0001370450--01-012020Q2falseP1Ytruetrue2P10Dus-gaap:OperatingLeaseLiabilityCurrentus-gaap:OperatingLeaseLiabilityNoncurrentus-gaap:OperatingLeaseLiability0011497000120120000Accelerated Filer40000040000002000000001370450wldn:NotesPayableForIbmMemberwldn:IbmSoftwareAgreementsMember2017-12-302018-12-280001370450wldn:EnergySegmentMember2018-12-292019-12-270001370450wldn:OtherEnergyMember2018-12-292019-12-270001370450us-gaap:SubsequentEventMember2020-08-072020-08-070001370450wldn:ThirdAmendmentMember2020-05-062020-05-060001370450wldn:TermaLoanMemberwldn:BMOHarrisBankNationalAssociationMember2019-06-262019-06-260001370450wldn:NotesPayableForIbmMember2017-12-302018-12-280001370450srt:MaximumMemberwldn:E3Inc.Member2019-10-280001370450wldn:CreditAgreement2019Member2019-12-282020-07-030001370450wldn:DebtCovenantThresholdTrancheTwoMemberwldn:CreditAgreement2019Member2019-12-282020-07-030001370450wldn:DebtCovenantThresholdTrancheOneMemberwldn:CreditAgreement2019Member2019-12-282020-07-030001370450wldn:ThirdAmendmentMember2020-05-060001370450wldn:NotesPayableForIbmMemberwldn:IbmSoftwareAgreementsMember2020-07-030001370450wldn:UtilityCustomerAgreementMember2020-07-030001370450wldn:NotesPayableForIbmMemberwldn:IbmSoftwareAgreementsMember2019-12-270001370450wldn:UtilityCustomerAgreementMember2019-12-270001370450us-gaap:CommonStockMember2020-04-042020-07-030001370450us-gaap:CommonStockMember2019-03-302019-06-280001370450us-gaap:RetainedEarningsMember2020-07-030001370450us-gaap:AdditionalPaidInCapitalMember2020-07-030001370450us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-030001370450us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-07-030001370450us-gaap:RetainedEarningsMember2020-04-030001370450us-gaap:AdditionalPaidInCapitalMember2020-04-030001370450us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-030001370450us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-04-0300013704502020-04-030001370450us-gaap:RetainedEarningsMember2019-12-270001370450us-gaap:AdditionalPaidInCapitalMember2019-12-270001370450us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-270001370450us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-270001370450us-gaap:RetainedEarningsMember2019-06-280001370450us-gaap:AdditionalPaidInCapitalMember2019-06-280001370450us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-280001370450us-gaap:RetainedEarningsMember2019-03-290001370450us-gaap:AdditionalPaidInCapitalMember2019-03-290001370450us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-2900013704502019-03-290001370450us-gaap:RetainedEarningsMember2018-12-280001370450us-gaap:AdditionalPaidInCapitalMember2018-12-280001370450wldn:UnitBasedContractMemberwldn:EngineeringConsultingServicesMember2020-04-042020-07-030001370450wldn:UnitBasedContractMemberwldn:EnergyMember2020-04-042020-07-030001370450wldn:PublicUtilityMemberwldn:EngineeringConsultingServicesMember2020-04-042020-07-030001370450wldn:PublicUtilityMemberwldn:EnergyMember2020-04-042020-07-030001370450wldn:GovernmentsMemberwldn:EngineeringConsultingServicesMember2020-04-042020-07-030001370450wldn:GovernmentsMemberwldn:EnergyMember2020-04-042020-07-030001370450wldn:CommercialMemberwldn:EngineeringConsultingServicesMember2020-04-042020-07-030001370450wldn:CommercialMemberwldn:EnergyMember2020-04-042020-07-030001370450us-gaap:TimeAndMaterialsContractMemberwldn:EngineeringConsultingServicesMember2020-04-042020-07-030001370450us-gaap:TimeAndMaterialsContractMemberwldn:EnergyMember2020-04-042020-07-030001370450us-gaap:FixedPriceContractMemberwldn:EngineeringConsultingServicesMember2020-04-042020-07-030001370450us-gaap:FixedPriceContractMemberwldn:EnergyMember2020-04-042020-07-030001370450country:USwldn:EngineeringConsultingServicesMember2020-04-042020-07-030001370450country:USwldn:EnergyMember2020-04-042020-07-030001370450wldn:UnitBasedContractMember2020-04-042020-07-030001370450wldn:PublicUtilityMember2020-04-042020-07-030001370450wldn:GovernmentsMember2020-04-042020-07-030001370450wldn:EngineeringConsultingServicesMember2020-04-042020-07-030001370450wldn:EnergyMember2020-04-042020-07-030001370450wldn:CommercialMember2020-04-042020-07-030001370450us-gaap:TimeAndMaterialsContractMember2020-04-042020-07-030001370450us-gaap:IntersegmentEliminationMember2020-04-042020-07-030001370450us-gaap:FixedPriceContractMember2020-04-042020-07-030001370450country:US2020-04-042020-07-030001370450wldn:UnitBasedContractMemberwldn:EngineeringConsultingServicesMember2019-12-282020-07-030001370450wldn:UnitBasedContractMemberwldn:EnergyMember2019-12-282020-07-030001370450wldn:PublicUtilityMemberwldn:EngineeringConsultingServicesMember2019-12-282020-07-030001370450wldn:PublicUtilityMemberwldn:EnergyMember2019-12-282020-07-030001370450wldn:GovernmentsMemberwldn:EngineeringConsultingServicesMember2019-12-282020-07-030001370450wldn:GovernmentsMemberwldn:EnergyMember2019-12-282020-07-030001370450wldn:CommercialMemberwldn:EngineeringConsultingServicesMember2019-12-282020-07-030001370450wldn:CommercialMemberwldn:EnergyMember2019-12-282020-07-030001370450us-gaap:TimeAndMaterialsContractMemberwldn:EngineeringConsultingServicesMember2019-12-282020-07-030001370450us-gaap:TimeAndMaterialsContractMemberwldn:EnergyMember2019-12-282020-07-030001370450us-gaap:FixedPriceContractMemberwldn:EngineeringConsultingServicesMember2019-12-282020-07-030001370450us-gaap:FixedPriceContractMemberwldn:EnergyMember2019-12-282020-07-030001370450country:USwldn:EngineeringConsultingServicesMember2019-12-282020-07-030001370450country:USwldn:EnergyMember2019-12-282020-07-030001370450wldn:UnitBasedContractMember2019-12-282020-07-030001370450wldn:PublicUtilityMember2019-12-282020-07-030001370450wldn:GovernmentsMember2019-12-282020-07-030001370450wldn:EngineeringConsultingServicesMember2019-12-282020-07-030001370450wldn:CommercialMember2019-12-282020-07-030001370450us-gaap:TimeAndMaterialsContractMember2019-12-282020-07-030001370450us-gaap:IntersegmentEliminationMember2019-12-282020-07-030001370450us-gaap:FixedPriceContractMember2019-12-282020-07-030001370450country:US2019-12-282020-07-030001370450wldn:UnitBasedContractMemberwldn:EngineeringConsultingServicesMember2019-03-302019-06-280001370450wldn:UnitBasedContractMemberwldn:EnergyMember2019-03-302019-06-280001370450wldn:PublicUtilityMemberwldn:EngineeringConsultingServicesMember2019-03-302019-06-280001370450wldn:PublicUtilityMemberwldn:EnergyMember2019-03-302019-06-280001370450wldn:GovernmentsMemberwldn:EngineeringConsultingServicesMember2019-03-302019-06-280001370450wldn:GovernmentsMemberwldn:EnergyMember2019-03-302019-06-280001370450wldn:CommercialMemberwldn:EngineeringConsultingServicesMember2019-03-302019-06-280001370450wldn:CommercialMemberwldn:EnergyMember2019-03-302019-06-280001370450us-gaap:TimeAndMaterialsContractMemberwldn:EngineeringConsultingServicesMember2019-03-302019-06-280001370450us-gaap:TimeAndMaterialsContractMemberwldn:EnergyMember2019-03-302019-06-280001370450us-gaap:FixedPriceContractMemberwldn:EngineeringConsultingServicesMember2019-03-302019-06-280001370450us-gaap:FixedPriceContractMemberwldn:EnergyMember2019-03-302019-06-280001370450country:USwldn:EngineeringConsultingServicesMember2019-03-302019-06-280001370450country:USwldn:EnergyMember2019-03-302019-06-280001370450wldn:UnitBasedContractMember2019-03-302019-06-280001370450wldn:PublicUtilityMember2019-03-302019-06-280001370450wldn:GovernmentsMember2019-03-302019-06-280001370450wldn:EngineeringConsultingServicesMember2019-03-302019-06-280001370450wldn:EnergyMember2019-03-302019-06-280001370450wldn:CommercialMember2019-03-302019-06-280001370450us-gaap:TimeAndMaterialsContractMember2019-03-302019-06-280001370450us-gaap:IntersegmentEliminationMember2019-03-302019-06-280001370450us-gaap:FixedPriceContractMember2019-03-302019-06-280001370450country:US2019-03-302019-06-280001370450wldn:UnitBasedContractMemberwldn:EngineeringConsultingServicesMember2018-12-292019-06-280001370450wldn:UnitBasedContractMemberwldn:EnergyMember2018-12-292019-06-280001370450wldn:PublicUtilityMemberwldn:EngineeringConsultingServicesMember2018-12-292019-06-280001370450wldn:PublicUtilityMemberwldn:EnergyMember2018-12-292019-06-280001370450wldn:GovernmentsMemberwldn:EngineeringConsultingServicesMember2018-12-292019-06-280001370450wldn:GovernmentsMemberwldn:EnergyMember2018-12-292019-06-280001370450wldn:CommercialMemberwldn:EngineeringConsultingServicesMember2018-12-292019-06-280001370450wldn:CommercialMemberwldn:EnergyMember2018-12-292019-06-280001370450us-gaap:TimeAndMaterialsContractMemberwldn:EngineeringConsultingServicesMember2018-12-292019-06-280001370450us-gaap:TimeAndMaterialsContractMemberwldn:EnergyMember2018-12-292019-06-280001370450us-gaap:FixedPriceContractMemberwldn:EngineeringConsultingServicesMember2018-12-292019-06-280001370450us-gaap:FixedPriceContractMemberwldn:EnergyMember2018-12-292019-06-280001370450country:USwldn:EngineeringConsultingServicesMember2018-12-292019-06-280001370450country:USwldn:EnergyMember2018-12-292019-06-280001370450wldn:UnitBasedContractMember2018-12-292019-06-280001370450wldn:PublicUtilityMember2018-12-292019-06-280001370450wldn:GovernmentsMember2018-12-292019-06-280001370450wldn:EngineeringConsultingServicesMember2018-12-292019-06-280001370450wldn:EnergyMember2018-12-292019-06-280001370450wldn:CommercialMember2018-12-292019-06-280001370450us-gaap:TimeAndMaterialsContractMember2018-12-292019-06-280001370450us-gaap:IntersegmentEliminationMember2018-12-292019-06-280001370450us-gaap:FixedPriceContractMember2018-12-292019-06-280001370450country:US2018-12-292019-06-280001370450srt:ScenarioForecastMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2019-12-282021-01-010001370450wldn:ComputerHardwareAndSoftwareMember2020-07-030001370450wldn:AutomobilesTrucksAndFieldEquipmentMember2020-07-030001370450us-gaap:LeaseholdImprovementsMember2020-07-030001370450us-gaap:FurnitureAndFixturesMember2020-07-030001370450wldn:ComputerHardwareAndSoftwareMember2019-12-270001370450wldn:AutomobilesTrucksAndFieldEquipmentMember2019-12-270001370450us-gaap:LeaseholdImprovementsMember2019-12-270001370450us-gaap:FurnitureAndFixturesMember2019-12-270001370450us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-042020-07-030001370450us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-302019-06-280001370450us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-292019-03-290001370450us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-282020-07-030001370450us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-282020-07-030001370450us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-282020-04-030001370450us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-282020-04-030001370450us-gaap:CostOfSalesMember2019-12-282020-07-030001370450wldn:WeidtGroupMember2020-04-042020-07-030001370450wldn:E3Inc.Member2020-04-042020-07-030001370450wldn:WeidtGroupMember2019-12-282020-07-030001370450wldn:E3Inc.Member2019-12-282020-07-030001370450us-gaap:FairValueHedgingMember2020-04-042020-07-030001370450us-gaap:CashFlowHedgingMember2020-04-042020-07-030001370450us-gaap:FairValueHedgingMember2019-12-282020-07-030001370450us-gaap:CashFlowHedgingMember2019-12-282020-07-030001370450us-gaap:FairValueHedgingMember2019-03-302019-06-280001370450us-gaap:CashFlowHedgingMember2019-03-302019-06-280001370450us-gaap:FairValueHedgingMember2018-12-292019-06-280001370450us-gaap:CashFlowHedgingMember2018-12-292019-06-280001370450us-gaap:RetainedEarningsMember2020-04-042020-07-030001370450us-gaap:RetainedEarningsMember2019-12-282020-04-030001370450us-gaap:RetainedEarningsMember2019-03-302019-06-280001370450us-gaap:RetainedEarningsMember2018-12-292019-03-290001370450wldn:DelayedDrawTermLoanFacilityMember2019-06-260001370450us-gaap:RevolvingCreditFacilityMember2019-06-260001370450srt:MinimumMemberwldn:DebtInterestPeriodFourMemberus-gaap:RevolvingCreditFacilityMember2020-05-062020-05-060001370450srt:MinimumMemberwldn:DebtInterestPeriodFourMemberus-gaap:LetterOfCreditMember2020-05-062020-05-060001370450srt:MaximumMemberwldn:DebtInterestPeriodFourMemberus-gaap:RevolvingCreditFacilityMember2020-05-062020-05-060001370450srt:MaximumMemberwldn:DebtInterestPeriodFourMemberus-gaap:LetterOfCreditMember2020-05-062020-05-060001370450srt:MinimumMemberus-gaap:RevolvingCreditFacilityMember2020-05-062020-05-060001370450srt:MinimumMemberus-gaap:LetterOfCreditMember2020-05-062020-05-060001370450srt:MaximumMemberus-gaap:RevolvingCreditFacilityMember2020-05-062020-05-060001370450srt:MaximumMemberus-gaap:LetterOfCreditMember2020-05-062020-05-060001370450srt:MinimumMember2020-07-030001370450srt:MaximumMember2020-07-030001370450us-gaap:CorporateNonSegmentMember2020-04-042020-07-030001370450us-gaap:CorporateNonSegmentMember2019-12-282020-07-030001370450us-gaap:CorporateNonSegmentMember2019-03-302019-06-280001370450us-gaap:CorporateNonSegmentMember2018-12-292019-06-280001370450wldn:EnergyMember2019-12-282020-07-030001370450wldn:EngineeringConsultingServicesMember2020-07-030001370450wldn:EnergyMember2020-07-030001370450wldn:EngineeringConsultingServicesMember2019-12-270001370450wldn:EnergyMember2019-12-2700013704502020-10-032021-01-0100013704502020-07-042020-10-0200013704502019-12-282021-01-010001370450srt:MinimumMember2019-12-282020-07-030001370450srt:MaximumMember2019-12-282020-07-030001370450srt:MinimumMember2019-09-282019-12-270001370450srt:MaximumMember2019-09-282019-12-2700013704502019-09-282019-12-2700013704502019-06-292019-09-2700013704502018-12-292019-12-270001370450srt:MinimumMemberus-gaap:TradeNamesMember2019-12-282020-07-030001370450srt:MinimumMemberus-gaap:NoncompeteAgreementsMember2019-12-282020-07-030001370450srt:MinimumMemberus-gaap:CustomerRelationshipsMember2019-12-282020-07-030001370450srt:MaximumMemberus-gaap:TradeNamesMember2019-12-282020-07-030001370450srt:MaximumMemberus-gaap:NoncompeteAgreementsMember2019-12-282020-07-030001370450srt:MaximumMemberus-gaap:CustomerRelationshipsMember2019-12-282020-07-030001370450us-gaap:OrderOrProductionBacklogMember2019-12-282020-07-030001370450us-gaap:DevelopedTechnologyRightsMember2019-12-282020-07-030001370450us-gaap:TradeNamesMember2020-07-030001370450us-gaap:OrderOrProductionBacklogMember2020-07-030001370450us-gaap:NoncompeteAgreementsMember2020-07-030001370450us-gaap:DevelopedTechnologyRightsMember2020-07-030001370450us-gaap:CustomerRelationshipsMember2020-07-030001370450us-gaap:TradeNamesMember2019-12-270001370450us-gaap:OrderOrProductionBacklogMember2019-12-270001370450us-gaap:NoncompeteAgreementsMember2019-12-270001370450us-gaap:DevelopedTechnologyRightsMember2019-12-270001370450us-gaap:CustomerRelationshipsMember2019-12-270001370450us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2019-01-310001370450wldn:OtherNoncurrentLiabilitiesAndAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-07-030001370450us-gaap:AccruedLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-07-030001370450wldn:OtherNoncurrentLiabilitiesAndAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-270001370450us-gaap:AccruedLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-270001370450us-gaap:OperatingSegmentsMemberwldn:EngineeringConsultingServicesMember2020-04-042020-07-030001370450us-gaap:OperatingSegmentsMemberwldn:EnergyMember2020-04-042020-07-030001370450us-gaap:OperatingSegmentsMemberwldn:EngineeringConsultingServicesMember2019-12-282020-07-030001370450us-gaap:OperatingSegmentsMemberwldn:EnergyMember2019-12-282020-07-030001370450wldn:EquipmentHeldUnderFinanceLeaseMember2019-12-282020-07-030001370450us-gaap:OperatingSegmentsMemberwldn:EngineeringConsultingServicesMember2019-03-302019-06-280001370450us-gaap:OperatingSegmentsMemberwldn:EnergyMember2019-03-302019-06-280001370450wldn:EquipmentHeldUnderFinanceLeaseMember2018-12-292019-12-270001370450us-gaap:OperatingSegmentsMemberwldn:EngineeringConsultingServicesMember2018-12-292019-06-280001370450us-gaap:OperatingSegmentsMemberwldn:EnergyMember2018-12-292019-06-280001370450wldn:TermaLoanMember2020-07-030001370450wldn:OtherDebtMember2020-07-030001370450wldn:DelayedDrawTermLoanFacilityMember2020-07-030001370