0000785557-21-000026 | 10-K | XBRL Viewer

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Cover - USD ($)	12 Months Ended
Cover - USD ($)	Sep. 30, 2021	Dec. 03, 2021	Mar. 31, 2021
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Sep. 30, 2021
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	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float			$ 54,418,928
Entity Common Stock, Shares Outstanding		12,714,269
Documents Incorporated by Reference	List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (e) under the Securities Act of 1933. 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, 2021.
Current Fiscal Year End Date	--09-30
Entity Central Index Key	0000785557
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	FY

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Income Statement [Abstract]
Revenue	$ 246,094	$ 209,185
Contract costs	194,614	163,596
General and administrative costs	25,054	24,195
Corporate development costs	1,088	930
Depreciation and amortization	8,115	7,003
Total operating costs	228,871	195,724
Income from operations	17,223	13,461
Interest expense, net	3,784	3,441
Income before income taxes	13,439	10,020
Income tax expense	3,294	2,906
Net income	$ 10,145	$ 7,114
Earnings Per Share [Abstract]
Net income per share - basic (in dollars per share)	$ 0.81	$ 0.58
Net income per share - diluted (in dollars per share)	$ 0.75	$ 0.54
Weighted average common shares outstanding
Basic (in shares)	12,549	12,282
Diluted (in shares)	13,597	13,105

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Current assets:
Cash and cash equivalents	$ 24,051	$ 1,357
Accounts receivable	33,447	32,541
Other current assets	4,265	3,499
Total current assets	61,763	37,397
Equipment and improvements, net	1,912	3,339
Operating lease right-of-use assets	19,919	22,427
Deferred taxes, net	0	37
Goodwill	65,643	67,144
Intangible assets, net	47,469	52,612
Other long-term assets	464	606
Total assets	197,170	183,562
Current liabilities:
Debt obligations - current, net of deferred financing costs	0	6,727
Operating lease liabilities - current	2,261	2,045
Accrued payroll	9,125	10,611
Deferred revenue	22,273	0
Accounts payable, accrued expenses, and other current liabilities	32,717	28,578
Total current liabilities	66,376	47,961
Deferred taxes, net	1,176	0
Operating lease liabilities - long-term	19,374	21,620
Long-term portion of bank debt obligations, net of deferred financing costs	44,636	60,544
Total long-term liabilities	65,186	82,164
Total liabilities	131,562	130,125
SHAREHOLDERS’ EQUITY
Common stock, $0.001 par value; authorized 40,000 shares; issued and outstanding 12,714 and 12,404 at September 30, 2021 and 2020, respectively	13	12
Additional paid-in capital	87,893	85,868
Accumulated deficit	(22,298)	(32,443)
Total shareholders’ equity	65,608	53,437
Total liabilities and shareholders' equity	$ 197,170	$ 183,562

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2021	Sep. 30, 2020
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)	12,714	12,714
Common stock, outstanding shares (in shares)	12,404	12,404

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Operating activities
Net income	$ 10,145	$ 7,114
Depreciation and amortization	8,115	7,003
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred financing costs charged to interest expense	792	721
Stock based compensation expense	1,660	910
Deferred taxes, net	1,213	2,308
Gain from lease modification	0	(121)
Changes in operating assets and liabilities
Accounts receivable	(906)	(5,408)
Other current assets	(766)	(1,592)
Accrued payroll	(1,486)	489
Deferred revenue	22,273	0
Accounts payable, accrued expenses, and other current liabilities	4,139	7,188
Other long-term assets and liabilities	486	839
Net cash provided by operating activities	45,665	19,451
Investing activities
Business acquisition, net of cash acquired	59	(32,678)
Purchase of equipment and improvements	(103)	(152)
Net cash used in investing activities	(44)	(32,830)
Financing activities
Proceeds from debt obligations	0	33,000
Repayment of debt obligations	(23,250)	(19,000)
Repurchase of common stock	0	(211)
Payment of deferred financing costs	(43)	(898)
Proceeds from stock option exercise	366	55
Net cash (used in)/provided by financing activities	(22,927)	12,946
Net change in cash and cash equivalents	22,694	(433)
Cash and cash equivalents at beginning of year	1,357	1,790
Cash and cash equivalents at end of year	24,051	1,357
Supplemental disclosures of cash flow information
Cash paid during the year for interest	2,941	2,806
Cash paid during the year for income taxes	936	917
Supplemental disclosures of non-cash activity
Non-cash cancellation of common stock	$ 68	$ 211

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Cumulative-effect adjustment for adoption of ASC 842	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Deficit Cumulative-effect adjustment for adoption of ASC 842
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201602Member
Beginning Balance (shares) at Sep. 30, 2019			12,036	0
Beginning Balance at Sep. 30, 2019	$ 45,571	$ (2)	$ 12	$ 0	$ 85,114	$ (39,555)	$ (2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Expense related to director restricted stock unit (shares)			90
Expense related to director restricted stock units	347				347
Expense related to employee stock options	563				563
Exercise of stock options (shares)			395
Exercise of stock options	55				55
Repurchases of common stock (in shares)				28
Repurchases of common stock	(113)			$ (113)
Cancellation of common stock (in shares)			(117)	(28)
Cancellation of common stock	(98)			$ 113	(211)
Net income	$ 7,114					7,114
Ending Balance (shares) at Sep. 30, 2020	12,404		12,404	0
Ending Balance at Sep. 30, 2020	$ 53,437		$ 12	$ 0	85,868	(32,443)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Expense related to director restricted stock unit (shares)			141
Expense related to director restricted stock units	467				467
Expense related to employee stock options	$ 1,193				1,193
Exercise of stock options (shares)	175		175
Exercise of stock options	$ 434		$ 1		433
Repurchases of common stock	0
Cancellation of common stock (in shares)			(6)
Cancellation of common stock	(68)				(68)
Net income	$ 10,145					10,145
Ending Balance (shares) at Sep. 30, 2021	12,404		12,714	0
Ending Balance at Sep. 30, 2021	$ 65,608		$ 13	$ 0	$ 87,893	$ (22,298)

Basis of Presentation	12 Months Ended
Basis of Presentation	Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements include the accounts of DLH Holdings Corp. and its subsidiaries (together with 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 Overview

12 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Overview

The Company is a full-service provider of technology-enabled health and human services, providing solutions to three market focus areas: Defense and Veterans' Health Solutions, Human Solutions and Services, and Public Health and Life Sciences. We deliver domain-specific expertise, industry best-practices and innovations to customers across these markets leveraging seven core competencies: secure data analytics, clinical trials and laboratory services, case management, performance evaluation, system modernization, operational logistics and readiness, and strategic digital communications. The Company manages its operations from its principal executive offices in Atlanta, Georgia, and we have a complementary headquarters office in Silver Spring, Maryland. We employ over 2,300 skilled employees working in more than 30 locations throughout the United States and one location overseas.

At present, the Company derives 99% of its revenue from agencies of the Federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors. A major customer is defined as a customer from whom the Company derives at least 10% of its revenues. Our three largest customers are the Department of Veteran Affairs ("VA"), the Department of Health and Human Services ("HHS"), and the Department of Defense ("DoD").

The following table summarizes the revenues by customer for the years ended September 30, 2021 and 2020, respectively:


	Year Ended
	September 30,
	2021				2020
(Amounts in thousands)	Revenue		Percent of total revenue		Revenue		Percent of total revenue
Department of Veterans Affairs	$	110,078	45	%	$	100,204	48	%
Department of Health and Human Services	91,543		37	%	95,026		45	%
Department of Defense	30,930		13	%	1,303		1	%
Customers with less than 10% share of total revenue	13,543		5	%	12,652		6	%
Total revenue	$	246,094	100	%	$	209,185	100	%

New Accounting Pronouncements	12 Months Ended
New Accounting Pronouncements	Sep. 30, 2021
Accounting Changes and Error Corrections [Abstract]
New Accounting Pronouncements	New Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which requires companies to record an allowance for expected credit losses over the contractual term of certain financial assets, including short-term trade receivables and contract assets. Additionally, it expands disclosure requirements for credit quality of financial assets. ASU 2016-13 became effective for the Company in the first quarter of fiscal year 2021. The adoption of this standard did not have a material impact on our operating results, financial position, or cash flows. For further detail of our outstanding receivables see Note 7. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions for the application of U.S. GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") and other references rates expected to be discontinued due to reference rate reform. ASU 2020-04 became effective on March 12, 2020 for all entities meeting certain criteria. The Company may elect to apply the amendments using a prospective approach through December 31, 2022. The Company is currently assessing the impact of electing this standard on its consolidated financial statements and related disclosures and does not expect the impact to be material. In April 2020, the FASB issued a Staff Q&A, Topic 842 and 840: Accounting For Lease Concessions Related to the Effects of the COVID-19 Pandemic in order to provide clarity regarding the accounting treatment for lease concessions provided as a result of COVID-19. Under existing lease guidance, changes to certain lease terms not specified in the original lease agreement require modification accounting treatment. To provide relief, the FASB Staff Q&A permits alternatives to modification accounting under Topic 842. For concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or our obligations as the lessee, we are not required to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the lease agreement and can elect to apply or not apply the lease modification guidance in Topic 842. In fiscal year 2021, we elected to account for lease concessions received for one of our operating leases as a resolution of a contingency, whereby we remeasured our lease liability and recorded the adjustment against the right-of-use asset, without reassessing lease classification or modifying the original discount rate. As a result of this election, our lease liability and right-of-use-asset decreased by less than $0.1 million. In August 2020, the FASB issued ASU 2020-06, which amends the measurement and disclosure of convertible instruments, contracts in an entity's own equity, and EPS guidance. The guidance can be adopted using a modified retrospective method or a fully retrospective method. The amendments are effective for fiscal years beginning after December 15, 2021 for public entities, excluding those that are smaller reporting companies. For all other entities the amendments are effective for fiscal years beginning after December 15, 2023. The Company does not expect the update to have a material impact on its consolidated financial statements and related disclosures

- 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.

