PRESS RELEASES
<< Back
Willdan Group Reports Increased Revenues and Earnings for Third Quarter 2017
Investment Community Conference Call Today at
Third Quarter 2017 Highlights
-
Total contract revenue of
$69.0 million , an increase of 18% over prior year - Organic revenue growth (as defined below) was 16% in the third quarter
-
Income from operations of
$4.2 million , an increase of 37% over prior year -
Diluted earnings per share of
$0.31
For the third quarter of 2017,
"We see positive trends across
Third Quarter 2017 Financial Highlights
Total contract revenue for the third quarter of 2017 was
Direct costs of contract revenue were
Revenue, net of subcontractor services and other direct costs (see "Use
of Non-GAAP Financial Measures" below), for the third quarter of 2017
was
Total general and administrative expenses for the third quarter of 2017
increased 23.3% to
Net income for the third quarter of 2017 was
The growth in revenue and improvement in project profitability enabled
EBITDA (see "Use of Non-GAAP Financial Measures" below) to increase 45%
to
Nine Months 2017 Financial Highlights
Total contract revenue for the nine months ended
Direct costs of contract revenue increased 46.7% to
Revenue, net of subcontractor services and other direct costs, for the
nine months ended
Total general and administrative expenses for the nine months ended
Net income for the nine months ended
The growth in revenues enabled EBITDA to grow 26.9% to
Liquidity and Capital Resources
Outlook
-
Total contract revenue of
$255 -$265 million -
Diluted earnings per share of
$1.12 -$1.18 - Effective tax rate of approximately 40% for the remaining quarter
- Diluted share count of 9.25 million shares
-
Depreciation of
$1.6 million -
Amortization of
$2.7 million
Over the long-term,
Conference Call Details
Chief Executive Officer
Interested parties may participate in the conference call by dialing 888-394-8218 and providing conference ID 5266745. The conference call will be webcast simultaneously on Willdan's website at www.willdan.com under Investors: Events and the replay will be archived for at least 12 months.
The telephonic replay of the conference call may be accessed following
the call by dialing 888-203-1112 and entering the passcode 5266745. The
replay will be available through
About Willdan Group, Inc.
Willdan provides professional technical and consulting services to
utilities, public agencies and private industry throughout the
Use of Non-GAAP Financial Measures
"Revenue, net of subcontractor services and other direct costs," a
non-GAAP financial measure, is a supplemental measure
that Willdan believes enhances investors' ability to analyze our
business trend and performance because it substantially measures the
work performed by our employees. In the course of providing services,
EBITDA is a supplemental measure used by Willdan's management to measure
its operating performance.
EBITDA has limitations as an analytical tool and should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP. Certain items excluded from EBITDA are significant components in understanding and assessing a company's financial performance, such as a company's costs of capital, as well as the historical costs of depreciable assets. Willdan's definition of EBITDA may also differ from those of many companies reporting similarly named measures. Willdan believes EBITDA is useful to investors, research analysts, investment bankers and lenders because it removes the impact of certain non-operational items from its operational results, which may facilitate comparison of its results from period to period. A reconciliation of net income as reported in accordance with GAAP to EBITDA is provided at the end of this news release.
Willdan's definition of Revenue, net of subcontractor services and other direct costs, and EBITDA may differ from other companies reporting similarly named measures. These measures should be considered in addition to, and not as a substitute for, or superior to, other measures of financial performance prepared in accordance with GAAP, such as contract revenue and net income.