450wldn:TermaLoanMember2019-12-270001370450wldn:OtherDebtMember2019-12-270001370450wldn:DelayedDrawTermLoanFacilityMember2019-12-270001370450us-gaap:RevolvingCreditFacilityMember2019-12-270001370450wldn:NotesPayableForIbmMember2018-12-280001370450wldn:UtilityCustomerAgreementMember2018-12-200001370450srt:MinimumMemberwldn:DebtInterestPeriodFourMemberwldn:ThirdAmendmentMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-060001370450srt:MinimumMemberwldn:ThirdAmendmentMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-060001370450srt:MinimumMemberwldn:DebtInterestPeriodThreeMemberwldn:ThirdAmendmentMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-062020-05-060001370450srt:MinimumMemberwldn:DebtInterestPeriodThreeMemberwldn:ThirdAmendmentMemberus-gaap:BaseRateMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-062020-05-060001370450srt:MinimumMemberwldn:DebtInterestPeriodFourMemberwldn:ThirdAmendmentMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-062020-05-060001370450srt:MinimumMemberwldn:DebtInterestPeriodFourMemberwldn:ThirdAmendmentMemberus-gaap:BaseRateMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-062020-05-060001370450srt:MaximumMemberwldn:DebtInterestPeriodThreeMemberwldn:ThirdAmendmentMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-062020-05-060001370450srt:MaximumMemberwldn:DebtInterestPeriodThreeMemberwldn:ThirdAmendmentMemberus-gaap:BaseRateMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-062020-05-060001370450srt:MaximumMemberwldn:DebtInterestPeriodFourMemberwldn:ThirdAmendmentMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-062020-05-060001370450srt:MaximumMemberwldn:DebtInterestPeriodFourMemberwldn:ThirdAmendmentMemberus-gaap:BaseRateMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-062020-05-060001370450wldn:DebtInterestPeriodTwoMemberwldn:ThirdAmendmentMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-062020-05-060001370450wldn:DebtInterestPeriodThreeMemberwldn:ThirdAmendmentMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-062020-05-060001370450wldn:DebtInterestPeriodThreeMemberwldn:ThirdAmendmentMemberus-gaap:BaseRateMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-062020-05-060001370450wldn:DebtInterestPeriodOneMemberwldn:ThirdAmendmentMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-05-052020-05-050001370450wldn:AccountsReceivableNetCurrentMember2020-07-030001370450wldn:AccountsReceivableNetCurrentMember2019-12-270001370450wldn:TopTenCustomersMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2020-04-042020-07-030001370450us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMemberwldn:EngineeringAndConsultingSegmentMember2020-04-042020-07-030001370450us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMemberwldn:EnergySegmentMember2020-04-042020-07-030001370450us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2020-04-042020-07-030001370450stpr:NYus-gaap:RevenueFromContractWithCustomerMember2020-04-042020-07-030001370450stpr:CAus-gaap:RevenueFromContractWithCustomerMember2020-04-042020-07-030001370450wldn:TopTenCustomersMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2019-12-282020-07-030001370450us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMemberwldn:EngineeringAndConsultingSegmentMember2019-12-282020-07-030001370450us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMemberwldn:EnergySegmentMember2019-12-282020-07-030001370450us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2019-12-282020-07-030001370450stpr:NYus-gaap:RevenueFromContractWithCustomerMember2019-12-282020-07-030001370450stpr:CAus-gaap:RevenueFromContractWithCustomerMember2019-12-282020-07-030001370450wldn:TopTenCustomersMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2019-03-302019-06-280001370450us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMemberwldn:EnergySegmentMember2019-03-302019-06-280001370450us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2019-03-302019-06-280001370450stpr:NYus-gaap:RevenueFromContractWithCustomerMember2019-03-302019-06-280001370450stpr:CAus-gaap:RevenueFromContractWithCustomerMember2019-03-302019-06-280001370450wldn:TopTenCustomersMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2018-12-292019-06-280001370450us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMemberwldn:EnergySegmentMember2018-12-292019-06-280001370450us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2018-12-292019-06-280001370450stpr:CAus-gaap:RevenueFromContractWithCustomerMember2018-12-292019-06-280001370450stpr:NY2018-12-292019-06-280001370450us-gaap:CommonStockMember2020-07-030001370450us-gaap:CommonStockMember2020-04-030001370450us-gaap:CommonStockMember2019-12-270001370450us-gaap:CommonStockMember2019-06-280001370450us-gaap:CommonStockMember2019-03-290001370450us-gaap:CommonStockMember2018-12-2800013704502018-12-2800013704502018-12-292019-06-280001370450wldn:E3Inc.Memberus-gaap:TradeNamesMember2019-10-280001370450wldn:E3Inc.Memberus-gaap:OrderOrProductionBacklogMember2019-10-280001370450wldn:E3Inc.Memberus-gaap:NoncompeteAgreementsMember2019-10-280001370450wldn:E3Inc.Memberus-gaap:CustomerRelationshipsMember2019-10-280001370450wldn:OnsiteEnergyCorporationMemberus-gaap:TradeNamesMember2019-07-020001370450wldn:OnsiteEnergyCorporationMemberus-gaap:OrderOrProductionBacklogMember2019-07-020001370450wldn:OnsiteEnergyCorporationMemberus-gaap:CustomerRelationshipsMember2019-07-020001370450wldn:WeidtGroupMemberus-gaap:TradeNamesMember2019-03-080001370450wldn:WeidtGroupMemberus-gaap:OrderOrProductionBacklogMember2019-03-080001370450wldn:WeidtGroupMemberus-gaap:DevelopedTechnologyRightsMember2019-03-080001370450wldn:WeidtGroupMemberus-gaap:CustomerRelationshipsMember2019-03-080001370450srt:MaximumMemberwldn:E3Inc.Member2019-10-282019-10-280001370450wldn:E3Inc.Member2019-10-282019-10-280001370450wldn:WilldanEnergySolutionsMembersrt:MaximumMemberwldn:OnsiteEnergyCorporationMember2019-07-022019-07-020001370450wldn:OnsiteEnergyCorporationMember2019-07-022019-07-020001370450wldn:WeidtGroupMember2019-03-082019-03-080001370450wldn:E3Inc.Member2019-10-280001370450wldn:OnsiteEnergyCorporationMember2019-07-020001370450wldn:WeidtGroupMember2019-03-080001370450wldn:LimeEnergyCoMember2020-04-042020-07-030001370450wldn:LimeEnergyCoMember2019-12-282020-07-030001370450wldn:LimeEnergyCoMember2019-03-302019-06-280001370450wldn:LimeEnergyCoMember2018-12-292019-06-280001370450us-gaap:OperatingSegmentsMemberwldn:EngineeringConsultingServicesMember2020-07-030001370450us-gaap:OperatingSegmentsMemberwldn:EnergyMember2020-07-030001370450us-gaap:IntersegmentEliminationMember2020-07-030001370450us-gaap:CorporateNonSegmentMember2020-07-030001370450us-gaap:OperatingSegmentsMemberwldn:EngineeringConsultingServicesMember2019-06-280001370450us-gaap:OperatingSegmentsMemberwldn:EnergyMember2019-06-280001370450us-gaap:IntersegmentEliminationMember2019-06-280001370450us-gaap:CorporateNonSegmentMember2019-06-2800013704502019-06-280001370450us-gaap:EmployeeStockOptionMember2019-03-302019-06-280001370450us-gaap:EmployeeStockOptionMember2018-12-292019-06-280001370450wldn:OnsiteEnergyCorporationMember2020-04-042020-07-030001370450wldn:OnsiteEnergyCorporationMember2019-12-282020-07-030001370450us-gaap:AdditionalPaidInCapitalMember2020-04-042020-07-0300013704502020-04-042020-07-030001370450us-gaap:AdditionalPaidInCapitalMember2019-03-302019-06-2800013704502019-03-302019-06-280001370450us-gaap:CommonStockMember2019-12-282020-04-030001370450us-gaap:AdditionalPaidInCapitalMember2019-12-282020-04-0300013704502019-12-282020-04-030001370450us-gaap:CommonStockMember2018-12-292019-03-290001370450us-gaap:AdditionalPaidInCapitalMember2018-12-292019-03-2900013704502018-12-292019-03-290001370450wldn:EquipmentHeldUnderFinanceLeaseMember2020-07-030001370450wldn:EquipmentHeldUnderFinanceLeaseMember2019-12-2700013704502020-07-0300013704502019-12-2700013704502020-08-0500013704502019-12-282020-07-03xbrli:sharesiso4217:USDiso4217:USDxbrli:sharesxbrli:purewldn:segmentwldn:statewldn:customerwldn:contractwldn:item