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+ Details

Significant Accounting Policies	12 Months Ended
Significant Accounting Policies	Sep. 30, 2021
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation of goodwill and intangible assets, interest rate swaps, stock-based compensation, right-of-use assets and liabilities, valuation allowances established against accounts receivable and deferred tax assets, and measurement of 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. In particular, a material reduction in the fair value of goodwill would have a material adverse effect on the Company’s financial position and results of operations. We account for the effect of a change in accounting estimate during the period in which the change occurs. Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, contract assets, 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. Goodwill At September 30, 2021, we performed a goodwill impairment evaluation on the year-end carrying value of approximately $65.6 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, 2021, as no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill. Our assessment incorporated effects of the COVID-19 pandemic, which is not expected to have a meaningful impact on our financial results. 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, 2020. Income Taxes The Company accounts for income taxes in accordance with the 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 asset 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, 2021 and 2020. We report interest and penalties as a component of income tax expense. For the years ended September 30, 2021 and 2020, we recognized no interest and no penalties related to income taxes. Stock-based Equity 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 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 a binomial and Black Scholes option pricing model 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. 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. 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, 2021, 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, 2021, 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 continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position and the results of its operations, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Revenue Recognition

12 Months Ended

Sep. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue Recognition

We recognize revenue over time when there is a continuous transfer of control to our customer. For our U.S. government contracts, this continuous transfer of control to the customer is supported by clauses in the contract that allow the U.S. government to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. When control is transferred over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. For services contracts, we satisfy our performance obligations as services are rendered. We use cost-based input and time-based output methods to measure progress.

Contract costs include labor, material and allocable indirect expenses. For time-and-material contracts, we bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced since the amount corresponds directly to the value of our performance to date. We consider control to transfer when we have a present right to payment. Essentially, all of our contracts satisfy their performance obligations over time. Contracts are often modified to account for changes in contract specifications and requirements. 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 time-and-materials contracts, revenue is recognized to the extent of billable rates times hours delivered plus materials and other reimbursable costs incurred. Revenue for cost-reimbursable contracts is recorded as reimbursable costs are incurred, including an estimated share of the applicable contractual fees earned. For firm-fixed-price contracts, the consideration received for our performance is set at a predetermined price. Revenue for our firm-fixed-price contracts is recognized over time using a straight-line measure of progress or using the percentage-of-completion method whereby progress toward completion is based on a comparison of actual costs incurred to total estimated costs to be incurred over the contract term. Contract costs are expensed as incurred. Estimated losses are recognized when identified.

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 receivables, 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.

The following table summarizes the contract balances recognized within the Company's consolidated balance sheets (in thousands):



		September 30,		September 30,
	Ref	2021		2020

Contract assets		$	7,307	$	7,943
Contract liabilities	(a)	$	22,473	$	200

Ref (a): The increase in contract liabilities is primarily due to contract start up funding provided under a contract awarded at the end of the fiscal year.

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 present our revenue disaggregated by these categories:

Revenue by customer (in thousands):



	Year Ended
	September 30,
	2021		2020
Department of Veterans Affairs	$	110,078	$	100,204
Department of Health and Human Services	91,543		95,026
Department of Defense	30,930		1,303
Other	13,543		12,652
Total Revenue	$	246,094	$	209,185

Revenue by contract type (in thousands):



	Year Ended
	September 30,
	2021		2020
Time and Materials	$	185,656	$	147,509
Cost Reimbursable	48,101		58,091
Firm Fixed Price	12,337		3,585
Total Revenue	$	246,094	$	209,185

Revenue by whether the Company acts as a prime contractor or a subcontractor (in thousands):



	Year Ended
	September 30,
	2021		2020
Prime Contractor	$	215,241	$	193,448
Subcontractor	30,853		15,737
Total Revenue	$	246,094	$	209,185

- 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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

Leases

12 Months Ended

Sep. 30, 2021

Leases [Abstract]

Leases

We have 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 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. 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 credit facility 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, 2021, operating leases for facilities and equipment have remaining lease terms of 1.2 to 9.5 years.

The following table summarizes lease balances on our consolidated balance sheet at September 30, 2021 and 2020 (in thousands):


	September 30,		September 30,
	2021		2020
Operating lease right-of-use assets	$	19,919	$	22,427

Operating lease liabilities, current	$	2,261	$	2,045
Operating lease liabilities, long-term	19,374		21,620
Total operating lease liabilities	$	21,635	$	23,665

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 ends June 2025. The sublease includes two additional 1 year term extension options.

For the years ended September 30, 2021 and 2020, total lease costs for our operating leases are as follows (in thousands):



	Year Ended
	September 30,
	2021		2020
Operating	$	3,653	$	4,236
Short-term	103		155
Variable	81		63
Sublease income	(302)		(271)
Total lease costs	$	3,535	$	4,183

At September 30, 2021, the weighted-average remaining lease term and weighted-average discount rate are 8.3 years and 6.0%, respectively. The calculation of the weighted-average discount rate was determined based on borrowing terms from our senior credit facility.

Other information related to our leases is as follows (in thousands):



	Year Ended
	September 30,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities	$	3,306	$	3,586
New lease liabilities, net of new right-of-use-assets	$	—	$	229
Lease liabilities arising from obtaining right-of-use-assets	$	—	$	7,822

The Company's future minimum lease payments as of September 30, 2021 are as follows:


For the Fiscal Year Ending September 30,	(in thousands)
2022	$	3,501
2023	3,391
2024	3,251
2025	3,092
2026	3,193
Thereafter	11,491
Total future minimum lease payments	27,919
Less: imputed interest	(6,284)
Present value of future minimum lease payments	21,635
Less: current portion of operating lease liabilities	(2,261)
Long-term operating lease liabilities	$	19,374

Supporting Financial Information

12 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supporting Financial Information

Accounts receivable


		(in thousands)
		September 30,		September 30,
	Ref	2021		2020
Billed receivables		$	26,140	$	24,598
Contract assets		7,307		7,943
Total accounts receivable		33,447		32,541
Less: Allowance for doubtful accounts	(a)	—		—
Accounts receivable, net		$	33,447	$	32,541

Ref (a): Accounts receivable are non-interest bearing, unsecured and carried at net realizable value. We evaluate our receivables on a quarterly basis and determine whether an allowance is appropriate based on specific collection issues. No allowance for doubtful accounts was deemed necessary at either September 30, 2021 or September 30, 2020.

Other current assets


	(in thousands)
	September 30,		September 30,
	2021		2020
Prepaid insurance and benefits	$	655	$	665
Other receivables	995		1,363
Prepaid expenses	2,615		1,471
Other current assets	$	4,265	$	3,499

Equipment and improvements, net


		(in thousands)
		September 30,		September 30,
	Ref	2021		2020
Furniture and equipment		$	958	$	958
Computer equipment		1,262		1,171
Computer software		4,353		4,341
Leasehold improvements		1,595		1,595
Total equipment and improvements		8,168		8,065
Less accumulated depreciation and amortization		(6,256)		(4,726)
Equipment and improvements, net	(a)	$	1,912	$	3,339

Ref (a): Depreciation and amortization was $1.5 million and $2.2 million for the years ended September 30, 2021 and 2020, respectively.

Intangible assets, net


		(in thousands)
		September 30,		September 30,
	Ref	2021		2020
Intangible assets
Customer contracts and related customer relationships		$	62,281	$	45,600
Covenants-not-to-compete		522		480
Trade name		3,051		2,109
Acquired intangibles - IBA acquisition		—		16,223
Total intangible assets		65,854		64,412
Less accumulated amortization
Customer contracts and related customer relationships		(17,378)		(11,150)
Covenants-not-to-compete		(264)		(212)
Trade name		(743)		(438)

Total accumulated amortization		(18,385)		(11,800)
Intangible assets, net	(a)	$	47,469	$	52,612

Ref (a): Total amount of amortization expense for the years ended September 30, 2021 and 2020 was $6.6 million and $4.8 million, respectively.


