(4,221)
Accrued payroll	437	274
Other liabilities	(3,540)	1,801
Net cash provided by operating activities	14,931	14,997
Investing activities
Business acquisition, net of cash acquired	0	(180,711)
Purchase of equipment and improvements	(627)	(580)
Net cash (used in) investing activities	(627)	(181,291)
Financing activities
Proceeds from revolving line of credit	257,067	144,697
Repayment of revolving line of credit	(252,123)	(128,204)
Proceeds from debt obligations	0	168,000
Repayments of debt obligations	(17,813)	(10,688)
Payments of deferred financing costs	0	(7,666)
Proceeds from issuance of common stock upon exercise of options and warrants	261	1,107
Payment of tax obligations resulting from net exercise of stock options	(1,488)	(650)
Net cash (used in) provided by financing activities	(14,096)	166,596
Net change in cash	208	302
Cash - beginning of period	215	228
Cash - end of period	423	530
Supplemental disclosure of cash flow information
Cash paid during the period for interest	11,656	10,006
Cash paid during the period for income taxes	2,280	4,055
Common stock surrendered for the exercise of stock options	$ 2,432	$ 238

Leases - Summary of Lease Balances in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Leases [Abstract]
Operating lease right-of-use assets	$ 7,498	$ 9,656
Operating lease liabilities - current	2,889	3,463
Operating lease liabilities - long-term	13,521	15,908
Total operating lease liabilities	$ 16,410	$ 19,371

Supporting Financial Information - Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Finite-Lived Intangible Assets [Line Items]
Total intangible assets	$ 164,542	$ 164,542
Total accumulated amortization	(52,107)	(39,765)
Intangible assets, net	112,435	124,777
Customer contracts and related customer relationships
Finite-Lived Intangible Assets [Line Items]
Total intangible assets	113,622	113,622
Total accumulated amortization	(38,455)	(29,929)
Covenants not to compete
Finite-Lived Intangible Assets [Line Items]
Total intangible assets	637	637
Total accumulated amortization	(426)	(378)
Trade name
Finite-Lived Intangible Assets [Line Items]
Total intangible assets	13,034	13,034
Total accumulated amortization	(3,162)	(2,185)
Backlog
Finite-Lived Intangible Assets [Line Items]
Total intangible assets	37,249	37,249
Total accumulated amortization	$ (10,064)	$ (7,273)

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Credit Facilities - Schedule of Credit Facilities (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2024	Sep. 30, 2023
Line of Credit Facility [Line Items]
Long-term debt	$ 166,490
Interest rate spread	5.30%	5.30%
Revolving Line of Credit
Line of Credit Facility [Line Items]
Long-term debt	$ 14,490	$ 9,546
Secured Debt
Line of Credit Facility [Line Items]
Long-term debt	152,000	169,813
Secured Debt \| Term Loans
Line of Credit Facility [Line Items]
Long-term debt	$ 152,000	$ 169,813
Interest	4.10%	4.10%
Secured Debt \| Revolving Line of Credit
Line of Credit Facility [Line Items]
Long-term debt	$ 14,490	$ 9,546
Interest	4.10%	4.10%

Significant Accounting Policies	9 Months Ended
Significant Accounting Policies	Jun. 30, 2024
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The most significant of these estimates and assumptions relate to estimating costs including overhead and its allocation, valuing and determining the amortization periods for long-lived intangible assets, interest rate swaps, stock-based compensation, and right-of-use assets and lease liabilities. We evaluate these estimates and judgments on an ongoing basis and base our estimates on historical experience, current and expected future outcomes, third-party evaluations, and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. We revise material accounting estimates if changes occur, such as more experience is acquired, additional information is obtained, or there is new information on which an estimate was or can be based. Actual results could differ from those estimates. Revenue The Company's revenues from contracts with customers are derived from offerings that include technology-enabled business process outsourcing, program management solutions, and public health research and analytics, substantially within the U.S. government and its agencies. The Company has various types of contracts including time-and-materials contracts, cost-reimbursable contracts, and firm-fixed-price contracts. We consider a contract with a customer to exist when there is a commitment by both parties (customer and Company), payment terms are determinable, there is commercial substance, and collectability is probably in accordance with Accounting Standards Codification ("ASC") No. 606, "Revenue from Contracts with Customers" ("Topic 606"). We recognize revenue over time when there is a continuous transfer of control to our customer as performance obligations are satisfied. For our U.S. government contracts, this continuous transfer of control to the customer is transferred over time and revenue is recognized based on the extent of progress toward completion of the performance obligation. We consider control to transfer when we have a right to payment. In some instances, the Company commences providing services prior to formal approval to begin work from the customer. The Company considers these factors, the risks associated with commencing work, and legal enforceability in determining whether a contract exists under Topic 606. Contract modification can occur throughout the life of the contract and can affect the transaction price, extend the period of performance, adjust funding, or create new performance obligations. We review each modification to assess the impact of these contract changes to determine if it should be treated as part of the original performance obligation or as a separate contract. Contract modifications impact performance obligations when the modification either creates new or changes the existing enforceable rights and obligations. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue and profit cumulatively. Furthermore, a significant change in one or more estimates could affect the profitability of our contracts. We recognize adjustments in estimated profit on contracts in the period identified. For service contracts, we satisfy our performance obligations as services are rendered. We use cost-based input and time-based output methods to measure progress based on the contract type. •Time and material - We bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced as the amount corresponds directly to the value of our performance to date. Revenue is recognized to the extent of billable rates times hours delivered plus materials and other reimbursable costs incurred. •Cost reimbursable - We record reimbursable costs as incurred, including an estimated share of the contractual fee earned. •Firm fixed price - We recognize revenue over time using a straight-line measure of progress. Contract costs generally include direct costs such as labor, materials, subcontract costs, and indirect costs identifiable with or allocable to a specific contract. Costs are expensed as incurred and include an estimate of the contractual fees earned. Contract costs incurred for U.S. government contracts, including indirect costs, are subject to audit and adjustment by various government audit agencies. Historically, our adjustments have not been material. Contract assets - Amounts are invoiced as work progresses in accordance with agreed-upon contractual terms. In part, revenue recognition occurs before we have the right to bill, resulting in contract assets. These contract assets are reported within accounts receivable on our consolidated balance sheets and are invoiced in accordance with payment terms defined in each contract. Period end balances will vary from period to period due to agreed-upon contractual terms. Fair Value of Financial Instruments The carrying amounts of the Company's cash, accounts receivable, contract assets, accrued expenses, and accounts payable approximate fair value due to the short-term nature of these instruments. The fair values of the Company's debt instruments approximate fair value because the underlying interest rates approximate market rates that the Company could obtain for similar instruments at the balance sheet dates. Long-Lived Assets Our long-lived assets include equipment and improvements, intangible assets, right-of-use assets, and goodwill. The Company continues to review long-lived assets for possible impairment or loss of value at least annually, or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit's carrying amount is greater than its fair value. Equipment and improvements are recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives (3 to 7 years) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are expensed as incurred. Intangible assets (other than goodwill) are originally recorded at fair value and are amortized on a straight-line basis over their estimated useful lives of 10 years. Right-of-use assets are measured at the present value of future minimum lease payments, including all probable renewals, plus lease payments made to the lessor before or at lease commencement and indirect costs paid, less incentives received. Our right-of-use assets include long-term leases for facilities and equipment and are amortized over their respective lease terms. Lease Liabilities The Company has leases for facilities and office equipment. Our lease liabilities are recognized as the present value of the future minimum lease payments over the lease term. Our lease payments consist of fixed and in-substance fixed amounts attributable to the use of the underlying asset over the lease term. Variable lease payments that do not depend on an index rate or are not in-substance fixed payments are excluded in the measurement of right-of-use assets and lease liabilities and are expensed in the period incurred. The incremental borrowing rate on our secured term loan is used in determining the present value of future minimum lease payments. Some of our lease agreements include options to extend the lease term or terminate the lease. These options are accounted for in our right-of-use assets and lease liabilities when it is reasonably certain that the Company will extend the lease term or terminate the lease. The Company does not have any finance leases. Goodwill The Company reviews goodwill for impairment on an annual basis and on a quarterly basis the Company assesses the impact of any macroeconomic changes that may impact the business conditions to determine if these changes have any adverse impact to goodwill. Notwithstanding this evaluation, factors including non-renewal of a major contract or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to future periods’ results of operations. The Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill. Income Tax The Company accounts for income taxes in accordance with the asset and liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance sheets when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is more likely than not that the position will be sustained upon examination. We had no uncertain tax positions at either June 30, 2024 or September 30, 2023. We report interest and penalties as a component of provision for income taxes. During the three and nine months ended June 30, 2024 and 2023, we recognized no interest and no penalties related to income taxes. Stock-Based Compensation The Company uses the fair value-based method for stock-based compensation. Options issued are designated as either an incentive stock option or a non-statutory stock option. No option may be granted with a term of more than 10 years from the date of grant. Option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued common shares. All awards to employees and non-employees are recorded at fair value on the date of the grant and expensed over the period of vesting. The Company uses a Monte Carlo method to estimate the fair value of each stock option at the date of grant. Any consideration paid by the option holders to purchase shares is credited to common stock. Stock-based compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The stock-based compensation expense for that portion of awards has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. For options that vest based on the Company’s common stock achieving and maintaining defined market prices, the Company values the awards with a Monte Carlo method that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation expense is recognized over the service period. Cash The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. We maintain cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation up to $250,000. Deposits held with financial institutions may exceed the $250,000 limit. Accounts Receivable Receivables include amounts billed and currently due from customers where the right to consideration is unconditional and amounts unbilled. Both billed and unbilled amounts are non-interest bearing, unsecured, and recognized at an estimated realizable value that includes costs and fees, and are generally expected to be billed and received within a single year. We evaluate our receivables for expected credit losses on a quarterly basis and determine whether an allowance for expected credit losses is appropriate based on specific collection issues. Earnings Per Share Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common stock outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method. Treasury Stock The Company periodically purchases its own common stock that is traded on public markets as part of announced stock repurchase programs. The repurchased common stock is classified as treasury stock on the consolidated balance sheets and held at cost. As of June 30, 2024 and September 30, 2023, the Company did not hold any treasury stock. Preferred Stock Our certificate of incorporation authorizes the issuance of "blank check" preferred stock with designations, rights and preferences as may be determined from time to time by our board of directors up to an aggregate of 5,000,000 shares of preferred stock. As of June 30, 2024 and September 30, 2023, the Company has not issued any preferred stock. Interest Rate Swap The Company uses derivative financial instruments to manage interest rate risk associated with its variable debt. The Company's objective in using these interest rate derivatives is to manage its exposure to interest rate movements and reduce volatility of interest expense. The gains and losses due to changes in the fair value of the interest rate swap agreements completely offset changes in the fair value of the hedged portion of the underlying debt. Offsetting changes in fair value of both the interest rate swaps and the hedged portion of the underlying debt are recognized in interest expense in the consolidated statements of operations. The Company does not hold or issue any derivative instruments for trading or speculative purposes. Risks and Uncertainties Management evaluates the impact of global markets and economic factors on our industry and the potential for adverse effects on the Company's consolidated financial position and its operations. As of June 30, 2024 and September 30, 2023 there was no indication of any global or economic impacts to our industry.

Stock-Based Compensation and Equity Grants - Stock Options Outstanding, Vested and Unvested (Details) - shares shares in Thousands	Jun. 30, 2024	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
Vested and exercisable (in shares)	1,408	1,608
Unvested (in shares)	260	670
Option outstanding (in shares)	1,668	2,278

Subsequent Events	9 Months Ended
Subsequent Events	Jun. 30, 2024
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Management has evaluated subsequent events through the date that the Company's unaudited consolidated financial statements were issued. Based on this evaluation, the Company has determined that no subsequent events have occurred which require disclosure through the date that these consolidated financial statements were issued.

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2024	Sep. 30, 2023
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	40,000	40,000
Common stock, issued (in shares)	14,183	13,950
Common stock, outstanding (in shares)	14,183	13,950

Leases - Company's Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Leases [Abstract]
2024 (remaining)	$ 1,108
2025	3,572
2026	3,350
2027	2,751
2028	2,602
Thereafter	6,546
Total future lease payments	19,929
Less: imputed interest	(3,519)
Total operating lease liabilities	16,410	$ 19,371
Less: current portion of operating lease liabilities	(2,889)	(3,463)
Long-term operating lease liabilities	$ 13,521	$ 15,908

Stock-Based Compensation and Equity Grants

9 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation and Equity Grants

Stock-based compensation expense

Options issued under equity incentive plans were designated as either an incentive stock or a non-statutory stock option. No option was granted with a term of more than 10 years from the date of grant. Exercisability of option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued shares. As of June 30, 2024, there were 0.9 million shares available for grant.

Stock-based compensation expense shown in the table below, is recorded in general and administrative expenses in our consolidated statements of operations as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
DLH employees (a)	$	537	$	489	$	1,851	$	1,481
Non-employee directors (b)	180		179		439		539
Total stock option expense	$	717	$	668	$	2,290	$	2,020

(a) Included in this amount are equity grants of restricted stock units ("RSU") to Executive Officers, which were issued in accordance with the DLH long-term incentive compensation policy in this fiscal year, including both RSU and stock option grants to employees during prior fiscal years. The RSUs issued and outstanding totaled 429,320 and 337,578 shares at June 30, 2024 and 2023, respectively. During the three months ended June 30, 2024 and 2023, there were no grants awarded to Executive Officers. For the nine months ended June 30, 2024 and 2023, the Company granted 169,544 and 197,174 shares of restricted stock units, respectively. During the nine months ended June 30, 2024, 84,773 shares of the RSUs granted have performance-based vesting criteria and the remaining 84,771 shares have service-based vesting criteria. During the nine months ended June 30, 2023, 141,892 shares of the RSUs granted have performance-based vesting criteria and the remaining 55,282 shares have service-based vesting criteria.

The RSUs granted during the nine months ended June 30, 2024 and 2023, were valued as follows using the Monte Carlo Method, and will be amortized over the 3-year measurement period.

(b) Equity grants of RSUs were made in accordance with DLH compensation policy for non-employee directors and a total of 61,525 and 50,367 restricted stock units were issued and outstanding at June 30, 2024 and 2023, respectively. These grants have service-based vesting criteria and vest at the end of this fiscal year.

The fair value of RSUs issued during the nine months ended June 30, 2024 and 2023 is presented in the table below:

Volatility

50%

Grant Date

Performance Vesting Base

Performance Vesting Criteria

(Years)

Fair Value

December 15, 2023

Revenue

Revenue increase at the end of the performance period as compared to the year ended September 30, 2023

3.82

December 15, 2023

Stock price

Stock price is at least $25.65 per share average for the 30 days prior to the end of the performance period

5.36

January 27, 2023

Revenue

Revenue increase at the end of the performance period as compared to the year ended September 30, 2022

3.51

January 27, 2023

Stock price

Stock price is at least $33.21 per share average for the 30 days prior to the end of the performance period

2.92

Notes:

Results based on 100,000 simulations

Unrecognized stock-based compensation expense

Unrecognized stock-based compensation expense is presented in the table below (in thousands):


	June 30,
	2024		2023
Unrecognized expense for DLH employees (a)	$	6,119	$	7,358
Unrecognized expense for non-employee directors	180		155
Total unrecognized expense	$	6,299	$	7,513

(a) On a weighted average basis, the unrecognized expense as of June 30, 2024 is expected to be recognized within the next 3.17 years.

