UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

 


 

FORM 8-K

 


 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 11, 2011

 


 

WILLDAN GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-33076

 

14-1951112

(State of other jurisdiction
of incorporation)

 

(Commission File Number)

 

(IRS Employer
Identification No.)

 

2401 East Katella Avenue, Suite 300, Anaheim, California 92806

(Address of Principal Executive Offices)

 

Registrant’s telephone number, including area code: (800) 424-9144

 

Not Applicable

(Former name or former address, if changed since last report)

 


 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

 

o            Soliciting material pursuant to Rule 14A-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 2.02.              Results of Operation and Financial Condition

 

Willdan Group, Inc. (“Willdan”) issued a press release on August 11, 2011. The press release announced its financial results for the second quarter ended July 1, 2011. The press release is filed as Exhibit 99.1 and is hereby incorporated by reference in its entirety. The information in this Form 8-K and the exhibit attached hereto is being furnished (not filed) under Item 2.02 of Form 8-K.

 

Item 9.01               Financial Statements and Exhibits

 

(d)                               Exhibits.

 

99.1         Press Release of Willdan Group, Inc. dated August 11, 2011 (financial results for the second quarter ended July 1, 2011).

 

2



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

WILLDAN GROUP, INC.

 

 

 

 

 

 

 

 

Date: August 11, 2011

 

By:

/s/ Kimberly D. Gant

 

 

 

Kimberly D. Gant

 

 

 

Chief Financial Officer

 

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EXHIBIT INDEX

 

Exhibit No.

 

Document

 

 

 

99.1

 

Press Release of Willdan Group, Inc. August 11, 2011 (Financial results for the second quarter ended July 1, 2011)

 

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Exhibit 99.1

 

 

Willdan Reports Second Quarter 2011 Financial Results

 

ANAHEIM, Calif., August 11, 2011 (BUSINESS WIRE) — Willdan Group, Inc. (“Willdan”) (NASDAQ:WLDN), today announced financial results for its second quarter ended July 1, 2011.

 

For the second quarter of 2011, Willdan reported total contract revenue of $25.8 million and net income of $0.7 million, or $0.10 per share.

 

Tom Brisbin, Willdan’s Chief Executive Officer, stated: We reported sequential improvements in revenue, earnings and cash flow in the second quarter.  As planned, we continued to make investments in key people and technology across our business lines during the quarter.  We continue to expect stronger profitability in the second half of the year as these investments begin to translate into improved revenue growth.”

 

Second Quarter 2011 Results

 

For the second quarter of fiscal 2011, revenue was $25.8 million, up $5.4 million, or 26.7%, from revenue of $20.4 million for the comparable period last year. On a sequential basis, revenue was up $3.1 million, or 13.5%, from the first quarter of 2011. Income from operations was $1.0 million for the second quarter of fiscal 2011, as compared to income from operations of $1.3 million for the comparable period last year. On a sequential basis, income from operations was up $1.2 million from a loss from operations of $0.3 million for the first quarter of 2011.

 

Net income was $0.7 million for the second quarter of fiscal 2011, as compared to net income of $1.3 million for the comparable period last year and a net loss of $0.3 million for the first quarter of 2011.

 

Basic and diluted earnings per share for the second quarter of fiscal 2011 were $0.10 as compared to earnings per share of $0.17 for the comparable period last year.

 

Willdan generated $0.9 million in cash flow from operations in the second quarter of fiscal 2011.

 

1



 

Six Months 2011 Results

 

For the six months ended July 1, 2011, revenue was $48.6 million, up $11.2 million, or 30.1%, from revenue of $37.3 million in the comparable period last year. Income from operations was $0.7 million for the six months ended July 1, 2011 as compared to income from operations of $1.7 million for the comparable period last year. Net income was $0.4 million for the six months ended July 1, 2011 as compared to net income of $1.7 million for the comparable period last year.

 

Basic and diluted earnings per share for the six months ended July 1, 2011 were $0.06 as compared to basic and diluted earnings per share of $0.23 for the comparable period last year.

 

Willdan generated $1.6 million in cash flow from operations in the six months ended July 1, 2011.

