XML 26 R16.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Business Combinations | 6 Months Ended
--- | ---
Mar. 31, 2017
Business Combinations [Abstract] |
Business Combinations | Business Combinations: Acquisition of Danya International, LLC On May 3, 2016, the Company acquired 100% of the equity interests of Dayna International, LLC for a purchase price of $38.75 million. The acquisition was financed through a combination of:
• | borrowings of $30.0 million under the Company’s senior credit facility,
• | cash on hand of approximately $3.75 million,
• | 670,242 restricted shares of DLH common stock, valued at $2.5 million based on the 20 day volume-weighted average price (VWAP) of DLH stock, or $3.73 per share, and
• | $2.5 million pursuant to a subordinated loan arrangement with the Company’s largest stockholder.
As of March 31, 2017 the Seller beneficially owns approximately 6.0% of the Company’s outstanding shares. The acquisition of Danya International is consistent with the Company’s growth strategy, which calls for the development of new customers and service offerings both organically and through mergers and acquisitions. We used the acquisition method of accounting for this transaction, whereby the assets acquired and liabilities assumed are recognized based upon their estimated fair values at the acquisition date. The total base purchase price for Danya was $38.75 million, with adjustments as necessary based on a finalized working capital calculation compared to the target prescribed in the acquisition agreement as amended. A $0.47 million working capital adjustment to the purchase price was finalized in December 2016, and the final $0.25 million payment made to the seller. As of December 31, 2016 the Company completed it valuation of the transaction and finalized the adjustments to the estimated values recognized at September 30, 2016. Therefore the Company recognized an increase to the fair value of intangibles in the amount of $9.0 million with a corresponding decrease to goodwill. Additionally, the change to the estimated amounts resulted in a decrease in amortization of $.3 million in the quarter ended December 31, 2016. The change was based on the final valuation which calculated the value for each type of intangible asset. See Note 4 for further presentation. We allocated total acquisition consideration and the finalized allocation of fair value to the related assets and liabilities as follows:
(Amounts in thousands) |  |
Cash |  | $ | 36,720 |
Common stock, fair value |  | 2,500 |
Total Consideration |  | $ | 39,220 |
(Amounts in thousands) |  |
Net assets acquired |  |
Cash and cash equivalents |  | $ | 4,009 |
Accounts receivable |  | 5,712 |
Other current assets |  | 444 |
Total current assets |  | 10,165 |
Accounts payable and accrued expenses |  | (5,013 | )
Payroll liabilities |  | (1,432 | )
Net working capital surplus |  | 3,720 |
Property and equipment, net |  | 403 |
Intangible assets: |  |
Customer relationships |  | 16,626 |
Covenant not to compete |  | 480 |
Trade name |  | 517 |
Other long term assets |  | 81 |
Net identifiable assets acquired |  | 18,107 |
Goodwill |  | 17,393 |
Net assets acquired |  | $ | 39,220 |
During the six months ended March 31, 2017, Danya contributed approximately $20.5 million of revenue and $1.2 million income from operations. The following table presents certain results for the three and six months ended March 31, 2017 and 2016 as though the acquisition of Danya had occurred on October 1, 2015. The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of our results if the acquisition had taken place on that date. The pro forma results presented below include amortization charges for acquired intangible assets and adjustments to interest expense incurred and exclude related acquisition expenses.
|  | (in thousands) |  | (in thousands)
|  | Three Months Ended |  | Six Months Ended
|  | March 31, |  | March 31,
Pro forma results |  | 2017 |  |  | 2016 |  |  | 2017 |  |  | 2016 |
Revenue |  | $ | 29,905 |  |  | $ | 28,987 |  |  | $ | 56,016 |  |  | $ | 57,495 |
Net income |  | $ | 979 |  |  | $ | 821 |  |  | $ | 1,303 |  |  | $ | 426 |
Number of shares outstanding - basic |  | 11,249 |  |  | 11,098 |  |  | 11,225 |  |  | 11,023 |
Number of shares outstanding - diluted |  | 12,745 |  |  | 12,047 |  |  | 12,713 |  |  | 11,921 |
Basic earnings per share |  | $ | 0.09 |  |  | $0.07 |  | $0.12 |  | $0.04
Diluted earnings per share |  | $ | 0.08 |  |  | $0.07 |  | $0.10 |  | $0.04

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1497-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1490-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1392-128463 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1486-128463 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4845-128472 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1524-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4922-128472 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4934-128472 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4926-128472 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=73530397&loc=SL65897772-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1383-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration