0000785557-23-000089 | 10-K | XBRL Viewer

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Supporting Financial Information - Interest Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Interest expense	$ 14,153	$ 1,574
Interest income	(64)	(23)
Amortization of deferred financing costs	2,182	664
Interest expense	$ 16,271	$ 2,215

- Definition

Amount of the cost of borrowed funds accounted for as interest expense.

+ References + Details

Subsequent Events	12 Months Ended
Subsequent Events	Sep. 30, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Management has evaluated subsequent events through the date that the Company's consolidated financial statements were issued. Based on this evaluation, the Company has determined that no further subsequent events have occurred which require disclosure through the date that these consolidated financial statements were issued.

Supporting Financial Information - Accounts Payable, Accrued Expense and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accounts payable	$ 12,603	$ 11,886
Accrued benefits	6,414	3,857
Accrued bonus and incentive compensation	4,719	3,625
Accrued workers' compensation insurance	2,369	4,880
Accrued Interest	1,309	0
Other accrued expenses	2,290	2,614
Accounts payable and accrued liabilities	$ 29,704	$ 26,862

Stock-based Compensation and Equity Grants - Stock-based Compensation Expense (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense	$ 1,922	$ 2,608
Minimum average price (in dollars per share)	$ 33.21
Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units issued (in shares)	211,228	140,404
Term	3 years
Performance Based Restricted Stock Awards Revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Term	3 years
Calculated fair value (in dollars per share)	$ 3.51
Performance Based Restricted Stock Awards Stock Price
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Term	3 years
Calculated fair value (in dollars per share)	$ 2.92
DLH Employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Unrecognized expense for DLH employees	$ 7,107	$ 5,214
Weighted average period for recognition of compensation expense	4 years 2 months 12 days
DLH Employees \| Selling, General and Administrative Expenses
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense	$ 1,204	$ 1,960
Non-employee Directors \| Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stocks vested in period (in shares)	50,367	53,510
Non-employee Directors \| Selling, General and Administrative Expenses
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense	$ 718	$ 648
NEO \| Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units issued (in shares)	197,174
Volatility rate	50.00%
NEO \| Performance Shares
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units issued (in shares)	141,892
NEO \| Service Based Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units issued (in shares)	55,282

Supporting Financial Information

12 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supporting Financial Information

Accounts receivable

The following table summarizes accounts receivable presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Billed receivables	$	38,577	$	32,814
Contract assets	20,542		7,682
Allowance for doubtful accounts	—		—
Accounts receivable	$	59,119	$	40,496

Other current assets

The following table summarizes other current assets presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Prepaid licenses and other expenses	$	1,330	$	1,196
Prepaid insurance and benefits	743		737
Other receivables	994		945
Other current assets	$	3,067	$	2,878

Goodwill

The change in the carrying amount of goodwill as follows presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):



Balance at September 30, 2022	$	65,643
Increase from GRSi acquisition (a)	72,658
Tax Adjustment GRSI acquisition	(140)
Goodwill	$	138,161

Ref (a); The Company has completed its valuation assessment of the GRSi acquisition. Please refer to Note 4 for more information.

Intangible assets, net

The following table summarizes intangible assets, net presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Intangible assets
Customer contracts and related customer relationships	$	113,622	$	47,044
Backlog	37,249		15,237
Trade names	13,034		3,051
Covenants-not-to-compete	637		522
Total intangible assets	$	164,542	$	65,854
Less accumulated amortization:
Customer contracts and related customer relationships	(29,929)		(19,731)
Backlog	(7,273)		(3,875)
Trade names	(2,185)		(1,048)
Covenants-not-to-compete	(378)		(316)
Total accumulated amortization	$	(39,765)	$	(24,970)
Intangible assets, net	$	124,777	$	40,884

Total amount of amortization expense for each of the years ended September 30, 2023 and 2022 was $14.8 million and $6.6 million, respectively.

As of September 30, 2023, the estimated annual amortization expense is as follows (in thousands):


For the Fiscal Year Ending September 30,
2024	$	16,456
2025	16,456
2026	15,721
2027	14,694
2028	14,694
Thereafter	46,756
Amortization expense	$	124,777

At September 30, 2023, the weighted-average remaining amortization period in total was 8.3 years. At September 30, 2023, the weighted-average amortization period for customer contracts and related customer relationships, backlog, trade names and covenants-not-to-compete was 8.2 years, 8.3 years, 8.7 years, 6 years, respectively.

Equipment and improvements, net

The following table summarizes equipment and improvements, net presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Furniture and equipment	$	1,790	$	893
Computer equipment and software	6,479		6,723
Leasehold improvements	1,614		1,614
Total equipment and improvements	$	9,883	$	9,230
Less: accumulated depreciation and amortization	(8,293)		(7,526)
Equipment and improvements, net	$	1,590	$	1,704

Depreciation and amortization was $0.8 million and $1.1 million for the years ended September 30, 2023 and 2022, respectively.

Accounts payable and accrued liabilities

The following table summarizes accounts payable and accrued liabilities presented on our consolidated balance sheets at September 30, 2023and 2022 (in thousands):


	2023		2022
Accounts payable	$	12,603	$	11,886
Accrued benefits	6,414		3,857
Accrued bonus and incentive compensation	4,719		3,625
Accrued workers' compensation insurance	2,369		4,880
Accrued Interest	1,309		—
Other accrued expenses	2,290		2,614
Accounts payable and accrued liabilities	$	29,704	$	26,862

Accrued payroll

The following table summarizes accrued payroll presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Accrued Leave	$	9,621	$	6,345
Accrued payroll	2,487		1,946
Accrued payroll taxes	1,173		411
Accrued severance	513		742
Accrued payroll	$	13,794	$	9,444

Debt obligations

The following table summarizes debt obligations presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Secured revolving line of credit	$	9,546	$	—
Secured term loan	169,813		22,000
Less: unamortized deferred financing costs	(7,024)		(1,584)
Net bank debt obligations	$	172,335	$	20,416
Less: current portion of debt obligations, net of deferred financing costs (a)	(17,188)		—
Long-term portion of debt obligations, net of deferred financing costs	$	155,147	$	20,416

As of September 30, 2023, we have satisfied mandatory principal payments on our secured term loan.

(a) Current portion comprises term loan amortization of $8.3 million and the $9.5 million outstanding balance on the secured revolving line of credit, net of $7.0 million of unamortized deferred financing costs.

Interest expense

The following table summarizes interest expense presented on our consolidated statements of operations for the years ended September 30, 2023 and 2022 (in thousands):


	2023		2022
Interest expense (a)	$	14,153	$	1,574
Interest income (b)	(64)		(23)
Amortization of deferred financing costs (c)	2,182		664
Interest expense	$	16,271	$	2,215

(a): Interest expense on borrowing

(b): Interest income

(c): Amortization of expenses related to secured term loan and secured revolving line of credit.

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Contract assets	$ 20,542	$ 7,682

Credit Facilities - Narrative (Details)	12 Months Ended
Credit Facilities - Narrative (Details)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Line of Credit Facility [Line Items]
Notional amount of floating-to-fix interest rate swap	$ 112,200,000
Debt annual amortization amount fiscal year 2023	8,313,000
Debt annual amortization amount fiscal year 2024	19,000,000
Debt annual amortization amount fiscal year 2025	19,000,000
Debt annual amortization fiscal year 2026	23,750,000
Debt annual amortization fiscal year 2027	109,296,000
Total repayments of debt	20,188,000	$ 41,750,000
Debt Instrument Excess Cash Flow Payment	0
Secured term loan	179,359,000
Maturity One
Line of Credit Facility [Line Items]
Notional amount of floating-to-fix interest rate swap	16,200,000
Maturity Two
Line of Credit Facility [Line Items]
Notional amount of floating-to-fix interest rate swap	96,000,000
Interest Rate Swap
Line of Credit Facility [Line Items]
Decrease in interest expense	$ 900,000
Interest Rate Swap \| Maturity One
Line of Credit Facility [Line Items]
Fixed interest rate applicable to swaps	1.61%
Interest Rate Swap \| Maturity Two
Line of Credit Facility [Line Items]
Fixed interest rate applicable to swaps	4.10%
Secured revolving line of credit
Line of Credit Facility [Line Items]
Secured term loan	$ 9,546,000	0
Secured Debt
Line of Credit Facility [Line Items]
Debt annual amortization amount fiscal year 2023	8,300,000
Secured term loan	$ 169,813,000	22,000,000
Secured Debt \| Term loan
Line of Credit Facility [Line Items]
Fixed charge coverage ratio	1.25
Debt annual amortization amount fiscal year 2023	$ 14,300,000
Debt annual amortization amount fiscal year 2024	14,300,000
Debt annual amortization amount fiscal year 2025	19,000,000
Debt annual amortization fiscal year 2026	19,000,000
Debt annual amortization fiscal year 2027	23,800,000
Total repayments of debt	3,600,000
Voluntary repayments of debt	5,900,000
Secured term loan	$ 169,800,000	22,000,000.0
Secured Debt \| Term loan \| Maximum
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to EBITDA through maturity	4.50
Secured Debt \| Term loan \| Minimum
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to EBITDA through maturity	2.00
Secured Debt \| Term loan \| Excess Cash Flow Greater Than or Equal to 2.50
Line of Credit Facility [Line Items]
Percentage of excess cash flow for each year of funded indebtedness to adjusted EBITDA	75.00%
Ratio of funded indebtedness to adjusted EBIDTA	2.50
Secured Debt \| Term loan \| Excess Cash Flow Less Than 2.50 But Greater Than or Equal to 1.50
Line of Credit Facility [Line Items]
Percentage of excess cash flow for each year of funded indebtedness to adjusted EBITDA	50.00%
Secured Debt \| Term loan \| Excess Cash Flows Less Than 2.50
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to adjusted EBIDTA	2.50
Secured Debt \| Term loan \| Excess Cash Flow Equal to 1.50
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to adjusted EBIDTA	1.50
Secured Debt \| Term loan \| Excess Cash Flow Less Than 1.50
Line of Credit Facility [Line Items]
Percentage of excess cash flow for each year of funded indebtedness to adjusted EBITDA	0.00%
Ratio of funded indebtedness to adjusted EBIDTA	1.50
Secured Debt \| Secured revolving line of credit
Line of Credit Facility [Line Items]
Line of credit ceiling	$ 70,000,000
Unused borrowing capacity	32,000,000
Secured term loan	9,500,000	$ 0
Secured Debt \| Letters of credit
Line of Credit Facility [Line Items]
Remaining borrowing availability	$ 10,000,000

Commitments and Contingencies - Contractual Obligations (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Maturity of Debt Obligations
Total long-term debt obligations	$ 179,359
2024	8,313
2025	19,000
2026	19,000
2027	23,750
2028	109,296
Thereafter	0
Maturity Operating Leases
Total future minimum lease payments	23,539
2024	4,612
2025	3,928
2026	3,700
2027	2,627
2028	2,377
Thereafter	6,295
Maturity Total Contractual Obligations
Contractual obligations	202,898
2024	12,923
2025	22,928
2026	22,700
2027	26,377
2028	111,673
Thereafter	6,297
Facility operating leases
Maturity Operating Leases
Total future minimum lease payments	23,489
2024	4,560
2025	3,928
2026	3,700
2027	2,627
2028	2,377
Thereafter	6,297
Equipment operating leases
Maturity Operating Leases
Total future minimum lease payments	50
2024	50
2025	0
2026	0
2027	0
2028	0
Thereafter	$ 0

Leases

12 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

The following table summarizes lease balances presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Operating lease right-of-use assets (a)	$	9,656	$	16,851

Operating lease liabilities, current	$	3,463	$	2,235
Operating lease liabilities, long-term	15,908		16,461
Operating lease liabilities	$	19,371	$	18,696

(a) Impairment loss of long-lived assets is a loss associated with a reduction of the fair value of an asset prompted by a triggering event. During the fourth quarter of fiscal 2023, DLH reduced its leased office space requirement by consolidating underutilized premises as part of an ongoing facility rationalization effort, to accurately reflect the operational needs of the business. As a result, the Company has determined that its Right of Use Assets experienced a reduction in fair value below its associated carrying value and recorded a $7.7 million loss of fair value.