 

 

 

Three Months Ended

 

Six Months Ended

 

In thousands (except per share data)

 

July 1,
2011

 

July 2,
2010

 

July 1,
2011

 

July 2,
2010

 

Revenue

 

$

25,812

 

$

20,367

 

$

48,554

 

$

37,318

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

954

 

1,265

 

674

 

1,650

 

Interest income

 

2

 

1

 

4

 

6

 

Interest expense

 

(14

)

(18

)

(32

)

(26

)

Other, net

 

(8

)

10

 

(3

)

20

 

Income tax expense

 

199

 

 

199

 

 

Net income

 

$

735

 

$

1,258

 

$

444

 

$

1,650

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share

 

$

0.10

 

$

0.17

 

$

0.06

 

$

0.23

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

7,257

 

7,229

 

7,254

 

7,226

 

Diluted

 

7,471

 

7,252

 

7,476

 

7,240

 

 

Use of Non-GAAP Financial Measures

 

Adjusted EBITDA is a supplemental measure used by Willdan’s management to measure its operating performance. Willdan defines Adjusted EBITDA as pre-tax net income plus (minus) net interest expense (income), depreciation and amortization, lease abandonment expense and loss (gain) on sale of assets. Willdan’s definition of Adjusted EBITDA may differ from those of many companies reporting similarly named measures. This measure should be considered in addition to, and not as a substitute for or superior to, other measures of financial performance prepared in accordance with U.S. generally accepted accounting principles, or GAAP, such as

 

2



 

net income. Willdan believes Adjusted EBITDA enables management to separate unusual or infrequent income and expense items from its results of operations to provide a more normalized and consistent view of operating performance on a period-to-period basis. Willdan uses Adjusted EBITDA to evaluate its performance for, among other things, budgeting, forecasting and incentive compensation purposes. Willdan also believes Adjusted EBITDA is useful to investors, research analysts, investment bankers and lenders because it removes from its operational results the impact of certain unusual or infrequent income and expense items, which may facilitate comparison of its results from period to period.

 

Adjusted EBITDA is not a recognized term under GAAP and does not purport to be an alternative to income from operations or net income as an indicator of operating performance or any other GAAP measure.

 

Adjusted EBITDA decreased $1.0 million to $1.2 million for the six months ended July 1, 2011 from $2.2 million for the comparable period last year.

 

The following is a reconciliation of net (loss) income to Adjusted EBITDA:

 

 

 

Six Months Ended

 

In thousands

 

July 1,
2011

 

July 2,
2010

 

 

 

 

 

 

 

Net income

 

$

444

 

$

1,650

 

Interest income

 

(4

)

(6

)

Interest expense

 

32

 

26

 

Loss (gain) on sale of equipment

 

7

 

(19

)

Income tax expense

 

199

 

 

Depreciation and amortization

 

519

 

518

 

Lease abandonment expense, net

 

9

 

13

 

Adjusted EBITDA

 

$

1,206

 

$

2,182

 

 

Liquidity and Capital Resources

 

Willdan had $7.2 million in cash and cash equivalents at July 1, 2011, compared with $6.6 million at December 31, 2010. Willdan has a $5.0 million bank revolving line of credit, with no outstanding borrowings at the quarter’s end.

 

Conference Call and Webcast

 

Chief Executive Officer Thomas Brisbin and Chief Financial Officer Kimberly Gant plan to host a conference call on August 11, 2011 at 5:00 p.m. Eastern/2:00 p.m. Pacific, to further discuss the Company’s financial results.

 

Interested parties may participate in the conference call by dialing 877-941-8609 (480-629-9818 for international callers). When prompted, ask for the “Willdan Group, Inc., Second Quarter 2011 Conference Call.” The conference call will be webcast simultaneously on Willdan’s website at www.willdan.com under Investors: Events.

 

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The telephonic replay of the conference call may be accessed approximately two hours after the call through August 25, 2011, by dialing 800-406-7325 (303-590-3030 for international callers).  The replay access code is 4458758.  The webcast replay will be archived for 12 months.

 

About Willdan Group, Inc.

 

Founded over 45 years ago, Willdan is a provider of professional technical and consulting services to small and mid-sized public agencies, large public utilities and, to a lesser extent, private industry primarily located in California, New York and Arizona. Willdan provides a broad range of services to clients, including civil engineering and planning, energy efficiency and sustainability, economic and financial consulting, and homeland security and communications and technology. For additional information, visit Willdan’s website at www.willdan.com.

