Dlh Holdings Corp. · NASDAQ:DLHC
Dlh — Merger or Acquisition (July 2019)
16 slides from Dlh's merger presentation, Jul 2, 2019
Slide 1: DLH Holdings Corp. Acquisition of Social & Scientific Systems
Your Mission is Our Passion DLH Holdings Corp. Acquisition of Social & Scientific Systems July 2, 2019
Slide 2: Forward Looking Statement
Forward Looking Statement Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events, such as DLH Holdings
Slide 3: DLH Holdings Continues to Create Value
DLH Holdings Continues to Create Value What We Are Presenting Strengthens DLH Key Financial Impacts Valuation Rationale Today Strategy Execution Adds highly complex skills and capabilities in targeted agencies $70 million purchase price funded DLH Holdings has acquired a Purchase price represents a
Slide 4: Strategic Rationale
Strategic Rationale Highly complementary businesses with common core capabilities for complex, nationally dispersed programs, operational synergies, and new business opportunities Accelerates long-term strategy of both entities; Public health & life sciences capabilities with a proven secure data an
Slide 5: Strengthens DLH Operating Model
Strengthens DLH Operating Model Health & Logistics Mission Services & Social & Scientific Solutions Operating Unit Solutions Operating Unit Systems Operating Unit1 (Kevin Wilson) (Helene Fisher) (Kevin Beverly) 5 1 New operating unit title is in-process
Slide 6: Integration Activity Underway
Integration Activity Underway Accomplished In-process ✓ Implemented Executive Leadership Team ❑ Go-to-market strategy ✓ Designated Integration Team Leads ❑ ERP integration ✓ Reactivated Integration Process Controls from 2016 ❑ Benefits consolidation integration experience ❑ IT / Web standardization
Slide 7: Market Portfolio Balanced via SSS Addition
Market Portfolio Balanced via SSS Addition DOD & Veteran Health Services Market • Pro Forma Annual Revenue: ~$90M • Key Capabilities: Mail-order pharmacy ops, virtual pharmacy, behavioral health, substance 13% abuse counseling, training, disability assessments, care coordination, case management • R
Slide 8: Portfolio Accelerates Targeted Market Growth Prospects
Portfolio Accelerates Targeted Market Growth Prospects Market Areas and Targeted Agencies Strategic Focus SSS Acquisition Impact DoD and Veterans Health Services DHA $303M addressable spend includes life sciences SSS 40 years experience with health research, clinical trials, clinical research across
Slide 9: Social & Scientific Systems Overview
Social & Scientific Systems Overview Clinical Research Services and Bioscience Epidemiology and Public Health Studies Program Evaluation and Policy Analysis Management and operational support for bioscience research Design and conduct epidemiologic studies examining associations Scientific evaluatio
Slide 10: Proforma Considerations
Proforma Considerations • DLH uses EBITDA as a supplemental non-GAAP measure of our performance. DLH defines EBITDA as net income excluding (i) interest expense, (ii) provision for or benefit from income taxes and (iii) depreciation and amortization. • Due to short-lived projects completed during th
Slide 11: Proforma 6-month Results at 3/31/19
Proforma 6-month Results at 3/31/19 ($000’s, unaudited) Financing & Proforma DLH SSS Proforma Amortization Consolidated Revenue $67,508 $35,665 $103,173 Direct Expenses 51,648 23,674 75,322 Gross Profit 15,860 11,991 27,851 General and administrative expenses 9,854 8,815 18,669 Depreciation and amor
Slide 12: Financial Benefits of the Acquisition
Financial Benefits of the Acquisition • Highly visible revenue - Acquired company has approximately $346 million of total backlog, of which $40 million is funded - Due to research and studies nature of SSS work, contract durations tend to be longer than usual • Expected strong free cash flow and deb
Slide 13: New Credit Facilities
New Credit Facilities • The acquisition was fully funded with Senior Debt, provided by a new syndicated financing agreements with a bank group led by First National Bank of Pennsylvania (agent) & M&T Bank • Term loan and cash reserves funded the transaction; revolver is available to fund future grow
Slide 14: Key Terms of New Credit Facilities
Key Terms of New Credit Facilities • The $70 million of new senior debt represents a leverage level of 3.47x proforma LTM Adjusted EBITDA(1) at closing • As of 6/30/19, DLH has made a $3.9 million voluntary prepayment of term debt Required Amortization Summary of Key Covenants Year one ended 6/30/20
Slide 15: Q&A
Your Mission is our Passion Q&A
Slide 16: Corporate Headquarters
CORPORATE HEADQUARTERS ATLANTA. HQ 3565 Piedmont Road, NE Building 3, Suite 700 Atlanta, Ga 30305 NATIONAL CAPITAL REGION HQ 8737 Colesville Road Suite 1100 Silver Spring, MD 20910 8757 Georgia Avenue Suite 1200 Silver Spring, MD 20910