For the years ended September 30, 2023 and 2022, total lease costs for our operating leases are as follows (in thousands):


	2023		2022
Operating	$	3,911	$	3,548
Short-term	287		114
Variable	95		120
Sublease income (a)	(282)		(258)
Lease costs	$	4,011	$	3,524

(a): The Company subleases a portion of one of its leased facilities. The sublease is classified as an operating lease with respect to the underlying asset. The sublease term is 5 years and includes two additional 1-year term extension options.

The Company's future minimum lease payments as of September 30, 2023 are as follows (in thousands):


For the Fiscal Year Ending September 30,
2024	$	4,612
2025	3,928
2026	3,700
2027	2,627
2028	2,377
Thereafter	6,295
Total future minimum lease payments	$	23,539
Less: imputed interest	(4,168)
Present value of future minimum lease payments	$	19,371
Less: current portion of operating lease liabilities	(3,463)
Long-term operating lease liabilities	$	15,908

At September 30, 2023, the weighted-average remaining lease term and weighted-average discount rate are 6.3 years and 6.3%, respectively. The calculation of the weighted-average discount rate was determined based on borrowing terms from our secured term loan.

Other information related to our leases is as follows for the years ending September 30, 2023 and 2022 (in thousands):


	2023		2022
Cash paid for amounts included in the measurement of lease liabilities	$	4,468	$	3,411
New lease liabilities, net of new right-of-use-assets	120		—
Other lease information	$	4,588	$	3,411

Stock-based Compensation and Equity Grants - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Number of Shares
Outstanding at beginning of period (in shares)	2,392
Granted (in shares)	470
Exercised (in shares)	(393)
Cancelled (in shares)	(191)
Outstanding at end of period (in shares)	2,278	2,392
Exercisable at end of period (in shares)	1,608
Weighted Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 7.05
Granted (in dollars per share)	11.57
Exercised (in dollars per share)	3.42
Cancelled (in dollars per share)	9.54
Outstanding at end of period (in dollars per share)	8.40	$ 7.05
Exercisable at end of period (in dollars per share)	$ 6.43
Weighted Average Remaining Contractual Term (in years)
Weighted Average Remaining Contractual Term, Options Outstanding at beginning of period (in years)	5 years 9 months 18 days	5 years 4 months 24 days
Weighted Average Remaining Contractual Term, Options Outstanding at period end (in years)	5 years 9 months 18 days	5 years 4 months 24 days
Weighted Average Remaining Contractual Term, Options Exercisable at period end (in years)	4 years 3 months 18 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value for Options Outstanding at beginning of period	$ 13,566
Aggregate Intrinsic Value for Options Outstanding at period end	8,693	$ 13,566
Aggregate Intrinsic Value Options Outstanding at period end	$ 8,648
Stock Options
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Volatility rate	50.00%
Term	10 years
Stock price threshold term	10 days

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)
Beginning Balance (in shares) at Sep. 30, 2021		12,714
Beginning Balance at Sep. 30, 2021	$ 65,608	$ 13	$ 87,893	$ (22,298)
Expense related to director restricted stock unit (shares)		0
Expense related to director restricted stock units	648		648
Expense related to employee stock-based compensation	1,960		1,960
Stock issued for director restricted stock units (in shares)		53
Stock issued for director restricted stock units	0
Exercise of stock options (shares)		257
Exercise of stock options	637		637
Common stock surrendered for the exercise of stock options (in shares)		(31)
Common stock surrendered for the exercise of stock options	(281)		(281)
Exercise of stock warrants (in shares)		54
Exercise of stock warrants	200		200
Net income	$ 23,288			23,288
Ending Balance (in shares) at Sep. 30, 2022	13,047	13,047
Ending Balance at Sep. 30, 2022	$ 92,060	$ 13	91,057	990
Issuance and fair value adjustment of common stock in business combiation		527
Issuance and fair value adjustment of common stock in business combination	6,539	$ 1	6,538
Expense related to director restricted stock units	718		718
Expense related to employee stock-based compensation	1,204		1,204
Stock issued for director restricted stock units (in shares)		50
Stock issued for director restricted stock units	$ 0
Exercise of stock options (shares)	393	393
Exercise of stock options	$ 1,107		1,107
Common stock surrendered for the exercise of stock options (in shares)		(67)
Common stock surrendered for the exercise of stock options	(650)		(650)
Net income	$ 1,461			1,461
Ending Balance (in shares) at Sep. 30, 2023	13,950	13,950
Ending Balance at Sep. 30, 2023	$ 102,439	$ 14	$ 99,974	$ 2,451

Earnings Per Share

12 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common shares outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method.

Earnings Per Share information is presented in the table below for the years ending September 30, 2023 and 2022 (in thousands except for per share amounts):


	2023		2022
Numerator:
Net income	$	1,461	$	23,288
Denominator:
Denominator for basic net income per share - weighted-average outstanding shares	13,704		12,830
Effect of dilutive securities:
Stock options and restricted stock	727		1,349
Denominator for diluted net income per share - weighted-average outstanding shares	$	14,431	$	14,179
Net income per share - basic	$	0.11	$	1.82
Net income per share - diluted	$	0.10	$	1.64

Income Taxes (Tables)

12 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Schedule of Significant Components of the Expense From Continuing Operations

The significant components of provision for income taxes from continuing operations are summarized as follows for the years ending September 30, 2023 and 2022 (in thousands):


	2023		2022
Current expense	$	3,823	$	7,351
Deferred expense	(4,464)		424
Income tax (benefit) expense	$	(641)	$	7,775

Schedule of Significant Differences Between the Income Taxes at Federal Statutory Rate and Effective Tax Rate

The following table presents the significant differences between our income taxes at the federal statutory rate and the Company's effective tax rate for continuing operations for the years ending September 30, 2023 and 2022 (in thousands):


	2023		2022
Income taxes at the federal statutory rate	$	187	$	6,523
State taxes, net	(536)		1,158
Other permanent items	(292)		94
Income tax (benefit) expense	$	(641)	$	7,775

Schedule of Deferred Tax Assets and Liabilities

An analysis of the Company's deferred tax assets and liabilities at September 30, 2023 and 2022 is as follows (in thousands):


	2023		2022
Deferred tax assets:
Net operating loss carry forwards, net	$	855	$	296
Stock based compensation	708		668
Accrued compensation	2,094		2,108
Capitalized transaction costs	973		—
Right of use asset/liability	1,669		—
Interest limitation	2,601		—
Total deferred tax assets	$	8,900	$	3,072
Less: valuation allowance	(847)		(262)
Total deferred tax assets, net	$	8,053	$	2,810
Deferred tax liabilities:
Depreciation on fixed assets	(418)		(458)
Amortization on identified intangibles and goodwill	(4,050)		(3,375)
Accrued expenses	(515)		(407)
Right of use liability	—		(104)
Total deferred tax liabilities	$	(4,983)	$	(4,344)
Net deferred tax assets (liabilities)	$	3,070	$	(1,534)

Business Combination

12 Months Ended

Sep. 30, 2023

Business Combinations [Abstract]

Business Combination

Acquisition of Grove Resource Solutions, LLC

On December 8, 2022, the Company acquired 100% of the equity interests of GRSi for a purchase price of $188 million, inclusive of the working capital adjustment completed and paid. The acquisition was financed through a combination of:

•borrowings of $181.5 million under the Company’s amended and restated credit facility; and

•common stock issued of approximately 0.5 million shares, which were valued at $6.5 million in the aggregate, based on the shares issued to the previous owners as determined by the equity purchase agreement and the stock price on the acquisition date.

The acquisition of GRSi was consistent with the Company’s growth strategy, as it provided contract diversification, expansion of key capabilities and increased presence in the military health market. The goodwill derived from this transaction is primarily due to these attributes.

The Company has used the acquisition method of accounting for this transaction, whereby the assets acquired and liabilities assumed are recognized based upon their estimated fair values at the acquisition date.

The purchase price for GRSi was $188 million adjusted to reflect acquired cash, assumed liabilities and net working capital adjustments.

The Purchase Agreement contains customary representations, warranties and covenants by the parties. Subject to certain limitations and conditions, the seller and the equity holders of the seller do not have indemnity obligation for damages resulting from breaches or inaccuracies of the representations, warranties, and covenants of the seller, GRSi and the equity holders as set forth in the Purchase Agreement. The Purchase Agreement also provided for the establishment of an escrow account in order to satisfy (i) any downward adjustment of the purchase price base on GRSi's net working capital at the closing and (ii) certain specified indemnification obligations of the seller and equity holders that may arise following the closing. The escrow account is funded by an aggregate amount of approximately $4.3 million and the stock consideration. A representations and warranties insurance policy has been purchased by the Company in connection with the Purchase Agreement, under which the Company may seek recourse for breaches of the representations and warranties of the seller, GRSi and the equity holders. The representations and warranties insurance policy is subject to certain customary exclusions and a deductible.

In accordance with ASU 2017-01, the Company evaluated the transaction as an acquisition of a business. The Company has assessed the acquisition price to the fair value of the assets and liabilities of GRSi at the acquisition date. We accounted for the total acquisition consideration and allocation of fair value of the related assets and liabilities at December 8, 2022 as follows (in thousands):


Purchase price for GRSi	$	187,997

Purchase price allocation:
Cash	747
Accounts receivable	25,468
Other current assets	1,354
Equipment and improvements, net	463
Intangible assets	98,688
Accounts payable and accrued expenses	(2,449)
Payroll liabilities	(7,826)
Other current liabilities	(325)
Other long-term assets and liabilities	(781)
Identifiable net assets acquired	115,339

Goodwill	$	72,658

All operating units are aggregated into a single reportable segment. The acquisition of GRSi did not create an additional reportable segment as all operations report to a single Chief Operating Decision Maker (CODM), serve a similar customer base, and provide similar services within a common regulatory environment. The goodwill represents intellectual capital and the acquired workforce, of which both do not qualify as a separate intangible asset.

During the year ended September 30, 2023, following the completion of the acquisition, GRSi contributed approximately $107.0 million of revenue and $4.4 million of income from operations, which includes $8.2 million of non-cash intangible asset amortization expense.

The unaudited pro forma information below is presented for informational purposes only and is not necessarily indicative of our results if the acquisition had taken place on that date. The pro forma information was prepared by combining our reported historical results with the historical results of GRSi for the pre-acquisition periods. In addition, the reported historical amounts were adjusted for the following items, net of associated tax effects:

•The impact of recording GRSi's intangible asset amortization.