 

Forward-Looking Statements

 

Safe Harbor Statement: Statements in this press release which are not purely historical, including statements regarding Willdan’s intentions, hopes, beliefs, expectations, representations, projections, estimates, plans or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties including, but not limited to, the risk that Willdan will not be able to expand its services or meet the needs of customers in markets in which it operates. It is important to note that Willdan’s actual results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, a slowdown in the local and regional economies of the states where Willdan conducts business and the loss of or inability to hire additional qualified professionals. Willdan’s business could be affected by a number of other factors, including the risk factors listed from time to time in Willdan’s SEC reports including, but not limited to, the Form 10-K annual report for the year ended December 31, 2010 filed on March 29, 2011. Willdan cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Willdan disclaims any obligation to, and does not undertake to, update or revise any forward-looking statements in this press release.

 

4



 

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

July 1,
2011

 

December 31,
2010

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

7,174,000

 

$

6,642,000

 

Accounts receivable, net of allowance for doubtful accounts of $741,000 and $959,000 at July 1, 2011 and December 31, 2010, respectively

 

11,272,000

 

14,484,000

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

15,683,000

 

11,343,000

 

Other receivables

 

173,000

 

176,000

 

Prepaid expenses and other current assets

 

1,420,000

 

1,714,000

 

Total current assets

 

35,722,000

 

34,359,000

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

1,362,000

 

1,496,000

 

Goodwill

 

15,208,000

 

12,475,000

 

Other intangible assets, net

 

68,000

 

95,000

 

Other assets

 

386,000

 

407,000

 

Deferred income taxes, net of current portion

 

622,000

 

622,000

 

Total assets

 

$

53,368,000

 

$

49,454,000

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Excess of outstanding checks over bank balance

 

$

1,512,000

 

$

1,223,000

 

Borrowings under line of credit

 

 

1,000,000

 

Accounts payable

 

3,986,000

 

5,380,000

 

Purchase price payable

 

2,733,000

 

 

Accrued liabilities

 

8,490,000

 

5,985,000

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

1,313,000

 

1,041,000

 

Current portion of notes payable

 

88,000

 

90,000

 

Current portion of capital lease obligations

 

175,000

 

173,000

 

Current portion of deferred income taxes

 

1,407,000

 

1,407,000

 

Total current liabilities

 

19,704,000

 

16,299,000

 

 

 

 

 

 

 

Notes payable, less current portion

 

113,000

 

131,000

 

Capital lease obligations, less current portion

 

96,000

 

96,000

 

Deferred lease obligations

 

699,000

 

766,000

 

Total liabilities

 

20,612,000

 

17,292,000

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

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

 

 

 

Common stock, $0.01 par value, 40,000,000 shares authorized: 7,257,000 and 7,246,000 shares issued and outstanding at July 1, 2011 and December 31, 2010, respectively

 

72,000

 

72,000

 

Additional paid-in capital

 

33,915,000

 

33,765,000

 

Accumulated deficit

 

(1,231,000

)

(1,675,000

)

Total stockholders’ equity

 

32,756,000

 

32,162,000

 

Total liabilities and stockholders’ equity

 

$

53,368,000

 

$

49,454,000

 

 

5



 

 WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

July 1,

 

July 2,

 

July 1,

 

July 2,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

Contract revenue

 

$

25,812,000

 

$

20,367,000

 

$

48,554,000

 

$

37,318,000

 

 

 

 

 

 

 

 

 

 

 

Direct costs of contract revenue:

 

 

 

 

 

 

 

 

 

Salaries and wages

 

6,628,000

 

5,612,000

 

12,999,000

 

10,626,000

 

Subconsultant services

 

6,567,000

 

3,542,000

 

13,793,000

 

5,479,000

 

Other direct costs

 

2,321,000

 

1,644,000

 

2,287,000

 

2,986,000

 

Total direct costs of contract revenue

 

15,516,000

 

10,798,000

 

29,079,000

 

19,091,000

 

Gross profit

 

10,296,000

 

9,569,000

 

19,475,000

 

18,227,000

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses:

 

 

 

 

 

 

 

 

 

Salaries and wages, payroll taxes and employee benefits

 

5,303,000

 

4,484,000

 

10,864,000

 

8,926,000

 

Facilities and facilities related

 

1,319,000

 

1,035,000

 

2,397,000

 

2,129,000

 

Stock-based compensation

 

