The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Joseph Gomes - NOBLE Capital Markets, Inc. - Analyst
: So just want to -- I know this is a little bit backwards looking, but I just kind of wanted to go a little bit over to CMOP. So it sounds like for fiscal '25,
Q1 and Q2 were -- should be somewhat as the same Q4 run rate. But then going forward, after Q2 when the extended contract -- the contract
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DECEMBER 05, 2024 / 3:00PM, DLHC.OQ - Q4 2024 DLH Holdings Corp Earnings Call
extension is over that, that should drop off somewhat dramatically. And so I was wondering what percent of that $140 million of CMOP that you
did this past fiscal year are you bidding on as a subcontractor?
Question: Joseph Gomes - NOBLE Capital Markets, Inc. - Analyst
: Okay. And obviously, in the quarter, you continue to do a great job on the SG&A side, down that, I think it was about $8.5 million. Is that a good
run rate? Or going forward, do you think there's more that can be taken out on the SG&A, obviously, putting aside the whole CMOP part of it? This
is the second.
Question: Joseph Gomes - NOBLE Capital Markets, Inc. - Analyst
: Okay. And then on the defense presence that you guys have. Obviously, we're having a new administration come in here in another month or so.
And then same thing on the DOGE, maybe you can just give us a little more color or detail on the opportunities that this opens up for you guys
and how that fits into some of your core strengths on the -- especially on the DOGE going forward?
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Question: Joseph Gomes - NOBLE Capital Markets, Inc. - Analyst
: Great. And then one more, if I may and I'll turn it over. So Kathryn, I know it's a very fluid situation here. But do you have any goal for debt reduction
for fiscal '25 that you care to share with us?
Question: Burton Osterweis - - Analyst
: Congratulations on a solid quarter and year-end. I had a question on the intangible assets number on the balance sheet. And I noticed it went
down a bit this quarter from last quarter. But am I correct in assuming that, that contains a component that represents a discounted future cash
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DECEMBER 05, 2024 / 3:00PM, DLHC.OQ - Q4 2024 DLH Holdings Corp Earnings Call
flow of pipeline contracts that we've won, but haven't yet executed on? And if so, what percentage -- how much did that new Navy contract bumped
that number up? And if not, then where does that appear on the balance sheet?
Question: Burton Osterweis - - Analyst
: So that Navy contract would appear that some component of it would have bumped the intangible assets?
Question: Burton Osterweis - - Analyst
: Okay. I got you. All right. Have a happy holidays, if I don't see you before.
Question: Ross Davisson - Banneton Capital - Analyst
: I think the only question I had was around just setting aside CMOP, my understanding is that you faced a headwind of small business set asides
just in the other parts of the business as well. And if I have that right, is there kind of a known amount or a horizon of that transition or is it an
ongoing process and you just -- it depends a lot on procurement processes, and you're just not sure when it might end?
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DECEMBER 05, 2024 / 3:00PM, DLHC.OQ - Q4 2024 DLH Holdings Corp Earnings Call
Question: Ross Davisson - Banneton Capital - Analyst
: That's very helpful. A really good color and, yes, great point, Kathryn. Of course, everything could change come January, February and thereafter
--
Question: Ross Davisson - Banneton Capital - Analyst
: Kidding. And just a quick follow-up on that. So I mean, is it fair to think about -- and this is just kind of more like, kind of a story to fiscal 2024. Is it
fair to think about -- you had this headwind that you just described and some -- it's helpful to understand like some of it was clearly identified when
you acquired GRSi and then some of it was more driven by the executive order. Is it fair to think about 2024 as facing that headwind and then the
-- because of the continuing resolutions and just some of the slowness there that you didn't see as much ramp as you might have otherwise.
And so you've got this declining -- anticipated, but slightly declining piece, and you didn't have as much growth as you might have had because
of the slow kind of process? Because I totally hear you that there's a large amount and a very -- it sounds a very exciting amount of sort of business
to come, and I'm excited to see that. I'm just curious, as you think back on the year, was there a little less of a pickup in new business than you might
have otherwise hoped?
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