•The impact of interest expense for the new credit facility.

•The removal of legacy GRSi director's fees.

•The removal of transaction costs for the acquisition incurred by GRSi.

The following table presents certain unaudited results for the year ended September 30, 2023 as though the acquisition of GRSi had occurred on October 1, 2022 (in thousands):


	Twelve Months Ended
	September 30,
Pro forma results	2023		2022
Revenue	$	402,958	$	507,251
Net income	2,054		18,912

Number of shares outstanding - basic	13,704		12,830
Number of shares outstanding - diluted	14,431		14,179

Basic earnings per share	$0.15		$1.47
Diluted earnings per share	$0.14		$1.33

Stock-based Compensation and Equity Grants - Stock Options Outstanding, Vested and Unvested (Details) - shares shares in Thousands	Sep. 30, 2023	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Vested and exercisable (in shares)	1,608	2,117
Unvested (in shares)	670	275
Options outstanding (in shares)	2,278	2,392

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating activities
Net income	$ 1,461	$ 23,288
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	15,562	7,665
Amortization of deferred financing costs charged to interest expense	2,182	664
Stock-based compensation expense	1,922	2,608
Deferred taxes, net	(4,604)	358
Impairment loss of long-lived asset	7,673	0
Changes in operating assets and liabilities
Accounts receivable	6,845	(7,049)
Other assets	1,757	1,387
Accrued payroll	(3,477)	319
Deferred revenue	0	(22,273)
Accounts payable and accrued liabilities	(75)	(5,855)
Other liabilities	1,787	131
Net cash provided by operating activities	31,033	1,243
Investing activities
Business acquisition, net of cash acquired	(180,572)	0
Purchase of equipment and improvements	(625)	(872)
Net cash used in investing activities	(181,197)	(872)
Financing activities
Proceeds from revolving line of credit	205,268	0
Repayment of revolving line of credit	(195,721)	0
Proceeds from debt obligations	168,000	17,000
Repayments of debt obligations	(20,188)	(41,750)
Payments of deferred financing costs	(7,666)	0
Proceeds from issuance of common stock upon exercise of options and warrants	1,108	837
Payment of tax obligations resulting from net exercise of stock options	(650)	(281)
Net cash provided by (used in) financing activities	150,151	(24,194)
Net change in cash	(13)	(23,823)
Cash - beginning of year	228	24,051
Cash - end of year	215	228
Supplemental disclosures of cash flow information
Cash paid during the year for interest	14,153	1,528
Cash paid during the year for income taxes	5,604	9,282
Supplemental disclosures of non-cash activity
Common stock surrendered for the exercise of stock options	$ 238	$ 256

Business Combination (Tables)

12 Months Ended

Sep. 30, 2023

Business Combinations [Abstract]

Schedule of Total Acquisition Consideration and Allocation of Fair Value of Assets and Liabilities

We accounted for the total acquisition consideration and allocation of fair value of the related assets and liabilities at December 8, 2022 as follows (in thousands):


Purchase price for GRSi	$	187,997

Purchase price allocation:
Cash	747
Accounts receivable	25,468
Other current assets	1,354
Equipment and improvements, net	463
Intangible assets	98,688
Accounts payable and accrued expenses	(2,449)
Payroll liabilities	(7,826)
Other current liabilities	(325)
Other long-term assets and liabilities	(781)
Identifiable net assets acquired	115,339

Goodwill	$	72,658

Schedule of Pro Forma Results (unaudited)

•The impact of recording GRSi's intangible asset amortization.

•The impact of interest expense for the new credit facility.

•The removal of legacy GRSi director's fees.

•The removal of transaction costs for the acquisition incurred by GRSi.

The following table presents certain unaudited results for the year ended September 30, 2023 as though the acquisition of GRSi had occurred on October 1, 2022 (in thousands):


	Twelve Months Ended
	September 30,
Pro forma results	2023		2022
Revenue	$	402,958	$	507,251
Net income	2,054		18,912

Number of shares outstanding - basic	13,704		12,830
Number of shares outstanding - diluted	14,431		14,179

Basic earnings per share	$0.15		$1.47
Diluted earnings per share	$0.14		$1.33

Supporting Financial Information - Goodwill (Details) $ in Thousands	12 Months Ended
	Sep. 30, 2023 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 65,643
Increase from GRSi acquisition	72,658
Tax Adjustment GRSI acquisition	(140)
Ending balance	$ 138,161

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Basis of Presentation	12 Months Ended
Basis of Presentation	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of DLH Holdings Corp. and its subsidiaries ("DLH" or the "Company" and also referred to as "we," "us," and "our"), all of which are wholly-owned. All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and with the instructions to Form 10-K, Regulation S-X, and Regulation S-K.

Business Combination - Pro Forma Results (unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Business Acquisition [Line Items]
Basic (in shares)	13,704	12,830
Diluted (in shares)	14,431	14,179
GRSI
Business Acquisition [Line Items]
Business Acquisition, Pro Forma Revenue	$ 402,958	$ 507,251
Net income	$ 2,054	$ 18,912
Basic (in shares)	13,704	12,830
Diluted (in shares)	14,431	14,179
Basic earnings per share (in dollars per share)	$ 0.15	$ 1.47
Diluted earnings per share (in dollars per share)	$ 0.14	$ 1.33

Leases - Summary of Lease Balances in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating lease right-of-use assets	$ 9,656	$ 16,851
Operating lease liabilities, current	3,463	2,235
Operating lease liabilities - long-term	15,908	16,461
Operating lease liabilities	$ 19,371	$ 18,696

Stock-based Compensation and Equity Grants

12 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation and Equity Grants

Stock-based compensation expense

Options issued under equity incentive plans were designated as either an incentive stock or a non-statutory stock option. No option was granted with a term of more than 10 years from the date of grant. Exercisability of option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued shares. As of September 30, 2023, there were 1.0 million shares available for grant.

Total stock-based compensation expense, presented in the table below, is recorded in general and administrative expenses included in our consolidated statements of operations for the years ended September 30, 2023 and 2022 (in thousands):


	2023		2022
DLH employees (a)	$	1,204	$	1,960
Non-employee directors (b)	718		648
Stock option expense	$	1,922	$	2,608

(a): Included in this amount are equity grants of restricted stock units ("RSU") to Executive Officers, which were issued in accordance with the DLH long-term incentive compensation policy in this fiscal year, and stock option grants to employees during prior fiscal years. The RSUs issued and outstanding totaled 211,228 and 140,404 at September 30, 2023 and 2022, respectively. During the fiscal year ended September 30, 2023, 197,174 RSUs were granted to Executive Officers. Of the RSUs granted, 141,892 have performance-based vesting criteria and the remaining 55,282 have service-based vesting criteria. At a 50% volatility and assumptions of a 3-year term and the performance vesting criteria results in an indicated a fair value. The RSUs granted during the fiscal year ended September 30, 2023, as follows using the Monte Carlo Method.

Volatility

50%

Grant Date

Performance Vesting Base

Performance Vesting Criteria

(Years)

Calculated Fair Value

January 27, 2023

Revenue

Revenue increase at the end of the performance period as compared to the year ended September 30, 2022

3.51

January 27, 2023

Stock price

Stock price is at least $33.21 per share average for the 30 days prior to the end of the performance period

2.92

Notes: Results based on 100,000 simulations

(b): Equity grants of RSUs were made in accordance with DLH compensation policy for non-employee directors and a total of 50,367 and 53,510 restricted stock units were issued and outstanding at September 30, 2023 and 2022, respectively. These grants have service-based vesting criteria and vest at the end of this fiscal year.

Unrecognized stock-based compensation expense

Unrecognized stock-based compensation expense is presented in the table below for the years ending September 30, 2023 and 2022 (in thousands):


	2023		2022
Unrecognized expense for DLH employees (a)	$	7,107	$	5,214

Unrecognized expense	$	7,107	$	5,214

(a): On a weighted average basis, this expense is expected to be recognized within the next 4.20 years.

Stock option activity for the year ended September 30, 2023:

The aggregate intrinsic value in the table below represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in the money options on those dates. This amount will change based on the fair market value of the Company’s stock. A summary of the Company's stock option awards is as follows:


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
	(in thousands)			(in years)	(in thousands)
Outstanding, September 30, 2022	2,392	$	7.05	5.4	$	13,566
Granted (a)	470	11.57		—	—
Exercised	(393)	3.42		—	—
Cancelled	(191)	9.54		—	—
Outstanding, September 30, 2023	2,278	$	8.40	5.8	$	8,693
Vested and exercisable, September 30, 2023	1,608	$	6.43	4.3	$	8,648

(a): Utilizing a volatility of 50% along with assumptions of a 10-year term and the aforementioned 10-day stock price threshold results in an indicated range of value of the options granted during the year ended September 30, 2023, as follows using the Monte Carlo method:


					Vesting		Expected
	Strike		Stock		Threshold		Term	Calculated
Grant Date	Price		Price		Price		(Years)	Fair Value
January 26, 2023	$	11.66	$	11.66	$	15.00	10	$	7.41
August 31, 2023	$	11.08	$	11.08	$	14.25	10	$	7.41
August 31, 2023	$	11.08	$	11.08	$	16.50	10	$	7.41
Note: Results based on 100,000 simulations

Stock options shares outstanding, vested and unvested for the years ended September 30, 2023 and 2022 (in thousands):


	Number of Shares
	2023	2022
Vested and exercisable	1,608	2,117
Unvested (a)	670	275
Options outstanding	2,278	2,392

(a): Certain awards vest upon satisfaction of certain performance criteria.

Supporting Financial Information - Accrued Payroll (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accrued Leave	$ 9,621	$ 6,345
Accrued payroll	2,487	1,946
Accrued payroll taxes	1,173	411
Accrued severance	513	742
Accrued payroll	$ 13,794	$ 9,444

Supporting Financial Information - Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prepaid licenses and other expenses	$ 1,330	$ 1,196
Prepaid insurance and benefits	743	737
Other receivables	994	945
Other current assets	$ 3,067	$ 2,878

Credit Facilities (Tables)

12 Months Ended

Sep. 30, 2023

Cash and Cash Equivalents [Abstract]

Schedule of Loan Facilities and Subordinated Debt Financing

A summary of our credit facilities as of September 30, 2023 and 2022 is as follows (in millions):


	2023				2022
Arrangement	Loan Balance		Interest	Arrangement	Loan Balance		Interest
Secured term loan (a) due December 8, 2027	$	169.8	SOFR1 + 4.1%	Secured term loan (a) due September 30, 2025	$	22.0	LIBOR2 + 2.5%
Secured revolving line of credit (b) due December 8, 2027	$	9.5	SOFR1 + 4.1%	Secured revolving line of credit (b) due September 30, 2025	$	—	LIBOR2 + 2.5%

1Secured Overnight Financing Rate ("SOFR") as of September 30, 2023 was 5.3%.

2LIBOR rate as of September 30, 2022 was 2.52%.