Stock option activity for the nine months ended June 30, 2024

The aggregate intrinsic value in the table below represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in the money options on those dates. This amount will change based on the fair market value of the Company’s stock. A summary of the Company's stock option awards is as follows:


				(in years)
				Weighted
		Weighted		Average	(in thousands)
	(in thousands)	Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
Options outstanding, September 30, 2023	2,278	$	8.40	5.80	$	8,693
Granted	—	—		—	—
Exercised	(535)	5.03		—	—
Cancelled	(75)	11.66		—	—
Options outstanding, June 30, 2024	1,668	$	8.94	5.70	$	7,370
Vested and exercisable, June 30, 2024	1,408	$	8.19	5.30	$	7,293

Stock option shares outstanding, vested and unvested balance as follows (in thousands):



	June 30,	September 30,
	2024	2023
Vested and exercisable	1,408	1,608
Unvested (a)	260	670
Options outstanding	1,668	2,278

(a) Certain awards vest upon satisfaction of certain performance criteria.

Related Party Transactions	9 Months Ended
Related Party Transactions	Jun. 30, 2024
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions The Company has determined that for the nine months ended June 30, 2024 and 2023, there were no significant related party transactions that have occurred which require disclosure through the date that these consolidated financial statements were issued.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

+ Details

Revenue Recognition - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2024	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
Contract liabilities	$ 0.0	$ 0.0

Stock-Based Compensation and Equity Grants (Tables)

9 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Stock-based Compensation Expense

Stock-based compensation expense shown in the table below, is recorded in general and administrative expenses in our consolidated statements of operations as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
DLH employees (a)	$	537	$	489	$	1,851	$	1,481
Non-employee directors (b)	180		179		439		539
Total stock option expense	$	717	$	668	$	2,290	$	2,020

The RSUs granted during the nine months ended June 30, 2024 and 2023, were valued as follows using the Monte Carlo Method, and will be amortized over the 3-year measurement period.

Unrecognized stock-based compensation expense is presented in the table below (in thousands):


	June 30,
	2024		2023
Unrecognized expense for DLH employees (a)	$	6,119	$	7,358
Unrecognized expense for non-employee directors	180		155
Total unrecognized expense	$	6,299	$	7,513

(a) On a weighted average basis, the unrecognized expense as of June 30, 2024 is expected to be recognized within the next 3.17 years.

Summary of Performance Vesting Critera

The fair value of RSUs issued during the nine months ended June 30, 2024 and 2023 is presented in the table below:

Volatility

50%

Grant Date

Performance Vesting Base

Performance Vesting Criteria

(Years)

Fair Value

December 15, 2023

Revenue

Revenue increase at the end of the performance period as compared to the year ended September 30, 2023

3.82

December 15, 2023

Stock price

Stock price is at least $25.65 per share average for the 30 days prior to the end of the performance period

5.36

January 27, 2023

Revenue

Revenue increase at the end of the performance period as compared to the year ended September 30, 2022

3.51

January 27, 2023

Stock price

Stock price is at least $33.21 per share average for the 30 days prior to the end of the performance period

2.92

Notes:

Results based on 100,000 simulations

Schedule of Stock Option Activity

A summary of the Company's stock option awards is as follows:


				(in years)
				Weighted
		Weighted		Average	(in thousands)
	(in thousands)	Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
Options outstanding, September 30, 2023	2,278	$	8.40	5.80	$	8,693
Granted	—	—		—	—
Exercised	(535)	5.03		—	—
Cancelled	(75)	11.66		—	—
Options outstanding, June 30, 2024	1,668	$	8.94	5.70	$	7,370
Vested and exercisable, June 30, 2024	1,408	$	8.19	5.30	$	7,293

Schedule of Option Shares Outstanding, Vested and Expected to Vest

Stock option shares outstanding, vested and unvested balance as follows (in thousands):



	June 30,	September 30,
	2024	2023
Vested and exercisable	1,408	1,608
Unvested (a)	260	670
Options outstanding	1,668	2,278

(a) Certain awards vest upon satisfaction of certain performance criteria.

Stock-Based Compensation and Equity Grants - FV of Performance Based Awards (Details) - $ / shares	9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	50.00%	50.00%
December 15, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Minimum average price (in dollars per share)	$ 25.65	$ 25.65
January 27, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Minimum average price (in dollars per share)	$ 33.21	$ 33.21
Revenue \| December 15, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	3 years	3 years
Calculated fair value (in dollars per share)	$ 3.82	$ 3.82
Revenue \| January 27, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	3 years	3 years
Calculated fair value (in dollars per share)	$ 3.51	$ 3.51
Stock price \| December 15, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	3 years	3 years
Calculated fair value (in dollars per share)	$ 5.36	$ 5.36
Stock price \| January 27, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	3 years	3 years
Calculated fair value (in dollars per share)	$ 2.92	$ 2.92

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480483/718-10-35-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(ii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(01)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(02)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(03)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(04)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(ii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)(01)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)(02)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)(03)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(ii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(iii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(iv)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(v)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

+ Details

Supporting Financial Information - Equipment and Improvements, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Furniture and equipment	$ 1,824	$ 1,790
Computer equipment and software	7,072	6,479
Leasehold improvements	1,614	1,614
Total equipment and improvements	10,510	9,883
Less: accumulated depreciation	(8,720)	(8,293)
Equipment and improvements, net	$ 1,790	$ 1,590

Supporting Financial Information - Accounts Receivable (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Billed receivables	$ 35,280	$ 38,577
Contract assets	23,061	20,542
Accounts receivable	$ 58,341	$ 59,119

Stock-Based Compensation and Equity Grants - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock option expense	$ 717	$ 668	$ 2,290	$ 2,020
Total unrecognized expense	6,299	7,513	$ 6,299	$ 7,513
Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)			429,320	337,578
Expected term (years)			3 years
DLH employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total unrecognized expense	6,119	7,358	$ 6,119	$ 7,358
Weighted average share based compensation expense recognition period			3 years 2 months 1 day
Non-employee directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total unrecognized expense	$ 180	$ 155	$ 180	$ 155
Non-employee directors \| Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)	61,525	50,367
NEO \| Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)	0	0	169,544	197,174
NEO \| Performance Shares
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)			84,773	141,892
NEO \| Service Based Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)			84,771	55,282
Selling, General and Administrative Expenses \| DLH employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock option expense	$ 537	$ 489	$ 1,851	$ 1,481
Selling, General and Administrative Expenses \| Non-employee directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock option expense	$ 180	$ 179	$ 439	$ 539

Earnings Per Share (Tables)

9 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Schedule of Diluted Earnings per Share

Earnings per share information is presented in the table below (in thousands except for per share amounts):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Net income	$	1,139	$	1,738	$	5,102	$	4,090
Denominator:
Denominator for basic net income per share - weighted-average outstanding shares	14,232		13,854		14,156		13,638
Effect of dilutive securities:
Stock options and restricted stock	472		685		560		783
Denominator for diluted net income per share - weighted-average outstanding shares	14,704		14,539		14,716		14,421

Net income per share - basic	$	0.08	$	0.13	$	0.36	$	0.30
Net income per share - diluted	$	0.08	$	0.12	$	0.35	$	0.28

