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Willdan Reports Second Quarter 2007 Financial Results
ANAHEIM, Calif., Aug 09, 2007 (BUSINESS WIRE) --
Willdan Group, Inc. ("Willdan") (NASDAQ:WLDN), announces financial results for its second quarter ended June 29, 2007.
For the second quarter of 2007, Willdan reported total contract revenue of $21.2 million and net income of $1.1 million, or $0.15 per basic and diluted share.
Key Operational Highlights for the Second Quarter 2007
-- Increased utilization rates of our direct employees;
-- Returned to profitability and positive cash flow from operations; and
-- Strengthened our management team through the appointments of Kimberly Gant as Chief Financial Officer and Marc Tipermas as President of National Programs, and the promotion of Mallory McCamant to Chief Operations Officer.
Thomas Brisbin, Chief Executive Officer of Willdan stated, "Since the first quarter of 2007, Willdan employees have responded with a sense of urgency. The result is higher utilization rates, improved profitability and increased cash flow. We have also recently made two key hires that strengthen our business development and financial capabilities. The steps we've taken in the second quarter reflect our progress in building a strong foundation for sustainable growth."
Second Quarter Results
For the second quarter of fiscal 2007, revenue was $21.2 million, up $0.9 million, or 4.5%, from revenue of $20.3 million for the comparable period last year. On a sequential basis, revenue was up $1.9 million, or 9.9% from the first quarter of 2007. Income from operations was $1.7 million for the second quarter of fiscal 2007, down $0.2 million, or 8.6% from the comparable period last year. On a sequential basis, income from operations was up $2.8 million from the first quarter of 2007. Net income was $1.1 million for the second quarter of fiscal 2007, down $2.8 million, or 72.7% from the comparable period last year. In the second quarter of fiscal 2006, the Company recognized income of $2.3 million for life insurance proceeds as a result of the death of its former Chief Executive Officer. Further, prior to the Company's initial public offering of its common stock (IPO) in November 2006, the Company was considered a qualified S Corporation for federal and state income tax purposes. Upon the completion of the IPO, the Company's S Corporation status terminated and the Company became subject to federal and state income taxes as a C Corporation. Pro forma net income for the second quarter of fiscal 2006 would have been $3.2 million assuming the Company had been taxed during that period as a C Corporation. Basic and diluted earnings per share for the second quarter of fiscal 2007 was $0.15 as compared to $0.82 for the comparable period last year or $0.69 on a pro forma basis giving effect to additional income tax expense.
Willdan generated cash flow from operations of $2.2 million in the second fiscal quarter of 2007.
Six Months Results
For the six months ended June 29, 2007, revenue was $40.4 million, up $2.3 million, or 6.2%, from revenue of $38.1 for the comparable period last year. Income from operations was $0.6 million for the first six months of fiscal 2007, down $2.3 million, or 79.7%, from the comparable period last year. Net income was $0.8 million for the first six months of fiscal 2007, down $4.0 million, or 83.0% from the comparable period last year. Giving effect to additional income tax expense, pro forma net income for the six months ended June 30, 2006 would have been $3.8 million. Basic and diluted earnings per share for the first six months of fiscal 2007 was $0.11 as compared to $1.01 for the comparable period last year or $0.80 on a pro forma basis.
Three Months Ended Six Months Ended
------------------ ----------------
June June June June
29, 30, 29, 30,
In thousands (except EPS data) 2007 2006 2007 2006
--------- ------- ------- -------
Revenue $21,180 $20,272 $40,448 $38,093
Income from operations 1,688 1,846 581 2,859
Interest expense 24 225 (550) 411
Interest income and other, net 148 2,283 328 2,355
Income tax expense 754 25 651 38
--------- ------- ------- -------
Net income $ 1,058 $ 3,879 $ 808 $ 4,765
========= ======= ======= =======
Basic and Diluted EPS:
Net income $ 0.15 $ 0.82 $ 0.11 $ 1.01
Weighted average shares
outstanding:
Basic 7,148 4,713 7,148 4,712
Diluted 7,151 4,713 7,150 4,712
Pro Forma Data (unaudited)(1):
Pro forma income tax expense $ 662 $ 1,021
Pro forma net income $ 3,242 $ 3,782
Pro forma EPS, basic and diluted $ 0.69 $ 0.80
(1) Assumes the Company was taxed as a C corporation during the three
and six months ended June 29, 2006.
Outlook
The following statement is based on current expectations. This statement is forward-looking and actual results could differ materially from current expectations. This outlook should be read in conjunction with the information on forward-looking statements at the end of this press release.
Willdan maintains its previously disclosed outlook of $86 million to $90 million in revenue for its fiscal year 2007.
