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Willdan Reports Second Quarter 2009 Financial Results
ANAHEIM, Calif., Aug 13, 2009 (BUSINESS WIRE) -- Willdan Group, Inc. ("Willdan") (NASDAQ:WLDN), today announced financial results for its second quarter ended July 3, 2009.
For the second quarter of 2009, Willdan reported total contract revenue of $15.5 million and a net loss of $0.9 million, or $0.12 per share. The second quarter results reflect an accounts receivable allowance of $0.4 million related to a private industry client in bankruptcy and a cumulative intangible amortization expense adjustment of $0.2 million related to the final purchase price allocation of Willdan Energy Solutions.
Tom Brisbin, Willdan's Chief Executive Officer, stated: "While the second quarter reflected a weak economic environment, we managed to drive profitability in two of our three business segments. At the same time, we continued to implement cost controls across the board in Q2 which are designed to positively impact cash flow going forward.
"We are focused on driving incremental revenue growth at Willdan Energy Solutions which addresses a growing sustainable energy marketplace. Our Public Finance and HomelandSecurity Services segments both posted profits, as finance remains a sector of increasing municipal interest, and the homeland security sector offers solid organic growth potential," Mr. Brisbin added.
Second Quarter 2009 Results
For the second quarter of fiscal 2009, revenue was $15.5 million, down $2.3 million, or 13.0%, from revenue of $17.8 million for the comparable period last year. On a sequential basis, revenue was down $1.7 million, or 9.9%, from the first quarter of 2009. Loss from operations was $1.4 million for the second quarter of fiscal 2009, as compared to $0.1 million for the comparable period last year. On a sequential basis, loss from operations increased by $0.7 million from $0.7 million in the first quarter of 2009.
Net loss was $0.9 million for the second quarter of fiscal 2009, as compared to $0.1 million in the comparable period last year and a net loss of $0.5 million in the first quarter of 2009.
Basic and diluted loss per share for the second quarter of fiscal 2009 was $0.12 as compared to $0.01 for the comparable period last year.
Willdan used $0.3 million in cash flow from operations in the second quarter of fiscal year 2009.
Six Months 2009 Results
For the six months ended July 3, 2009, revenue was $32.7 million, down $2.9 million, or 8.2%, from revenue of $35.6 million in the comparable period last year. Loss from operations was $2.1 million for the six months ended July 3, 2009 as compared to $0.1 million for the comparable period last year. Net loss was $1.4 million for the six months ended July 3, 2009 as compared to net income of $0.1 million for the comparable period last year.
Basic and diluted loss per share for the six months ended July 3, 2009 was $0.19 as compared to basic and diluted earnings per share of $0.01 for the comparable period last year.
Willdan generated $1.3 million in cash flow from operations in the six months ended July 3, 2009.
| Three Months Ended | Six Months Ended | ||||||||||||||||
| In thousands (except EPS data) | July 3, 2009 | June 27, 2008 | July 3, 2009 | June 27, 2008 | |||||||||||||
| Revenue | $ | 15,484 | $ | 17,807 | $ | 32,669 | $ | 35,583 | |||||||||
| Loss from operations | (1,433 | ) | (130 | ) | (2,138 | ) | (87 | ) | |||||||||
| Interest income | 11 | 93 | 23 | 241 | |||||||||||||
| Interest expense | (9 | ) | (22 | ) | (20 | ) | (2 | ) | |||||||||
| Other, net | (3 | ) | 20 | (3 | ) | 20 | |||||||||||
| Income tax (benefit) expense | (536 | ) | 16 | (786 | ) | 111 | |||||||||||
| Net (loss) income | $ | (898 | ) | $ | (55 | ) | $ | (1,352 | ) | $ | 61 | ||||||
| Basic and diluted (loss) earnings per share | $ | (0.12 | ) | $ | (0.01 | ) | $ | (0.19 | ) | $ | 0.01 | ||||||
| Weighted average shares outstanding: | |||||||||||||||||
| Basic | 7,188 | 7,156 | 7,178 | 7,156 | |||||||||||||
| Diluted | 7,188 | 7,157 | 7,178 | 7,157 | |||||||||||||
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 net (loss) income plus net interest expense, income tax (benefit) expense, depreciation and amortization, lease abandonment (recapture) expense and loss (gain) on sales 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 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 or net income as an indicator of operating performance or any other GAAP measure.
Adjusted EBITDA decreased $1.7 million to $(928,000) for the six months ended July 3, 2009 from $747,000 for the comparable period last year.
The following is a reconciliation of net (loss) income to Adjusted EBITDA:
| In thousands | Six Months Ended | |||||||||||
| July 3, 2009 | June 27, 2008 | |||||||||||
| Net (loss) income | $ | (1,352 | ) | $ | 61 | |||||||
| Interest income | (23 | ) | (241 | ) | ||||||||
| Interest expense | 20 | 2 | ||||||||||
| Loss (gain) on the sale of assets | 3 | (20 | ) | |||||||||
| Income tax (benefit) expense | (786 | ) | 111 | |||||||||
| Depreciation and amortization | 1,229 | 834 | ||||||||||
| Lease abandonment (recapture) expense | (19 | ) | -- | |||||||||
| Adjusted EBITDA | $ | (928 | ) | $ | 747 | |||||||
Liquidity and Capital Resources
Willdan had $8.7 million in cash and cash equivalents at July 3, 2009, compared with $8.1 million at January 2, 2009. Willdan has a $5 million bank revolving line of credit, at prime, which was unused 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 13, 2009 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 866-225-8754 (480-629-9692 for international callers). When prompted, ask for the "Willdan Group 2nd Quarter 2009 Investor Call." The conference call will be webcast simultaneously on Willdan's website at www.willdan.com under Investors: Events.
The telephonic replay of the conference call may be accessed approximately two hours after the call through August 27, 2009, by dialing 800-406-7325 (303-590-3030 for international callers). The replay access code is 4125896#. 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, energy efficiency, water conservation, renewable resource strategy, financial and economic consulting, disaster preparedness and homeland security. www.willdan.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 January 2, 2009 filed on March 31, 2009. 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 (unaudited) | ||||||||
| July 3, 2009 | January 2, 2009 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 8,703,000 | $ | 8,144,000 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $1,175,000 and $662,000 at July 3, 2009 and January 2, 2009, respectively | 9,885,000 | 12,862,000 | ||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | 8,304,000 | 8,281,000 | ||||||
| Income tax receivable | 1,582,000 | 956,000 | ||||||
| Other receivables | 83,000 | 48,000 | ||||||
| Prepaid expenses and other current assets | 1,646,000 | 1,784,000 | ||||||
| Total current assets | 30,203,000 | 32,075,000 | ||||||
| Equipment and leasehold improvements, net | 1,786,000 | 2,377,000 | ||||||
| Goodwill | 13,093,000 | 11,145,000 | ||||||
| Other intangible assets, net | 176,000 | 1,367,000 | ||||||
| Other assets | 346,000 | 373,000 | ||||||
| Deferred income taxes, net of current portion | 233,000 | 233,000 | ||||||
| Total assets | $ | 45,837,000 | $ | 47,570,000 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Excess of outstanding checks over bank balance | $ | 878,000 | $ | 448,000 | ||||
| Accounts payable | 1,384,000 | 2,111,000 | ||||||
| Purchase price payable | 1,323,000 | 1,000,000 | ||||||
| Accrued liabilities | 4,815,000 | 5,253,000 | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 799,000 | 704,000 | ||||||
| Current portion of notes payable | 43,000 | 52,000 | ||||||