Forward-Looking Statements
Statements in this press release that 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,
including statements regarding Willdan's targets for fiscal year 2017
and the expected benefits of Willdan's recent acquisition of Integral
Analytics. 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, Willdan's failure
to execute on existing projects, inability to integrate recent
acquisitions, including its recent acquisition of Integral Analytics, a
slowdown in the local and regional economies of the states where Willdan
conducts business, Willdan's inability to successfully implement its tax
strategy 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 Annual
Report on Form 10-K filed for the year ended December 30, 2016 and the
Quarterly Reports on Form 10-Q for the quarters ended
|
|
||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (Unaudited) | ||||||
|
|
|
|||||
| 2017 | 2016 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 5,603,000 | $ | 22,668,000 | ||
|
Accounts receivable, net of allowance for doubtful accounts of
|
36,084,000 | 30,285,000 | ||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | 27,188,000 | 18,988,000 | ||||
| Other receivables | 1,778,000 | 699,000 | ||||
| Prepaid expenses and other current assets | 2,831,000 | 2,601,000 | ||||
| Total current assets | 73,484,000 | 75,241,000 | ||||
| Equipment and leasehold improvements, net | 5,360,000 | 4,511,000 | ||||
|
|
40,056,000 | 21,947,000 | ||||
| Other intangible assets, net | 11,145,000 | 5,941,000 | ||||
| Other assets | 807,000 | 707,000 | ||||
| Total assets | $ | 130,852,000 | $ | 108,347,000 | ||
| Liabilities and Stockholders' Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 23,048,000 | $ | 17,395,000 | ||
| Accrued liabilities | 17,755,000 | 19,049,000 | ||||
| Contingent consideration payable | 777,000 | 1,925,000 | ||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 7,102,000 | 8,377,000 | ||||
| Notes payable | 1,276,000 | 3,972,000 | ||||
| Capital lease obligations | 307,000 | 334,000 | ||||
| Total current liabilities | 50,265,000 | 51,052,000 | ||||
| Contingent consideration payable | 8,205,000 | 2,537,000 | ||||
| Notes payable | 1,500,000 | 2,074,000 | ||||
| Capital lease obligations, less current portion | 177,000 | 210,000 | ||||
| Deferred lease obligations | 650,000 | 714,000 | ||||
| Deferred income taxes, net | 3,626,000 | 1,842,000 | ||||
| Total liabilities | 64,423,000 | 58,429,000 | ||||
| Commitments and contingencies | ||||||
| Stockholders' equity: | ||||||
|
Preferred stock, |
— | — | ||||
|
Common stock, |
88,000 | 83,000 | ||||
| Additional paid-in capital | 50,043,000 | 42,376,000 | ||||
| Retained earnings | 16,298,000 | 7,459,000 | ||||
| Total stockholders' equity | 66,429,000 | 49,918,000 | ||||
| Total liabilities and stockholders' equity | $ | 130,852,000 | $ | 108,347,000 | ||
|
|
||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
|
|
|
|||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Contract revenue | $ | 69,007,000 | $ | 58,660,000 | $ | 209,191,000 | $ | 151,516,000 | ||||||||
| Direct costs of contract revenue (inclusive of directly related depreciation and amortization): | ||||||||||||||||
| Salaries and wages | 11,425,000 | 10,421,000 | 33,594,000 | 28,753,000 | ||||||||||||
| Subcontractor services and other direct costs | 37,310,000 | 32,134,000 | 118,881,000 | 75,161,000 | ||||||||||||
| Total direct costs of contract revenue | 48,735,000 | 42,555,000 | 152,475,000 | 103,914,000 | ||||||||||||
| General and administrative expenses: | ||||||||||||||||
| Salaries and wages, payroll taxes and employee benefits | 8,691,000 | 7,825,000 | 26,092,000 | 23,035,000 | ||||||||||||
| Facilities and facility related | 1,235,000 | 1,039,000 | 3,478,000 | 2,978,000 | ||||||||||||
| Stock-based compensation | 896,000 | 268,000 | 1,992,000 | 732,000 | ||||||||||||
| Depreciation and amortization | 1,053,000 | 742,000 | 2,896,000 | 2,308,000 | ||||||||||||
| Other | 4,214,000 | 3,178,000 | 11,548,000 | 9,694,000 | ||||||||||||
| Total general and administrative expenses | 16,089,000 | 13,052,000 | 46,006,000 | 38,747,000 | ||||||||||||
| Income from operations | 4,183,000 | 3,053,000 | 10,710,000 | 8,855,000 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (23,000 | ) | (43,000 | ) | (88,000 | ) | (137,000 | ) | ||||||||
| Other, net | 18,000 | — | 56,000 | 2,000 | ||||||||||||
| Total other expense, net | (5,000 | ) | (43,000 | ) | (32,000 | ) | (135,000 | ) | ||||||||
| Income before income taxes | 4,178,000 | 3,010,000 | 10,678,000 | 8,720,000 | ||||||||||||
| Income tax expense | 1,292,000 | 548,000 | 1,839,000 | 1,990,000 | ||||||||||||
| Net income | $ | 2,886,000 | $ | 2,462,000 | $ | 8,839,000 | $ | 6,730,000 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.33 | $ | 0.30 | $ | 1.03 | $ | 0.82 | ||||||||
| Diluted | $ | 0.31 | $ | 0.28 | $ | 0.97 | $ | 0.79 | ||||||||
| Weighted-average shares outstanding: | ||||||||||||||||
| Basic | 8,730,000 | 8,308,000 | 8,580,000 | 8,181,000 | ||||||||||||