Conference Call and Webcast
Chief Executive Officer Thomas Brisbin, Chief Operations Officer Mallory McCamant and Chief Financial Officer Kimberly Gant plan to host a conference call on August 9, 2007 at 5:00 p.m. Eastern/2:00 p.m. Pacific to further discuss the Company's financial results and business developments.
Interested parties may access the conference call by dialing 866-249-5225 (303-262-2211 for international callers). When prompted, ask for the "Willdan Group Investor Conference Call." The conference call will be webcast simultaneously on Willdan's website at www.willdangroup.com under Investor Relations: Events.
The telephonic replay of the conference call may be accessed approximately two hours after the call through August 23, 2007, by dialing 800-405-2236 (303-590-3000 for international callers). The replay access code is 11094945#. The webcast replay will be archived for 12 months.
About Willdan Group, Inc.
Founded over 40 years ago, Willdan Group, Inc. is a leading provider of outsourced services to public agencies located primarily in California and other western states. Willdan Group, Inc. assists cities and other government agencies with a broad range of services, including civil engineering, building and safety services, geotechnical engineering, financial and economic consulting, and disaster preparedness and homeland security. www.willdangroup.com
Forward-Looking Statements
Safe Harbor Statement: Statements in this press release which are not purely historical, including statements regarding Willdan Group'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 the Company 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 the Company'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. The Company's business could be affected by a number of other factors, including the risk factors listed from time to time in the Company's SEC reports including, but not limited to, the Form 10-K annual report for the year ended December 29, 2006 filed on March 27, 2007. The Company cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Willdan Group, Inc. disclaims any obligation, and does not undertake to update or revise any forward-looking statements in this press release.
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December June
29, 29,
2006 2007
----------- -----------
Assets (Unaudited)
Current assets:
Cash and cash equivalents $20,633,000 $ 5,000,000
Liquid investments -- 7,700,000
---------- -----------
Cash, cash equivalents and liquid
investments 20,633,000 12,700,000
---------- -----------
Accounts receivable, net of allowance for
doubtful accounts of $492,000 and
$598,000 at December 29, 2006 and June
29, 2007, respectively 14,270,000 14,464,000
Costs and estimated earnings in excess of
billings on uncompleted contracts 7,960,000 8,846,000
Other receivables 4,505,000 1,315,000
Prepaid expenses and other current assets 1,858,000 1,376,000
---------- -----------
Total current assets 49,226,000 38,701,000
Equipment and leasehold improvements, net 4,372,000 3,949,000
Goodwill 2,911,000 2,911,000
Other assets 599,000 559,000
---------- -----------
Total assets $57,108,000 $ 46,120,000
========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Excess of outstanding checks over bank
balance $ 257,000 $ 652,000
Accounts payable 1,270,000 864,000
Accrued liabilities 14,106,000 6,081,000
Billings in excess of costs and estimated
earnings on uncompleted contracts 1,222,000 1,266,000
Accrued final distribution payable to
holders of redeemable common stock 3,150,000 --
Current portion of notes payable 993,000 345,000
Current portion of notes payable to
related parties 75,000 --
Current portion of capital lease
obligations 170,000 170,000
Current portion of deferred income taxes 1,693,000 1,693,000
---------- -----------
Total current liabilities 22,936,000 11,071,000
---------- -----------
Notes payable to related parties, less
current portion 46,000 --
Capital lease obligations, less current
portion 348,000 287,000
Deferred lease obligations 547,000 646,000
Deferred income taxes, net of current portion 398,000 398,000
---------- -----------
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: 7,148,000 shares
issued and outstanding at December 29,
2006 and June 29, 2007, respectively 71,000 71,000
Additional paid-in capital 32,552,000 32,629,000
Retained earnings 210,000 1,018,000
---------- -----------
Total stockholders' equity 32,833,000 33,718,000
---------- -----------
Total liabilities and
stockholders' equity $57,108,000 $ 46,120,000
========== ===========
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
------------------------ -----------------------
June 30, June 29, June 30, June 29,
2006 2007 2006 2007
-------------- --------- ----------- ----------
Contract revenues $20,272,000 $21,180,000 $38,093,000 $40,448,000
----------- ---------- ----------- ----------
Direct costs of
contract revenues:
Salaries and
wages 6,273,000 6,917,000 12,158,000 13,401,000