Credit Facilities - Narrative (Details)	3 Months Ended	9 Months Ended
Credit Facilities - Narrative (Details)	Jun. 30, 2024 USD ($)	Jun. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)
Line of Credit Facility [Line Items]
Debt amortization fiscal year 2024	$ 14,490,000	$ 14,490,000
Debt amortization fiscal year 2025	9,500,000	9,500,000
Debt amortization fiscal year 2026	19,000,000	19,000,000
Debt amortization fiscal year 2027	23,750,000	23,750,000
Long-term debt	166,490,000	166,490,000
Interest Rate Swap Due 2026
Line of Credit Facility [Line Items]
Derivative notional amount	$ 80,000,000	$ 80,000,000
Derivative fixed interest rate	4.10%	4.10%
Interest Rate Swap
Line of Credit Facility [Line Items]
Decrease in interest expense	$ 300,000	$ 1,000,000
Revolving Line of Credit
Line of Credit Facility [Line Items]
Long-term debt	14,490,000	14,490,000	$ 9,546,000
Secured Debt
Line of Credit Facility [Line Items]
Debt amortization fiscal year 2025	4,800,000	4,800,000
Long-term debt	152,000,000	$ 152,000,000	169,813,000
Secured Debt \| Term Loans
Line of Credit Facility [Line Items]
Fixed charge coverage ratio		1.25
Debt amortization fiscal year 2024	14,300,000	$ 14,300,000
Debt amortization fiscal year 2025	19,000,000	19,000,000
Debt amortization fiscal year 2026	19,000,000	19,000,000
Debt amortization fiscal year 2027	23,750,000	23,750,000
Voluntary principal amortization of term debt		7,100,000
Long-term debt	152,000,000	$ 152,000,000	169,813,000
Secured Debt \| Term Loans \| Excess Cash Flows Greater Than Or Equal to 2.50
Line of Credit Facility [Line Items]
Percentage of excess cash flow for each year of funded indebtedness to EBDTA		75.00%
Ratio of funded indebtedness to adjusted EBIDTA		2.5
Secured Debt \| Term Loans \| Excess Cash Flows Less Than 2.50 But Greater Than 1.50
Line of Credit Facility [Line Items]
Percentage of excess cash flow for each year of funded indebtedness to EBDTA		50.00%
Secured Debt \| Term Loans \| Excess Cash Flows Less Than 2.50
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to adjusted EBIDTA		2.5
Secured Debt \| Term Loans \| Excess Cash Flows Equal to 1.50
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to adjusted EBIDTA		1.5
Secured Debt \| Term Loans \| Excess Cash Flows Less Than 1.50
Line of Credit Facility [Line Items]
Percentage of excess cash flow for each year of funded indebtedness to EBDTA		0.00%
Ratio of funded indebtedness to adjusted EBIDTA		1.5
Secured Debt \| Term Loans \| Maximum
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to EBITDA through maturity		4.50
Secured Debt \| Term Loans \| Minimum
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to EBITDA through maturity		2.00
Secured Debt \| Revolving Line of Credit
Line of Credit Facility [Line Items]
Long-term debt	14,490,000	$ 14,490,000	$ 9,546,000
Line of credit, maximum borrowing capacity	70,000,000	70,000,000
Line of credit, unused borrowing capacity	24,000,000	24,000,000
Secured Debt \| Letter of Credit
Line of Credit Facility [Line Items]
Line of credit, current borrowing capacity	$ 10,000,000	$ 10,000,000

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
Contract assets	$ 23,061	$ 20,542

Leases - Narrative (Details)	9 Months Ended
Leases - Narrative (Details)	Jun. 30, 2024 sublease sublease_option
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of facilities subleased \| sublease	1
Sublease term	5 years
Sublease number of additional extension options \| sublease_option	2
Sublease extension option period	1 year
Weighted-average remaining lease term	6 years
Weighted-average discount rate	6.10%
Minimum \| Facilities and Equipment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease term (in years)	1 year
Maximum \| Facilities and Equipment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease term (in years)	7 years 6 months

Commitment and Contingencies (Tables)

9 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Schedule of Contractual Obligations

Contractual obligations as of June 30, 2024 are as follows (in thousands):


			Payments Due Per Fiscal Year
			(Remaining)
	Total		2024		2025		2026		2027		2028		Thereafter
Debt obligations	$	166,490	$	14,490	$	9,500	$	19,000	$	23,750	$	99,750	$	—
Facility operating leases	19,929		1,108		3,572		3,350		2,751		2,602		6,546

Total contractual obligations	$	186,419	$	15,598	$	13,072	$	22,350	$	26,501	$	102,352	$	6,546

Leases (Tables)

9 Months Ended

Jun. 30, 2024

Leases [Abstract]

Schedule of Summarized Lease Balances in Consolidated Balance Sheet

The following table summarizes lease balances presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Operating lease right-of-use assets	$	7,498	$	9,656

Operating lease liabilities, current	$	2,889	$	3,463
Operating lease liabilities - long-term	13,521		15,908
Total operating lease liabilities	$	16,410	$	19,371

Schedule of Lease Costs and Other Information Related to Leases

Total lease costs for our leases were as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Operating	$	883	$	1,097	$	4,915	$	2,921
Short-term	50		83		298		225
Variable	37		47		179		63
Sublease income (a)	(67)		(71)		(339)		(214)
Total lease costs	$	903	$	1,156	$	5,053	$	2,995

Other information related to our leases for the nine months ended June 30, 2024 and 2023 was as follows (in thousands):


	2024		2023
Cash paid for amounts included in the measurement of lease liabilities	$	3,233	$	3,317
Lease liabilities arising from obtaining right-of-use assets	—		2,052
Other lease information	$	3,233	$	5,369

Schedule of Company's Future Lease Payments

The Company's future minimum lease payments as of June 30, 2024 were as follows (in thousands):


Fiscal year ending:
2024 (remaining)	$	1,108
2025	3,572
2026	3,350
2027	2,751
2028	2,602
Thereafter	6,546
Total future lease payments	19,929
Less: imputed interest	(3,519)
Present value of future minimum lease payments	16,410
Less: current portion of operating lease liabilities	(2,889)
Long-term operating lease liabilities	$	13,521

Credit Facilities (Tables)

9 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Summary of Credit Facilities

A summary of our credit facilities as presented on our consolidated balance sheets as follows (in millions):