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2023	Sep. 30, 2022
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares (in shares)	40,000	40,000
Common stock, issued shares (in shares)	13,950	13,047
Common stock, shares outstanding (in shares)	13,950	13,047

Supporting Financial Information - Amortization and Weighted Average Amortization period of Intangible Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangibles	$ 14.8	$ 6.6
Finite-Lived Intangible Assets, Remaining Amortization Period	8 years 3 months 18 days
Customer contracts and related customer relationships
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Remaining Amortization Period	8 years 2 months 12 days
Backlog
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Remaining Amortization Period	8 years 3 months 18 days
Trade names
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Remaining Amortization Period	8 years 8 months 12 days
Covenants-not-to-compete
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Remaining Amortization Period	6 years

Audit Information	12 Months Ended
Audit Information	Sep. 30, 2023
Auditor Information [Abstract]
Auditor Name	WithumSmith+Brown, PC
Auditor Location	East Brunswick, New Jersey
Auditor Firm ID	100

Business Combination - Narrative (Details) - USD ($) $ in Thousands, shares in Millions		12 Months Ended
	Dec. 08, 2022	Sep. 30, 2023	Sep. 30, 2022
Business Acquisition [Line Items]
Borrowings		$ 168,000	$ 17,000
Issuance and fair value adjustment of common stock in business combination		6,539
GRSI
Business Acquisition [Line Items]
Percentage of equity interest acquired	10000.00%
Purchase price	$ 187,997
Borrowings	181,500
Issuance and fair value adjustment of common stock in business combination	6,500
Escrow funds	$ 4,300
Revenue contributed since the acquisition date		107,000
Income from operations contributed since the acquisition date		4,400
Non-cash intangible asset amortization expense		$ 8,200
GRSI \| Common Stock
Business Acquisition [Line Items]
Issuance of common stock in business combination (in shares)	0.5

Supporting Financial Information - Debt Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Debt Instrument [Line Items]
Secured term loan	$ 179,359
Total long-term debt obligations	172,335	$ 20,416
Debt obligations - current, net of deferred financing costs	(17,188)	0
Debt obligations - long-term, net of deferred financing costs	155,147	20,416
Debt annual amortization amount fiscal year 2023	8,313
Secured revolving line of credit
Debt Instrument [Line Items]
Secured term loan	9,546	0
Secured Debt
Debt Instrument [Line Items]
Secured term loan	169,813	22,000
Less: unamortized deferred financing costs	7,024	1,584
Debt annual amortization amount fiscal year 2023	8,300
Secured Debt \| Secured revolving line of credit
Debt Instrument [Line Items]
Secured term loan	$ 9,500	$ 0

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Stock-based Compensation and Equity Grants - Narrative (Details) - Stock Options shares in Millions	12 Months Ended
	Sep. 30, 2023 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration term of options	10 years
Number of shares available for grant (in shares)	1.0
2016 Omnibus Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration term of options	10 years

- Definition

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+ Details

Provision for Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Current expense	$ 3,823	$ 7,351
Deferred expense	(4,464)	424
Income tax (benefit) expense	$ (641)	$ 7,775

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Supporting Financial Information - Intangible Assets, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 164,542	$ 65,854
Accumulated amortization	(39,765)	(24,970)
Intangible assets, net	124,777	40,884
Customer contracts and related customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	113,622	47,044
Accumulated amortization	(29,929)	(19,731)
Backlog
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	37,249	15,237
Accumulated amortization	(7,273)	(3,875)
Trade names
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	13,034	3,051
Accumulated amortization	(2,185)	(1,048)
Covenants-not-to-compete
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	637	522
Accumulated amortization	$ (378)	$ (316)

Significant Accounting Policies	12 Months Ended
Significant Accounting Policies	Sep. 30, 2023
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The most significant of these estimates and assumptions relate to costs including overhead and its allocation, assessing fair value of acquired assets and liabilities accounted for through business acquisitions, valuing and determining the amortization periods for long-lived intangible assets, interest rate swaps, stock-based compensation, right-of-use assets and leases liabilities, and loss development on workers' compensation claims. We evaluate these estimates and judgments on an ongoing basis and base our estimates on historical experience, current and expected future outcomes, third-party evaluations, and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. We revise material accounting estimates if changes occur, such as more experience is acquired, additional information is obtained, or there is new information on which an estimate was or can be based. Actual results could differ from those estimates. Revenue The Company's revenues from contracts with customers are derived from offerings that include technology-enabled business process outsourcing, program management solutions, and public health research and analytics, substantially within the U.S. government and its agencies. The Company has various types of contracts including time-and-materials contracts, cost-reimbursable contracts, and firm-fixed-price contracts. We consider a contract with a customer to exist when there is a commitment by both parties (customer and Company), payment terms are determinable, there is commercial substance, and collectability is probably in accordance with Accounting Standards Codification ("ASC") No. 606, "Revenue from Contracts with Customers" ("Topic 606"). We recognize revenue over time when there is a continuous transfer of control to our customer as performance obligations are satisfied. For our U.S. government contracts, this continuous transfer of control to the customer is transferred over time and revenue is recognized based on the extent of progress toward completion of the performance obligation. We consider control to transfer when we have a right to payment. In some instances, the Company commences providing services prior to formal approval to begin work from the customer. The Company considers these factors, the risks associated with commencing work, and legal enforceability in determining whether a contract exists under Topic 606. Contract modification can occur throughout the life of the contract and can affect the transaction price, extend the period of performance, adjust funding, or create new performance obligations. We review each modification to assess the impact of these contract changes to determine if it should be treated as part of the original performance obligation or as a separate contract. Contract modifications impact performance obligations when the modification either creates new or changes the existing enforceable rights and obligations. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue and profit cumulatively. Furthermore, a significant change in one or more estimates could affect the profitability of our contracts. We recognize adjustments in estimated profit on contracts in the period identified. For service contracts, we satisfy our performance obligations as services are rendered. We use cost-based input and time-based output methods to measure progress based on the contract type. •Time and material - We bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced as the amount corresponds directly to the value of our performance to date. Revenue is recognized to the extent of billable rates times hours delivered plus materials and other reimbursable costs incurred. •Cost reimbursable - We record reimbursable costs as incurred, including an estimated share of the contractual fee earned. •Firm fixed price - We recognize revenue over time using a straight-line measure of progress. Contract costs generally include direct costs such as labor, materials, subcontract costs, and indirect costs identifiable with or allocable to a specific contract. Costs are expensed as incurred and include an estimate of the contractual fees earned. Contract costs incurred for U.S. government contracts, including indirect costs, are subject to audit and adjustment by various government audit agencies. Historically, our adjustments have not been material. Contract assets - Amounts are invoiced as work progresses in accordance with agreed-upon contractual terms. In part, revenue recognition occurs before we have the right to bill, resulting in contract assets. These contract assets are reported within Accounts receivable, net on our consolidated balance sheets and are invoiced in accordance with payment terms defined in each contract. Period end balances will vary from period to period due to agreed-upon contractual terms. Contract liabilities - Amounts are a result of billings in excess of costs incurred or prepayment for services to be rendered. Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, contract assets, contract liabilities, accrued expenses, and accounts payable approximate fair value due to the short-term nature of these instruments. The fair values of the Company's debt instruments approximate fair value because the underlying interest rates approximate market rates that the Company could obtain for similar instruments at the balance sheet dates. Long-lived Assets Our long-lived assets include equipment and improvements, intangible assets, right-of-use assets, and goodwill. The Company continues to review its long-lived assets for possible impairment or loss of value at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. Equipment and improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives (3 to 7 years) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Intangible assets (other than goodwill) are originally recorded at fair value and are amortized on a straight-line basis over their estimated useful lives of 10 years. Maintenance and repair costs are expensed as incurred. Right-of-use assets are measured at the present value of future minimum lease payments, including all probable renewals, plus lease payments made to the lessor before or at lease commencement and indirect costs paid, less incentives received. Our right-of-use assets include long-term leases for facilities and equipment and are amortized over their respective lease terms. Our right-of-use-assets are recognized as the present value of the future minimum lease payments over the lease term less unamortized lease incentives and the balance remaining in deferred rent liability under ASC 840. Lease Liabilities The Company has leases for facilities and office equipment. Our lease liabilities are recognized as the present value of the future minimum lease payments over the lease term. Our lease payments consist of fixed and in-substance fixed amounts attributable to the use of the underlying asset over the lease term. Variable lease payments that do not depend on an index rate or are not in-substance fixed payments are excluded in the measurement of right-of-use assets and lease liabilities and are expensed in the period incurred. The incremental borrowing rate on our secured term loan is used in determining the present value of future minimum lease payments. Some of our lease agreements include options to extend the lease term or terminate the lease. These options are accounted for in our right-of-use assets and lease liabilities when it is reasonably certain that the Company will extend the lease term or terminate the lease. The Company does not have any finance leases. As of September 30, 2023, operating leases for facilities and equipment have remaining lease terms of less than 1 year to 8 years. Goodwill At September 30, 2023, we performed an internal goodwill impairment evaluation on the year-end carrying value of approximately $138.2 million. We performed a qualitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted at September 30, 2023, as no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill. Notwithstanding this evaluation, factors including non-renewal of a major contract or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to future periods’ results of operations. Similarly, there were no impairments during the prior year ended September 30, 2022. Provision for Income Taxes The Company accounts for income taxes in accordance with the asset and liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance sheet when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is more-likely-than-not that the position will be sustained upon examination. We had no uncertain tax positions at either September 30, 2023 and 2022. We report interest and penalties as a component of provision for income taxes. For the years ended September 30, 2023 and 2022, we recognized no interest and no penalties related to income taxes. Stock-based Compensation The Company uses the fair value-based method for stock-based equity compensation. Options issued are designated as either an incentive stock or a non-statutory stock option. No option may be granted with a term of more than 10 years from the date of grant. Option awards may depend on the achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued common shares. All awards to employees and non-employees are recorded at fair value on the date of the grant and expensed over the period of vesting. The Company uses the Monte Carlo method to estimate the fair value of each stock option at the date of grant. Any consideration paid by the option holders to purchase shares is credited to capital stock. Stock-based Compensation Expense Stock-based Compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The stock-based compensation expense for that portion of awards has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. For options that vest based on the Company’s common stock achieving and maintaining defined market prices, the Company values the awards with a Monte Carlo method that utilizes various probability factors and other criterion in establishing fair value of the grant. The related stock-based compensation expense is recognized over the service period. Stock based compensation is reliant on continued employment with the Company. These arrangements are forfeited upon employee separation and accounted for as they occur. Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. We maintain cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Deposits held with financial institutions may exceed the $250,000 limit. Receivables Receivables include amounts billed and currently due from customers where the right to consideration is unconditional and amounts unbilled. Both billed and unbilled amounts are non-interest bearing, unsecured, and recognized at an estimated realizable value that include costs and fees, and are generally expected to be billed and received within a single year. We evaluate our receivables for expected credit losses and estimate expected credit losses if appropriate based on customers collections. No allowance for doubtful accounts was deemed necessary at either September 30, 2023 or September 30, 2022. Earnings Per Share Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common stock outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method. Treasury Stock The Company periodically purchases its own common stock that is traded on public markets as part of announced stock repurchase programs. The repurchased common stock is classified as treasury stock on the consolidated balance sheets and held at cost. As of September 30, 2023 and 2022, the Company did not hold any treasury stock. Preferred Stock Our certificate of incorporation authorizes the issuance of "blank check" preferred stock with such designations, rights and preferences as may be determined from time to time by our board of directors up to an aggregate of 5,000,000 shares of preferred stock. As of September 30, 2023 and 2022, the Company has not issued any preferred stock. Interest Rate Swap The Company uses derivative financial instruments to manage interest rate risk associated with its variable debt. The Company's objective in using these interest rate derivatives is to manage its exposure to interest rate movements and reduce volatility of interest expense. The gains and losses due to changes in the fair value of the interest rate swap agreements completely offset changes in the fair value of the hedged portion of the underlying debt. Offsetting changes in fair value of both the interest rate swaps and the hedged portion of the underlying debt are recognized in interest expense in the consolidated statements of operations. The Company does not hold or issue any derivative instrument for trading or speculative purposes. Risks & Uncertainties Management evaluates the impact of global markets and economic factors on our industry and the potential for adverse effects on the Company's consolidated financial position and its operations. As of September 30, 2023, there was no indication of any global or economic impacts to our industry.