Production
expenses 438,000 453,000 768,000 797,000
Subconsultant
services 1,067,000 1,192,000 1,960,000 2,251,000
----------- ---------- ----------- ----------
Total direct
costs of
contract
revenues 7,778,000 8,562,000 14,886,000 16,449,000
----------- ---------- ----------- ----------
General and
administrative
expenses:
Salaries and
wages, payroll
taxes and
employee
benefits 6,721,000 5,957,000 13,045,000 13,344,000
Facilities 973,000 1,158,000 1,863,000 2,260,000
Depreciation and
amortization 391,000 449,000 723,000 896,000
Other 2,563,000 3,366,000 4,717,000 6,918,000
----------- ---------- ----------- ----------
Total general
and
administrative
expenses 10,648,000 10,930,000 20,348,000 23,418,000
----------- ---------- ----------- ----------
Income from
operations 1,846,000 1,688,000 2,859,000 581,000
----------- ---------- ----------- ----------
Other income
(expense):
Interest expense (225,000) (24,000) (411,000) 550,000
Interest income
and other, net 2,283,000 148,000 2,355,000 328,000
----------- ---------- ----------- ----------
Total
other
income 2,058,000 124,000 1,944,000 878,000
----------- ---------- ----------- ----------
Income
before
income
tax
expense 3,904,000 1,812,000 4,803,000 1,459,000
Income tax expense 25,000 754,000 38,000 651,000
----------- ---------- ----------- ----------
Net
income $ 3,879,000 $ 1,058,000 $ 4,765,000 $ 808,000
=========== ========== =========== ==========
Net income per
share:
Basic and diluted $ 0.82 $ 0.15 $ 1.01 $ 0.11
=========== ========== =========== ==========
Weighted-average
shares outstanding:
Basic 4,713,000 7,148,000 4,712,000 7,148,000
=========== ========== =========== ==========
Diluted 4,713,000 7,151,000 4,712,000 7,150,000
=========== ========== =========== ==========
Pro Forma Data
(unaudited):
Pro forma provision
for income taxes $ 662,000 $ 1,021,000
Pro forma net income $ 3,242,000 $ 3,782,000
Pro forma income per
common share, basic
and diluted $ 0.69 $ 0.80
=========== ===========
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
--------------------------
June 30, June 29,
2006 2007
------------ ------------
Cash flows from operating activities:
Net income $ 4,765,000 $ 808,000
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 724,000 896,000
(Gain) loss on sale of equipment (13,000) 10,000
Allowance for doubtful accounts 84,000 91,000
Stock-based compensation -- 67,000
Changes in operating assets and
liabilities:
Accounts receivable (2,571,000) (285,000)
Costs and estimated earnings in
excess of billing on uncompleted
contracts (88,000) (886,000)
Other receivables (1,875,000) 3,190,000
Prepaid expenses and other
current assets 182,000 482,000
Other assets (111,000) 26,000
Accounts payable 361,000 (406,000)
Accrued liabilities (711,000) (8,025,000)
Billings in excess of costs and
estimated earnings on
uncompleted contracts 390,000 44,000
Deferred income taxes 48,000 --
Deferred lease obligations 4,000 99,000
----------- ------------
Net cash provided by (used
in) operating activities 1,189,000 (3,889,000)
----------- ------------
Cash flows from investing activities:
Purchase of equipment and leasehold
improvements (1,754,000) (468,000)
Proceeds from sale of equipment 4,000 27,000
Purchase of other assets (100,000) --
Purchase of liquid investments -- (12,600,000)
Proceeds from sale of liquid investments -- 4,900,000
----------- ------------
Net cash used in investing
activities (1,850,000) (8,141,000)
----------- ------------
Cash flows from financing activities:
Changes in excess of outstanding checks
over bank balance (55,000) 395,000
Payments on notes payable (820,000) (769,000)
Proceeds from borrowings under line of
credit 10,060,000 --
Repayments of line of credit (8,741,000) --
Principal payments on capital leases (70,000) (89,000)
Payments on liabilities to stockholders (3,000) --
Proceeds from issuance of redeemable
common stock 18,000 --
Distributions to holders of redeemable
common stock (2,334,000) (3,150,000)
(Payment) refund of offering costs (341,000) 10,000
----------- ------------
Net cash used in financing
activities (2,286,000) (3,603,000)
----------- ------------
Net decrease in cash and
cash equivalents (2,947,000) (15,633,000)
Cash and cash equivalents at beginning of
the period 3,066,000 20,633,000
----------- ------------
Cash and cash equivalents at end of the
period $ 119,000 $ 5,000,000
=========== ============
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 102,000 $ 49,000
Income taxes 38,000 424,000
Supplemental disclosures of noncash
investing and financing activities:
Equipment acquired under capital leases $ 271,000 $ 29,000
Note payable issued in connection with
acquisition of assets 150,000 --
SOURCE: Willdan Group, Inc.
Willdan Group, Inc. Mallory McCamant Chief Operations Officer 714-940-6327 mallory@willdangroup.com Kimberly Gant Chief Financial Officer 714-940-6329 kgant@willdangroup.com
Copyright Business Wire 2007
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