June 30, 2024

September 30, 2023

Arrangement

Loan Balance

Interest

Arrangement

Loan Balance

Interest

Secured term loan (a) due December 8, 2027

152,000

SOFR1 + 4.1%

Secured term loan (a) due December 8, 2027

169,813

SOFR1 + 4.1%

Secured revolving line of credit (b) due December 8, 2027

14,490

SOFR1 + 4.1%

Secured revolving line of credit (b) due December 8, 2027

9,546

SOFR1 + 4.1%

1Secured Overnight Financing Rate ("SOFR") as of June 30, 2024 and September 30, 2023 were 5.3% and 5.3% respectively.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings
Beginning Balance (in shares) at Sep. 30, 2022		13,047
Beginning balance at Sep. 30, 2022	$ 92,060	$ 13	$ 91,057	$ 990
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance and fair value adjustment of common stock in business combination (in shares)		527
Issuance and fair value adjustment of common stock in business combination	6,539	$ 1	6,538
Expense related to director restricted stock units	539		539
Expense related to employee stock-based compensation	1,481		1,481
Exercise of stock options (in shares)		393
Exercise of stock options	1,107		1,107
Common stock surrendered for the exercise of stock options (in shares)		(67)
Common stock surrendered for the exercise of stock options	(650)		(650)
Net income	4,090			4,090
Ending Balance (in shares) at Jun. 30, 2023		13,900
Ending balance at Jun. 30, 2023	105,166	$ 14	100,072	5,080
Beginning Balance (in shares) at Mar. 31, 2023		13,793
Beginning balance at Mar. 31, 2023	101,940	$ 14	98,584	3,342
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Expense related to director restricted stock units	179		179
Expense related to employee stock-based compensation	489		489
Exercise of stock options (in shares)		107
Exercise of stock options	820		820
Net income	1,738			1,738
Ending Balance (in shares) at Jun. 30, 2023		13,900
Ending balance at Jun. 30, 2023	$ 105,166	$ 14	100,072	5,080
Beginning Balance (in shares) at Sep. 30, 2023	13,950	13,950
Beginning balance at Sep. 30, 2023	$ 102,439	$ 14	99,974	2,451
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Expense related to director restricted stock units	439		439
Expense related to employee stock-based compensation	$ 1,851		1,851
Exercise of stock options (in shares)	535	535
Exercise of stock options	$ 261		261
Common stock surrendered for the exercise of stock options (in shares)		(302)
Common stock surrendered for the exercise of stock options	(1,487)		(1,487)
Net income	$ 5,102			5,102
Ending Balance (in shares) at Jun. 30, 2024	14,183	14,183
Ending balance at Jun. 30, 2024	$ 108,605	$ 14	101,038	7,553
Beginning Balance (in shares) at Mar. 31, 2024		14,230
Beginning balance at Mar. 31, 2024	106,750	$ 14	100,322	6,414
Increase (Decrease) in Stockholders' Equity [Roll Forward]
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 (in shares)		(47)
Common stock surrendered for the exercise of stock options	(1)		(1)
Net income	$ 1,139			1,139
Ending Balance (in shares) at Jun. 30, 2024	14,183	14,183
Ending balance at Jun. 30, 2024	$ 108,605	$ 14	$ 101,038	$ 7,553

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Current assets:
Cash	$ 423	$ 215
Accounts receivable	58,341	59,119
Other current assets	2,742	3,067
Total current assets	61,506	62,401
Goodwill	138,161	138,161
Intangible assets, net	112,435	124,777
Operating lease right-of-use assets	7,498	9,656
Deferred taxes, net	3,381	3,070
Equipment and improvements, net	1,790	1,590
Other long-term assets	186	186
Total assets	324,957	339,841
Current liabilities:
Accounts payable and accrued liabilities	23,189	29,704
Debt obligations - current, net of deferred financing costs	17,646	17,188
Accrued payroll	14,232	13,794
Operating lease liabilities - current	2,889	3,463
Other current liabilities	482	638
Total current liabilities	58,438	64,787
Long-term liabilities:
Debt obligations - long-term, net of deferred financing costs	143,258	155,147
Operating lease liabilities - long-term	13,521	15,908
Other long-term liabilities	1,135	1,560
Total long-term liabilities	157,914	172,615
Total liabilities	216,352	237,402
Shareholders' equity:
Common stock, $0.001 par value; 40,000 shares authorized; 14,183 and 13,950 shares issued and outstanding at June 30, 2024 and September 30, 2023, respectively	14	14
Additional paid-in capital	101,038	99,974
Retained earnings	7,553	2,451
Total shareholders’ equity	108,605	102,439
Total liabilities and shareholders' equity	$ 324,957	$ 339,841

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Earnings Per Share

9 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Earnings Per Share

Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common shares outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method.

Earnings per share information is presented in the table below (in thousands except for per share amounts):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Net income	$	1,139	$	1,738	$	5,102	$	4,090
Denominator:
Denominator for basic net income per share - weighted-average outstanding shares	14,232		13,854		14,156		13,638
Effect of dilutive securities:
Stock options and restricted stock	472		685		560		783
Denominator for diluted net income per share - weighted-average outstanding shares	14,704		14,539		14,716		14,421

Net income per share - basic	$	0.08	$	0.13	$	0.36	$	0.30
Net income per share - diluted	$	0.08	$	0.12	$	0.35	$	0.28

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
Revenue	$ 100,694	$ 102,241	$ 299,551	$ 274,385
Contract costs	81,646	80,919	239,839	216,779
General and administrative costs	9,013	9,935	28,420	27,670
Corporate development costs	0	0	0	1,735
Depreciation and amortization	4,272	4,280	12,769	11,281
Total operating costs	94,931	95,134	281,028	257,465
Income from operations	5,763	7,107	18,523	16,920
Interest expenses	4,143	4,917	12,991	11,512
Income before provision for income tax	1,620	2,190	5,532	5,408
Provision for income tax expense	481	452	430	1,318
Net income	$ 1,139	$ 1,738	$ 5,102	$ 4,090
Net income per share - basic (in dollars per share)	$ 0.08	$ 0.13	$ 0.36	$ 0.30
Net income per share - diluted (in dollars per share)	$ 0.08	$ 0.12	$ 0.35	$ 0.28
Weighted average common stock outstanding
Basic (in shares)	14,232	13,854	14,156	13,638
Diluted (in shares)	14,704	14,539	14,716	14,421

Stock-Based Compensation and Equity Grants - Narrative (Details) - shares	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Omnibus Equity Incentive Plan 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant (in shares)	900,000		900,000
Employee Stock Option \| Omnibus Equity Incentive Plan 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration term of share-based compensation plan awards			10 years
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted stock units granted (in shares)			429,320	337,578
Restricted Stock Units \| NEO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted stock units granted (in shares)	0	0	169,544	197,174
Performance Shares \| NEO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted stock units granted (in shares)			84,773	141,892
Service Based Restricted Stock Units \| NEO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted stock units granted (in shares)			84,771	55,282

Commitments and Contingencies - Contractual Obligations (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Debt obligations
Debt obligations	$ 166,490
2024	14,490
2025	9,500
2026	19,000
2027	23,750
2028	99,750
Thereafter	0
Operating Leases
Total future lease payments	19,929
2024 (remaining)	1,108
2025	3,572
2026	3,350
2027	2,751
2028	2,602
Thereafter	6,546
Total Contractual Obligations
Total Obligations	186,419
2024	15,598
2025	13,072
2026	22,350
2027	26,501
2028	102,352
Thereafter	6,546
Facility operating leases
Operating Leases
Total future lease payments	19,929
2024 (remaining)	1,108
2025	3,572
2026	3,350
2027	2,751
2028	2,602
Thereafter	$ 6,546

Supporting Financial Information - Debt Obligations (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Debt Instrument [Line Items]
Long-term debt	$ 166,490
Net bank debt obligations	160,904	$ 172,335
Less: current portion of debt obligations, net of deferred financing costs (a)	(17,646)	(17,188)
Long-term portion of debt obligations, net of deferred financing costs	143,258	155,147
Debt amortization fiscal year 2025	9,500
Secured Debt
Debt Instrument [Line Items]
Long-term debt	152,000	169,813
Less: unamortized deferred financing costs	(5,586)	(7,024)
Debt amortization fiscal year 2025	4,800
Current unamortized deferred financing costs	1,600
Revolving Line of Credit
Debt Instrument [Line Items]
Long-term debt	14,490	9,546
Revolving Line of Credit \| Secured Debt
Debt Instrument [Line Items]
Long-term debt	$ 14,490	$ 9,546

Supporting Financial Information

9 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supporting Financial Information

Accounts receivable

The following table summarizes accounts receivable presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Billed receivables	$	35,280	$	38,577
Contract assets	23,061		20,542

Accounts receivable	$	58,341	$	59,119

Other current assets

The following table summarizes other current assets presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Prepaid licenses and other expenses	$	1,426	$	1,330
Prepaid insurance and benefits	856		743
Other receivables	460		994
Other current assets	$	2,742	$	3,067

Goodwill

There were no activities in goodwill for the three and nine months ended June 30, 2024. The balance of goodwill was $138,161 as of June 30, 2024 and September 30, 2023.