Estimated amortization expense for future years:	(in thousands)

Fiscal 2022	$	6,585
Fiscal 2023	6,585
Fiscal 2024	6,585
Fiscal 2025	6,585
Fiscal 2026	5,851
Thereafter	15,278
Total amortization expense	$	47,469

Goodwill

The changes in the carrying amount of goodwill for the years ended September 30, 2021 and 2020 are as follows:


		(in thousands)
	Ref	Total


Balance at September 30, 2019		$	52,758
Preliminary increase from IBA acquisition		14,386
Balance at September 30, 2020		67,144
Total adjustments from IBA acquisition	(a)	(1,501)
Balance at September 30, 2021		$	65,643

Ref (a): The adjustments were determined based on third party valuations.

Accounts payable, accrued expenses, and other current liabilities


	(in thousands)
	September 30,		September 30,
	2021		2020
Accounts payable	$	16,684	$	14,645
Accrued benefits	2,916		2,833
Accrued bonus and incentive compensation	2,381		2,340
Accrued workers' compensation insurance	7,014		5,529
Other accrued expenses	3,722		3,231
Accounts payable, accrued expenses, and other current liabilities	$	32,717	$	28,578

Debt obligations


	(in thousands)
	September 30,		September 30,
	2021		2020

Bank term loan	$	46,750	$	70,000

Less: unamortized deferred financing costs	(2,114)		(2,729)
Net bank debt obligations	44,636		67,271
Less: current portion of bank debt obligations, net of deferred financing costs	—		(6,727)
Long-term portion of bank debt obligations, net of deferred financing costs	$	44,636	$	60,544

Interest expense


		(in thousands)
		Year Ended
		September 30,
	Ref	2021		2020
Interest expense	(a)	$	(2,992)	$	(2,841)
Amortization of deferred financing costs	(b)	(792)		(721)

Other income (expense), net	(c)	—		121

Interest expense, net		$	(3,784)	$	(3,441)

Ref (a): Interest expense on borrowing

Ref (b): Amortization of expenses related to term loan and revolving line of credit.

Ref (c): Gain on lease modification due to a lease amendment

Credit Facilities

12 Months Ended

Sep. 30, 2021

Cash and Cash Equivalents [Abstract]

Credit Facilities

A summary of our loan facility as of September 30, 2021 is as follows:

($ in Millions)

As of September 30, 2021

Lender

Arrangement

Loan Balance

Interest

Maturity Date

First National Bank of Pennsylvania

Secured term loan (a)

46.8

LIBOR* + 3.5%

09/30/25

First National Bank of Pennsylvania

Secured revolving line of credit (b)

—

LIBOR* + 3.5%

09/30/25

*LIBOR rate as of September 30, 2021 was 0.08%. As of September 30, 2020, our LIBOR rate is subject to a minimum floor of 0.5%. The floor affects interest payments for periods after September 30, 2020.

(a) Represents the principal amounts payable on our secured term loan. The $70.0 million secured term loan 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 September 30, 2025.

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 Funded Indebtedness to Adjusted EBITDA ratio not exceeding the ratio of 3.75:1.0 to 2.75:1.0 through maturity. Adjusted EBITDA 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-recurring charges, losses or expenses to include transaction and non-cash equity expense. The term loan has an interest rate spread range from 2.5% to 4.5% depending on the funded indebtedness to adjusted EBITDA ratio. We are in compliance with all loan covenants and restrictions.

We are required to pay quarterly amortization payments commencing in December 2020 through September 2025. The annual amount of principal amortization is based on a percentage of the loan balance at September 30, 2020. The annual amortization amounts are $7.0 million each for fiscal years 2021 and 2022 and $8.75 million each for fiscal years 2023 - 2025. The quarterly payments are in equal installments. During the year ended September 30, 2021, the Company made voluntary prepayments of $16.3 million, bringing the total amount paid on the secured loan term loan to $23.3 million. As of September 30, 2021, we have satisfied mandatory principal amortization until December 31, 2023.

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 2.50:1.0; (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 2.50:1.0 but greater than or equal to 1.5:1.0; 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 1.5:1.0. 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 11 Commitments and Contingencies.

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, 2021 is $22.8 million and matures in 2024. The notional amount was $28.8 million at the end prior fiscal year. The remaining outstanding balance of our term loan is subject to interest rate fluctuations and the minimum LIBOR floor. On the notional amount, the Company pays a base fixed rate of 1.61%, plus applicable credit spread. As a result, for the year ended September 30, 2021, interest expense increased by approximately $0.4 million.

(b) The secured revolving line of credit has a ceiling of up to $25.0 million. Borrowing on the line of credit is secured by liens on substantially all of the assets of the Company. The Company accessed funds from the revolving credit facility during the year, but has no outstanding balance at September 30, 2021.

The Company's total borrowing availability, based on eligible accounts receivables at September 30, 2021, was $25.0 million. As part of the revolving credit facility, the lenders agreed to a sublimit of $5 million for letters of credit for the account of the Company, subject to applicable procedures.

The revolving line of credit has a maturity date of September 30, 2025 and is subject to loan covenants as described above. The Company is fully compliant with those covenants.

Stock-based Compensation and Equity Grants

12 Months Ended

Sep. 30, 2021

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, 2021, there were 1.7 million shares available for grant.

Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our Consolidated Statements of Operations:


		(in thousands)
		Year Ended
	Ref	September 30,
		2021		2020
DLH employees	(a)	$	1,193	$	563
Non-employee directors	(b)	467		347
Total stock option expense		$	1,660	$	910

Ref (a): Included in this amount are equity grants of restricted stock units to Named Executive Officers ("NEO"), which were issued in accordance with the DLH long-term incentive compensation policy in this fiscal year, and stock option grants to NEO and non-NEO company employees. The restricted stock units totaled 147,431 restricted stock units issued and outstanding at September 30, 2021.

Ref (b): In the first quarter of fiscal 2021, we issued 63,177 restricted stock units to the Company's non-employee directors, all of which vested as of September 30, 2021. The shares of common stock underlying such restricted stock units were issued on September 30, 2021.

Unrecognized stock-based compensation expense


		(in thousands)
		Year Ended
		September 30,
	Ref	2021		2020
Unrecognized expense for DLH employees	(a)	$	4,468	$	2,633

Ref (a): 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 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 binomial model that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation expense is recognized over the derived

service period determined in the valuation. On a weighted average basis, this expense is expected to be recognized within the next 4.70 years.

Stock option activity for the year ended September 30, 2021:

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.


				(in years)
				Weighted
			Weighted	Average	(in thousands)
		(in thousands)	Average	Remaining	Aggregate
		Number of	Exercise	Contractual	Intrinsic
	Ref	Shares	Price	Term	Value



Options outstanding, September 30, 2020		2,129	$6.14	7.4	$	6,583
Granted	(a)	455	$10.47	—	—
Exercised		(175)	$2.48	—	—
Cancelled		(35)	$7.36	—	—
Options outstanding, September 30, 2021		2,374	$7.77	7.7	$	15,899

Ref (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, 2021,

as follows using the Monte Carlo method.


								Volatility
								50%
					Vesting		Expected
	Strike		Stock		Threshold		Term	Calculated
Grant Date	Price		Price		Price		(Years)	Fair Value




December 15, 2020	$	10.05	$	10.05	$	13.00	10	$	5.83
July 30, 2021	$	10.75	$	10.75	$	14.00	10	$	5.83
Notes:
Results based on 100,000 simulations

Stock options shares outstanding, vested and unvested for the years ended September 30, 2021 and 2020 (in thousands):



		Number of Shares
		September 30,
	Ref	2021	2020
Vested and exercisable	(a)	1,662	1,213
Unvested	(b)	712	916
Options outstanding		2,374	2,129

Ref (a): Weighted average exercise price of vested and exercisable shares was $3.91 and $2.25 at September 30, 2021 and 2020, respectively. Aggregate intrinsic value was approximately $13.9 and $6.1 million at September 30, 2021 and 2020, respectively. Weighted average contractual term remaining was 6.0 years and 4.6 years at September 30, 2021 and 2020, respectively.

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

Earnings Per Share

12 Months Ended

Sep. 30, 2021

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.


