DLH announced fourth quarter 2015 results. Q4 revenues were $17 million, an increase of $1.4 million or 9.1% over prior year fourth quarter.
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Revenue growth was due primarily to expansion on existing programs and new business awards.
Gross margin of $3.4 million increased by $1 million or 44.7% over prior year fourth quarter. As a percentage of revenue,gross margin rate was 19.9%, an improvement of 4.9% over prior year fourth quarter.
Gross margin benefited from improved program performance and higher margin on new business.
G&A expenses were $2.4 million, an increase of $0.3 million over prior year fourth quarter, due principally to managing expanded contract base and business development initiatives to grow business. As a percent of revenue, G&A expenses were 14.2%, an increase of 0.7% over prior year fourth quarter.
Income from operations was approximately $1.0 million, an increase of nearly $0.8 million over prior year fourth quarter. Income growth in fourth quarter 2015 was due principally to improved gross margin of $1.0 million, partially offset by increased expenses of approximately $0.3 million as described above.
Income before taxes was approximately $2.4 million, an increase of $2.2 million over prior year fourth quarter, due principally to $0.8 million improved operating margin and $1.5 million favorable closure of the legacy payroll tax issue in fourth quarter 2015.
On a non-GAAP basis, diluted earnings per share before taxes was $0.24 for fourth quarter, an improvement of $0.22 per share over prior year period.
Net income for fourth quarter 2015 was approximately $8.2 million, or $0.82 per diluted share, compared to $4.8 million, or $0.48 per diluted share, for the prior year fourth quarter.
The fourth quarter increase of approximately $3.5 million results from a $5.8 million tax benefit in 2015 versus $4.6 million in 2014, nearly $0.8 million improved operating margin in 2015, and $1.5 million favorable closure of the legacy payroll tax issue in fourth quarter 2015, net of tax.
Basic earnings per share was $0.86 per share for fourth quarter compared to $0.50 over the prior year period. Diluted earnings per share was $0.82 compared to $0.48 per share over prior year fourth quarter.
Earnings Before Interest Tax Depreciation and Amortization ("EBITDA") adjusted for other non-cash charges (Adjusted EBITDA) for fourth quarter ended September 30, 2015 was approximately $1.0 million, an increase of approximately $0.7 million over prior year fourth quarter.
The increase was due principally to improved operating performance. Diluted earnings per share on adjusted EBITDA for fourth quarter ended September 30, 2015 was $0.10 compared to $0.03 for the prior year fourth quarter. See reconciliation below.
Revenues for the year ended September 30, 2015 were $65.3 million, an increase of approximately $4.9 million or 8.0% over prior year. Revenue growth is due primarily to new contract awards and expansion on current programs.
Gross margin was approximately $11.7 million, an increase of approximately $2.7 million or 30.5% over prior fiscal year.
As a percentage of revenue,gross margin rate was 17.9% for the year ended September 30, 2015, an increase of 3.1% over the prior year period. Favorable margin results are due principally to improved performance on programs and higher margin on new business.
G&A expenses were approximately $9.1 million, an increase of approximately of $1.0 million or 13.0% over prior year period. The increase was due principally to managing increased business volume, investing in business development resources, and increasing proposal activity in pursuit of new business.
As a percentage of revenue, G&A expenses were approximately 14.0%, an increase of 0.6% over prior year.
Income from operations for the year ended September 30, 2015 was approximately $2.5 million, an increase of approximately $1.7 million over the prior year period.
Fiscal 2015 income growth was due principally to improved gross margin of approximately $2.7 million offset by $1.0 million increased expenses as described above.
Income before taxes for fiscal year ended September 30, 2015 was approximately $3.2 million, an improvement of approximately $2.5 million over prior fiscal year.
This improvement was due principally to $1.7 million improved income from operations and $0.7 million other income, net, which includes $1.5 million favorable closure of the legacy payroll tax issue, partially offset by $0.6 million non-cash settlement of the retroactive payment issue in March 2015.
On a non-GAAP basis, diluted earnings per share before taxes was $0.32 for the year ended September 30, 2015, compared to $0.08 per share for the prior year.
Net income for the year ended September 30, 2015 was approximately $8.7 million, or $0.87 per diluted share, compared to approximately $5.4 million, or $0.54 per diluted share, in the prior year period.
The total year net income increase of approximately $3.4 million results from a $5.5 million deferred tax benefit in 2015 versus $4.6 million in 2014, improved operating margin of $1.7 million for fiscal year 2015, and $1.5 million favorable closure of the legacy payroll tax issue in September 2015.
These were partially offset by $0.6 million net impact of the non-cash retroactive payment claim.
Earnings Before Interest Tax Depreciation and Amortization (EBITDA) adjusted for other non-cash charges (Adjusted EBITDA) for year ended September 30, 2015 was approximately $3.0 million, an increase of approximately $1.7 million over the prior fiscal year.
This increase was due principally to improved gross margin of approximately $2.7 million, partially offset by expense growth of $1.0 million as previously described.
Diluted earnings per share on adjusted EBITDA for the year ended September 30, 2015 was $0.30 compared to $0.14 for the year ended September 30, 2014. ■