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 3, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to          

Commission file number 001-33076

WILLDAN GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

14-1951112

(State or Other Jurisdiction of
Incorporation or Organization)

(IRS Employer Identification No.)

2401 East Katella Avenue, Suite 300
Anaheim, California

92806

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (800424-9144

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

WLDN

The Nasdaq Stock Market LLC

(Nasdaq Global Market)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

Accelerated filer

Non-accelerated filer 

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of August 5, 2020, there were 12,065,909 shares of common stock, $0.01 par value per share, of Willdan Group, Inc. issued and outstanding.

Table of Contents

WILLDAN GROUP, INC.

FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS

Page

PART I. FINANCIAL INFORMATION

3

Item 1. Financial Statements (unaudited)

3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

41

Item 3. Quantitative and Qualitative Disclosures About Market Risk

55

Item 4. Controls and Procedures

57

PART II. OTHER INFORMATION

58

Item 1. Legal Proceedings

58

Item 1A. Risk Factors

58

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

58

Item 3. Defaults upon Senior Securities

59

Item 4. Mine Safety Disclosures

59

Item 5. Other Information

59

Item 6. Exhibits

60

i

Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q (this “10-Q”) contains statements that constitute forward-looking statements as that term is defined by the Private Securities Litigation Reform Act of 1995, as amended. These statements concern our business, operations and financial performance and condition as well as our plans, objectives and expectations for our business operations and financial performance and condition, which are subject to risks and uncertainties. All statements other than statements of historical fact included in this 10-Q are forward-looking statements. These statements may include words such as “aim,” “anticipate,” “assume,” “believe,” “can have,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “likely,” “may,” “objective,” “plan,” “potential,” “positioned,” “predict,” “should,” “target,” “will,” “would” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events or trends. For example, all statements we make relating to our plans and objectives for future operations, growth or initiatives and strategies are forward-looking statements.

These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions. We derive many of our forward-looking statements from our own operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that predicting the impact of known factors is very difficult, and we cannot anticipate all factors that could affect our actual results.

All of our forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from our expectations. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to:

the extent to which the coronavirus (“Covid-19”) pandemic and measures taken to contain its spread ultimately impact our business, results of operation and financial condition, including the speed with which our various direct install programs for small businesses are able to resume normal operations following government mandated shutdowns and phased re-openings;
our ability to adequately complete projects in a timely manner;
our ability to compete successfully in the highly competitive energy efficiency services market, which represented 84% of our consolidated revenue in fiscal year 2019;
our reliance on work from our top ten clients, which accounted for 51% of our consolidated contract revenue for fiscal year 2019;
changes in state, local and regional economies and government budgets;
our ability to win new contracts, to renew existing contracts and to compete effectively for contracts awarded through bidding processes;
our ability to successfully integrate our acquisitions and execute on our growth strategy;
our ability to make principal and interest payments on our outstanding debt as they come due and to comply with the financial covenants contained in our debt agreements; and
our ability to obtain financing and to refinance our outstanding debt as it matures.

The factors noted above and risks included in our other SEC filings may be increased or intensified as a result of the Covid-19 pandemic, including the resurgence of the Covid-19 virus in the United States and any future resurgences. The extent to which the Covid-19 pandemic ultimately impacts our business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. See the risk factor in Part II, Item 1A. “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended April 3, 2020,

1

Table of Contents

The Covid-19 pandemic and health and safety measures intended to reduce its spread have adversely affected, and may continue to adversely affect, our business, results of operations and financial condition.” for more information. The above is not a complete list of factors or events that could cause actual results to differ from our expectations, and we cannot predict all of them. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements disclosed elsewhere in this Quarterly Report on Form 10-Q, under Part I, Item 1A. “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 27, 2019 and under Part II, Item 1A. “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2020, as such disclosures may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission, including subsequent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and public communications. You should evaluate all forward-looking statements made in this Quarterly Report on Form 10-Q and otherwise in the context of these risks and uncertainties.

Potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on any forward-looking statements we make. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are not guarantees of future performance or developments and involve known and unknown risks, uncertainties and other factors that are in many cases beyond our control. Except as required by law, we undertake no obligation to update or revise any forward-looking statements publicly, whether as a result of new information, future developments or otherwise.