| Current portion of capital lease obligations | 131,000 | 168,000 | ||||||
| Current portion of deferred income taxes | 2,519,000 | 2,519,000 | ||||||
| Total current liabilities | 11,892,000 | 12,255,000 | ||||||
| Notes payable, less current portion | -- | 17,000 | ||||||
| Capital lease obligations, less current portion | 98,000 | 157,000 | ||||||
| Deferred lease obligations | 675,000 | 805,000 | ||||||
| Total liabilities | 12,665,000 | 13,234,000 | ||||||
| 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: 7,188,000 and 7,164,000 shares issued and outstanding at July 3, 2009 and January 2, 2009, respectively | 72,000 | 72,000 | ||||||
| Additional paid-in capital | 33,272,000 | 33,084,000 | ||||||
| (Accumulated deficit) retained earnings | (172,000 | ) | 1,180,000 | |||||
| Total stockholders' equity | 33,172,000 | 34,336,000 | ||||||
| Total liabilities and stockholders' equity | $ | 45,837,000 | $ | 47,570,000 | ||||
WILLDAN GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| July 3, | June 27, | July 3, | June 27, | ||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||||
| Contract revenue | $ | 15,484,000 | $ | 17,807,000 | $ | 32,669,000 | $ | 35,583,000 | |||||||||
| Direct costs of contract revenue (exclusive of depreciation and amortization shown separately below): | |||||||||||||||||
| Salaries and wages | 4,502,000 | 5,538,000 | 9,292,000 | 11,082,000 | |||||||||||||
| Subconsultant services | 2,182,000 | 1,539,000 | 4,608,000 | 2,814,000 | |||||||||||||
| Other direct costs | 740,000 | 522,000 | 1,827,000 | 837,000 | |||||||||||||
| Total direct costs of contract revenue | 7,424,000 | 7,599,000 | 15,727,000 | 14,733,000 | |||||||||||||
| General and administrative expenses: | |||||||||||||||||
| Salaries and wages, payroll taxes and employee benefits | 5,066,000 | 5,927,000 | 10,548,000 | 12,369,000 | |||||||||||||
| Facilities and facility related | 1,098,000 | 1,174,000 | 2,236,000 | 2,322,000 | |||||||||||||
| Stock-based compensation | 73,000 | 61,000 | 142,000 | 154,000 | |||||||||||||
| Depreciation and amortization | 704,000 | 440,000 | 1,229,000 | 834,000 | |||||||||||||
| Other | 2,552,000 | 2,736,000 | 4,925,000 | 5,258,000 | |||||||||||||
| Total general and administrative expenses | 9,493,000 | 10,338,000 | 19,080,000 | 20,937,000 | |||||||||||||
| (Loss) from operations | (1,433,000 | ) | (130,000 | ) | (2,138,000 | ) | (87,000 | ) | |||||||||
| Other income (expense): | |||||||||||||||||
| Interest income | 11,000 | 93,000 | 23,000 | 241,000 | |||||||||||||
| Interest expense | (9,000 | ) | (22,000 | ) | (20,000 | ) | (2,000 | ) | |||||||||
| Other, net | (3,000 | ) | 20,000 | (3,000 | ) | 20,000 | |||||||||||
| Total other income, net | (1,000 | ) | 91,000 | -- | 259,000 | ||||||||||||
| (Loss) income before income tax expense | (1,434,000 | ) | (39,000 | ) | (2,138,000 | ) | 172,000 | ||||||||||
| Income tax (benefit) expense | (536,000 | ) | 16,000 | (786,000 | ) | 111,000 | |||||||||||
| Net (loss) income | $ | (898,000 | ) | $ | (55,000 | ) | $ | (1,352,000 | ) | $ | 61,000 | ||||||
| (Loss) earnings per share: | |||||||||||||||||
| Basic and diluted | $ | (0.12 | ) | $ | (0.01 | ) | $ | (0.19 | ) | $ | 0.01 | ||||||
| Weighted-average shares outstanding: | |||||||||||||||||
| Basic | 7,188,000 | 7,156,000 | 7,178,000 | 7,156,000 | |||||||||||||
| Diluted | 7,188,000 | 7,157,000 | 7,178,000 | 7,157,000 | |||||||||||||