Intangible assets

The following table summarizes intangible assets, net presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Intangible assets
Customer contracts and related customer relationships	$	113,622	$	113,622
Covenants not to compete	637		637
Trade name	13,034		13,034
Backlog	37,249		37,249
Total intangible assets	164,542		164,542
Less: accumulated amortization
Customer contracts and related customer relationships	(38,455)		(29,929)
Covenants not to compete	(426)		(378)
Trade name	(3,162)		(2,185)
Backlog	(10,064)		(7,273)
Total accumulated amortization	(52,107)		(39,765)
Intangible assets, net	$	112,435	$	124,777

Amortization expense was $4.1 million and $4.1 million for the three months ended June 30, 2024 and 2023, respectively, and $12.3 million and $10.7 million for the nine months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, the estimated amortization expense per fiscal year was as follows (in thousands):


Fiscal year ending:
2024 (remaining)	$	4,114
2025	16,456
2026	15,722
2027	14,694
2028	14,694
Thereafter	46,755
Total amortization expense	$	112,435

At June 30, 2024, the weighted-average remaining amortization period in total was 7.6 years. The weighted-average amortization period for customer contracts and related customer relationships, backlog, trade names and covenants not to

compete was 7.5 years, 7.8 years, 8.0 years, 5.6 years, respectively.

Equipment and improvements, net

The following table summarizes equipment and improvements, net presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Furniture and equipment	$	1,824	$	1,790
Computer equipment and software	7,072		6,479
Leasehold improvements	1,614		1,614
Total equipment and improvements	10,510		9,883
Less: accumulated depreciation	(8,720)		(8,293)
Equipment and improvements, net	$	1,790	$	1,590

Depreciation expense was $0.2 million and $0.2 million for the three months ended June 30, 2024 and 2023, respectively; $0.4 million and $0.6 million for the nine months ended June 30, 2024 and 2023, respectively.

Accounts payable and accrued liabilities

The following table summarizes accounts payable and accrued liabilities presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Accounts payable	$	12,513	$	12,603
Accrued benefits	5,111		6,414
Accrued workers' compensation insurance	1,828		2,369
Accrued bonus and incentive compensation	2,282		4,719
Accrued interest	1,241		1,309
Other accrued expenses	214		2,290
Accounts payable and accrued liabilities	$	23,189	$	29,704

Accrued payroll

The following table summarizes accrued payroll presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Accrued leave	$	7,718	$	9,621
Accrued payroll	5,277		2,487
Accrued payroll taxes	1,115		1,173
Accrued severance	122		513
Total accrued payroll	$	14,232	$	13,794

Debt obligations

The following table summarizes debt obligations presented on our consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Secured term loan	$	152,000	$	169,813
Secured revolving line of credit	14,490		9,546

Less: unamortized deferred financing costs	(5,586)		(7,024)
Net bank debt obligations	160,904		172,335
Less: current portion of debt obligations, net of deferred financing costs (a)	(17,646)		(17,188)
Long-term portion of debt obligations, net of deferred financing costs	$	143,258	$	155,147

As of June 30, 2024, we have satisfied quarterly minimum principal payments on our secured term loan through March 31, 2025.

Interest expense

The following table summarizes interest expense presented on our consolidated statements of operations as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Interest expense (a)	$	3,756	$	4,282	$	11,588	$	9,972
Interest income (b)	(10)		—		(34)		—
Amortization of deferred financing costs (c)	397		635		1,437		1,540
Interest expense	$	4,143	$	4,917	$	12,991	$	11,512

(a) Interest expense on borrowing.

(b) Interest earned from customer payments received after the due date.

New Accounting Pronouncements	9 Months Ended
New Accounting Pronouncements	Jun. 30, 2024
Accounting Changes and Error Corrections [Abstract]
New Accounting Pronouncements	New Accounting Pronouncements In November 2023, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" which provides guidance intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, and each reported measure of segment profit or loss. The ASU requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. We are currently evaluating the impacts of the single reportable segment disclosures. In December 2023, FASB issued ASU 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" which provides guidance on the requirements such as the requirement that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. DLH is a public company that reports income tax disclosures and therefore this ASU applies to the Company. ASU 2023-09 is effective for public business entities for fiscal years beginning after Dec. 15, 2024. We are currently evaluating the impacts of the improvements to income tax disclosure. In March 2024, FASB issued ASU No. 2024-01, "Scope Application of Profits Interest and Similar Awards". The ASU clarifies how an entity determines whether a profits interest or similar award is (1) within the scope of ASC 718 or (2) not a share-based payment arrangement and therefore within the scope of other guidance. The guidance in ASU 2024-01 applies to all entities that issue profits interest awards as compensation to employees or non-employees in exchange for goods or services. We are currently evaluating the impacts of the improvements to our disclosure. In March 2024, the Securities and Exchange Commission ("SEC") has released a final rule that requires registrants to provide comprehensive climate-related disclosures in their annual reports and registration statements, including those for IPOs, beginning with annual reports for the year ending December 31, 2027, for smaller reporting companies ("SRC"). Registrants must disclose climate-related financial metrics and impacts on their financial estimates and assumptions in a footnote to the audited financial statements. The disclosures will also need to be addressed as part of management’s internal control over financial reporting ("ICFR") and will be subject to the financial statement and ICFR audit (if applicable) of an independent registered public accounting firm. We are currently evaluating the impacts of the improvements to our disclosure.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147476173/280-10-65-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)(4)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 105
-SubTopic 10
-Name Accounting Standards Codification
-Section 65
-Paragraph 7
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479343/105-10-65-7

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 805
-SubTopic 60
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147476176/805-60-65-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 848
-SubTopic 10
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483550/848-10-65-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 323
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (g)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478666/740-323-65-2

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 323
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (g)(4)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478666/740-323-65-2

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 323
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (g)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478666/740-323-65-2

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 848
-SubTopic 10
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (d)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483550/848-10-65-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 848
-SubTopic 10
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (e)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483550/848-10-65-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (g)(2)(i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480016/944-40-65-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (g)(2)(ii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480016/944-40-65-2

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (g)(2)(iii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480016/944-40-65-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (g)(2)(iv)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480016/944-40-65-2

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (h)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480016/944-40-65-2

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 5
-Subparagraph (SAB Topic 11.M.Q2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480530/250-10-S99-5

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 20
-Name Accounting Standards Codification
-Section 65
-Paragraph 6
-Subparagraph (i)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480528/815-20-65-6

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-1

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 326
-SubTopic 10
-Name Accounting Standards Codification
-Section 65
-Paragraph 4
-Subparagraph (e)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479654/326-10-65-4

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 326
-SubTopic 10
-Name Accounting Standards Codification
-Section 65
-Paragraph 4
-Subparagraph (e)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479654/326-10-65-4

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 926
-SubTopic 20
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (f)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483194/926-20-65-2

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Topic 926
-SubTopic 20
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (f)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483194/926-20-65-2

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 926
-SubTopic 20
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (f)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483194/926-20-65-2

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480530/250-10-S99-6

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (c)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-1

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-1

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 250
-Publisher FASB
-URI https://asc.fasb.org/250/tableOfContent

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (e)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480175/815-40-65-1

+ Details

Revenue Recognition (Tables)

9 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Contract Balances Recognized on the Company's Consolidated Balance Sheets

The following table summarizes the contract balances recognized on the Company's consolidated balance sheets as follows (in thousands):


	June 30,		September 30,
	2024		2023
Contract assets	$	23,061	$	20,542

Schedule of Disaggregation of Revenue From Contracts with Customers

The following series of tables present our revenue disaggregated by these categories:

Revenue by customer was as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Department of Health and Human Services	$	48,301	$	44,536	$	139,937	$	115,528
Department of Veterans Affairs	35,492		35,898		105,788		104,489
Department of Defense	15,175		21,003		48,458		50,802