2

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(Unaudited)

    

July 3,

    

December 27,

2020

2019

Assets

Current assets:

Cash and cash equivalents

$

17,160

$

5,452

Accounts receivable, net of allowance for doubtful accounts of $2,079 and $1,147 at July 3, 2020 and December 27, 2019, respectively

 

43,001

 

57,504

Contract assets

 

62,062

 

101,418

Other receivables

 

4,354

 

4,845

Prepaid expenses and other current assets

 

4,884

 

6,254

Total current assets

 

131,461

 

175,473

Equipment and leasehold improvements, net

 

12,791

 

12,051

Goodwill

130,236

127,647

Right-of-use assets

22,679

22,297

Other intangible assets, net

70,121

76,837

Other assets

 

13,452

 

16,296

Deferred income taxes, net

12,628

9,312

Total assets

$

393,368

$

439,913

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

35,070

$

34,000

Accrued liabilities

 

35,948

 

67,615

Contingent consideration payable

6,366

5,155

Contract liabilities

 

7,157

 

5,563

Notes payable

 

13,866

 

13,720

Finance lease obligations

332

375

Lease liability

5,994

5,550

Total current liabilities

 

104,733

 

131,978

Contingent consideration payable

3,877

4,891

Notes payable

104,592

116,631

Finance lease obligations, less current portion

 

256

 

191

Lease liability, less current portion

17,935

18,411

Other noncurrent liabilities

579

533

Total liabilities

 

231,972

 

272,635

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.01 par value, 10,000 shares authorized, no shares issued and outstanding

 

 

Common stock, $0.01 par value, 40,000 shares authorized; 12,012 and 11,497 shares issued and outstanding at July 3, 2020 and December 27, 2019, respectively

 

120

 

115

Additional paid-in capital

 

140,165

 

132,547

Accumulated other comprehensive loss

(762)

(396)

Retained earnings

 

21,873

 

35,012

Total stockholders’ equity

 

161,396

 

167,278

Total liabilities and stockholders’ equity

$

393,368

$

439,913

See accompanying notes to Condensed Consolidated Financial Statements.

3

Table of Contents

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, except per share amounts)

(Unaudited)

Three Months Ended

Six Months Ended

July 3,

June 28,

July 3,

June 28,

    

2020

    

2019

    

2020

    

2019

Contract revenue

$

83,549

$

104,396

$

189,575

$

196,189

Direct costs of contract revenue (inclusive of directly related depreciation and amortization):

Salaries and wages

 

13,650

 

15,624

 

32,565

 

30,534

Subcontractor services and other direct costs

 

40,355

 

57,623

 

96,775

 

108,571

Total direct costs of contract revenue

 

54,005

 

73,247

 

129,340

 

139,105

General and administrative expenses:

Salaries and wages, payroll taxes and employee benefits

 

15,331

 

15,437

 

35,743

 

30,406

Facilities and facility related

 

2,642

 

2,047

 

5,336

 

3,819

Stock-based compensation

 

4,230

 

2,224

 

8,825

 

4,041

Depreciation and amortization

 

5,466

 

2,866

 

9,985

 

5,520

Other

 

5,716

 

5,802

 

12,456

 

10,759

Total general and administrative expenses

 

33,385

 

28,376

 

72,345

 

54,545

Income (Loss) from operations

 

(3,841)

 

2,773

 

(12,110)

 

2,539

Other income (expense):

Interest expense, net

 

(1,257)

 

(1,221)

 

(2,770)

 

(2,342)

Other, net

 

23

 

18

 

46

 

29

Total other expense, net

 

(1,234)

 

(1,203)

 

(2,724)

 

(2,313)

Income (Loss) before income taxes

 

(5,075)

 

1,570

 

(14,834)

 

226

Income tax benefit

 

(90)

 

(70)

 

(1,695)

 

(997)

Net income (loss)

(4,985)

1,640

(13,139)

1,223

Other comprehensive income (loss):

Unrealized gain (loss) on derivative contracts, net of tax

83

(219)

(366)

(438)

Comprehensive income (loss)

$

(4,902)

$

1,421

$

(13,505)

$

785

Earnings (Loss) per share:

Basic

$

(0.43)

$

0.15

$

(1.13)

$

0.11

Diluted

$

(0.43)

$

0.14

$

(1.13)

$

0.10

Weighted-average shares outstanding:

Basic

 

11,682

 

11,100

 

11,593

 

11,037

Diluted

 

11,682

 

11,679

 

11,593

 

11,670

See accompanying notes to Condensed Consolidated Financial Statements.

4

Table of Contents

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(Unaudited)

Accumulated

 

Additional

other

 

Common Stock

Paid-in

Comprehensive

Retained

 

    

Shares

    

Amount

    

Capital

    

Loss

    

Earnings

    

Total

 

Balance at December 28, 2018

 

10,968

$

110

$

114,008

$

$

30,171

$

144,289

Shares of common stock issued in connection with employee stock purchase plan

 

28

 

 

749

 

 

 

749

Shares of common stock issued in connection with incentive stock plan

21

291

291

Shares used to pay taxes on stock grants

 

(66)

 

(1)

 

(2,515)

 

 

 

(2,516)

Issuance of restricted stock award and units

175

2

(2)

Stock-based compensation expense

 

 

 

1,817

 

 

 

1,817

Net loss

 

 

 

 

 

(417)

 

(417)

Net unrealized loss on derivative contracts

(219)

(219)

Balance at March 29, 2019

 

11,126

$

111

$

114,348

$

(219)

$

29,754

$

143,994

Shares of common stock issued in connection with incentive stock plan

77

1

231

232

Unregistered sales of equity securities and use of proceeds

 

(9)

 

 

(346)

 

 

 

(346)

Stock-based compensation expense

 

 

 

2,224

 

 

 

2,224

Net income

 

 

 

 

 

1,640

 

1,640

Net unrealized loss on derivative contracts

(219)

(219)

Balance at June 28, 2019

 

11,194

$

112

$

116,457

$

(438)

$

31,394

$

147,525

Accumulated

Additional

Other

Common Stock

Paid-in

Comprehensive

Retained

    

Shares

    

Amount

    

Capital

    

Loss

    

Earnings

    

Total

Balance at December 27, 2019

 

11,497

$

115

$

132,547

$

(396)

$

35,012

$

167,278

Shares of common stock issued in connection with employee stock purchase plan

 

40

0

1,073

 

1,073

Shares of common stock issued in connection with incentive stock plan

19

0

260

260

Shares used to pay taxes on stock grants

 

(92)

(1)

(2,866)

 

(2,867)

Issuance of restricted stock award and units

176

2

(1)

1

Stock-based compensation expense

 

4,595

 

4,595

Net loss

 

(8,154)

 

(8,154)

Net unrealized loss on derivative contracts

(449)

 

(449)

Balance at April 3, 2020

 

11,640

$

116

$

135,608

$

(845)

$

26,858

$

161,737

Shares of common stock issued in connection with incentive stock plan

63

1

330

331

Issuance of restricted stock award and units

309

3

(3)

Stock-based compensation expense

 

4,230

 

4,230

Net loss

 

(4,985)

 

(4,985)

Net unrealized gain on derivative contracts

83

 

83

Balance at July 3, 2020

 

12,012

$

120

$

140,165

$

(762)

$

21,873

$

161,396

See accompanying notes to Condensed Consolidated Financial Statements.