	(in thousands)
	Year Ended
	September 30,
	2021		2020
Numerator:
Net income	$	10,145	$	7,114
Denominator:
Denominator for basic net income per share - weighted-average outstanding shares	12,549		12,282
Effect of dilutive securities:
Stock options and restricted stock	1,048		823
Denominator for diluted net income per share - weighted-average outstanding shares	13,597		13,105
Net income per share - basic	$	0.81	$	0.58
Net income per share - diluted	$	0.75	$	0.54

Commitments and Contingencies

12 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Contractual Obligations as of September 30, 2021 (in thousands):


			Payments Due Per Fiscal Year

	Total		2022		2023		2024		2025		2026		Thereafter
Debt obligations	$	46,750	$	—	$	—	$	8,250	$	38,500	$	—	$	—
Facility leases	27,701		3,418		3,308		3,199		3,092		3,193		11,491
Equipment operating leases	218		83		83		52		—		—		—
Total contractual obligations	$	74,669	$	3,501	$	3,391	$	11,501	$	41,592	$	3,193	$	11,491

Workers' Compensation

We accrue workers' compensation expense based on claims submitted, applying actuarial loss development factors to estimate the costs incurred but not yet recorded. Our accrued liability for claims development as of September 30, 2021 and September 30, 2020 was approximately $7.0 million and $5.5 million, respectively.

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.

Related Party Transactions	12 Months Ended
Related Party Transactions	Sep. 30, 2021
Related Party Transactions [Abstract]
Related Party Transactions	Related Party TransactionsThe Company has determined that for the years ended September 30, 2021 and 2020 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.

Income Taxes

12 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

The significant components of income tax expense for income taxes from continuing operations are summarized as follows (in thousands):


	Year Ended
	September 30,
	2021		2020
Current expense	$	2,081	$	598
Deferred expense	1,213		2,308
Total expense	$	3,294	$	2,906

The following table indicates the significant differences between our income taxes at the federal statutory rate and the Company's effective tax rate for continuing operations (in thousands):


	Year Ended
	September 30,
	2021		2020
Federal statutory rate	$	2,822	$	2,104
State taxes, net	376		554
Other permanent items	96		160
Deferred tax estimate adjustment	—		88

Total	$	3,294	$	2,906

An analysis of the Company's deferred tax assets and liabilities is as follows (in thousands):


	Year Ended
	September 30,
	2021		2020
Deferred income tax assets:
Net operating loss carry forwards, net	$	29	$	1,554

Stock based compensation	508		140
Accrued expenses	1,944		1,698
Other items, net	—		258
Total deferred tax asset	2,481		3,650
Deferred tax liability:
Equipment and intangible assets	(3,507)		(3,613)
Right of use liability	(150)		—
Total deferred tax liability	(3,657)		(3,613)
Net deferred tax (liability)/asset	$	(1,176)	$	37

- 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 + Details

Quarterly Financial Data (Unaudited)

12 Months Ended

Sep. 30, 2021

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited)

A summary of quarterly information is as follows (in thousands, except per share data)


		2021 Quarters
	Ref	First		Second		Third		Fourth
Revenue	(a)	$	57,852	$	61,506	$	61,555	$	65,182

Income from operations		3,635		4,620		4,939		4,030
Interest expense, net		(1,080)		(1,004)		(893)		(808)
Income before income taxes		2,555		3,616		4,046		3,222
Income tax expense		741		1,049		1,166		339
Net income		$	1,814	$	2,567	$	2,880	$	2,883
Earnings per share:
Basic		$	0.15	$	0.20	$	0.23	$	0.23
Diluted		$	0.13	$	0.19	$	0.21	$	0.21


	2020 Quarters
	First		Second		Third		Fourth
Revenue	$	52,238	$	54,798	$	51,459	$	50,691

Income from operations	3,126		3,837		3,800		2,698
Interest expense, net	(941)		(906)		(813)		(781)
Income before income taxes	2,185		2,931		2,987		1,917
Income tax expense	634		855		863		554
Net income	$	1,551	$	2,076	$	2,124	$	1,363
Earnings per share:
Basic	$	0.13	$	0.17	$	0.17	$	0.11
Diluted	$	0.12	$	0.16	$	0.16	$	0.10

Ref (a): Given its closing on the final day of fiscal year 2020, IBA has no impact to fiscal 2020 quarterly results and is fully included in each of the quarters of fiscal 2021.

Employee Benefit Plans	12 Months Ended
Employee Benefit Plans	Sep. 30, 2021
Retirement Benefits [Abstract]
Employee Benefits Plans	Employee Benefit PlansAs of September 30, 2021, the Company and its subsidiaries maintain 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 $1.5 million in fiscal 2021 and $1.2 million in fiscal year 2020. The increase was primarily due to headcount growth from the IBA acquisition. Participants are always fully vested in their elective contributions and vests in Company matching contributions over a four year period.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Subsequent Events	12 Months Ended
Subsequent Events	Sep. 30, 2021
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsManagement 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.

Significant Accounting Policies (Policies)	12 Months Ended
Significant Accounting Policies (Policies)	Sep. 30, 2021
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements include the accounts of DLH Holdings Corp. and its subsidiaries (together with 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.
New Accounting Pronouncements	New Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which requires companies to record an allowance for expected credit losses over the contractual term of certain financial assets, including short-term trade receivables and contract assets. Additionally, it expands disclosure requirements for credit quality of financial assets. ASU 2016-13 became effective for the Company in the first quarter of fiscal year 2021. The adoption of this standard did not have a material impact on our operating results, financial position, or cash flows. For further detail of our outstanding receivables see Note 7. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions for the application of U.S. GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") and other references rates expected to be discontinued due to reference rate reform. ASU 2020-04 became effective on March 12, 2020 for all entities meeting certain criteria. The Company may elect to apply the amendments using a prospective approach through December 31, 2022. The Company is currently assessing the impact of electing this standard on its consolidated financial statements and related disclosures and does not expect the impact to be material. In April 2020, the FASB issued a Staff Q&A, Topic 842 and 840: Accounting For Lease Concessions Related to the Effects of the COVID-19 Pandemic in order to provide clarity regarding the accounting treatment for lease concessions provided as a result of COVID-19. Under existing lease guidance, changes to certain lease terms not specified in the original lease agreement require modification accounting treatment. To provide relief, the FASB Staff Q&A permits alternatives to modification accounting under Topic 842. For concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or our obligations as the lessee, we are not required to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the lease agreement and can elect to apply or not apply the lease modification guidance in Topic 842. In fiscal year 2021, we elected to account for lease concessions received for one of our operating leases as a resolution of a contingency, whereby we remeasured our lease liability and recorded the adjustment against the right-of-use asset, without reassessing lease classification or modifying the original discount rate. As a result of this election, our lease liability and right-of-use-asset decreased by less than $0.1 million. In August 2020, the FASB issued ASU 2020-06, which amends the measurement and disclosure of convertible instruments, contracts in an entity's own equity, and EPS guidance. The guidance can be adopted using a modified retrospective method or a fully retrospective method. The amendments are effective for fiscal years beginning after December 15, 2021 for public entities, excluding those that are smaller reporting companies. For all other entities the amendments are effective for fiscal years beginning after December 15, 2023. The Company does not expect the update to have a material impact on its consolidated financial statements and related disclosures.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation of goodwill and intangible assets, interest rate swaps, stock-based compensation, right-of-use assets and liabilities, valuation allowances established against accounts receivable and deferred tax assets, and measurement of 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. In particular, a material reduction in the fair value of goodwill would have a material adverse effect on the Company’s financial position and results of operations. We account for the effect of a change in accounting estimate during the period in which the change occurs.
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, 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. 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.
Income Taxes	Income Taxes The Company accounts for income taxes in accordance with the 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 asset 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 Equity Compensation	Stock-based Equity 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 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 a binomial and Black Scholes option pricing model 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.
Cash and Cash Equivalents	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.
Earnings per Share	Earnings per ShareBasic 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, 2021, 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, 2021, 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.
Revenue Recognition	Revenue Recognition We recognize revenue over time when there is a continuous transfer of control to our customer. For our U.S. government contracts, this continuous transfer of control to the customer is supported by clauses in the contract that allow the U.S. government to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. When control is transferred over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. For services contracts, we satisfy our performance obligations as services are rendered. We use cost-based input and time-based output methods to measure progress. Contract costs include labor, material and allocable indirect expenses. For time-and-material contracts, we bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced since the amount corresponds directly to the value of our performance to date. We consider control to transfer when we have a present right to payment. Essentially, all of our contracts satisfy their performance obligations over time. Contracts are often modified to account for changes in contract specifications and requirements. 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 time-and-materials contracts, revenue is recognized to the extent of billable rates times hours delivered plus materials and other reimbursable costs incurred. Revenue for cost-reimbursable contracts is recorded as reimbursable costs are incurred, including an estimated share of the applicable contractual fees earned. For firm-fixed-price contracts, the consideration received for our performance is set at a predetermined price. Revenue for our firm-fixed-price contracts is recognized over time using a straight-line measure of progress or using the percentage-of-completion method whereby progress toward completion is based on a comparison of actual costs incurred to total estimated costs to be incurred over the contract term. Contract costs are expensed as incurred. Estimated losses are recognized when identified. 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 receivables, 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. 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.