Other	1,726		804		5,368		3,566
Total	$	100,694	$	102,241	$	299,551	$	274,385

Revenue by contract type was as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Time and Materials	$	54,978	$	51,572	$	165,260	$	154,366
Cost Reimbursable	19,513		29,110		60,166		58,951
Firm Fixed Price	26,203		21,559		74,125		61,068
Total	$	100,694	$	102,241	$	299,551	$	274,385

Revenue by whether the Company acts as a prime contractor or a subcontractor was as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Prime Contractor	$	90,791	$	97,885	$	269,109	$	259,692
Subcontractor	9,903		4,356		30,442		14,693
Total	$	100,694	$	102,241	$	299,551	$	274,385

Supporting Financial Information - Accounts Payable, Accrued Expense and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accounts payable	$ 12,513	$ 12,603
Accrued benefits	5,111	6,414
Accrued workers' compensation insurance	1,828	2,369
Accrued bonus and incentive compensation	2,282	4,719
Accrued interest	1,241	1,309
Other accrued expenses	214	2,290
Accounts payable and accrued liabilities	$ 23,189	$ 29,704

Supporting Financial Information - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Interest expense	$ 3,756	$ 4,282	$ 11,588	$ 9,972
Interest income	(10)	0	(34)	0
Amortization of deferred financing costs	397	635	1,437	1,540
Interest expense	$ 4,143	$ 4,917	$ 12,991	$ 11,512

- Definition

Amount of interest expense classified as operating and nonoperating. Includes, but is not limited to, cost of borrowing accounted for as interest expense.

+ References + Details

Basis of Presentation and Principles of Consolidation	9 Months Ended
Basis of Presentation and Principles of Consolidation	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of DLH Holdings Corp. and its wholly-owned subsidiaries (together with its subsidiaries, "DLH" or the "Company" and also referred to as "we," "us" and "our"). All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by GAAP for complete financial statements. Operating results for the nine months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending September 30, 2024 or any future period. Amounts as of June 30, 2024 and for the three and nine months ended June 30, 2024 are unaudited. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2023 filed with the Securities and Exchange Commission on December 6, 2023.

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of Revenue [Line Items]
Total	$ 100,694	$ 102,241	$ 299,551	$ 274,385
Prime Contractor
Disaggregation of Revenue [Line Items]
Total	90,791	97,885	269,109	259,692
Subcontractor
Disaggregation of Revenue [Line Items]
Total	9,903	4,356	30,442	14,693
Time and Materials
Disaggregation of Revenue [Line Items]
Total	54,978	51,572	165,260	154,366
Cost Reimbursable
Disaggregation of Revenue [Line Items]
Total	19,513	29,110	60,166	58,951
Firm Fixed Price
Disaggregation of Revenue [Line Items]
Total	26,203	21,559	74,125	61,068
Department of Health and Human Services \| Revenue from Contract with Customer \| Customer concentration
Disaggregation of Revenue [Line Items]
Total	48,301	44,536	139,937	115,528
Department of Veterans Affairs \| Revenue from Contract with Customer \| Customer concentration
Disaggregation of Revenue [Line Items]
Total	35,492	35,898	105,788	104,489
Department of Defense \| Revenue from Contract with Customer \| Customer concentration
Disaggregation of Revenue [Line Items]
Total	15,175	21,003	48,458	50,802
Other \| Revenue from Contract with Customer \| Customer concentration
Disaggregation of Revenue [Line Items]
Total	$ 1,726	$ 804	$ 5,368	$ 3,566

Significant Accounting Policies (Policies)	9 Months Ended
Significant Accounting Policies (Policies)	Jun. 30, 2024
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The most significant of these estimates and assumptions relate to estimating costs including overhead and its allocation, valuing and determining the amortization periods for long-lived intangible assets, interest rate swaps, stock-based compensation, and right-of-use assets and lease liabilities. We evaluate these estimates and judgments on an ongoing basis and base our estimates on historical experience, current and expected future outcomes, third-party evaluations, and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. We revise material accounting estimates if changes occur, such as more experience is acquired, additional information is obtained, or there is new information on which an estimate was or can be based. Actual results could differ from those estimates.
Revenue	Revenue The Company's revenues from contracts with customers are derived from offerings that include technology-enabled business process outsourcing, program management solutions, and public health research and analytics, substantially within the U.S. government and its agencies. The Company has various types of contracts including time-and-materials contracts, cost-reimbursable contracts, and firm-fixed-price contracts. We consider a contract with a customer to exist when there is a commitment by both parties (customer and Company), payment terms are determinable, there is commercial substance, and collectability is probably in accordance with Accounting Standards Codification ("ASC") No. 606, "Revenue from Contracts with Customers" ("Topic 606"). We recognize revenue over time when there is a continuous transfer of control to our customer as performance obligations are satisfied. For our U.S. government contracts, this continuous transfer of control to the customer is transferred over time and revenue is recognized based on the extent of progress toward completion of the performance obligation. We consider control to transfer when we have a right to payment. In some instances, the Company commences providing services prior to formal approval to begin work from the customer. The Company considers these factors, the risks associated with commencing work, and legal enforceability in determining whether a contract exists under Topic 606. Contract modification can occur throughout the life of the contract and can affect the transaction price, extend the period of performance, adjust funding, or create new performance obligations. We review each modification to assess the impact of these contract changes to determine if it should be treated as part of the original performance obligation or as a separate contract. Contract modifications impact performance obligations when the modification either creates new or changes the existing enforceable rights and obligations. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue and profit cumulatively. Furthermore, a significant change in one or more estimates could affect the profitability of our contracts. We recognize adjustments in estimated profit on contracts in the period identified. For service contracts, we satisfy our performance obligations as services are rendered. We use cost-based input and time-based output methods to measure progress based on the contract type. •Time and material - We bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced as the amount corresponds directly to the value of our performance to date. Revenue is recognized to the extent of billable rates times hours delivered plus materials and other reimbursable costs incurred. •Cost reimbursable - We record reimbursable costs as incurred, including an estimated share of the contractual fee earned. •Firm fixed price - We recognize revenue over time using a straight-line measure of progress. Contract costs generally include direct costs such as labor, materials, subcontract costs, and indirect costs identifiable with or allocable to a specific contract. Costs are expensed as incurred and include an estimate of the contractual fees earned. Contract costs incurred for U.S. government contracts, including indirect costs, are subject to audit and adjustment by various government audit agencies. Historically, our adjustments have not been material. Contract assets - Amounts are invoiced as work progresses in accordance with agreed-upon contractual terms. In part, revenue recognition occurs before we have the right to bill, resulting in contract assets. These contract assets are reported within accounts receivable on our consolidated balance sheets and are invoiced in accordance with payment terms defined in each contract. Period end balances will vary from period to period due to agreed-upon contractual terms. Disaggregation of Revenue from Contracts with Customers We disaggregate our revenue from contracts with customers by customer, contract type, as well as whether the Company acts as prime contractor or subcontractor. We believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The carrying amounts of the Company's cash, accounts receivable, contract assets, accrued expenses, and accounts payable approximate fair value due to the short-term nature of these instruments. The fair values of the Company's debt instruments approximate fair value because the underlying interest rates approximate market rates that the Company could obtain for similar instruments at the balance sheet dates.
Long-Lived Assets	Long-Lived Assets Our long-lived assets include equipment and improvements, intangible assets, right-of-use assets, and goodwill. The Company continues to review long-lived assets for possible impairment or loss of value at least annually, or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit's carrying amount is greater than its fair value. Equipment and improvements are recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives (3 to 7 years) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are expensed as incurred. Intangible assets (other than goodwill) are originally recorded at fair value and are amortized on a straight-line basis over their estimated useful lives of 10 years.
Right-of-Use Assets and Lease Liabilities	Right-of-use assets are measured at the present value of future minimum lease payments, including all probable renewals, plus lease payments made to the lessor before or at lease commencement and indirect costs paid, less incentives received. Our right-of-use assets include long-term leases for facilities and equipment and are amortized over their respective lease terms. Lease Liabilities The Company has leases for facilities and office equipment. Our lease liabilities are recognized as the present value of the future minimum lease payments over the lease term. Our lease payments consist of fixed and in-substance fixed amounts attributable to the use of the underlying asset over the lease term. Variable lease payments that do not depend on an index rate or are not in-substance fixed payments are excluded in the measurement of right-of-use assets and lease liabilities and are expensed in the period incurred. The incremental borrowing rate on our secured term loan is used in determining the present value of future minimum lease payments. Some of our lease agreements include options to extend the lease term or terminate the lease. These options are accounted for in our right-of-use assets and lease liabilities when it is reasonably certain that the Company will extend the lease term or terminate the lease. The Company does not have any finance leases.
Goodwill	Goodwill The Company reviews goodwill for impairment on an annual basis and on a quarterly basis the Company assesses the impact of any macroeconomic changes that may impact the business conditions to determine if these changes have any adverse impact to goodwill. Notwithstanding this evaluation, factors including non-renewal of a major contract or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to future periods’ results of operations. The Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill.
Income Tax	Income Tax The Company accounts for income taxes in accordance with the asset and liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance sheets when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is more likely than not that the position will be sustained upon examination.
Stock-based Compensation	Stock-Based Compensation The Company uses the fair value-based method for stock-based compensation. Options issued are designated as either an incentive stock option or a non-statutory stock option. No option may be granted with a term of more than 10 years from the date of grant. Option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued common shares. All awards to employees and non-employees are recorded at fair value on the date of the grant and expensed over the period of vesting. The Company uses a Monte Carlo method to estimate the fair value of each stock option at the date of grant. Any consideration paid by the option holders to purchase shares is credited to common stock. Stock-based compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The stock-based compensation expense for that portion of awards has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. For options that vest based on the Company’s common stock achieving and maintaining defined market prices, the Company values the awards with a Monte Carlo method that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation expense is recognized over the service period.
Cash	Cash The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. We maintain cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation up to $250,000. Deposits held with financial institutions may exceed the $250,000 limit.
Accounts Receivable	Accounts Receivable Receivables include amounts billed and currently due from customers where the right to consideration is unconditional and amounts unbilled. Both billed and unbilled amounts are non-interest bearing, unsecured, and recognized at an estimated realizable value that includes costs and fees, and are generally expected to be billed and received within a single year. We evaluate our receivables for expected credit losses on a quarterly basis and determine whether an allowance for expected credit losses is appropriate based on specific collection issues.
Earnings Per Share	Earnings Per Share Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common stock outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method.
Treasury Stock and Preferred Stock	Treasury Stock The Company periodically purchases its own common stock that is traded on public markets as part of announced stock repurchase programs. The repurchased common stock is classified as treasury stock on the consolidated balance sheets and held at cost. As of June 30, 2024 and September 30, 2023, the Company did not hold any treasury stock. Preferred Stock Our certificate of incorporation authorizes the issuance of "blank check" preferred stock with designations, rights and preferences as may be determined from time to time by our board of directors up to an aggregate of 5,000,000 shares of preferred stock.
Interest Rate Swap	Interest Rate Swap The Company uses derivative financial instruments to manage interest rate risk associated with its variable debt. The Company's objective in using these interest rate derivatives is to manage its exposure to interest rate movements and reduce volatility of interest expense. The gains and losses due to changes in the fair value of the interest rate swap agreements completely offset changes in the fair value of the hedged portion of the underlying debt. Offsetting changes in fair value of both the interest rate swaps and the hedged portion of the underlying debt are recognized in interest expense in the consolidated statements of operations. The Company does not hold or issue any derivative instruments for trading or speculative purposes.
Risks and Uncertainties	Risks and Uncertainties Management evaluates the impact of global markets and economic factors on our industry and the potential for adverse effects on the Company's consolidated financial position and its operations. As of June 30, 2024 and September 30, 2023 there was no indication of any global or economic impacts to our industry.
New Accounting Pronouncements	New Accounting Pronouncements In November 2023, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" which provides guidance intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, and each reported measure of segment profit or loss. The ASU requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. We are currently evaluating the impacts of the single reportable segment disclosures. In December 2023, FASB issued ASU 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" which provides guidance on the requirements such as the requirement that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. DLH is a public company that reports income tax disclosures and therefore this ASU applies to the Company. ASU 2023-09 is effective for public business entities for fiscal years beginning after Dec. 15, 2024. We are currently evaluating the impacts of the improvements to income tax disclosure. In March 2024, FASB issued ASU No. 2024-01, "Scope Application of Profits Interest and Similar Awards". The ASU clarifies how an entity determines whether a profits interest or similar award is (1) within the scope of ASC 718 or (2) not a share-based payment arrangement and therefore within the scope of other guidance. The guidance in ASU 2024-01 applies to all entities that issue profits interest awards as compensation to employees or non-employees in exchange for goods or services. We are currently evaluating the impacts of the improvements to our disclosure. In March 2024, the Securities and Exchange Commission ("SEC") has released a final rule that requires registrants to provide comprehensive climate-related disclosures in their annual reports and registration statements, including those for IPOs, beginning with annual reports for the year ending December 31, 2027, for smaller reporting companies ("SRC"). Registrants must disclose climate-related financial metrics and impacts on their financial estimates and assumptions in a footnote to the audited financial statements. The disclosures will also need to be addressed as part of management’s internal control over financial reporting ("ICFR") and will be subject to the financial statement and ICFR audit (if applicable) of an independent registered public accounting firm. We are currently evaluating the impacts of the improvements to our disclosure.

Supporting Financial Information - Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prepaid licenses and other expenses	$ 1,426	$ 1,330
Prepaid insurance and benefits	856	743
Other receivables	460	994
Other current assets	$ 2,742	$ 3,067

Leases - Other Information Related to Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 3,233	$ 3,317
Lease liabilities arising from obtaining right-of-use assets	0	2,052
Other lease information	$ 3,233	$ 5,369

Stock-Based Compensation and Equity Grants - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2024	Sep. 30, 2023
Number of Shares
Options outstanding, beginning (in shares)	2,278
Granted (in shares)	0
Exercised (in shares)	(535)
Cancelled (in shares)	(75)
Options outstanding, ending (in shares)	1,668	2,278
Weighted Average Exercise Price
Options outstanding, beginning (in dollars per share)	$ 8.40
Granted (in dollars per share)	0
Exercised (in dollars per share)	5.03
Cancelled (in dollars per share)	11.66
Options outstanding, ending (in dollars per share)	$ 8.94	$ 8.40
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term	5 years 8 months 12 days	5 years 9 months 18 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value	$ 7,370	$ 8,693
Vested and exercisable (in shares)	1,408
Vested and exercisable, weighted average exercise price (in dollars per share)	$ 8.19
Vested and exercisable, weighted average remaining contractual term (in years)	5 years 3 months 18 days
Vested and exercisable, intrinsic value	$ 7,293

Leases - Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Leases - Lease Costs (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Leases [Abstract]
Operating	$ 883	$ 1,097	$ 4,915	$ 2,921
Short-term	50	83	298	225
Variable	37	47	179	63
Sublease income	(67)	(71)	(339)	(214)
Total lease costs	$ 903	$ 1,156	$ 5,053	$ 2,995

Supporting Financial Information - Accrued Payroll (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accrued leave	$ 7,718	$ 9,621
Accrued payroll	5,277	2,487
Accrued payroll taxes	1,115	1,173
Accrued severance	122	513
Total accrued payroll	$ 14,232	$ 13,794