DLH to Provide Information Technology Services at National Institute on Drug Abuse

Rhea-AI Summary

DLH Holdings Corp. (NASDAQ: DLHC) secures a $23 million contract extension with the National Institute on Drug Abuse (NIDA) for information technology services, showcasing DLH's expertise in Health IT and cybersecurity.

Positive

• DLH Holdings Corp. awarded a contract extension with NIDA worth approximately $23 million.
• DLH to provide information technology services for NIDA, including managing clinical/research informatics systems.
• Partnership between DLH and NIDA initiated in 2014 continues with this new award.
• DLH's work for NIDA is 100% NIH funded, focusing on prevention and treatment interventions for substance use disorders in the U.S.
• DLH's President of Health IT Operations Center highlights the company's excellence in execution and commitment to quality.
• DLH's expertise in digital transformation, cybersecurity, science research, and systems engineering recognized through this contract extension.

Negative

• None.

Market Research Analyst

The contract extension for DLH Holdings Corp. to continue providing IT services for NIH's NIDA is a significant affirmation of the company's performance and reputation in the Health IT sector. The deal, valued at approximately $23 million, is poised to contribute positively to DLH's revenue stream over the next five years, assuming all option years are exercised. This continuity not only ensures a stable financial forecast for DLH but also reinforces its market position as a trusted service provider in the highly specialized and competitive field of Health IT and research informatics.

Investors and stakeholders might view this development as a positive indicator of DLH's operational competence and its ability to secure long-term contracts, which are crucial for sustained growth. The fact that the contract is 100% NIH funded provides a layer of financial security, as it is backed by a federal agency known for its rigorous selection process and standards.

Medical Research Analyst

The partnership between DLH and NIDA underscores the critical role of Health IT in advancing medical research on drug use and addiction. By managing integrated clinical and research informatics systems, DLH is at the forefront of facilitating data sharing and resource allocation among researchers, which is essential for timely and effective scientific discoveries. The focus on real-time data sharing could accelerate the pace of research and the development of interventions for substance use disorders, which affect over 40 million people in the U.S.

This contract extension may also reflect DLH's capability to handle complex IT infrastructure, a necessity for supporting the vast and intricate data networks that modern medical research demands. The commitment to not only maintain but also develop Intranet applications and public web pages indicates DLH's role in enhancing the accessibility and dissemination of research findings to the scientific community and the public.

Financial Analyst

From a financial perspective, the contract's structure, with a base period and four one-year options, provides DLH with a predictable revenue model that can be factored into long-term financial planning. The total value of $23 million, while not necessarily transformative for a company of DLH's size, is nonetheless a substantial addition to its portfolio and could potentially improve its financial ratios and attractiveness to investors.

It's important to note that the extension of a long-standing partnership, such as the one between DLH and NIDA, often suggests cost efficiencies and a high level of customer satisfaction, which can lead to a positive feedback loop of contract renewals and new business opportunities. Moreover, DLH's specialization in Health IT could be seen as a defensive play within the broader IT services market, providing a buffer against economic downturns due to the essential nature of health-related expenditures.

ATLANTA, Feb. 13, 2024 (GLOBE NEWSWIRE) -- DLH Holdings Corp. (NASDAQ: DLHC) (“DLH” or the “Company”), a leading Health IT provider of digital transformation and cybersecurity, science research and development, and systems engineering and integration, today announced that it has been awarded a contract to continue providing information technology services for the National Institutes of Health’s (“NIH”) National Institute on Drug Abuse (“NIDA”). NIDA is the lead federal agency supporting scientific research on drug use and addiction.

The new award extends a partnership that began with DLH’s first contract with NIDA in 2014. The contract includes a base period of one year with four one-year options, for a total value of approximately $23 million. Through this award, DLH will provide a host of information technology services for NIDA, including managing the operations of an integrated advanced clinical/research informatics series of systems which enables researchers to share data and resources in real time. Additionally, the Company will be responsible for the research, design, development, and maintenance of clinical and scientific informatics, Intranet applications, and public web pages, as well as IT infrastructure and desktop support. This work is 100% NIH funded.

“NIDA-supported research leads to the development of effective prevention and treatment interventions that affect the more than 40 million people in the United States with substance use disorders and their families,” said Diane Yarnell, President of DLH’s Health IT Operations Center. “That NIDA continues to choose DLH for this important work is a testament to our team’s superb execution and commitment to excellence.”

About DLH

DLH (NASDAQ:DLHC) delivers improved health and national security readiness solutions for federal programs through science research and development, systems engineering and integration, and digital transformation. The Company’s experts in public health, performance evaluation, and health operations solve the complex problems faced by civilian and military customers alike, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 3,200 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to innovation to improve the lives of millions. For more information, visit www.DLHcorp.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or DLH’s future financial performance. Any statements that refer to expectations, projections or other characterizations of future events or circumstances or that are not statements of historical fact (including without limitation statements to the effect that the Company or its management “believes”, “expects”, “anticipates”, “plans”, “intends” and similar expressions) should be considered forward looking statements that involve risks and uncertainties which could cause actual events or DLH’s actual results to differ materially from those indicated by the forward-looking statements. Forward-looking statements in this release include, among others, statements regarding estimates of future revenues, operating income, earnings and cash flow. These statements reflect our belief and assumptions as to future events that may not prove to be accurate. Our actual results may differ materially from such forward-looking statements made in this release due to a variety of factors, including: the risk that we will not realize the anticipated benefits of acquisitions (including anticipated future financial performance and results); the diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations; the inability to retain employees and customers; contract awards in connection with re-competes for present business and/or competition for new business; our ability to manage our debt obligations; compliance with bank financial and other covenants; changes in client budgetary priorities; government contract procurement (such as bid and award protests, small business set asides, loss of work due to organizational conflicts of interest, etc.) and termination risks; the impact of inflation and higher interest rates; and other risks described in our SEC filings. For a discussion of such risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s periodic reports filed with the SEC, including our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, as well as subsequent reports filed thereafter. The forward-looking statements contained herein are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry and business.

Such forward-looking statements are made as of the date hereof and may become outdated over time. The Company does not assume any responsibility for updating forward-looking statements, except as may be required by law.

INVESTOR RELATIONS
Contact: Chris Witty
Phone: 646-438-9385
Email: cwitty@darrowir.com

What is the contract value of DLH's extension with NIDA?

The contract extension with NIDA is valued at approximately $23 million.

What services will DLH provide for NIDA under the new award?

DLH will offer information technology services, manage clinical/research informatics systems, design and maintain informatics applications, web pages, and provide IT infrastructure and desktop support.

When did DLH start its partnership with NIDA?

DLH's partnership with NIDA began in 2014 and continues with this new contract extension.

Who funds the work that DLH will perform for NIDA?

The work that DLH will do for NIDA is 100% NIH funded.

What does DLH's President of Health IT Operations Center say about the partnership with NIDA?

The President highlights DLH's superb execution and commitment to excellence in providing services for NIDA.

What areas of expertise does DLH showcase through this contract extension with NIDA?

DLH demonstrates expertise in Health IT, cybersecurity, science research, and systems engineering through this partnership with NIDA.