Business Overview (Tables)

12 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedules of Revenues by Customer

The following table summarizes the revenues by customer for the years ended September 30, 2021 and 2020, respectively:


	Year Ended
	September 30,
	2021				2020
(Amounts in thousands)	Revenue		Percent of total revenue		Revenue		Percent of total revenue
Department of Veterans Affairs	$	110,078	45	%	$	100,204	48	%
Department of Health and Human Services	91,543		37	%	95,026		45	%
Department of Defense	30,930		13	%	1,303		1	%
Customers with less than 10% share of total revenue	13,543		5	%	12,652		6	%
Total revenue	$	246,094	100	%	$	209,185	100	%

Revenue Recognition (Tables)

12 Months Ended

Sep. 30, 2021

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 (in thousands):



		September 30,		September 30,
	Ref	2021		2020

Contract assets		$	7,307	$	7,943
Contract liabilities	(a)	$	22,473	$	200

Ref (a): The increase in contract liabilities is primarily due to contract start up funding provided under a contract awarded at the end of the fiscal year.

Schedule of Disaggregation of Revenue From Contracts with Customers

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

Revenue by customer (in thousands):



	Year Ended
	September 30,
	2021		2020
Department of Veterans Affairs	$	110,078	$	100,204
Department of Health and Human Services	91,543		95,026
Department of Defense	30,930		1,303
Other	13,543		12,652
Total Revenue	$	246,094	$	209,185

Revenue by contract type (in thousands):



	Year Ended
	September 30,
	2021		2020
Time and Materials	$	185,656	$	147,509
Cost Reimbursable	48,101		58,091
Firm Fixed Price	12,337		3,585
Total Revenue	$	246,094	$	209,185

Revenue by whether the Company acts as a prime contractor or a subcontractor (in thousands):



	Year Ended
	September 30,
	2021		2020
Prime Contractor	$	215,241	$	193,448
Subcontractor	30,853		15,737
Total Revenue	$	246,094	$	209,185

Leases (Tables)

12 Months Ended

Sep. 30, 2021

Leases [Abstract]

Schedule of Summarized Lease Balances in Consolidated Balance Sheet

The following table summarizes lease balances on our consolidated balance sheet at September 30, 2021 and 2020 (in thousands):


	September 30,		September 30,
	2021		2020
Operating lease right-of-use assets	$	19,919	$	22,427

Operating lease liabilities, current	$	2,261	$	2,045
Operating lease liabilities, long-term	19,374		21,620
Total operating lease liabilities	$	21,635	$	23,665

Schedule of Lease Costs and Other Information Related to Leases

For the years ended September 30, 2021 and 2020, total lease costs for our operating leases are as follows (in thousands):



	Year Ended
	September 30,
	2021		2020
Operating	$	3,653	$	4,236
Short-term	103		155
Variable	81		63
Sublease income	(302)		(271)
Total lease costs	$	3,535	$	4,183

Other information related to our leases is as follows (in thousands):



	Year Ended
	September 30,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities	$	3,306	$	3,586
New lease liabilities, net of new right-of-use-assets	$	—	$	229
Lease liabilities arising from obtaining right-of-use-assets	$	—	$	7,822

Schedule of Company's Future Lease Payments

The Company's future minimum lease payments as of September 30, 2021 are as follows:


For the Fiscal Year Ending September 30,	(in thousands)
2022	$	3,501
2023	3,391
2024	3,251
2025	3,092
2026	3,193
Thereafter	11,491
Total future minimum lease payments	27,919
Less: imputed interest	(6,284)
Present value of future minimum lease payments	21,635
Less: current portion of operating lease liabilities	(2,261)
Long-term operating lease liabilities	$	19,374

Supporting Financial Information (Tables)

12 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Accounts Receivable

Accounts receivable


		(in thousands)
		September 30,		September 30,
	Ref	2021		2020
Billed receivables		$	26,140	$	24,598
Contract assets		7,307		7,943
Total accounts receivable		33,447		32,541
Less: Allowance for doubtful accounts	(a)	—		—
Accounts receivable, net		$	33,447	$	32,541

Schedule of Other Current Assets

Other current assets


	(in thousands)
	September 30,		September 30,
	2021		2020
Prepaid insurance and benefits	$	655	$	665
Other receivables	995		1,363
Prepaid expenses	2,615		1,471
Other current assets	$	4,265	$	3,499

Schedule of Equipment and Improvements, Net

Equipment and improvements, net


		(in thousands)
		September 30,		September 30,
	Ref	2021		2020
Furniture and equipment		$	958	$	958
Computer equipment		1,262		1,171
Computer software		4,353		4,341
Leasehold improvements		1,595		1,595
Total equipment and improvements		8,168		8,065
Less accumulated depreciation and amortization		(6,256)		(4,726)
Equipment and improvements, net	(a)	$	1,912	$	3,339

Ref (a): Depreciation and amortization was $1.5 million and $2.2 million for the years ended September 30, 2021 and 2020, respectively.

Schedule of Intangible Assets, Net

Intangible assets, net


		(in thousands)
		September 30,		September 30,
	Ref	2021		2020
Intangible assets
Customer contracts and related customer relationships		$	62,281	$	45,600
Covenants-not-to-compete		522		480
Trade name		3,051		2,109
Acquired intangibles - IBA acquisition		—		16,223
Total intangible assets		65,854		64,412
Less accumulated amortization
Customer contracts and related customer relationships		(17,378)		(11,150)
Covenants-not-to-compete		(264)		(212)
Trade name		(743)		(438)

Total accumulated amortization		(18,385)		(11,800)
Intangible assets, net	(a)	$	47,469	$	52,612

Ref (a): Total amount of amortization expense for the years ended September 30, 2021 and 2020 was $6.6 million and $4.8 million, respectively.

Schedule of Estimated Future Amortization Expense of Finite-lived Intangibles


Estimated amortization expense for future years:	(in thousands)

Fiscal 2022	$	6,585
Fiscal 2023	6,585
Fiscal 2024	6,585
Fiscal 2025	6,585
Fiscal 2026	5,851
Thereafter	15,278
Total amortization expense	$	47,469

Schedule of Goodwill

The changes in the carrying amount of goodwill for the years ended September 30, 2021 and 2020 are as follows:


		(in thousands)
	Ref	Total


Balance at September 30, 2019		$	52,758
Preliminary increase from IBA acquisition		14,386
Balance at September 30, 2020		67,144
Total adjustments from IBA acquisition	(a)	(1,501)
Balance at September 30, 2021		$	65,643

Ref (a): The adjustments were determined based on third party valuations.

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

Accounts payable, accrued expenses, and other current liabilities


	(in thousands)
	September 30,		September 30,
	2021		2020
Accounts payable	$	16,684	$	14,645
Accrued benefits	2,916		2,833
Accrued bonus and incentive compensation	2,381		2,340
Accrued workers' compensation insurance	7,014		5,529
Other accrued expenses	3,722		3,231
Accounts payable, accrued expenses, and other current liabilities	$	32,717	$	28,578

Schedule of Debt Obligations

Debt obligations


	(in thousands)
	September 30,		September 30,
	2021		2020

Bank term loan	$	46,750	$	70,000

Less: unamortized deferred financing costs	(2,114)		(2,729)
Net bank debt obligations	44,636		67,271
Less: current portion of bank debt obligations, net of deferred financing costs	—		(6,727)
Long-term portion of bank debt obligations, net of deferred financing costs	$	44,636	$	60,544

Schedule of Interest Expense

Interest expense


		(in thousands)
		Year Ended
		September 30,
	Ref	2021		2020
Interest expense	(a)	$	(2,992)	$	(2,841)
Amortization of deferred financing costs	(b)	(792)		(721)

Other income (expense), net	(c)	—		121

Interest expense, net		$	(3,784)	$	(3,441)

Ref (a): Interest expense on borrowing

Ref (b): Amortization of expenses related to term loan and revolving line of credit.

Ref (c): Gain on lease modification due to a lease amendment

Credit Facilities (Tables)

12 Months Ended

Sep. 30, 2021

Cash and Cash Equivalents [Abstract]

Schedule of Loan Facilities and Subordinated Debt Financing

A summary of our loan facility as of September 30, 2021 is as follows:

($ in Millions)

As of September 30, 2021

Lender

Arrangement

Loan Balance

Interest

Maturity Date

First National Bank of Pennsylvania

Secured term loan (a)

46.8

LIBOR* + 3.5%

09/30/25

First National Bank of Pennsylvania

Secured revolving line of credit (b)

—

LIBOR* + 3.5%

09/30/25

Stock-based Compensation and Equity Grants (Tables)

12 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Schedule of Stock-based Compensation Expense

Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our Consolidated Statements of Operations:


		(in thousands)
		Year Ended
	Ref	September 30,
		2021		2020
DLH employees	(a)	$	1,193	$	563
Non-employee directors	(b)	467		347
Total stock option expense		$	1,660	$	910

Unrecognized stock-based compensation expense


		(in thousands)
		Year Ended
		September 30,
	Ref	2021		2020
Unrecognized expense for DLH employees	(a)	$	4,468	$	2,633

service period determined in the valuation. On a weighted average basis, this expense is expected to be recognized within the next 4.70 years.

