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DLH Holdings (NASDAQ: DLHC) loosens leverage and coverage covenants in amended credit agreement

Filing Impact
(Moderate)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

DLH Holdings Corp. amended its secured credit agreement with its bank group on June 11, 2026. The facility continues to include a syndicated term loan originally sized at $190,000,000 and a revolving credit line of up to $50,000,000, with a $10,000,000 swingline sublimit.

The amendment revises the definition of Consolidated EBITDA to add lease termination and restructuring costs in fiscal 2026 and permits up to $3,000,000 of pro forma income from material contract awards. Total Funded Debt is adjusted to exclude undrawn letters of credit related to the VA Consolidated Mail Outpatient Pharmacy program.

Financial covenants are eased, raising the maximum total leverage ratio to 5.0:1.0 for the quarter ending June 30, 2026 and 5.5:1.0 for the quarter ending September 30, 2026, while lowering the minimum fixed charge coverage ratio to 1.05:1.0 over the same period. As of the amendment’s effective date, the principal on the secured senior loan has amortized to $122,000,000, and the facility remains secured by substantially all company and subsidiary assets.

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Insights

DLH temporarily relaxes leverage and coverage covenants on its secured credit facility.

DLH has amended its secured credit agreement, keeping the original $190,000,000 term loan structure and $50,000,000 revolver while changing how key covenants are calculated. Consolidated EBITDA now adds certain 2026 lease termination and restructuring costs plus up to $3,000,000 of pro forma income from new material contract awards.

Total Funded Debt will no longer count undrawn letters of credit tied to the VA Consolidated Mail Outpatient Pharmacy program, which can lower the reported leverage metric. The company also raised its maximum total leverage ratio to 5.0:1.0 for the quarter ending June 30, 2026 and 5.5:1.0 for the quarter ending September 30, 2026, while reducing the minimum fixed charge coverage ratio to 1.05:1.0 over the same period.

These changes provide more headroom within the covenant package while the secured senior loan principal stands at $122,000,000. Actual implications depend on DLH’s operating performance, restructuring progress, and any material contract awards referenced in the amended EBITDA definition, which future company filings may detail further.

Item 1.01 Entry into a Material Definitive Agreement Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Syndicated term loan original size $190,000,000 Second Amended and Restated Credit Agreement
Revolving credit facility limit $50,000,000 Including a $10,000,000 swingline sublimit
Swingline sublimit $10,000,000 Within the revolving credit facility
Pro forma income addback cap $3,000,000 Consolidated EBITDA for material contract awards
Maximum leverage ratio Q2 2026 5.0:1.0 Fiscal quarter ending June 30, 2026
Maximum leverage ratio Q3 2026 5.5:1.0 Fiscal quarter ending September 30, 2026
Minimum fixed charge coverage ratio 1.05:1.0 From June 30, 2026 to September 30, 2026
Secured senior loan principal $122,000,000 As of effective date of Second Amendment
Consolidated EBITDA financial
"the definition of Consolidated EBITDA was modified solely to (i) include the following amounts"
Consolidated EBITDA is a measure of a parent company’s total operating earnings across all its subsidiaries, calculated before interest, taxes, depreciation and amortization (non‑cash charges). It shows the group’s raw cash‑generation and operating performance independent of financing and accounting choices, so investors use it like comparing the horsepower of an entire fleet rather than individual cars to judge core profitability and to compare firms on a more even footing.
Total Funded Debt financial
"Total Funded Debt was modified to exclude undrawn Letters of Credit"
total leverage ratio financial
"an increase to the maximum threshold of the total leverage ratio to 5.0 to 1.0"
fixed charge coverage ratio financial
"a reduction of the minimum threshold on the fixed charge coverage ratio to at least 1.05 to 1.0"
A fixed charge coverage ratio measures how well a company's operating income can cover its fixed, recurring obligations like interest payments and lease costs. Think of it as a safety margin — the higher the number, the more comfortably a business can pay steady bills from its normal earnings, which matters to investors because it signals financial stability, lower default risk, and greater ability to withstand revenue dips.
swingline sublimit financial
"a revolving credit facility of up to $50,000,000, including a $10,000,000 swingline sublimit"
A swingline sublimit is a reserved portion of a larger revolving loan that lets a borrower take very short-term, typically small, advances quickly for immediate cash needs—think of it as an emergency overdraft within a broader credit line. Investors care because the size and availability of the swingline sublimit indicate how easily a company can handle sudden cash shortfalls without tapping longer‑term debt, which affects short‑term liquidity risk and the likelihood of covenant breaches.

FAQ

What did DLH Holdings Corp. (DLHC) change in its credit agreement?
DLH amended its secured credit agreement to adjust key covenant definitions and thresholds. It revised Consolidated EBITDA and Total Funded Debt calculations and temporarily eased leverage and fixed charge coverage ratios, while keeping the overall term loan and revolving credit facility structure in place.

How large is DLH Holdings Corp.’s current credit facility under the amended agreement?
The agreement continues to provide a syndicated term loan originally sized at $190,000,000 and a revolving credit facility of up to $50,000,000, including a $10,000,000 swingline sublimit. As of the amendment’s effective date, the secured senior loan principal has amortized to $122,000,000.

How was Consolidated EBITDA redefined for DLH Holdings Corp. (DLHC)?
Consolidated EBITDA now includes losses, expenses, or non-cash charges from terminating the Silver Spring lease and cash restructuring charges in fiscal 2026. It also allows up to $3,000,000 of pro forma consolidated net income from any material contract award entered into after the Second Amendment.