Supporting Financial Information - Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
2024	$ 16,456
2025	16,456
2026	15,721
2027	14,694
2028	14,694
Thereafter	46,756
Intangible assets, net	$ 124,777	$ 40,884

Revenue Recognition

12 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

The following table summarizes the contract balances recognized within the Company's consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Contract assets	$	20,542	$	7,682

Disaggregation of revenue from contracts with customers

We disaggregate our revenue from contracts with customers by customer, contract type, as well as whether the Company acts as prime contractor or subcontractor. We believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following series of tables presents our revenue disaggregated by these categories:

Revenue by customer for the years ended September 30, 2023 and 2022 (in thousands):


	2023		2022
Department of Health and Human Services	$	161,311	$	102,201
Department of Veterans Affairs	138,862		126,106
Department of Defense	70,325		33,612
Department of Homeland Security	919		126,576
Other	4,455		6,678
Revenue	$	375,872	$	395,173

Revenue by contract type for the years ended September 30, 2023 and 2022 (in thousands):


	2023		2022
Time and Materials	$	209,951	$	308,944
Cost Reimbursable	81,797		46,231
Firm Fixed Price	84,124		39,998
Revenue	$	375,872	$	395,173

Revenue by whether the Company acts as a prime contractor or a subcontractor for the years ended September 30, 2023 and 2022 (in thousands):


	2023		2022
Prime Contractor	$	356,792	$	366,571
Subcontractor	19,080		28,602
Revenue	$	375,872	$	395,173

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

Earnings Per Share (Tables)

12 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Diluted Earnings Per Share

Earnings Per Share information is presented in the table below for the years ending September 30, 2023 and 2022 (in thousands except for per share amounts):


	2023		2022
Numerator:
Net income	$	1,461	$	23,288
Denominator:
Denominator for basic net income per share - weighted-average outstanding shares	13,704		12,830
Effect of dilutive securities:
Stock options and restricted stock	727		1,349
Denominator for diluted net income per share - weighted-average outstanding shares	$	14,431	$	14,179
Net income per share - basic	$	0.11	$	1.82
Net income per share - diluted	$	0.10	$	1.64

Leases - Company's Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
2024	$ 4,612
2025	3,928
2026	3,700
2027	2,627
2028	2,377
Thereafter	6,295
Total future minimum lease payments	23,539
Less: imputed interest	(4,168)
Operating lease liabilities	19,371	$ 18,696
Less: current portion of operating lease liabilities	(3,463)	(2,235)
Long-term operating lease liabilities	$ 15,908	$ 16,461

Commitments and Contingencies

12 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Contractual Obligations as of September 30, 2023 (in thousands):


			Payments Due Per Fiscal Year
	Total		2024		2025		2026		2027		2028		Thereafter
Debt obligations	$	179,359	$	8,313	$	19,000	$	19,000	$	23,750	$	109,296	$	—
Facility operating leases	23,489		4,560		3,928		3,700		2,627		2,377		6,297
Equipment operating leases	50		50		—		—		—		—		—
Contractual obligations	$	202,898	$	12,923	$	22,928	$	22,700	$	26,377	$	111,673	$	6,297

Legal Proceedings

As a commercial enterprise and employer, the Company is subject to various claims and legal actions in the ordinary course of business. These matters can include professional liability, employment-relations issues, workers’ compensation, tax, payroll and employee-related matters, other commercial disputes arising in the course of its business, and inquiries and investigations by governmental agencies regarding our employment practices or other matters. The Company is not aware of any pending or threatened litigation that it believes is reasonably likely to have a material adverse effect on its results of operations, financial position or cash flows.

Commitments and Contingencies (Tables)

12 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Contractual Obligations

Contractual Obligations as of September 30, 2023 (in thousands):


			Payments Due Per Fiscal Year
	Total		2024		2025		2026		2027		2028		Thereafter
Debt obligations	$	179,359	$	8,313	$	19,000	$	19,000	$	23,750	$	109,296	$	—
Facility operating leases	23,489		4,560		3,928		3,700		2,627		2,377		6,297
Equipment operating leases	50		50		—		—		—		—		—
Contractual obligations	$	202,898	$	12,923	$	22,928	$	22,700	$	26,377	$	111,673	$	6,297

Supporting Financial Information (Tables)

12 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Accounts Receivable

The following table summarizes accounts receivable presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Billed receivables	$	38,577	$	32,814
Contract assets	20,542		7,682
Allowance for doubtful accounts	—		—
Accounts receivable	$	59,119	$	40,496

Schedule of Other Current Assets

The following table summarizes other current assets presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Prepaid licenses and other expenses	$	1,330	$	1,196
Prepaid insurance and benefits	743		737
Other receivables	994		945
Other current assets	$	3,067	$	2,878

Schedule of Goodwill

The change in the carrying amount of goodwill as follows presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):



Balance at September 30, 2022	$	65,643
Increase from GRSi acquisition (a)	72,658
Tax Adjustment GRSI acquisition	(140)
Goodwill	$	138,161

Ref (a); The Company has completed its valuation assessment of the GRSi acquisition. Please refer to Note 4 for more information.

Schedule of Intangible Assets, Net

The following table summarizes intangible assets, net presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Intangible assets
Customer contracts and related customer relationships	$	113,622	$	47,044
Backlog	37,249		15,237
Trade names	13,034		3,051
Covenants-not-to-compete	637		522
Total intangible assets	$	164,542	$	65,854
Less accumulated amortization:
Customer contracts and related customer relationships	(29,929)		(19,731)
Backlog	(7,273)		(3,875)
Trade names	(2,185)		(1,048)
Covenants-not-to-compete	(378)		(316)
Total accumulated amortization	$	(39,765)	$	(24,970)
Intangible assets, net	$	124,777	$	40,884

Schedule of Estimated Future Amortization Expense of Finite-lived Intangibles

As of September 30, 2023, the estimated annual amortization expense is as follows (in thousands):


For the Fiscal Year Ending September 30,
2024	$	16,456
2025	16,456
2026	15,721
2027	14,694
2028	14,694
Thereafter	46,756
Amortization expense	$	124,777

Schedule of Equipment and Improvements, Net

The following table summarizes equipment and improvements, net presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Furniture and equipment	$	1,790	$	893
Computer equipment and software	6,479		6,723
Leasehold improvements	1,614		1,614
Total equipment and improvements	$	9,883	$	9,230
Less: accumulated depreciation and amortization	(8,293)		(7,526)
Equipment and improvements, net	$	1,590	$	1,704

Schedule of Accounts Payable, Accrued Expenses, and Other Current Liabilities

The following table summarizes accounts payable and accrued liabilities presented on our consolidated balance sheets at September 30, 2023and 2022 (in thousands):


	2023		2022
Accounts payable	$	12,603	$	11,886
Accrued benefits	6,414		3,857
Accrued bonus and incentive compensation	4,719		3,625
Accrued workers' compensation insurance	2,369		4,880
Accrued Interest	1,309		—
Other accrued expenses	2,290		2,614
Accounts payable and accrued liabilities	$	29,704	$	26,862

Schedule of Accrued Payroll

The following table summarizes accrued payroll presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Accrued Leave	$	9,621	$	6,345
Accrued payroll	2,487		1,946
Accrued payroll taxes	1,173		411
Accrued severance	513		742
Accrued payroll	$	13,794	$	9,444

Schedule of Debt Obligations

Debt obligations

The following table summarizes debt obligations presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Secured revolving line of credit	$	9,546	$	—
Secured term loan	169,813		22,000
Less: unamortized deferred financing costs	(7,024)		(1,584)
Net bank debt obligations	$	172,335	$	20,416
Less: current portion of debt obligations, net of deferred financing costs (a)	(17,188)		—
Long-term portion of debt obligations, net of deferred financing costs	$	155,147	$	20,416

As of September 30, 2023, we have satisfied mandatory principal payments on our secured term loan.

Schedule of Interest Expense

Interest expense

The following table summarizes interest expense presented on our consolidated statements of operations for the years ended September 30, 2023 and 2022 (in thousands):


	2023		2022
Interest expense (a)	$	14,153	$	1,574
Interest income (b)	(64)		(23)
Amortization of deferred financing costs (c)	2,182		664
Interest expense	$	16,271	$	2,215

(a): Interest expense on borrowing

(b): Interest income

(c): Amortization of expenses related to secured term loan and secured revolving line of credit.

Significant Accounting Policies (Details) - USD ($)	12 Months Ended
Significant Accounting Policies (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Significant Accounting policies disclosures [Line Items]
Finite-lived intangibles estimated useful lives	10 years
Goodwill	$ 138,161,000	$ 65,643,000
Goodwill impairment loss	0	0
Uncertain tax positions	0	0
Tax interest	0	0
Tax penalties	0	0
FDIC insurance limit amount	250,000
Allowance for doubtful accounts	$ 0	$ 0
Treasury stock (in shares)	0	0
Authorized shares of preferred stock (shares)	5,000,000
Issued preferred stock (shares)	0	0
Minimum
Significant Accounting policies disclosures [Line Items]
Estimated useful asset lives	3 years
Minimum \| Facilities and Equipment
Significant Accounting policies disclosures [Line Items]
Remaining lease term	1 year
Maximum
Significant Accounting policies disclosures [Line Items]
Estimated useful asset lives	7 years
Maximum \| Facilities and Equipment
Significant Accounting policies disclosures [Line Items]
Remaining lease term	8 years

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Revenue	$ 375,872	$ 395,173
Cost of Operations
Contract costs	296,016	322,886
General and administrative costs	37,795	30,730
Impairment loss of long-lived asset	7,673	0
Corporate development costs	1,735	614
Depreciation and amortization	15,562	7,665
Total operating costs	358,781	361,895
Income from operations	17,091	33,278
Interest expense	(16,271)	(2,215)
Income before provision for income taxes	820	31,063
Provision for income tax (benefit) expense	(641)	7,775
Net income	$ 1,461	$ 23,288
Earnings Per Share [Abstract]
Net income per share - basic (in dollars per share)	$ 0.11	$ 1.82
Net income per share - diluted (in dollars per share)	$ 0.10	$ 1.64
Weighted average common shares outstanding
Basic (in shares)	13,704	12,830
Diluted (in shares)	14,431	14,179

Revenue Recognition (Tables)