5

Table of Contents

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

Six Months Ended

July 3,

June 28,

    

2020

    

2019

Cash flows from operating activities:

Net income (loss)

$

(13,139)

$

1,223

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

 

9,985

 

5,712

Deferred income taxes, net

 

(3,726)

 

(167)

(Gain) loss on sale/disposal of equipment

 

(16)

 

(8)

Provision for doubtful accounts

 

968

 

202

Stock-based compensation

 

8,825

 

4,041

Accretion and fair value adjustments of contingent consideration

1,630

(627)

Changes in operating assets and liabilities, net of effects from business acquisitions:

Accounts receivable

 

13,535

 

15,998

Contract assets

 

35,862

 

(8,148)

Other receivables

 

897

 

(1,719)

Prepaid expenses and other current assets

 

1,140

 

877

Other assets

 

2,496

 

(615)

Accounts payable

 

1,070

 

(6,615)

Accrued liabilities

 

(31,987)

 

2,036

Contract liabilities

 

1,594

 

65

Right-of-use assets

 

97

 

240

Net cash provided by operating activities

 

29,231

 

12,495

Cash flows from investing activities:

Purchase of equipment and leasehold improvements

 

(2,946)

 

(3,619)

Proceeds from sale of equipment

17

44

Cash paid for acquisitions, net of cash acquired

(21,800)

Net cash used in investing activities

 

(2,929)

 

(25,375)

Cash flows from financing activities:

Payments on contingent consideration

 

(1,433)

 

(1,381)

Payments on notes payable

(163)

(929)

Payments on debt issuance costs

(577)

Borrowings under term loan facility and line of credit

24,000

100,000

Repayments under term loan facility and line of credit

(35,500)

(70,000)

Principal payments on finance leases

 

(296)

 

(300)

Proceeds from stock option exercise

 

591

 

523

Proceeds from sales of common stock under employee stock purchase plan

 

1,073

 

749

Shares used to pay taxes on stock grants

(2,867)

(2,862)

Restricted Stock Award and Units

1

Net cash (used in) provided by financing activities

 

(14,594)

 

25,223

Net increase (decrease) in cash and cash equivalents

 

11,708

 

12,343

Cash and cash equivalents at beginning of period

 

5,452

 

15,259

Cash and cash equivalents at end of period

$

17,160

$

27,602

Supplemental disclosures of cash flow information:

Cash paid during the period for:

Interest

$

2,797

$

2,156

Income taxes

 

262

 

2,040

Supplemental disclosures of noncash investing and financing activities:

Equipment acquired under finance leases

318

413

See accompanying notes to Condensed Consolidated Financial Statements.

6

Table of Contents

WILLDAN GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. ORGANIZATION AND OPERATIONS OF THE COMPANY

Willdan Group, Inc. (“Willdan” or the “Company”) is a provider of professional, technical and consulting services to utilities, private industry, and public agencies at all levels of government. As resources and infrastructures undergo continuous change, the Company helps organizations and their communities evolve and thrive by providing a wide range of technical services for energy solutions and government infrastructure. Through engineering, program management, policy advisory, and software and data management, the Company designs and delivers trusted, comprehensive, innovative, and proven solutions to improve efficiency, resiliency, and sustainability in energy and infrastructure.

The Company’s broad portfolio of services operates within two financial reporting segments: (1) Energy and (2) Engineering and Consulting. The interfaces and synergies between these segments are important elements of the Company’s strategy to design and deliver trusted, comprehensive, innovative, and proven solutions for its customers.

The accounting policies followed by the Company are set forth in Part II, Item 8, Note 1, Organization and Operations of the Company, of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2019. In the opinion of management, all adjustments necessary to fairly state the Condensed Consolidated Financial Statements have been made. All such adjustments are of a normal, recurring nature. Certain information and footnote disclosures normally included in the Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These Condensed Consolidated Financial Statements and related notes thereto should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2019. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year.

Fiscal Years

The Company operates and reports its annual financial results based on 52 or 53-week periods ending on the Friday closest to December 31. The Company operates and reports its quarterly financial results based on the 13-week period ending on the Friday closest to March 31, June 30 and September 30 and the 13 or 14-week period ending on the Friday closest to March 31, as applicable. Fiscal year 2020, which ends on January 1, 2021, will be comprised of 53 weeks, with the first quarter consisting of 14 weeks and the remaining quarters consisting of 13 weeks each. Fiscal year 2019, which ended on December 27, 2019 was comprised of 52 weeks, with all quarters presented consisting of 13 weeks. All references to years in the notes to consolidated financial statements represent fiscal years.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Management’s Plans in Response to Covid-19

On January 30, 2020, the spread of a novel strain of coronavirus (“Covid-19”) was declared a Public Health Emergency of International Concern by the World Health Organization (“WHO”). On March 11, 2020, WHO characterized the Covid-19 outbreak as a pandemic. The Covid-19 pandemic has resulted in governmental authorities around the world implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place or total lock-down orders and business limitations and shutdowns (subject to exceptions for certain essential operations and businesses). Although some of these measures have since been lifted or scaled back, a

7

Table of Contents

WILLDAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

recent resurgence of Covid-19 in the United States has resulted in the reimposition of certain restrictions and may lead to other restrictions being reimplemented in response to efforts to reduce the spread of Covid-19. The Covid-19 outbreak and restrictions intended to slow the spread of Covid-19 have caused economic and social disruption on an unprecedented scale. It is unclear how long these restrictions will remain in place and they may remain in place in some form for an extended period of time. Given the uncertainties associated with the duration of the pandemic, the Company cannot reasonably estimate the ultimate impacts of Covid-19 and efforts to limit its spread on its business, financial condition, results of operations or cash flows for the foreseeable future or whether the Company’s assumptions used to estimate its future liquidity requirements will be correct.

Health and Safety

In response to the Covid-19 pandemic, the Company has taken and will continue to take temporary precautionary measures intended to help minimize the risk of Covid-19 to its employees, including requiring the majority of its employees to work remotely, suspending non-essential travel and restricting in-person work-related meetings. The Company expects to continue to implement these measures until it has determined that the Covid-19 pandemic is adequately contained for purposes of its business, and may take further actions as government authorities require or recommend or as it determines to be in the best interests of its employees, customers, business partners and third-party service providers.

Financial Position and Results of Operations

The Covid-19 pandemic and efforts to limit its spread negatively impacted the Company’s business during the three and six months ended July 3, 2020. In California and New York, the states in which the Company has historically derived a majority of its revenue, mandatory shutdown orders were issued in March 2020. In California, phased re-openings began in May 2020 and were subsequently curtailed in July 2020 as result of the resurgence of Covid-19 cases. In New York, phased re-openings began in June 2020. As a result, the most significant pandemic related impacts to the Company’s business are now occurring in California to its direct install business. The Company’s business in New York has been improving over the last month and all New York utility programs have restarted.

In the Energy segment, the Company has experienced and expects to continue to experience a negative impact on its direct install programs that serve small businesses as a result of restrictions put in place by governmental authorities that have required temporary shutdowns of all “non-essential” businesses. In fiscal 2019, the Company derived approximately 40% of its gross revenue from its direct install programs that serve small businesses, and a significant portion of its direct install work on these programs is just entering recovery as phased re-openings continue. The Company’s other programs, which generated approximately 60% of its gross revenue in fiscal 2019, are either businesses that have been determined to be “essential” by government authorities or have continued to progress during the pandemic. In addition, some of the Company’s programs in the Energy segment, particularly those related to improvements in public schools, have been accelerated to take advantage of empty facilities.

In the Engineering and Consulting segment, the Company’s revenues have been minimally affected by Covid-19. The services in this segment have generally been deemed “essential” by the government and have continued to operate while abiding social distancing measures.

As of August 7, 2020, though some of the Company’s work has been suspended, none of its contracts have been cancelled and proposal activities for new programs have continued to advance. The Company currently estimates that pandemic related slowdowns and work suspensions are reducing its revenue by approximately 20% from pre-pandemic levels, an improvement from the estimated 40% reduction observed in April.

In response to the Covid-19 pandemic and efforts to prevent its spread, the Company began taking a number of steps during the first quarter of fiscal 2020 aimed at preserving liquidity and positioning itself to resume its growth trajectory after work restrictions are lifted. These steps include:

8

Table of Contents

WILLDAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

Executing a reduction in workforce, primarily through an unpaid furlough, impacting approximately 300 members of staff. The largest reductions were a result of government-mandated work restrictions impacting the Company’s direct install programs in California and New York. During the Company’s second fiscal quarter, furloughed employees began to return to work as government authorities began lifting restrictions through phased re-openings;

A temporary freeze on all non-critical spending for travel, capital expenditures, and other discretionary expenses;

A temporary cash wage reduction for salaried employees, ranging from 0% for lower salary bands up to 75% for senior management. During the second half of the Company’s second fiscal quarter, as the initial impact of Covid-19 was ascertained and operations were adjusted accordingly, salaries were reinstituted with the exception of corporate staff, whose salaries were reinstituted at the end of July 2020;

Suspension of cash fees for the Company’s Board of Directors, until such time as the Board of Directors determines;

Implementing a temporary hiring freeze; and

Amending the Company’s credit facility for increased flexibility.

