Dlh Holdings Corp. · NASDAQ:DLHC
Dlh — Merger or Acquisition (May 2016)
12 slides from Dlh's merger presentation, May 3, 2016
Slide 1: Acquisition of Danya International
Integrity & Trust | Performance | Excellence | Inclusion & Diversity | Agility May 3, 2016 – Conference Call DLH Holdings Corp. Acquisition of Danya International
Slide 2: Forward Looking Statement Safe Harbor
Forward Looking Statement “Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Please note that this presentation contains "forward-looking statements" as defined by the Federal Securities Laws. Statements in this presentation regarding DLH Holding Corp.’s business, wh
Slide 3: Call Participants
Call Participants Zachary Parker DLH President & Chief Executive Officer Kathryn JohnBull DLH Chief Financial Officer 3 © 2016 | DLH Proprietary | May 3, 2016 – Danya Acquisition Conference Call
Slide 4: DLH Holdings Acquires Danya International
DLH Holdings Acquires Danya International DLH Holdings has acquired privately held Danya International, a transformational acquisition that brings together two highly complementary businesses What We Are Announcing Today The strategic combination of DLH and Danya creates an industry leading pure- pl
Slide 5: Transaction Overview
Transaction Overview The Transaction • Acquired Danya International • Unanimously approved by DLH Board of Directors • Pro forma for the acquisition, calendar year 2015 revenue and Adjusted EBITDA of over $100 million and $10 million, respectively(1) • Expected to be immediately accretive to earning
Slide 6: Strategic Rationale
Highly complementary businesses with common core capabilities for complex, nationally dispersed programs, operational synergies, and new business opportunities Portfolio Diversification • Expands DLH’s market opportunity and diversifies its portfolio of healthcare and human services contracts and pr
Slide 7: Danya International Overview
• Danya’s flagship prime contract with HHS’ Office of Head Start (“OHS”) aligns with DLH’s capabilities and solutions that impact diverse communities and populations • DLH expects to integrate components of its and Danya’s capabilities to deliver tailored solutions for customers in health IT, pharma
Slide 8: Highly visible revenue and strong free cash flow
• Highly visible revenue – Combined company has over $300 million of total backlog, which includes funded and unfunded amounts as of December 2015 – Danya is the prime contractor on HHS’ Head Start National Monitoring System program • Expected strong free cash flow and debt service – Acquisition is
Slide 9: New Credit Facilities
Fifth Third Bank Term Loan $25.0 million Interest Rate LIBOR + 3.0% Term 5.0 years Fifth Third Bank Revolving Line of Credit $10.0 million ($5.0 million drawn at close) Interest Rate LIBOR + 3.0% Maturity 2.0 years Subordinated Bridge Loan $2.5 million Interest Rate 4.0% accrued non-cash(1) Maturity
Slide 10: Pro Forma Capitalization and Key Covenants
3.5x 3.0x 2.5x 1.35x 1.35x 1.35x 9/30/2016 9/30/2017 9/30/2018 Funded Indebtedness to Adj. EBITDA Fixed Charge Coverage Pro Forma Capitalization Summary 10 Pro Forma Capitalization Summary of Key Covenants • The $30 million of new senior debt represents a leverage level of 2.9x pro forma December 20
Slide 11: GAAP to Non-GAAP Adjusted EBITDA Reconciliation
($ in millions) For the twelve months ending December 31, 2015 DLH Danya Pro Forma Net Income $8.5 $5.0 $13.5 Plus: Interest Expense 0.1 - 0.1 Plus: Income Tax Expense / (Benefit) (5.7) - (5.7) Plus: Depreciation & Amortization 0.1 0.3 0.4 Plus: Other Expense / (Income) (0.3) (0.0) (0.3) EBITDA(1) $
Slide 12: Primary Investor Relations Contacts
Primary Investor Relations Contacts Zachary Parker, President & Chief Executive Officer Kathryn JohnBull, Chief Financial Officer 3565 Piedmont Road, NE Building 3, Suite 700 Atlanta, GA 30305 investorrelations@dlhcorp.com © 2016 | DLH Proprietary | May 3, 2016 – Danya Acquisition Conference Call 12