12 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Contract Balances Recognized on the Company's Consolidated Balance Sheets

The following table summarizes the contract balances recognized within the Company's consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Contract assets	$	20,542	$	7,682

Schedule of Disaggregation of Revenue From Contracts with Customers

The following series of tables presents our revenue disaggregated by these categories:

Revenue by customer for the years ended September 30, 2023 and 2022 (in thousands):


	2023		2022
Department of Health and Human Services	$	161,311	$	102,201
Department of Veterans Affairs	138,862		126,106
Department of Defense	70,325		33,612
Department of Homeland Security	919		126,576
Other	4,455		6,678
Revenue	$	375,872	$	395,173

Revenue by contract type for the years ended September 30, 2023 and 2022 (in thousands):


	2023		2022
Time and Materials	$	209,951	$	308,944
Cost Reimbursable	81,797		46,231
Firm Fixed Price	84,124		39,998
Revenue	$	375,872	$	395,173

Revenue by whether the Company acts as a prime contractor or a subcontractor for the years ended September 30, 2023 and 2022 (in thousands):


	2023		2022
Prime Contractor	$	356,792	$	366,571
Subcontractor	19,080		28,602
Revenue	$	375,872	$	395,173

Provision for Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Deferred tax assets:
Net operating loss carry forwards, net	$ 855	$ 296
Stock based compensation	708	668
Accrued compensation	2,094	2,108
Capitalized transaction costs	973	0
Right of use asset/liability	1,669	0
Interest limitation	2,601	0
Total deferred tax assets	8,900	3,072
Less: valuation allowance	(847)	(262)
Total deferred tax assets, net	8,053	2,810
Deferred tax liabilities:
Depreciation on fixed assets	(418)	(458)
Amortization on identified intangibles and goodwill	(4,050)	(3,375)
Accrued expenses	(515)	(407)
Right of use liability	0	(104)
Total deferred tax liabilities	(4,983)	(4,344)
Net deferred tax assets	3,070	0
Net deferred liabilities	$ 0	$ (1,534)

Business Combination - Total Acquisition Consideration and Fair Value of Net Assets Acquired (Details) - USD ($) $ in Thousands	Dec. 08, 2022	Sep. 30, 2023	Sep. 30, 2022
Purchase price allocation:
Goodwill		$ 138,161	$ 65,643
GRSI
Business Acquisition [Line Items]
Purchase price for GRSi	$ 187,997
Purchase price allocation:
Cash	747
Accounts receivable	25,468
Other current assets	1,354
Equipment and improvements, net	463
Intangible assets	98,688
Accounts payable and accrued expenses	(2,449)
Payroll liabilities	(7,826)
Other current liabilities	(325)
Other long-term assets and liabilities	(781)
Identifiable net assets acquired	115,339
Goodwill	$ 72,658

Employee Benefit Plans	12 Months Ended
Employee Benefit Plans	Sep. 30, 2023
Retirement Benefits [Abstract]
Employee Benefits Plans	Employee Benefit Plans As of September 30, 2023, the Company maintains a 401(k) Plan (the "401(k) Plan"), a defined contribution and supplemental pension plan for the benefit of its eligible employees. The Company may provide a discretionary matching contribution of a participant's elective contributions under the 401(k) Plan. The Company recorded related expense of $2.6 million and $2.2 million for the years ending September 30, 2023 and 2022, respectively. Participants are always fully vested in their elective contributions and vest in Company matching contributions over a four-year period.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 70
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480482/715-20-55-17

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (q)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (l)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//715/tableOfContent

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Name Accounting Standards Codification
-Section 50
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 60
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480266/715-60-50-3

+ Details

Leases - Other Information Related to Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 4,468	$ 3,411
New lease liabilities, net of new right-of-use-assets	120	0
Other lease information	$ 4,588	$ 3,411

Leases (Tables)

12 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Summarized Lease Balances in Consolidated Balance Sheet

The following table summarizes lease balances presented on our consolidated balance sheets at September 30, 2023 and 2022 (in thousands):


	2023		2022
Operating lease right-of-use assets (a)	$	9,656	$	16,851

Operating lease liabilities, current	$	3,463	$	2,235
Operating lease liabilities, long-term	15,908		16,461
Operating lease liabilities	$	19,371	$	18,696

Schedule of Lease Costs and Other Information Related to Leases

For the years ended September 30, 2023 and 2022, total lease costs for our operating leases are as follows (in thousands):


	2023		2022
Operating	$	3,911	$	3,548
Short-term	287		114
Variable	95		120
Sublease income (a)	(282)		(258)
Lease costs	$	4,011	$	3,524

Other information related to our leases is as follows for the years ending September 30, 2023 and 2022 (in thousands):


	2023		2022
Cash paid for amounts included in the measurement of lease liabilities	$	4,468	$	3,411
New lease liabilities, net of new right-of-use-assets	120		—
Other lease information	$	4,588	$	3,411

Schedule of Company's Future Lease Payments

The Company's future minimum lease payments as of September 30, 2023 are as follows (in thousands):


For the Fiscal Year Ending September 30,
2024	$	4,612
2025	3,928
2026	3,700
2027	2,627
2028	2,377
Thereafter	6,295
Total future minimum lease payments	$	23,539
Less: imputed interest	(4,168)
Present value of future minimum lease payments	$	19,371
Less: current portion of operating lease liabilities	(3,463)
Long-term operating lease liabilities	$	15,908

Credit Facilities

12 Months Ended

Sep. 30, 2023

Cash and Cash Equivalents [Abstract]

Credit Facilities

A summary of our credit facilities as of September 30, 2023 and 2022 is as follows (in millions):


	2023				2022
Arrangement	Loan Balance		Interest	Arrangement	Loan Balance		Interest
Secured term loan (a) due December 8, 2027	$	169.8	SOFR1 + 4.1%	Secured term loan (a) due September 30, 2025	$	22.0	LIBOR2 + 2.5%
Secured revolving line of credit (b) due December 8, 2027	$	9.5	SOFR1 + 4.1%	Secured revolving line of credit (b) due September 30, 2025	$	—	LIBOR2 + 2.5%

1Secured Overnight Financing Rate ("SOFR") as of September 30, 2023 was 5.3%.

2LIBOR rate as of September 30, 2022 was 2.52%.

(a) Represents the principal amounts payable on our term loan, which is secured by liens on substantially all of the assets of the Company. The principal of the term loan is payable in quarterly installments with the remaining balance due on December 8, 2027.

On September 30, 2019, we executed a floating-to-fixed interest rate swap with First National Bank ("FNB") as counter party. The notional amount in the floating-to-fixed interest rate swap on September 30, 2023 is $16.2 million and matures in 2024 and the fixed rate of 1.61%. On January 31, 2023, we executed an additional floating-to-fixed interest rate swap with FNB; the notional amount as of September 30, 2023 is $96.0 million, it matures in January 2026, and the fixed rate is 4.10%. The total floating-to-fixed swap balance as of September 30, 2023 is $112.2 million. As a result of entering these agreements, for the twelve months ended September 30, 2023, interest expense has been decreased by approximately $0.9 million.

The Credit Agreement requires compliance with a number of financial covenants and contains restrictions on our ability to engage in certain transactions. Among other matters, we must comply with limitations on: granting liens; incurring other indebtedness; maintenance of assets; investments in other entities and extensions of credit; mergers and consolidations; and changes in nature of business. The loan agreement also requires us to comply with certain quarterly financial covenants including: (i) a minimum fixed charge coverage ratio of at least 1.25 to 1.00, and (ii) a total leverage ratio not exceeding the ratio of 4.50:1.00 to 2.00:1.00 through maturity. The total leverage ratio is calculated by dividing the Company's total interest-bearing debt by net income adjusted to exclude (i) interest and other expenses, (ii) provision for or benefit from income taxes, if any, (iii) depreciation and amortization, and (iv) non-cash charges, losses or expenses, including stock-based compensation, and (v) non-recurring charges, losses or expenses to include transaction and non-cash equity expense. We are in compliance with all loan covenants and restrictions as of September 30, 2023.

We are required to pay quarterly amortization payments, which commenced in December 2022. The annual amortization amounts are $14.3 million each for fiscal years 2023 and 2024, $19.0 million each for fiscal years 2025 and 2026, and $23.8 million for fiscal year 2027, with the remaining unpaid loan balance due at maturity in December 2027. The quarterly payments are equal installments. The Company made a mandatory payment of $3.6 million and voluntary prepayments of $5.9 million during the quarter ended September 30, 2023 bringing the outstanding principal balance on the secured term loan to $169.8 million. We have satisfied the mandatory principal payment the quarter ended December 31, 2023 and partially satisfied the mandatory prepayment for the quarter ended March 31, 2024.

In addition to quarterly payments of the outstanding indebtedness, the loan agreement also requires annual payments of a percentage of excess cash flow, as defined in the loan agreement. The loan agreement states that an excess cash flow recapture payment must be made equal to (a) 75% of the excess cash flow for the immediately preceding fiscal year in which indebtedness to consolidated EBITDA ratio is greater than or equal to 2.50:1.00; (b) 50% of the excess cash flow for the immediately preceding fiscal year in which the funded indebtedness to consolidated EBITDA Ratio is less than 2.50:1.00 but greater than or equal to 1.50:1.00; or (c) 0% of the excess cash flow for the immediately preceding fiscal year in which the funded indebtedness to consolidated EBITDA Ratio is less than 1.50:1.00. In addition, the Company must make additional mandatory prepayment of amounts outstanding based on proceeds received from asset sales and sales of certain equity securities or other indebtedness. Due to the voluntary prepayment of term debt, there was no excess cash flow payment required. For additional information regarding the schedule of future payment obligations, please refer to Note 1 1 Commitments and Contingencies.