The Company believes that its financial position is sufficiently flexible to enable it to maneuver in the current economic environment. Throughout the first and second quarter of fiscal year 2020, the Company enhanced liquidity by minimizing working capital and significantly improving cash collections. In addition, in May 2020, the Company amended its credit facility to modify, among other things, certain covenants to increase its financial flexibility. Combined with availability under its credit facility, the Company believes its enhanced liquidity position provides a cushion against liquidity disruptions. The Company anticipates borrowing additional amounts under its existing credit facility during the second half of fiscal year 2020 to support an expectation of recovery from Covid-19 operating levels and the accompanying need for working capital as a result of the easing of Covid-19 restrictions.

Asset and liability valuation and other estimates used in preparation of financial statements

As of July 3, 2020, the Company did not have any impairment with respect to goodwill or long-lived assets, including intangible assets. Because the full extent of the impact of the Covid-19 outbreak and efforts to slow its spread are unknown at this time, they could, under certain circumstances, cause impairment and result in a non-cash impairment charge being recorded in future periods.

Changes to the estimated future profitability of the business may require that the Company establish an additional valuation allowance against all or some portion of its net deferred tax assets.

Impact on Clients and Subcontractors and Other Risks

9

Table of Contents

WILLDAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

The Company primarily works for utilities, municipalities and other public agencies. The Company expects many governmental and other public agencies will have significant budget shortfalls for 2020 and potentially beyond as a result of the economic slowdown from the measures taken to mitigate the Covid-19 pandemic. Although none of the Company’s contracts with governmental or other public agencies were materially modified in the second fiscal quarter, these potential budget deficits could result in delayed funding for existing contracts with the Company, postponements of new contracts or price concessions. Further, most of the Company’s clients are not committed to purchase any minimum amount of services, as the Company agreements with them are based on a “purchase order” model. As a result, they may discontinue utilizing some or all of the Company’s services with little or no notice.

 In addition, the Company relies on subcontractors and material suppliers to complete a substantial portion of our work, especially in its Energy segment. If the Company’s significant subcontractors and material suppliers suffer significant economic harm and must limit or cease operations or file for bankruptcy as a result of the current economic slowdown, the Company’s subcontractors and material suppliers may not be able to fulfill their contractual obligations satisfactorily and the Company may not have the ability to select its subcontractors and material suppliers of choice for new contracts. If the Company’s subcontractors and material suppliers are not able to fulfill their contractual obligations, it could result in a significant increase in costs for the Company to complete the projects. The ultimate impact of Covid-19 on the Company’s financial condition and results of operations will depend on all of the factors noted above, including other factors that the Company may not be able to forecast at this time. See the risk factor “The Covid-19 pandemic and health and safety measures intended to slow its spread have adversely affected, and may continue to adversely affect, our business, results of operations and financial condition.” under Part II, Item 1A. “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2020. While Covid-19 has had, and the Company expects it to continue to have, an adverse effect on its business, financial condition and results of operations, it is unable to predict the extent of these impacts at this time.

10

Table of Contents

WILLDAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

2. RECENT ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Recently Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires entities to report “expected” credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 will also require enhanced disclosures relating to significant estimates and judgments used in estimating credit losses, as well as the credit quality. The Company adopted this standard effective December 28, 2019. The adoption of this standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

Accounting Pronouncements Recently Issued

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 provides, among other things, guidance that modifications of contracts within the scope of Topic 470, Debt, should be accounted for by prospectively adjusting the effective interest rate; modifications of contracts within the scope of Topic 840, Leases, should be accounted for as a continuation of the existing contract; and, changes in the critical terms of hedging relationships, caused by reference rate reform, should not result in the de-designation of the instrument, provided certain criteria are met. The Company’s exposure to LIBOR rates includes its credit facilities and swap agreement. The amendments are effective as of March 12, 2020 through December 31, 2022. Adoption is permitted at any time. The Company is currently evaluating the impact this update will have on its Condensed Consolidated Financial Statements.

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 amends the accounting for income taxes by, among other things, removing: (i) The exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items (for example, discontinued operations or other comprehensive income); (ii) The exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (iii) The exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (iv) The exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, which for the Company is the first quarter of fiscal 2021. The Company is currently evaluating the impact this update will have on its Condensed Consolidated Financial Statements.

11

Table of Contents

WILLDAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

3. REVENUES

The Company enters into contracts with its clients that contain various types of pricing provisions, including fixed price, time-and-materials, and unit-based provisions. The Company recognizes revenues in accordance with ASU 2014-09, Revenue from Contracts with Customer, codified as ASC Topic 606 and the related amendments (collectively “ASC 606”). As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenues when (or as) the Company satisfies a performance obligation.

The following table reflects the Company’s two reportable segments and the types of contracts that each most commonly enters into for revenue generating activities.

Segment

Contract Type

Revenue Recognition Method

Time-and-materials

Time-and-materials

Energy

Unit-based

Unit-based

Software license

Unit-based

Fixed price

Percentage-of-completion

Time-and-materials

Time-and-materials

Engineering and Consulting

Unit-based

Unit-based

Fixed price

Percentage-of-completion

Revenue on the vast majority of the Company’s contracts is recognized over time because of the continuous transfer of control to the customer. Revenue on fixed price contracts is recognized on the percentage-of-completion method based generally on the ratio of direct costs incurred-to-date to estimated total direct costs at completion. The Company uses the percentage-of-completion method to better match the level of work performed at a certain point in time in relation to the effort that will be required to complete a project. In addition, the percentage-of-completion method is a common method of revenue recognition in the Company’s industry.

Many of the Company’s fixed price contracts involve a high degree of subcontracted fixed price effort and are relatively short in duration, thereby lowering the risks of not properly estimating the percent complete. Revenue on time-and-materials and unit-based contracts is recognized as the work is performed in accordance with the specific rates and terms of the contract. The Company recognizes revenues for time-and-materials contracts based upon the actual hours incurred during a reporting period at contractually agreed upon rates per hour and also includes in revenue all reimbursable costs incurred during a reporting period. Certain of the Company’s time-and-materials contracts are subject to maximum contract values and, accordingly, when revenue is expected to exceed the maximum contract value, these contracts are generally recognized under the percentage-of-completion method, consistent with fixed price contracts. For unit-based contracts, the Company recognizes the contract price of units of a basic production product as revenue when the production product is delivered during a period. Revenue recognition for software licenses issued by the Energy segment is generally recognized at a point in time, utilizing the unit-based revenue recognition method, upon acceptance of the software by the customer and in recognition of the fulfillment of the performance obligation. Certain additional performance obligations beyond the base software license may be separated from the gross license fee and recognized on a straight-line basis over time. Revenue for amounts that have been billed but not earned is deferred, and such deferred revenue is referred to as contract liabilities in the accompanying condensed consolidated balance sheets.

To determine the proper revenue recognition method for contracts, the Company evaluates whether two or more contracts should be combined and accounted for as one single contract and whether the combined contract should be accounted for as one performance obligation. With respect to the Company’s contracts, it is rare that multiple contracts should be combined into a single performance obligation. This evaluation requires significant judgment and the decision to combine a group of contracts or separate a single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. Contracts are considered to have a single performance

12

Table of Contents

WILLDAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

obligation if the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts, which is mainly because the Company provides a significant service of integrating a complex set of tasks and components into a single project or capability.