Schedule of Stock Option Activity


				(in years)
				Weighted
			Weighted	Average	(in thousands)
		(in thousands)	Average	Remaining	Aggregate
		Number of	Exercise	Contractual	Intrinsic
	Ref	Shares	Price	Term	Value



Options outstanding, September 30, 2020		2,129	$6.14	7.4	$	6,583
Granted	(a)	455	$10.47	—	—
Exercised		(175)	$2.48	—	—
Cancelled		(35)	$7.36	—	—
Options outstanding, September 30, 2021		2,374	$7.77	7.7	$	15,899

Ref (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, 2021,

as follows using the Monte Carlo method.

Schedule of Stock Options, Valuation Assumptions


								Volatility
								50%
					Vesting		Expected
	Strike		Stock		Threshold		Term	Calculated
Grant Date	Price		Price		Price		(Years)	Fair Value




December 15, 2020	$	10.05	$	10.05	$	13.00	10	$	5.83
July 30, 2021	$	10.75	$	10.75	$	14.00	10	$	5.83
Notes:
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, 2021 and 2020 (in thousands):



		Number of Shares
		September 30,
	Ref	2021	2020
Vested and exercisable	(a)	1,662	1,213
Unvested	(b)	712	916
Options outstanding		2,374	2,129

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

Earnings Per Share (Tables)

12 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Schedule of Diluted Earnings Per Share

Diluted earnings per share is calculated using the treasury stock method.


	(in thousands)
	Year Ended
	September 30,
	2021		2020
Numerator:
Net income	$	10,145	$	7,114
Denominator:
Denominator for basic net income per share - weighted-average outstanding shares	12,549		12,282
Effect of dilutive securities:
Stock options and restricted stock	1,048		823
Denominator for diluted net income per share - weighted-average outstanding shares	13,597		13,105
Net income per share - basic	$	0.81	$	0.58
Net income per share - diluted	$	0.75	$	0.54

Commitments and Contingencies (Tables)

12 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Schedule of Contractual Obligations

Contractual Obligations as of September 30, 2021 (in thousands):


			Payments Due Per Fiscal Year

	Total		2022		2023		2024		2025		2026		Thereafter
Debt obligations	$	46,750	$	—	$	—	$	8,250	$	38,500	$	—	$	—
Facility leases	27,701		3,418		3,308		3,199		3,092		3,193		11,491
Equipment operating leases	218		83		83		52		—		—		—
Total contractual obligations	$	74,669	$	3,501	$	3,391	$	11,501	$	41,592	$	3,193	$	11,491

Income Taxes (Tables)

12 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Schedule of Significant Components of the Expense From Continuing Operations

The significant components of income tax expense for income taxes from continuing operations are summarized as follows (in thousands):


	Year Ended
	September 30,
	2021		2020
Current expense	$	2,081	$	598
Deferred expense	1,213		2,308
Total expense	$	3,294	$	2,906

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

The following table indicates the significant differences between our income taxes at the federal statutory rate and the Company's effective tax rate for continuing operations (in thousands):


	Year Ended
	September 30,
	2021		2020
Federal statutory rate	$	2,822	$	2,104
State taxes, net	376		554
Other permanent items	96		160
Deferred tax estimate adjustment	—		88

Total	$	3,294	$	2,906

Schedule of Deferred Tax Assets and Liabilities

An analysis of the Company's deferred tax assets and liabilities is as follows (in thousands):


	Year Ended
	September 30,
	2021		2020
Deferred income tax assets:
Net operating loss carry forwards, net	$	29	$	1,554

Stock based compensation	508		140
Accrued expenses	1,944		1,698
Other items, net	—		258
Total deferred tax asset	2,481		3,650
Deferred tax liability:
Equipment and intangible assets	(3,507)		(3,613)
Right of use liability	(150)		—
Total deferred tax liability	(3,657)		(3,613)
Net deferred tax (liability)/asset	$	(1,176)	$	37

Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Sep. 30, 2021

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

A summary of quarterly information is as follows (in thousands, except per share data)


		2021 Quarters
	Ref	First		Second		Third		Fourth
Revenue	(a)	$	57,852	$	61,506	$	61,555	$	65,182

Income from operations		3,635		4,620		4,939		4,030
Interest expense, net		(1,080)		(1,004)		(893)		(808)
Income before income taxes		2,555		3,616		4,046		3,222
Income tax expense		741		1,049		1,166		339
Net income		$	1,814	$	2,567	$	2,880	$	2,883
Earnings per share:
Basic		$	0.15	$	0.20	$	0.23	$	0.23
Diluted		$	0.13	$	0.19	$	0.21	$	0.21


	2020 Quarters
	First		Second		Third		Fourth
Revenue	$	52,238	$	54,798	$	51,459	$	50,691

Income from operations	3,126		3,837		3,800		2,698
Interest expense, net	(941)		(906)		(813)		(781)
Income before income taxes	2,185		2,931		2,987		1,917
Income tax expense	634		855		863		554
Net income	$	1,551	$	2,076	$	2,124	$	1,363
Earnings per share:
Basic	$	0.13	$	0.17	$	0.17	$	0.11
Diluted	$	0.12	$	0.16	$	0.16	$	0.10

Ref (a): Given its closing on the final day of fiscal year 2020, IBA has no impact to fiscal 2020 quarterly results and is fully included in each of the quarters of fiscal 2021.

Business Overview - Narrative (Details)	12 Months Ended
Business Overview - Narrative (Details)	Sep. 30, 2021 employee business_area location customer	Sep. 30, 2020
Concentration Risk [Line Items]
Number of market focus areas \| business_area	3
Number of market core competencies \| business_area	7
Number of employees (over) \| employee	2,300
Number of largest customers \| customer	3
Customer Concentration \| Revenue Concentration
Concentration Risk [Line Items]
Percent of total revenue	100.00%	100.00%
Customer Concentration \| Revenue Concentration \| Federal Government
Concentration Risk [Line Items]
Percent of total revenue	99.00%
United States
Concentration Risk [Line Items]
Number of locations in which the entity operates (more than) \| location	30
Overseas
Concentration Risk [Line Items]
Number of locations in which the entity operates (more than) \| location	1

Business Overview - Revenues by Customer (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2021	Sep. 30, 2020
Concentration Risk [Line Items]
Revenue	$ 65,182	$ 61,555	$ 61,506	$ 57,852	$ 50,691	$ 51,459	$ 54,798	$ 52,238	$ 246,094	$ 209,185
Revenue Concentration \| Customer Concentration
Concentration Risk [Line Items]
Revenue									$ 246,094	$ 209,185
Percent of total revenue									100.00%	100.00%
Revenue Concentration \| Customer Concentration \| Department of Veterans Affairs
Concentration Risk [Line Items]
Revenue									$ 110,078	$ 100,204
Percent of total revenue									45.00%	48.00%
Revenue Concentration \| Customer Concentration \| Department of Health and Human Services
Concentration Risk [Line Items]
Revenue									$ 91,543	$ 95,026
Percent of total revenue									37.00%	45.00%
Revenue Concentration \| Customer Concentration \| Department of Defense
Concentration Risk [Line Items]
Revenue									$ 30,930	$ 1,303
Percent of total revenue									13.00%	1.00%
Revenue Concentration \| Customer Concentration \| Customers with less than 10% share of total revenue
Concentration Risk [Line Items]
Revenue									$ 13,543	$ 12,652
Percent of total revenue									5.00%	6.00%

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130543-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

New Accounting Pronouncements (Details) - COVID-19 $ in Millions	12 Months Ended
	Sep. 30, 2021 USD ($) lease_concesion
New Accounting Pronouncement, Early Adoption [Line Items]
Number of operating lease concessions \| lease_concesion	1
Decrease in operating lease liabilities due to lease concessions	$ 0.1
Decrease in operating right-of-use assets due to lease concessions	$ 0.1

Significant Accounting Policies (Details) - USD ($)	12 Months Ended
Significant Accounting Policies (Details) - USD ($)	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2019
Goodwill [Line Items]
Finite-lived intangibles estimated useful lives	10 years
Goodwill	$ 65,643,000	$ 67,144,000	$ 52,758,000
Goodwill impairment loss	0	0
Uncertain tax positions	0	0
Tax interest	0	0
Tax penalties	0	$ 0
FDIC insurance limit amount	$ 250,000
Treasury stock (shares)	0
Authorized shares of preferred stock (shares)	5,000,000
Issued preferred stock (shares)	0
Stock Options
Goodwill [Line Items]
Number of options authorized for issuance (in shares)	0
Expiration term of options	10 years
Minimum
Goodwill [Line Items]
Estimated useful lives of property and equipment	3 years
Maximum
Goodwill [Line Items]
Estimated useful lives of property and equipment	7 years

