DLH to Provide Information Technology Services to the National Cancer Institute
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Insights
The contract awarded to DLH Holdings Corp. by the National Cancer Institute represents a significant business development with potential long-term revenue implications. The $52 million base contract value, with an additional $86 million in optional IT services, indicates a substantial increase in the company's future cash flows, assuming full exercise of the options. Such a contract not only solidifies DLH's position within the Health IT sector but also provides a stable income stream over the next five and a half years.
From a market perspective, investors might view this news as a positive indicator of DLH's competitive edge in securing government contracts. Furthermore, the association with a reputable institution like the National Cancer Institute may enhance DLH's credibility and attractiveness to other potential clients in the healthcare and government sectors.
With DLH Holdings Corp.'s announcement of the NCI contract, it is essential to analyze the financial implications. A contract of this magnitude can lead to economies of scale, where DLH can leverage its expertise to reduce costs and improve profit margins over time. However, investors should scrutinize the company's quarterly financial statements to monitor the impact of the contract on the operational costs and the company's ability to manage the increased workload without significant increases in expenses.
Additionally, the potential $138 million maximum contract value, if the optional services are fully utilized, could represent a significant portion of DLH's market cap, which was approximately $90 million as of March 2024. This could lead to an improved earnings outlook and potentially influence the company's stock price positively.
DLH's commitment to providing a wide range of IT services to nearly 7,000 NCI employees showcases the company's capabilities in handling large-scale IT systems. The mention of ServiceNow functions suggests DLH is utilizing contemporary cloud-based platforms to manage IT workflows, which is in line with industry best practices for efficiency and scalability.
Investors with an interest in technology companies would do well to consider the technical competencies required for such a contract. DLH's ability to manage hardware configuration, software management strategies and network connectivity indicates a robust technical infrastructure and a skilled workforce, both of which are critical assets in the IT service industry.
ATLANTA, March 07, 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 and expand its user-experience, technology refresh and IT services for the National Institutes of Health’s (“NIH”) National Cancer Institute (“NCI”). NCI, the largest institute under NIH, is the federal government's principal agency for cancer research, training, and health information dissemination.
“This new award extends DLH’s longstanding partnership with NCI’s Center for Biomedical Informatics and Information Technology (“CBIIT”) by providing scientific computing and informatics to support NCI’s research mission,” said Zach Parker, President and Chief Executive Officer of DLH. The contract was competitively awarded through the multiple-award blanket purchase agreement with CBIIT that the Company announced in February 2023. Including the base period and all option periods, the contract has a value of approximately
Through this work, DLH will provide IT services for nearly 7,000 NCI employees, on matters ranging from hardware configuration to software management strategies, ServiceNow functions, network connectivity, desktop data protection, desktop platform engineering, technology refresh, and more. The Company will leverage its world-class IT systems expertise and advanced solution set to efficiently resolve customer service requests.
“Managing IT user support for NCI is an immense responsibility, on which DLH has delivered excellence,” said Diane Yarnell, President of DLH’s Health IT Operations Center. “Our performance exemplifies a commitment to innovation, customer service, and execution, and we are honored for the opportunity to continue our work on behalf of the Institute’s mission to accelerate the understanding and treatment of cancer.”
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
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