(b) The secured revolving line of credit has a ceiling of up to $70.0 million; as of September 30, 2023, we had unused borrowing capacity of $32.0 million, which is net of outstanding letters of credit. Borrowing on the secured revolving line of credit is secured by liens on substantially all of the assets of the Company. The Company accessed funds from the secured revolving line of credit during the year, which had a $9.5 million outstanding balance at September 30, 2023. As part of the secured revolving line of credit, the lenders agreed to a sublimit of $10.0 million for letters of credit for the account of the Company, subject to applicable procedures.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
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-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
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-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
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-Paragraph 1I
-Subparagraph (d)
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Provision for Income Taxes

12 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Provision for Income Taxes

The significant components of provision for income taxes from continuing operations are summarized as follows for the years ending September 30, 2023 and 2022 (in thousands):


	2023		2022
Current expense	$	3,823	$	7,351
Deferred expense	(4,464)		424
Income tax (benefit) expense	$	(641)	$	7,775


	2023		2022
Income taxes at the federal statutory rate	$	187	$	6,523
State taxes, net	(536)		1,158
Other permanent items	(292)		94
Income tax (benefit) expense	$	(641)	$	7,775

An analysis of the Company's deferred tax assets and liabilities at September 30, 2023 and 2022 is as follows (in thousands):


	2023		2022
Deferred tax assets:
Net operating loss carry forwards, net	$	855	$	296
Stock based compensation	708		668
Accrued compensation	2,094		2,108
Capitalized transaction costs	973		—
Right of use asset/liability	1,669		—
Interest limitation	2,601		—
Total deferred tax assets	$	8,900	$	3,072
Less: valuation allowance	(847)		(262)
Total deferred tax assets, net	$	8,053	$	2,810
Deferred tax liabilities:
Depreciation on fixed assets	(418)		(458)
Amortization on identified intangibles and goodwill	(4,050)		(3,375)
Accrued expenses	(515)		(407)
Right of use liability	—		(104)
Total deferred tax liabilities	$	(4,983)	$	(4,344)
Net deferred tax assets (liabilities)	$	3,070	$	(1,534)

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
-Section S99
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Stock-based Compensation and Equity Grants - Stock Options Fair Value Assumptions (Details) - Stock Options - $ / shares			12 Months Ended
	Jan. 26, 2023	Aug. 01, 2022	Sep. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (Years)			10 years
Fair Value Assumption One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Strike price (in dollars per share)	$ 11.66
Stock price (in dollars per share)	11.66
Vesting threshold price (in dollars per share)	$ 15.00
Expected term (Years)	10 years
Calculated fair value (in dollars per share)	$ 7.41
Fair Value Assumption Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Strike price (in dollars per share)		$ 11.08
Stock price (in dollars per share)		11.08
Vesting threshold price (in dollars per share)		$ 14.25
Expected term (Years)		10 years
Calculated fair value (in dollars per share)		$ 7.41
Fair Value Assumption Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Strike price (in dollars per share)		11.08
Stock price (in dollars per share)		11.08
Vesting threshold price (in dollars per share)		$ 16.50
Expected term (Years)		10 years
Calculated fair value (in dollars per share)		$ 7.41

Supporting Financial Information - Accounts Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Billed receivables	$ 38,577	$ 32,814
Contract assets	20,542	7,682
Allowance for doubtful accounts	0	0
Accounts receivable	$ 59,119	$ 40,496

New Accounting Pronouncements	12 Months Ended
New Accounting Pronouncements	Sep. 30, 2023
Accounting Changes and Error Corrections [Abstract]
New Accounting Pronouncements	New Accounting Pronouncements In March 2020 and January 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and ASU No. 2021-01, “Reference Rate Reform (Topic 848): Scope,” respectively (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In December 2022, FASB issued ASU 2022-06 "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848" which defers the end date for electing the relief provided in Topic 848 from December 31, 2022 to December 31, 2024. In the first quarter of fiscal 2023, the Company adopted the optional expedients and exceptions provided in Topic 848. The adoption did not have a material impact on the Company’s consolidated financial statements. DLH adopted the standard in fiscal year 2023 by virtue of the loan modification on December 8, 2022 that converted the basis of the interest rate from LIBOR to Secured Overnight Financing Rate ("SOFR"). DLH had no other contracts or offerings that used LIBOR as a basis for rates.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 375,872	$ 395,173
Prime Contractor
Disaggregation of Revenue [Line Items]
Revenue	356,792	366,571
Subcontractor
Disaggregation of Revenue [Line Items]
Revenue	19,080	28,602
Time and Materials
Disaggregation of Revenue [Line Items]
Revenue	209,951	308,944
Cost Reimbursable
Disaggregation of Revenue [Line Items]
Revenue	81,797	46,231
Firm Fixed Price
Disaggregation of Revenue [Line Items]
Revenue	84,124	39,998
Department of Health and Human Services \| Revenue Concentration \| Customer Concentration
Disaggregation of Revenue [Line Items]
Revenue	161,311	102,201
Department of Veterans Affairs \| Revenue Concentration \| Customer Concentration
Disaggregation of Revenue [Line Items]
Revenue	138,862	126,106
Department of Defense \| Revenue Concentration \| Customer Concentration
Disaggregation of Revenue [Line Items]
Revenue	70,325	33,612
Department of Homeland Security \| Revenue Concentration \| Customer Concentration
Disaggregation of Revenue [Line Items]
Revenue	919	126,576
Other \| Revenue Concentration \| Customer Concentration
Disaggregation of Revenue [Line Items]
Revenue	$ 4,455	$ 6,678

Credit Facilities - Summary of Loan Facilities and Subordinated Debt Financing (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Debt Instrument [Line Items]
Loan Balance	$ 179,359
SOFR
Debt Instrument [Line Items]
Debt instrument, interest rate, effective percentage	5.30%
Secured revolving line of credit
Debt Instrument [Line Items]
Loan Balance	$ 9,546	$ 0
Secured Debt
Debt Instrument [Line Items]
Loan Balance	169,813	22,000
Secured Debt \| Term loan
Debt Instrument [Line Items]
Loan Balance	$ 169,800	$ 22,000
Secured Debt \| Term loan \| SOFR
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	4.10%
Secured Debt \| Term loan \| LIBOR 1
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		2.50%
Secured Debt \| Secured revolving line of credit
Debt Instrument [Line Items]
Loan Balance	$ 9,500	$ 0
Secured Debt \| Secured revolving line of credit \| SOFR
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	4.10%
Secured Debt \| Secured revolving line of credit \| LIBOR 1
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		2.50%
Debt instrument, interest rate, effective percentage		2.52%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Cover - USD ($)	12 Months Ended
Cover - USD ($)	Sep. 30, 2023	Dec. 04, 2023	Mar. 31, 2023
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Sep. 30, 2023
Current Fiscal Year End Date	--09-30
Document Transition Report	false
Entity File Number	0-18492
Entity Registrant Name	DLH HOLDINGS CORP.
Entity Incorporation, State or Country Code	NJ
Entity Tax Identification Number	22-1899798
Entity Address, Address Line One	3565 Piedmont Road,
Entity Address, Address Line Two	Building 3,
Entity Address, Address Line Three	Suite 700
Entity Address, City or Town	Atlanta,
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30305
City Area Code	770
Local Phone Number	554-3545
Title of 12(b) Security	Common Stock
Trading Symbol	DLHC
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 91,396,871
Entity Common Stock, Shares Outstanding		14,067,732
Documents Incorporated by Reference	Part III of this report incorporates information by reference from the Company's definitive proxy statement, which proxy statement is due to be filed with the Securities and Exchange Commission not later than 120 days after September 30, 2023.
Entity Central Index Key	0000785557
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY

Employee Benefit Plans (Details) - USD ($) $ in Millions	12 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Millions	Sep. 30, 2023	Sep. 30, 2022
Retirement Benefits [Abstract]
Defined contribution plan, recorded expense	$ 2.6	$ 2.2
Defined contribution plan, matching contributions period	4 years

Stock-based Compensation and Equity Grants (Tables)

12 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Stock-based Compensation Expense


	2023		2022
DLH employees (a)	$	1,204	$	1,960
Non-employee directors (b)	718		648
Stock option expense	$	1,922	$	2,608

Volatility

50%

Grant Date

Performance Vesting Base

Performance Vesting Criteria

(Years)

Calculated Fair Value

January 27, 2023

Revenue

Revenue increase at the end of the performance period as compared to the year ended September 30, 2022

3.51

January 27, 2023

Stock price

Stock price is at least $33.21 per share average for the 30 days prior to the end of the performance period

2.92

Notes: Results based on 100,000 simulations

Unrecognized stock-based compensation expense

Unrecognized stock-based compensation expense is presented in the table below for the years ending September 30, 2023 and 2022 (in thousands):


	2023		2022
Unrecognized expense for DLH employees (a)	$	7,107	$	5,214

Unrecognized expense	$	7,107	$	5,214

(a): On a weighted average basis, this expense is expected to be recognized within the next 4.20 years.

Schedule of Stock Option Activity

A summary of the Company's stock option awards is as follows:


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
	(in thousands)			(in years)	(in thousands)
Outstanding, September 30, 2022	2,392	$	7.05	5.4	$	13,566
Granted (a)	470	11.57		—	—
Exercised	(393)	3.42		—	—
Cancelled	(191)	9.54		—	—
Outstanding, September 30, 2023	2,278	$	8.40	5.8	$	8,693
Vested and exercisable, September 30, 2023	1,608	$	6.43	4.3	$	8,648

Schedule of Stock Options, Valuation Assumptions


					Vesting		Expected
	Strike		Stock		Threshold		Term	Calculated
Grant Date	Price		Price		Price		(Years)	Fair Value
January 26, 2023	$	11.66	$	11.66	$	15.00	10	$	7.41
August 31, 2023	$	11.08	$	11.08	$	14.25	10	$	7.41
August 31, 2023	$	11.08	$	11.08	$	16.50	10	$	7.41
Note: Results based on 100,000 simulations

Schedule of Stock Option Shares Outstanding, Vested and Expected to Vest

Stock options shares outstanding, vested and unvested for the years ended September 30, 2023 and 2022 (in thousands):


	Number of Shares
	2023	2022
Vested and exercisable	1,608	2,117
Unvested (a)	670	275
Options outstanding	2,278	2,392

(a): Certain awards vest upon satisfaction of certain performance criteria.

Leases - Narrative (Details) $ in Thousands	12 Months Ended
Leases - Narrative (Details) $ in Thousands	Sep. 30, 2023 USD ($) sublease sublease_option	Sep. 30, 2022 USD ($)
Leases [Abstract]
Impairment loss of long-lived asset \| $	$ 7,673	$ 0
Number of subleased facilities \| sublease	1
Sublease term	5 years
Number of sublease extension options \| sublease_option	2
Sublease option extension period	1 year
Weighted-average remaining lease term	6 years 3 months 18 days
Weighted-average discount rate	6.30%

Related Party Transactions	12 Months Ended
Related Party Transactions	Sep. 30, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions The Company has determined that for the years ended September 30, 2023 and 2022 and through the filing date of this report, there were no significant related party transactions that have occurred which require disclosure through the date that these consolidated financial statements were issued.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
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-Paragraph 5
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-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 2
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-Publisher FASB
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