What changes were made to DLH Holdings Corp.’s leverage and coverage covenants?
The maximum total leverage ratio increased to 5.0:1.0 for the quarter ending June 30, 2026 and 5.5:1.0 for the quarter ending September 30, 2026. The minimum fixed charge coverage ratio was reduced to at least 1.05:1.0 over the same timeframe, easing covenant pressure temporarily.

How was Total Funded Debt redefined for DLH Holdings Corp. (DLHC)?
Total Funded Debt was modified to exclude undrawn letters of credit derived from DLH’s contracts with the VA’s Consolidated Mail Outpatient Pharmacy program. This exclusion can reduce reported Total Funded Debt for covenant calculations without changing the underlying contractual letter of credit capacity.

Is DLH Holdings Corp.’s amended credit facility still secured by its assets?
Yes. Under the amended credit agreement, the facility remains collateralized by substantially all assets of DLH and its operating subsidiaries. Other than the specified covenant and definitional changes plus technical amendments, the material terms and collateral structure of the original secured credit agreement remain in effect.

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Understanding 8-K Material Events →
0000785557false00007855572026-06-112026-06-11

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):  June 11, 2026
DLH Holdings Corp.
(Exact Name of Registrant as Specified in Charter)
New Jersey0-1849222-1899798
(State or Other Jurisdiction of Incorporation(Commission File Number)(I.R.S. Employer Identification No.)
3565 Piedmont Road, NE, Building 3, Suite 700
Atlanta, GA 30305
(Address of Principal Executive Offices, and Zip Code)

(770) 554-3545
Registrant's Telephone Number, Including Area Code

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockDLHCNasdaqCapital Market
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐    


Item 1.01Entry into a Material Definitive Agreement.
On June 11, 2026, DLH Holdings Corp. (the “Company” or “DLH”) and its direct, wholly owned subsidiaries (collectively, the “Borrowers”), entered into the Second Amendment (the “Second Amendment”) to the Second Amended and Restated Credit Agreement dated December 8, 2022 (the “Secured Credit Agreement” and, as amended by the Second Amendment, the “Amended Credit Agreement”) by and among the Borrowers, First National Bank of Pennsylvania, as administrative agent (the “Administrative Agent”), F.N.B. Capital Markets (as a Joint Lead Arranger), Manufacturers and Traders Trust Company and Atlantic Union Bank (as Joint Lead Arrangers), and certain other lenders (collectively, the “Lenders”) party to such Secured Credit Agreement. The Secured Credit Agreement provides for an aggregate credit commitment consisting of a syndicated term loan originally in the amount of $190,000,000 and a revolving credit facility of up to $50,000,000, including a $10,000,000 swingline sublimit.

Pursuant to the Second Amendment, the Borrowers and the Lenders agreed to amend the Secured Credit Agreement to modify the definition of Consolidated EBITDA and Total Funded Debt, and adjust certain financial covenants set forth therein. In the Amended Credit Agreement, the definition of Consolidated EBITDA was modified solely to (i) include the following amounts as additions to consolidated net income: losses, expenses, or non-cash charges arising from or related to the termination of the Company’s lease in Silver Spring, Maryland and cash restructuring charges, including termination costs, incurred during fiscal quarters ending in 2026; and (ii) add up to $3,000,000 of pro forma consolidated net income attributable to any material contract award entered into following the Second Amendment. Total Funded Debt was modified to exclude undrawn Letters of Credit derived from the Company’s contracts with the VA's Consolidated Mail Outpatient Pharmacy program.

The modifications to the financial covenants effect (i) an increase to the maximum threshold of the total leverage ratio to 5.0 to 1.0 for the fiscal quarter ending June 30, 2026 and to 5.5 to 1.0 for the fiscal quarter ending September 30, 2026 and (ii) a reduction of the minimum threshold on the fixed charge coverage ratio to at least 1.05 to 1.0 commencing with the fiscal quarter ending June 30, 2026 to the end of the fiscal quarter ending September 30, 2026. Further, the Second Amendment makes other technical amendments to certain provisions of the Secured Credit Agreement.

Other than the aforementioned changes, the Second Amendment does not modify any other material terms of the Secured Credit Agreement. As of the effective date of the Second Amendment, the principal amount of the secured senior loan has been amortized to $122,000,000. The Amended Credit Agreement remains collateralized by substantially all of the assets of the Company and its operating subsidiaries and includes the other terms, conditions, covenants and provisions of the Secured Credit Agreement. The foregoing description of the Second Amendment and the Amended Credit Agreement is qualified in its entirety by reference to the full text of the Second Amendment attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information contained in Item 1.01 above regarding the Second Amendment and the Amended Credit Agreement is incorporated by reference herein. The foregoing does not constitute a complete summary of the terms of the Second Amendment and the Amended Credit Agreement, and reference is made to the disclosures contained in Item 1.01 hereof and the complete text of the Second Amendment filed as Exhibit 10.1 to this Current Report on Form 8-K, which are incorporated by reference herein.


Item 9.01Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are attached to this Current Report on Form 8-K:
1

Exhibit NumberExhibit Title or Description
10.1
Second Amendment dated June 11, 2026 to the Second Amended & Restated Credit Agreement*
104Cover Page Interactive Data File (embedded within the Inline XBRL document)

*Schedules omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a copy of any omitted schedule to the Securities and Exchange Commission upon request.
2

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
  DLH Holdings Corp.
   
  By: /s/Zachary C. Parker
  
  Name: Zachary C. Parker
  Title:   Chief Executive Officer
 Date:  June 17, 2026 






3

Source: View Original Filing on SEC EDGAR

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