54,000

 

48,000

 

108,000

 

128,000

 

Depreciation and amortization

 

229,000

 

239,000

 

486,000

 

510,000

 

Other

 

2,437,000

 

2,498,000

 

4,946,000

 

4,884,000

 

Total general and administrative expenses

 

9,342,000

 

8,304,000

 

18,801,000

 

16,577,000

 

Income from operations

 

954,000

 

1,265,000

 

674,000

 

1,650,000

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

Interest income

 

2,000

 

1,000

 

4,000

 

6,000

 

Interest expense

 

(14,000

)

(18,000

)

(32,000

)

(26,000

)

Other, net

 

(8,000

)

10,000

 

(3,000

)

20,000

 

Total other expense, net

 

(20,000

)

(7,000

)

(31,000

)

 

Income before income taxes

 

934,000

 

1,258,000

 

643,000

 

1,650,000

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

199,000

 

 

199,000

 

 

Net income

 

$

735,000

 

$

1,258,000

 

$

444,000

 

$

1,650,000

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.10

 

$

0.17

 

$

0.06

 

$

0.23

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

7,257,000

 

7,229,000

 

7,254,000

 

7,226,000

 

Diluted

 

7,471,000

 

7,252,000

 

7,476,000

 

7,240,000

 

 

6



 

WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 

 

 

Six Months Ended

 

 

 

July 1,
2011

 

July 2,
2010

 

Cash flows from operating activities:

 

 

 

 

 

Net income

 

$

444,000

 

$

1,650,000

 

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

 

 

 

 

 

Depreciation and amortization

 

519,000

 

518,000

 

Lease abandonment expense, net

 

9,000

 

13,000

 

Loss (gain) on sale of equipment

 

7,000

 

(19,000

)

Provision for doubtful accounts

 

64,000

 

210,000

 

Stock-based compensation

 

108,000

 

128,000

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

3,148,000

 

(1,646,000

)

Costs and estimated earnings in excess of billings on uncompleted contracts

 

(4,340,000

)

(4,571,000

)

Other receivables

 

3,000

 

41,000

 

Prepaid expenses and other current assets

 

294,000

 

(4,000

)

Other assets

 

21,000

 

(38,000

)

Accounts payable

 

(1,394,000

)

(71,000

)

Accrued liabilities

 

2,505,000

 

1,836,000

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

272,000

 

350,000

 

Deferred lease obligations

 

(76,000

)

(134,000

)

Net cash provided by (used in) operating activities

 

1,584,000

 

(1,737,000

)

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchase of equipment and leasehold improvements

 

(263,000

)

(241,000

)

Proceeds from sale of equipment

 

1,000

 

30,000

 

Net cash used in investing activities

 

(262,000

)

(211,000

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Changes in excess of outstanding checks over bank balance

 

289,000

 

310,000

 

Payments on notes payable

 

(43,000

)

(20,000

)

Proceeds from notes payable

 

23,000

 

 

Borrowings under line of credit

 

13,667,000

 

5,470,000

 

Repayments on line of credit

 

(14,667,000

)

(5,470,000

)

Principal payments on capital lease obligations

 

(101,000

)

(81,000

)

Proceeds from sales of common stock under employee stock purchase plan

 

42,000

 

47,000

 

Net cash (used in) provided by financing activities

 

(790,000

)

256,000

 

Net increase (decrease) in cash and cash equivalents

 

532,000

 

(1,692,000

)

Cash and cash equivalents at beginning of the period

 

6,642,000

 

8,445,000

 

Cash and cash equivalents at end of the period

 

$

7,174,000

 

$

6,753,000

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

Interest

 

$

37,000

 

$

28,000

 

Income taxes

 

18,000

 

2,000

 

 

 

 

 

 

 

Supplemental disclosures of noncash investing and financing activities:

 

 

 

 

 

Equipment acquired under capital lease obligations

 

$

103,000

 

$

51,000

 

Purchase price payable

 

2,733,000

 

2,000,000

 

 

7



 

SOURCE:  Willdan Group, Inc.

 

Contact:

Willdan Group, Inc.

Kimberly Gant

Chief Financial Officer

Tel: 714-940-6300

kgant@willdan.com

 

or

 

Financial Profiles, Inc.

Moira Conlon

Tel: 310-478-2700 x11

mconlon@finprofiles.com

 

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