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Revenue from Contract with Customer [Abstract]
Contract assets	$ 7,307	$ 7,943
Contract liabilities	$ 22,473	$ 200

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2021	Sep. 30, 2020
Disaggregation of Revenue [Line Items]
Total Revenue	$ 65,182	$ 61,555	$ 61,506	$ 57,852	$ 50,691	$ 51,459	$ 54,798	$ 52,238	$ 246,094	$ 209,185
Prime Contractor
Disaggregation of Revenue [Line Items]
Total Revenue									215,241	193,448
Subcontractor
Disaggregation of Revenue [Line Items]
Total Revenue									30,853	15,737
Time and Materials
Disaggregation of Revenue [Line Items]
Total Revenue									185,656	147,509
Cost Reimbursable
Disaggregation of Revenue [Line Items]
Total Revenue									48,101	58,091
Firm Fixed Price
Disaggregation of Revenue [Line Items]
Total Revenue									$ 12,337	$ 3,585

- Definition

+ References

+ Details

Leases - Narrative (Details)	12 Months Ended
Leases - Narrative (Details)	Sep. 30, 2021 sublease sublease_option
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
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	8 years 3 months 18 days
Weighted-average discount rate	6.00%
Facilities and Equipment \| Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Remaining lease term	1 year 2 months 12 days
Facilities and Equipment \| Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Remaining lease term	9 years 6 months

Leases - Summary of Lease Balances in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Leases [Abstract]
Operating lease right-of-use assets	$ 19,919	$ 22,427
Operating lease liabilities, current	2,261	2,045
Operating lease liabilities - long-term	19,374	21,620
Total operating lease liabilities	$ 21,635	$ 23,665

Leases - Lease Costs (Details) - USD ($) $ in Thousands	12 Months Ended
Leases - Lease Costs (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Leases [Abstract]
Operating	$ 3,653	$ 4,236
Short-term	103	155
Variable	81	63
Sublease income	(302)	(271)
Total lease costs	$ 3,535	$ 4,183

Leases - Other Information Related to Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 3,306	$ 3,586
New lease liabilities, net of new right-of-use-assets	0	229
Lease liabilities arising from obtaining right-of-use-assets	$ 0	$ 7,822

Leases - Company's Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Leases [Abstract]
2022	$ 3,501
2023	3,391
2024	3,251
2025	3,092
2026	3,193
Thereafter	11,491
Total future minimum lease payments	27,919
Less: imputed interest	(6,284)
Present value of future minimum lease payments	21,635	$ 23,665
Less: current portion of operating lease liabilities	(2,261)	(2,045)
Long-term operating lease liabilities	$ 19,374	$ 21,620

Supporting Financial Information - Accounts Receivable (Details) - USD ($)	Sep. 30, 2021	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Billed receivables	$ 26,140,000	$ 24,598,000
Contract assets	7,307,000	7,943,000
Total accounts receivable	33,447,000	32,541,000
Less: Allowance for doubtful accounts	0	0
Accounts receivable, net	$ 33,447,000	$ 32,541,000

Supporting Financial Information - Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prepaid insurance and benefits	$ 655	$ 665
Other receivables	995	1,363
Prepaid expenses	2,615	1,471
Other current assets	$ 4,265	$ 3,499

Supporting Financial Information - Equipment and Improvements, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Furniture and equipment	$ 958	$ 958
Computer equipment	1,262	1,171
Computer software	4,353	4,341
Leasehold improvements	1,595	1,595
Total equipment and improvements	8,168	8,065
Less accumulated depreciation and amortization	(6,256)	(4,726)
Equipment and improvements, net	1,912	3,339
Depreciation	$ 1,500	$ 2,200

Supporting Financial Information - Intangible Assets, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 65,854	$ 64,412
Less accumulated amortization	(18,385)	(11,800)
Intangible assets, net	47,469	52,612
Amortization expense of intangibles	6,600	4,800
IBA
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	0	16,223
Customer contracts and related customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	62,281	45,600
Less accumulated amortization	(17,378)	(11,150)
Covenants-not-to-compete
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	522	480
Less accumulated amortization	(264)	(212)
Trade name
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	3,051	2,109
Less accumulated amortization	$ (743)	$ (438)

Supporting Financial Information - Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Fiscal 2022	$ 6,585
Fiscal 2023	6,585
Fiscal 2024	6,585
Fiscal 2025	6,585
Fiscal 2026	5,851
Thereafter	15,278
Intangible assets, net	$ 47,469	$ 52,612

Supporting Financial Information - Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Goodwill [Roll Forward]
Beginning balance	$ 67,144	$ 52,758
Preliminary increase from IBA acquisition		14,386
Total adjustments from IBA acquisition	(1,501)
Ending balance	$ 65,643	$ 67,144

Supporting Financial Information - Accounts Payable, Accrued Expense and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accounts payable	$ 16,684	$ 14,645
Accrued benefits	2,916	2,833
Accrued bonus and incentive compensation	2,381	2,340
Accrued workers' compensation insurance	7,014	5,529
Other accrued expenses	3,722	3,231
Accounts payable, accrued expenses, and other current liabilities	$ 32,717	$ 28,578

Supporting Financial Information - Debt Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Debt Instrument [Line Items]
Net bank debt obligations	$ 46,750
Less: current portion of bank debt obligations, net of deferred financing costs	0	$ (6,727)
Long-term portion of bank debt obligations, net of deferred financing costs	44,636	60,544
Secured Debt
Debt Instrument [Line Items]
Bank term loan	46,750	70,000
Less: unamortized deferred financing costs	(2,114)	(2,729)
Net bank debt obligations	44,636	67,271
Less: current portion of bank debt obligations, net of deferred financing costs	0	(6,727)
Long-term portion of bank debt obligations, net of deferred financing costs	$ 44,636	$ 60,544

Supporting Financial Information - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2021	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Interest expense									$ (2,992)	$ (2,841)
Amortization of deferred financing costs									(792)	(721)
Other income (expense), net									0	121
Interest expense, net	$ (808)	$ (893)	$ (1,004)	$ (1,080)	$ (781)	$ (813)	$ (906)	$ (941)	$ (3,784)	$ (3,441)

Credit Facilities - Summary of Loan Facilities and Subordinated Debt Financing (Details) - Secured Debt - USD ($)	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Debt Instrument [Line Items]
Loan Balance	$ 46,750,000	$ 70,000,000
Secured term loan
Debt Instrument [Line Items]
Loan Balance	$ 46,800,000
Secured term loan \| LIBOR
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	0.035%
Debt instrument, interest rate, effective percentage	0.08%
Debt instrument, floor percentage		0.50%
Secured revolving line of credit
Debt Instrument [Line Items]
Loan Balance	$ 0
Secured revolving line of credit \| LIBOR
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	0.035%
Debt instrument, interest rate, effective percentage	0.08%
Debt instrument, floor percentage		0.50%

Credit Facilities - Narrative (Details)	12 Months Ended
Credit Facilities - Narrative (Details)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)
Line of Credit Facility [Line Items]
Debt annual amortization amount fiscal year 2021	$ 0
Debt annual amortization amount fiscal year 2022	0
Debt annual amortization amount fiscal year 2023	8,250,000
Debt annual amortization fiscal year 2024	38,500,000
Debt annual amortization fiscal year 2025	0
Total repayments of debt	23,250,000	$ 19,000,000
Excess cash flow payment required	0
Interest Rate Swap
Line of Credit Facility [Line Items]
Notional amount of floating-to-fix interest rate swap	$ 22,800,000	28,800,000
Fixed interest rate applicable to swaps	1.61%
Increase in interest expense	$ 400,000
Secured Debt
Line of Credit Facility [Line Items]
Bank term loan	46,750,000	$ 70,000,000
Secured Debt \| Term loan
Line of Credit Facility [Line Items]
Secured term loan, face amount	$ 70,000,000
Fixed charge coverage ratio	1.25
Ratio of debt to EBITDA	2.75
Debt annual amortization amount fiscal year 2021	$ 7,000,000
Debt annual amortization amount fiscal year 2022	7,000,000
Debt annual amortization amount fiscal year 2023	8,750,000
Debt annual amortization fiscal year 2024	8,750,000
Debt annual amortization fiscal year 2025	8,750,000
Voluntary repayments of debt	16,300,000
Total repayments of debt	23,300,000
Bank term loan	$ 46,800,000
Secured Debt \| Term loan \| Maximum
Line of Credit Facility [Line Items]
Ratio of debt to EBITDA	3.75
Debt instrument, interest rate, effective percentage	4.50%
Secured Debt \| Term loan \| Minimum
Line of Credit Facility [Line Items]
Debt instrument, interest rate, effective percentage	2.50%
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 Flow Less Than 2.50 But Greater Than or Equal to 1.50 \| Maximum
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	1.5
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	1.5
Secured Debt \| Secured revolving line of credit
Line of Credit Facility [Line Items]
Line of credit ceiling	$ 25,000,000
Bank term loan	0
Remaining borrowing availability	25,000,000
Secured Debt \| Letters of credit
Line of Credit Facility [Line Items]
Remaining borrowing availability	$ 5,000,000