WILLDAN GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||||
| Six Months Ended | ||||||||||
| July 3, 2009 | June 27, 2008 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net (loss) income | $ | (1,352,000 | ) | $ | 61,000 | |||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||
| Depreciation and amortization | 1,229,000 | 834,000 | ||||||||
| Lease abandonment/recapture expense | (19,000 | ) | -- | |||||||
| Loss on sale of equipment | 3,000 | 20,000 | ||||||||
| Allowance for doubtful accounts | 537,000 | 146,000 | ||||||||
| Stock-based compensation | 142,000 | 154,000 | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Accounts receivable | 2,440,000 | 1,511,000 | ||||||||
| Costs and estimated earnings in excess of billing on uncompleted contracts | (23,000 | ) | (237,000 | ) | ||||||
| Income tax receivable | (626,000 | ) | -- | |||||||
| Other receivables | (35,000 | ) | (10,000 | ) | ||||||
| Prepaid expenses and other current assets | 138,000 | 443,000 | ||||||||
| Other assets | 27,000 | (86,000 | ) | |||||||
| Accounts payable | (727,000 | ) | 476,000 | |||||||
| Accrued liabilities | (438,000 | ) | (1,290,000 | ) | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 95,000 | (109,000 | ) | |||||||
| Deferred lease obligations | (111,000 | ) | (28,000 | ) | ||||||
| Net cash provided by operating activities | 1,280,000 | 1,885,000 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Purchase of equipment and leasehold improvements | (66,000 | ) | (369,000 | ) | ||||||
| Proceeds from sale of equipment | -- | 49,000 | ||||||||
| Payments for business acquisition, net of cash acquired | (1,009,000 | ) | (9,760,000 | ) | ||||||
| Purchase of liquid investments | -- | (7,100,000 | ) | |||||||
| Proceeds from sale of liquid investments | -- | 7,025,000 | ||||||||
| Net cash used in investing activities | (1,075,000 | ) | (10,155,000 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Changes in excess of outstanding checks over bank balance | 430,000 | (196,000 | ) | |||||||
| Payments on notes payable | (26,000 | ) | (772,000 | ) | ||||||
| Principal payments on capital leases | (96,000 | ) | (88,000 | ) | ||||||
| Proceeds from employee stock purchase plan | 46,000 | 41,000 | ||||||||
| Net cash provided by (used) in financing activities | 354,000 | (1,015,000 | ) | |||||||
| Net increase (decrease) in cash and cash equivalents | 559,000 | (9,285,000 | ) | |||||||
| Cash and cash equivalents at beginning of the period | 8,144,000 | 15,511,000 | ||||||||
| Cash and cash equivalents at end of the period | $ | 8,703,000 | $ | 6,226,000 | ||||||
| Supplemental disclosures of cash flow information: | ||||||||||
| Cash paid during the period for: | ||||||||||
| Interest | $ | 21,000 | $ | 50,000 | ||||||
| Income taxes | 1,000 | 636,000 | ||||||||
| Supplemental disclosures of noncash investing and financing activities: | ||||||||||
| Equipment acquired under capital leases | $ | -- | $ | 29,000 | ||||||
| Note payable issued in connection with acquisition of assets | -- | 100,000 | ||||||||
| Purchase price payable | 1,323,000 | 1,000,000 | ||||||||
SOURCE: Willdan Group, Inc.
Willdan Group, Inc.
Kimberly Gant
Chief Financial Officer
714-940-6329
kgant@willdan.com
or
Financial Profiles, Inc.
Moira Conlon
310-277-4907
mconlon@finprofiles.com
Copyright Business Wire 2009