Significant Accounting Policies (Policies)	12 Months Ended
Significant Accounting Policies (Policies)	Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of DLH Holdings Corp. and its subsidiaries ("DLH" or the "Company" and also referred to as "we," "us," and "our"), all of which are wholly-owned. All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and with the instructions to Form 10-K, Regulation S-X, and Regulation S-K.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The most significant of these estimates and assumptions relate to costs including overhead and its allocation, assessing fair value of acquired assets and liabilities accounted for through business acquisitions, valuing and determining the amortization periods for long-lived intangible assets, interest rate swaps, stock-based compensation, right-of-use assets and leases liabilities, and loss development on workers' compensation claims. We evaluate these estimates and judgments on an ongoing basis and base our estimates on historical experience, current and expected future outcomes, third-party evaluations, and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. We revise material accounting estimates if changes occur, such as more experience is acquired, additional information is obtained, or there is new information on which an estimate was or can be based. Actual results could differ from those estimates.
Revenue	Revenue The Company's revenues from contracts with customers are derived from offerings that include technology-enabled business process outsourcing, program management solutions, and public health research and analytics, substantially within the U.S. government and its agencies. The Company has various types of contracts including time-and-materials contracts, cost-reimbursable contracts, and firm-fixed-price contracts. We consider a contract with a customer to exist when there is a commitment by both parties (customer and Company), payment terms are determinable, there is commercial substance, and collectability is probably in accordance with Accounting Standards Codification ("ASC") No. 606, "Revenue from Contracts with Customers" ("Topic 606"). We recognize revenue over time when there is a continuous transfer of control to our customer as performance obligations are satisfied. For our U.S. government contracts, this continuous transfer of control to the customer is transferred over time and revenue is recognized based on the extent of progress toward completion of the performance obligation. We consider control to transfer when we have a right to payment. In some instances, the Company commences providing services prior to formal approval to begin work from the customer. The Company considers these factors, the risks associated with commencing work, and legal enforceability in determining whether a contract exists under Topic 606. Contract modification can occur throughout the life of the contract and can affect the transaction price, extend the period of performance, adjust funding, or create new performance obligations. We review each modification to assess the impact of these contract changes to determine if it should be treated as part of the original performance obligation or as a separate contract. Contract modifications impact performance obligations when the modification either creates new or changes the existing enforceable rights and obligations. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue and profit cumulatively. Furthermore, a significant change in one or more estimates could affect the profitability of our contracts. We recognize adjustments in estimated profit on contracts in the period identified. For service contracts, we satisfy our performance obligations as services are rendered. We use cost-based input and time-based output methods to measure progress based on the contract type. •Time and material - We bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced as the amount corresponds directly to the value of our performance to date. Revenue is recognized to the extent of billable rates times hours delivered plus materials and other reimbursable costs incurred. •Cost reimbursable - We record reimbursable costs as incurred, including an estimated share of the contractual fee earned. •Firm fixed price - We recognize revenue over time using a straight-line measure of progress. Contract costs generally include direct costs such as labor, materials, subcontract costs, and indirect costs identifiable with or allocable to a specific contract. Costs are expensed as incurred and include an estimate of the contractual fees earned. Contract costs incurred for U.S. government contracts, including indirect costs, are subject to audit and adjustment by various government audit agencies. Historically, our adjustments have not been material. Contract assets - Amounts are invoiced as work progresses in accordance with agreed-upon contractual terms. In part, revenue recognition occurs before we have the right to bill, resulting in contract assets. These contract assets are reported within Accounts receivable, net on our consolidated balance sheets and are invoiced in accordance with payment terms defined in each contract. Period end balances will vary from period to period due to agreed-upon contractual terms. Contract liabilities - Amounts are a result of billings in excess of costs incurred or prepayment for services to be rendered. Disaggregation of revenue from contracts with customers We disaggregate our revenue from contracts with customers by customer, contract type, as well as whether the Company acts as prime contractor or subcontractor. We believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, contract assets, contract liabilities, accrued expenses, and accounts payable approximate fair value due to the short-term nature of these instruments. The fair values of the Company's debt instruments approximate fair value because the underlying interest rates approximate market rates that the Company could obtain for similar instruments at the balance sheet dates.
Long Lived Assets	Long-lived Assets Our long-lived assets include equipment and improvements, intangible assets, right-of-use assets, and goodwill. The Company continues to review its long-lived assets for possible impairment or loss of value at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. Equipment and improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives (3 to 7 years) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Intangible assets (other than goodwill) are originally recorded at fair value and are amortized on a straight-line basis over their estimated useful lives of 10 years. Maintenance and repair costs are expensed as incurred.
Leases	Right-of-use assets are measured at the present value of future minimum lease payments, including all probable renewals, plus lease payments made to the lessor before or at lease commencement and indirect costs paid, less incentives received. Our right-of-use assets include long-term leases for facilities and equipment and are amortized over their respective lease terms. Our right-of-use-assets are recognized as the present value of the future minimum lease payments over the lease term less unamortized lease incentives and the balance remaining in deferred rent liability under ASC 840. Lease Liabilities The Company has leases for facilities and office equipment. Our lease liabilities are recognized as the present value of the future minimum lease payments over the lease term. Our lease payments consist of fixed and in-substance fixed amounts attributable to the use of the underlying asset over the lease term. Variable lease payments that do not depend on an index rate or are not in-substance fixed payments are excluded in the measurement of right-of-use assets and lease liabilities and are expensed in the period incurred. The incremental borrowing rate on our secured term loan is used in determining the present value of future minimum lease payments. Some of our lease agreements include options to extend the lease term or terminate the lease. These options are accounted for in our right-of-use assets and lease liabilities when it is reasonably certain that the Company will extend the lease term or terminate the lease. The Company does not have any finance leases.
Goodwill	Goodwill At September 30, 2023, we performed an internal goodwill impairment evaluation on the year-end carrying value of approximately $138.2 million. We performed a qualitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted at September 30, 2023, as no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill. Notwithstanding this evaluation, factors including non-renewal of a major contract or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to future periods’ results of operations.
Provision for Income Taxes	Provision for Income Taxes The Company accounts for income taxes in accordance with the asset and liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance sheet when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is more-likely-than-not that the position will be sustained upon examination.
Share-based Compensation and Compensation Expense	Stock-based Compensation The Company uses the fair value-based method for stock-based equity compensation. Options issued are designated as either an incentive stock or a non-statutory stock option. No option may be granted with a term of more than 10 years from the date of grant. Option awards may depend on the achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued common shares. All awards to employees and non-employees are recorded at fair value on the date of the grant and expensed over the period of vesting. The Company uses the Monte Carlo method to estimate the fair value of each stock option at the date of grant. Any consideration paid by the option holders to purchase shares is credited to capital stock. Stock-based Compensation Expense Stock-based Compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The stock-based compensation expense for that portion of awards has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. For options that vest based on the Company’s common stock achieving and maintaining defined market prices, the Company values the awards with a Monte Carlo method that utilizes various probability factors and other criterion in establishing fair value of the grant. The related stock-based compensation expense is recognized over the service period. Stock based compensation is reliant on continued employment with the Company. These arrangements are forfeited upon employee separation and accounted for as they occur.
Cash and Cash Equivalents and Receivables	Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. We maintain cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Deposits held with financial institutions may exceed the $250,000 limit. Receivables Receivables include amounts billed and currently due from customers where the right to consideration is unconditional and amounts unbilled. Both billed and unbilled amounts are non-interest bearing, unsecured, and recognized at an estimated realizable value that include costs and fees, and are generally expected to be billed and received within a single year. We evaluate our receivables for expected credit losses and estimate expected credit losses if appropriate based on customers collections. No allowance for doubtful accounts was deemed necessary at either September 30, 2023 or September 30, 2022.
Earnings per Share	Earnings Per Share Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common stock outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method.
Treasury Stock and Preferred Stock	Treasury Stock The Company periodically purchases its own common stock that is traded on public markets as part of announced stock repurchase programs. The repurchased common stock is classified as treasury stock on the consolidated balance sheets and held at cost. As of September 30, 2023 and 2022, the Company did not hold any treasury stock. Preferred Stock Our certificate of incorporation authorizes the issuance of "blank check" preferred stock with such designations, rights and preferences as may be determined from time to time by our board of directors up to an aggregate of 5,000,000 shares of preferred stock. As of September 30, 2023 and 2022, the Company has not issued any preferred stock.
Interest Rate Swap	Interest Rate Swap The Company uses derivative financial instruments to manage interest rate risk associated with its variable debt. The Company's objective in using these interest rate derivatives is to manage its exposure to interest rate movements and reduce volatility of interest expense. The gains and losses due to changes in the fair value of the interest rate swap agreements completely offset changes in the fair value of the hedged portion of the underlying debt. Offsetting changes in fair value of both the interest rate swaps and the hedged portion of the underlying debt are recognized in interest expense in the consolidated statements of operations. The Company does not hold or issue any derivative instrument for trading or speculative purposes.
Risks & Uncertainties	Risks & Uncertainties Management evaluates the impact of global markets and economic factors on our industry and the potential for adverse effects on the Company's consolidated financial position and its operations. As of September 30, 2023, there was no indication of any global or economic impacts to our industry.
New Accounting Pronouncements	New Accounting Pronouncements In March 2020 and January 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and ASU No. 2021-01, “Reference Rate Reform (Topic 848): Scope,” respectively (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In December 2022, FASB issued ASU 2022-06 "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848" which defers the end date for electing the relief provided in Topic 848 from December 31, 2022 to December 31, 2024. In the first quarter of fiscal 2023, the Company adopted the optional expedients and exceptions provided in Topic 848. The adoption did not have a material impact on the Company’s consolidated financial statements. DLH adopted the standard in fiscal year 2023 by virtue of the loan modification on December 8, 2022 that converted the basis of the interest rate from LIBOR to Secured Overnight Financing Rate ("SOFR"). DLH had no other contracts or offerings that used LIBOR as a basis for rates.

Leases - Lease Costs (Details) - USD ($) $ in Thousands	12 Months Ended
Leases - Lease Costs (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating Lease, Cost	$ 3,911	$ 3,548
Short-term	287	114
Variable	95	120
Sublease Income	(282)	(258)
Lease costs	$ 4,011	$ 3,524

Supporting Financial Information - Equipment and Improvements, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Furniture and equipment	$ 1,790	$ 893
Computer equipment and software	6,479	6,723
Leasehold improvements	1,614	1,614
Total equipment and improvements	9,883	9,230
Less: accumulated depreciation and amortization	(8,293)	(7,526)
Equipment and improvements, net	1,590	1,704
Depreciation	$ 800	$ 1,100

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Numerator:
Net income	$ 1,461	$ 23,288
Denominator:
Denominator for basic net income per share - weighted-average outstanding shares (in shares)	13,704	12,830
Effect of dilutive securities:
Stock options and restricted stock (in shares)	727	1,349
Denominator for diluted net income per share - weighted-average outstanding shares (in shares)	14,431	14,179
Net income per share - basic (in dollars per share)	$ 0.11	$ 1.82
Net income per share - diluted (in dollars per share)	$ 0.10	$ 1.64

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

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-Topic 250
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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

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+ Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Current assets:
Cash	$ 215	$ 228
Accounts receivable	59,119	40,496
Other current assets	3,067	2,878
Total current assets	62,401	43,602
Goodwill	138,161	65,643
Intangible assets, net	124,777	40,884
Operating lease right-of-use assets	9,656	16,851
Deferred taxes, net	3,070	0
Equipment and improvements, net	1,590	1,704
Other long-term assets	186	328
Total assets	339,841	169,012
Current liabilities:
Accounts payable and accrued liabilities	29,704	26,862
Debt obligations - current, net of deferred financing costs	17,188	0
Accrued payroll	13,794	9,444
Operating lease liabilities - current	3,463	2,235
Other current liabilities	638	0
Total current liabilities	64,787	38,541
Long-term liabilities:
Debt obligations - long-term, net of deferred financing costs	155,147	20,416
Operating lease liabilities - long-term	15,908	16,461
Deferred taxes, net	0	1,534
Other long-term liabilities	1,560	0
Total long-term liabilities	172,615	38,411
Total liabilities	237,402	76,952
Shareholders' equity:
Common stock, $0.001 par value; authorized 40,000 shares; issued and outstanding 13,950 and 13,047 at September 30, 2023 and 2022, respectively	14	13
Additional paid-in capital	99,974	91,057
Retained earnings	2,451	990
Total shareholders’ equity	102,439	92,060
Total liabilities and shareholders' equity	$ 339,841	$ 169,012

Provision for Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income taxes at the federal statutory rate	$ 187	$ 6,523
State taxes, net	(536)	1,158
Other permanent items	(292)	94
Income tax (benefit) expense	$ (641)	$ 7,775

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details