Stock-based Compensation and Equity Grants - Narrative (Details) - Stock Options	12 Months Ended
	Sep. 30, 2021 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options that may be granted with a term of more than 10 years from date of grant (in shares)	0
Expiration term of options	10 years
Number of shares available for grant (in shares)	1,700,000
2016 Omnibus Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options that may be granted with a term of more than 10 years from date of grant (in shares)	0
Expiration term of options	10 years

Stock-based Compensation and Equity Grants - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2020	Sep. 30, 2021	Sep. 30, 2020
Selling, General and Administrative Expenses
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense		$ 1,660	$ 910
DLH employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Unrecognized expense for DLH employees		$ 4,468	2,633
Weighted average period for recognition of compensation expense		4 years 8 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		$ 1,193	563
Non-employee directors \| Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units issued (in shares)	63,177
Number of restricted stocks vested in period (in shares)		63,177
Non-employee directors \| Selling, General and Administrative Expenses
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense		$ 467	$ 347
NEO \| Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units issued (in shares)		147,431
Number of restricted stock outstanding (in shares)		147,431

Stock-based Compensation and Equity Grants - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands			12 Months Ended
	Jul. 30, 2021	Dec. 15, 2020	Sep. 30, 2021	Sep. 30, 2020
Number of Shares
Outstanding at September 30, 2020 (in shares)			2,129
Granted (in shares)			455
Exercised (in shares)			(175)
Cancelled (in shares)			(35)
Outstanding at September 30, 2021 (in shares)			2,374	2,129
Weighted Average Exercise Price
Outstanding at September 30, 2020 (in dollars per share)			$ 6.14
Granted (in dollars per share)			10.47
Exercised (in dollars per share)			2.48
Cancelled (in dollars per share)			7.36
Outstanding at September 30, 2021 (in dollars per share)			$ 7.77	$ 6.14
Weighted Average Remaining Contractual Term (in years)
Outstanding at September 30, 2020			7 years 8 months 12 days	7 years 4 months 24 days
Outstanding at September 30, 2021			7 years 8 months 12 days	7 years 4 months 24 days
Aggregate Intrinsic Value
Outstanding at the September 30, 2020			$ 6,583
Options outstanding at September 30, 2021			$ 15,899	$ 6,583
Stock Options
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Volatility rate	50.00%	50.00%	50.00%
Term	10 years	10 years	10 years
Stock price threshold term			10 days

Stock-based Compensation and Equity Grants - Stock Options Fair Value Assumptions (Details) - Stock Options - $ / shares			12 Months Ended
	Jul. 30, 2021	Dec. 15, 2020	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	50.00%	50.00%	50.00%
Strike price (in dollars per share)	$ 10.75	$ 10.05
Stock price (in dollars per share)	10.75	10.05
Vesting threshold price (in dollars per share)	$ 14.00	$ 13.00
Expected term (Years)	10 years	10 years	10 years
Calculated fair value (in dollars per share)	$ 5.83	$ 5.83

Stock-based Compensation and Equity Grants - Stock Options Outstanding, Vested and Unvested (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Share-based Payment Arrangement [Abstract]
Vested and exercisable (in shares)	1,662	1,213
Unvested (in shares)	712	916
Options outstanding (in shares)	2,374	2,129
Weighted average exercise price of vested and exercisable shares (in dollars per share)	$ 3.91	$ 2.25
Aggregate intrinsic value of vested and exercisable shares	$ 13.9	$ 6.1
Weighted average contractual term remaining of vested and exercisable shares	6 years	4 years 7 months 6 days

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2021	Sep. 30, 2020
Numerator:
Net income	$ 2,883	$ 2,880	$ 2,567	$ 1,814	$ 1,363	$ 2,124	$ 2,076	$ 1,551	$ 10,145	$ 7,114
Denominator:
Denominator for basic net income per share - weighted-average outstanding shares (in shares)									12,549	12,282
Effect of dilutive securities:
Stock options and restricted stock (in shares)									1,048	823
Denominator for diluted net income per share - weighted-average outstanding shares (in shares)									13,597	13,105
Net income per share - basic (in dollars per share)	$ 0.23	$ 0.23	$ 0.20	$ 0.15	$ 0.11	$ 0.17	$ 0.17	$ 0.13	$ 0.81	$ 0.58
Net income per share - diluted (in dollars per share)	$ 0.21	$ 0.21	$ 0.19	$ 0.13	$ 0.10	$ 0.16	$ 0.16	$ 0.12	$ 0.75	$ 0.54

- Definition

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

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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.

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

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
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-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 55
-Paragraph 4K
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Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22658-107794

+ Details

Commitments and Contingencies - Contractual Obligations (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Maturity of Debt Obligations
Net bank debt obligations	$ 46,750
2022	0
2023	0
2024	8,250
2025	38,500
2026	0
Thereafter	0
Maturity Operating Leases
Total future minimum lease payments	27,919
2022	3,501
2023	3,391
2024	3,251
2025	3,092
2026	3,193
Thereafter	11,491
Maturity Total Contractual Obligations
Total contractual obligations	74,669
2022	3,501
2023	3,391
2024	11,501
2025	41,592
2026	3,193
Thereafter	11,491
Facility leases
Maturity Operating Leases
Total future minimum lease payments	27,701
2022	3,418
2023	3,308
2024	3,199
2025	3,092
2026	3,193
Thereafter	11,491
Equipment operating leases
Maturity Operating Leases
Total future minimum lease payments	218
2022	83
2023	83
2024	52
2025	0
2026	0
Thereafter	$ 0

Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2021	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Workers' compensation liability	$ 7.0	$ 5.5

Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2021	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Current expense									$ 2,081	$ 598
Deferred expense									1,213	2,308
Total expense	$ 339	$ 1,166	$ 1,049	$ 741	$ 554	$ 863	$ 855	$ 634	$ 3,294	$ 2,906

- Definition

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

+ References + Details

Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2021	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Federal statutory rate									$ 2,822	$ 2,104
State taxes, net									376	554
Other permanent items									96	160
Deferred tax estimate adjustment									0	88
Total expense	$ 339	$ 1,166	$ 1,049	$ 741	$ 554	$ 863	$ 855	$ 634	$ 3,294	$ 2,906

- Definition

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

+ References + Details

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Deferred income tax assets:
Net operating loss carry forwards, net	$ 29	$ 1,554
Stock based compensation	508	140
Accrued expenses	1,944	1,698
Other items, net	0	258
Total deferred tax asset	2,481	3,650
Deferred tax liability:
Equipment and intangible assets	(3,507)	(3,613)
Right of use liability	(150)	0
Total deferred tax liability	(3,657)	(3,613)
Net deferred tax (liability)	$ (1,176)
Net deferred tax asset		$ 37

Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2021	Sep. 30, 2020
Quarterly Financial Information Disclosure [Abstract]
Revenue	$ 65,182	$ 61,555	$ 61,506	$ 57,852	$ 50,691	$ 51,459	$ 54,798	$ 52,238	$ 246,094	$ 209,185
Income from operations	4,030	4,939	4,620	3,635	2,698	3,800	3,837	3,126	17,223	13,461
Interest expense, net	(808)	(893)	(1,004)	(1,080)	(781)	(813)	(906)	(941)	(3,784)	(3,441)
Income before income taxes	3,222	4,046	3,616	2,555	1,917	2,987	2,931	2,185	13,439	10,020
Income tax expense	339	1,166	1,049	741	554	863	855	634	3,294	2,906
Net income	$ 2,883	$ 2,880	$ 2,567	$ 1,814	$ 1,363	$ 2,124	$ 2,076	$ 1,551	$ 10,145	$ 7,114
Basic (in dollars per share)	$ 0.23	$ 0.23	$ 0.20	$ 0.15	$ 0.11	$ 0.17	$ 0.17	$ 0.13	$ 0.81	$ 0.58
Diluted (in dollars per share)	$ 0.21	$ 0.21	$ 0.19	$ 0.13	$ 0.10	$ 0.16	$ 0.16	$ 0.12	$ 0.75	$ 0.54

- Definition

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

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

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-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
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-Publisher FASB
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-Section S99
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-Name Accounting Standards Codification
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
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-Publisher FASB
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-Section S99
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+ Details

- Definition

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

+ References + Details

- Definition

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

Employee Benefit Plans (Details) - USD ($) $ in Thousands	12 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Retirement Benefits [Abstract]
Defined contribution plan, recorded expense	$ 1,500	$ 1,200
Defined contribution plan, matching contributions period	4 years