The Company may enter into contracts that include separate phases or elements. If each phase or element is negotiated separately based on the technical resources required and/or the supply and demand for the services being provided, the Company evaluates if the contracts should be segmented. If certain criteria are met, the contracts would be segmented which could result in revenues being assigned to the different elements or phases with different rates of profitability based on the relative value of each element or phase to the estimated total contract revenue. Segmented contracts may comprise up to approximately 2.0% to 3.0% of the Company’s consolidated contract revenue.

Contracts that cover multiple phases or elements of the project or service lifecycle (development, construction and maintenance and support) may be considered to have multiple performance obligations even when they are part of a single contract. For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract. For the periods presented, the value of the separate performance obligations under contracts with multiple performance obligations (generally measurement and verification tasks under certain energy performance contracts) were not material. In cases where the Company does not provide the distinct good or service on a standalone basis, the primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which the Company forecasts the Company’s expected costs of satisfying a performance obligation and then adds an appropriate margin for the distinct good or service.

The Company provides quality of workmanship warranties to customers that are included in the sale and are not priced or sold separately or do not provide customers with a service in addition to assurance of compliance with agreed-upon specifications and industry standards. The Company does not consider these types of warranties to be separate performance obligations.

In some cases, the Company has a master service or blanket agreement with a customer under which each task order releases the Company to perform specific portions of the overall scope in the service contract. Each task order is typically accounted for as a separate contract because the task order establishes the enforceable rights and obligations, and payment terms.

Under ASC 606, variable consideration should be considered when determining the transaction price and estimates should be made for the variable consideration component of the transaction price, as well as assessing whether an estimate of variable consideration is constrained. For certain of the Company’s contracts, variable consideration can arise from modifications to the scope of services resulting from unapproved change orders or customer claims. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on assessments of legal enforceability, the Company’s performance, and all information (historical, current and forecasted) that is reasonably available to the Company.

Due to the nature of the work required to be performed on many of the Company’s performance obligations, the estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgment. As a significant change in one or more of these estimates could affect the profitability of the Company’s contracts, the Company reviews and updates the Company’s contract-related estimates regularly through a company-wide disciplined project review process in which management reviews the progress and execution of the Company’s performance obligations and the estimate at completion (EAC). As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule and the related changes in estimates of revenues and costs. Management must make assumptions and estimates

13

Table of Contents

WILLDAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

regarding labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, the performance of subcontractors, and the availability and timing of funding from the customer, among other variables.

The Company recognizes adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, the Company recognizes the full amount of estimated loss in the period it is identified.

Contracts are often modified to account for changes in contract specifications and requirements. The Company considers contract modifications to exist when the modification either creates new rights or obligations or changes the existing enforceable rights or obligations. Most of the Company’s contract modifications are for goods or services that are not distinct from existing contracts due to the significant integration provided in the context of the contract and are accounted for as if they were part of the original contract. The effect of a contract modification that is not distinct from the existing contract on the transaction price and the Company’s measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.

For contract modifications that result in the promise to deliver goods or services that are distinct from the existing contract and the increase in price of the contract is for the same amount as the standalone selling price of the additional goods or services included in the modification, the Company accounts for such contract modifications as a separate contract.

The Company includes claims to vendors, subcontractors and others as a receivable and a reduction in recognized costs when enforceability of the claim is established by the contract and the amounts are reasonably estimable and probable of being recovered. The amounts are recorded up to the extent of the lesser of the amounts management expects to recover or to costs incurred.

Billing practices are governed by the contract terms of each project based upon costs incurred, achievement of milestones or pre-agreed schedules. Billings do not necessarily correlate with revenue recognized using the percentage-of-completion method of revenue recognition.

Direct costs of contract revenue consist primarily of that portion of technical and nontechnical salaries and wages that has been incurred in connection with revenue producing projects. Direct costs of contract revenue also include production expenses, subcontractor services and other expenses that are incurred in connection with revenue producing projects.

Direct costs of contract revenue exclude that portion of technical and nontechnical salaries and wages related to marketing efforts, vacations, holidays and other time not spent directly generating revenue under existing contracts. Such costs are included in general and administrative expenses. Additionally, payroll taxes, bonuses and employee benefit costs for all Company personnel are included in general and administrative expenses in the accompanying consolidated statements of comprehensive income since no allocation of these costs is made to direct costs of contract revenue. No allocation of facilities costs is made to direct costs of contract revenue. Other companies may classify as direct costs of contract revenue some of the costs that the Company classifies as general and administrative costs. The Company expenses direct costs of contract revenue when incurred.

Included in revenue and costs are all reimbursable costs for which the Company has the risk or on which the fee was based at the time of bid or negotiation. No revenue or cost is recorded for costs in which the Company acts solely in the capacity of an agent and has no risks associated with such costs.

14

Table of Contents

WILLDAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts based upon a review of all outstanding amounts on a quarterly basis. Management determines allowances for doubtful accounts through specific identification of amounts considered to be uncollectible and potential write-offs, plus a non-specific allowance for other amounts for which some potential loss has been determined to be probable based on current and past experience. The Company’s historical credit losses have been minimal with governmental entities and large public utilities, but disputes may arise related to these receivable amounts. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.

Retainage, included in contract assets, represents amounts withheld from billings to the Company’s clients pursuant to provisions in the contracts and may not be paid to the Company until specific tasks are completed or the project is completed and, in some instances, for even longer periods. As of July 3, 2020 and December 27, 2019, contract assets included retainage of $5.0 million and $5.4 million, respectively.

In addition to the above, the Company derives revenue from software licenses and professional services and maintenance fees. In accordance with ASC 606, the Company performs an assessment of each contract to identify the performance obligations, determine the overall transaction price for the contract, allocate the transaction price to the performance obligations, and recognize the revenue when the performance obligations are satisfied.

The Company utilizes the residual approach by which it estimates the standalone selling price by reference to the total transaction price less the sum of the observable standalone selling prices of other goods or services promised in the contract. The software license revenue is typically recognized at a point in time when control is transferred to the client, which is defined as the point in time when the client can use and benefit from the license. The software license is delivered before related services are provided and is functional without services, updates, or technical support. Related professional services include training and support services in which the standalone selling price is determined based on an input measure of hours incurred to total estimated hours and is recognized over time, usually which is the life of the contract.

15

Table of Contents

WILLDAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

4. SUPPLEMENTAL FINANCIAL STATEMENT DATA

Accounts Receivable

From time to time, in connection with factoring agreements, the Company sells trade accounts receivable without recourse to third party purchasers in exchange for cash. During the six months ended July 3, 2020 and June 28, 2019, the Company did not sell any trade accounts receivable.

Equipment and Leasehold Improvements

July 3,

December 27,

    

2020

    

2019

(in thousands)

Furniture and fixtures

$

4,086

$

4,614

Computer hardware and software

 

15,983

 

14,789

Leasehold improvements

 

2,971

 

2,410

Equipment under finance leases

 

2,247

 

1,957

Automobiles, trucks, and field equipment

 

3,255

 

3,564

Subtotal

 

28,542

 

27,334

Accumulated depreciation and amortization

 

(15,751)

 

(15,283)

Equipment and leasehold improvements, net

$

12,791

$

12,051

Included in accumulated depreciation and amortization is $0.3 million and $0.5 million of amortization expense related to equipment held under finance leases in the six months ended July 3, 2020 and fiscal year 2019, respectively.

Accrued Liabilities

July 3,

December 27,

    

2020

    

2019

(in thousands)

Accrued subcontractor costs

$

21,502

$

45,366

Compensation and payroll taxes

 

5,070

 

3,286

Accrued bonuses

3,663

7,756

Other

 

2,506

 

4,630

Employee withholdings

 

1,876

 

3,463

Paid leave bank

 

1,331

 

3,114

Total accrued liabilities

$

35,948

$

67,615

Goodwill

December 27,

Additional

Additions /

July 3,

    

2019

    

Purchase Cost