| Diluted | 9,248,000 | 8,720,000 | 9,138,000 | 8,516,000 | ||||||||||||
|
|
||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited) | ||||||||
| Nine Months Ended | ||||||||
|
|
|
|||||||
| 2017 | 2016 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 8,839,000 | $ | 6,730,000 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 2,976,000 | 2,314,000 | ||||||
| Deferred income taxes, net | 1,784,000 | 2,556,000 | ||||||
| Loss on sale/disposal of equipment | 26,000 | 3,000 | ||||||
| (Recovery of) provision for doubtful accounts | (98,000 | ) | 92,000 | |||||
| Stock-based compensation | 1,992,000 | 732,000 | ||||||
| Accretion and fair value adjustments of contingent consideration | 779,000 | (139,000 | ) | |||||
| Changes in operating assets and liabilities, net of effects from business acquisitions: | ||||||||
| Accounts receivable | (5,061,000 | ) | 5,148,000 | |||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | (8,200,000 | ) | (7,956,000 | ) | ||||
| Other receivables | (1,071,000 | ) | (1,918,000 | ) | ||||
| Prepaid expenses and other current assets | (167,000 | ) | (335,000 | ) | ||||
| Other assets | 44,000 | 56,000 | ||||||
| Accounts payable | 5,408,000 | 1,760,000 | ||||||
| Accrued liabilities | (3,340,000 | ) | 5,246,000 | |||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | (1,812,000 | ) | 2,469,000 | |||||
| Deferred lease obligations | (64,000 | ) | (9,000 | ) | ||||
| Net cash provided by operating activities | 2,035,000 | 16,749,000 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchase of equipment and leasehold improvements | (1,826,000 | ) | (1,386,000 | ) | ||||
| Cash paid for acquisitions, net of cash acquired | (14,603,000 | ) | (8,857,000 | ) | ||||
| Net cash used in investing activities | (16,429,000 | ) | (10,243,000 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payments on contingent consideration | (1,659,000 | ) | (1,285,000 | ) | ||||
| Payments on notes payable | (3,270,000 | ) | (3,083,000 | ) | ||||
| Principal payments on capital lease obligations | (323,000 | ) | (411,000 | ) | ||||
| Proceeds from stock option exercise | 1,751,000 | 164,000 | ||||||
| Proceeds from sales of common stock under employee stock purchase plan | 830,000 | 209,000 | ||||||
| Net cash used in financing activities | (2,671,000 | ) | (4,406,000 | ) | ||||
| Net (decrease) increase in cash and cash equivalents | (17,065,000 | ) | 2,100,000 | |||||
| Cash and cash equivalents at beginning of period | 22,668,000 | 16,487,000 | ||||||
| Cash and cash equivalents at end of period | $ | 5,603,000 | $ | 18,587,000 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | 88,000 | $ | 137,000 | ||||
| Income taxes | 2,142,000 | 2,046,000 | ||||||
| Supplemental disclosures of noncash investing and financing activities: | ||||||||
| Issuance of notes payable related to business acquisitions | $ | — | $ | 4,569,000 | ||||
| Issuance of common stock related to business acquisitions | 3,099,000 | 2,228,000 | ||||||
| Contingent consideration related to business acquisitions | 5,400,000 | — | ||||||
| Other payable for working capital adjustment | 1,881,000 | — | ||||||
| Other receivable for working capital adjustment | — | 604,000 | ||||||
| Equipment acquired under capital leases | 263,000 | 186,000 | ||||||
|
|
||||||||||||
| Reconciliation of GAAP Revenue and "Revenue, Net of Subcontractor Services and Other Direct Costs" | ||||||||||||
| (Non-GAAP Measure) | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
|
|
|
|
|
|||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Contract revenue | $ | 69,007,000 | $ | 58,660,000 | $ | 209,191,000 | $ | 151,516,000 | ||||
| Subcontractor services and other direct costs | 37,310,000 | 32,134,000 | 118,881,000 | 75,161,000 | ||||||||
| Revenue, net of subcontractor services and other direct costs | $ | 31,697,000 | $ | 26,526,000 | $ | 90,310,000 | $ | 76,355,000 | ||||
|
|
||||||||||||
| Reconciliation of GAAP Net Income to EBITDA | ||||||||||||
| (Non-GAAP Measure) | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
|
|
|
|
|
|||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Net income | $ | 2,886,000 | $ | 2,462,000 | $ | 8,839,000 | $ | 6,730,000 | ||||
| Interest expense | 23,000 | 43,000 | 88,000 | 137,000 | ||||||||
| Income tax expense | 1,292,000 | 548,000 | 1,839,000 | 1,990,000 | ||||||||
| Interest accretion(1) | 498,000 | 168,000 | 779,000 | 278,000 | ||||||||
| Depreciation and amortization | 1,106,000 | 742,000 | 2,976,000 | 2,308,000 | ||||||||
| EBITDA | $ | 5,805,000 | $ | 3,963,000 | $ | 14,521,000 | $ | 11,443,000 | ||||
_____________________________
| (1) |
Interest accretion represents the imputed interest on the earn-out
payments to be paid by us in connection with our acquisitions of
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171102006798/en/
Chief Financial
Officer
Tel: 714-940-6300
smclaughlin@willdan.com
or
Investor/Media
Contact
Tel:
310-622-8221
trossi@finprofiles.com
Source:
News Provided by Acquire Media
