ANAHEIM, Calif.--(BUSINESS WIRE)-- Willdan Group, Inc. ("Willdan") (NASDAQ:WLDN), today announced financial results for its second quarter ended June 28, 2013.

For the second quarter of 2013, Willdan reported total contract revenue of $20.5 million and net income of $0.7 million, or $0.09 per share.

Tom Brisbin, Willdan's Chief Executive Officer, stated: "While our second quarter revenue was lower than last year, I'm pleased to report that we generated positive cash flow and earnings for the quarter. Lower revenue was due to continued declines in our energy segment, offset by gains in all of our other business lines. Our energy projects began to ramp up during the second quarter as planned and we expect revenue growth and higher levels of profitability in the second half of 2013."

Second Quarter 2013 Results

For the second quarter of fiscal 2013, revenue was $20.5 million, down $3.0 million, or 12.7%, from revenue of $23.5 million for the comparable period last year. On a sequential basis, revenue was down $0.9 million, or 4.2%, from the first quarter of 2013. Income from operations was $0.7 million for the second quarter of fiscal 2013, as compared to a loss from operations of $19.6 million for the comparable period last year. On a sequential basis, income from operations was $0.7 million as compared to $0.5 million for the first quarter of 2013.

Net income was $0.7 million for the second quarter of fiscal 2013, as compared to a net loss of $17.0 million for the comparable period last year and net income of $0.4 million for the first quarter of 2013.

Basic and diluted earnings per share for the second quarter of fiscal 2013 were $0.09 as compared to a basic and diluted loss per share of $2.33 for the comparable period last year.

Willdan generated $1.4 million in cash flow from operations in the second quarter of fiscal 2013.

Six Months 2013 Results

For the six months ended June 28, 2013, revenue was $41.9 million, as compared to $48.9 million in the comparable period last year. Income from operations was $1.2 million for the six months ended June 28, 2013 as compared to a loss from operations of $21.9 million for the comparable period last year. Net income was $1.1 million for the six months ended June 28, 2013 as compared to a net loss of $18.4 million for the comparable period last year.

Basic and diluted earnings per share for the six months ended June 28, 2013 were $0.15 as compared to a basic and diluted loss per share of $2.52 for the comparable period last year.

Willdan generated $2.4 million in cash flow from operations in the six months ended June 28, 2013.

		Three Months Ended							Six Months Ended
In thousands (except per share data)		June 28, 2013			June 29, 2012				June 28, 2013			June 29, 2012
Revenue		$	20,496		$	23,481			$	41,881		$	48,949
Income (loss) from operations		718			(19,583		)		1,175			(21,900		)
Interest income		2			1				5			2
Interest expense		(50		)	(30		)		(77		)	(52		)
Other, net		10			(21		)		25			(21		)
Income tax (benefit) expense		(8		)	(2,657		)		41			(3,584		)
Net income (loss)		$	688		$	(16,976	)		$	1,087		$	(18,387	)
Basic and diluted earnings (loss) per share		$	0.09		$	(2.33	)		$	0.15		$	(2.52	)
Weighted average shares outstanding:
Basic		7,353			7,297				7,336			7,294
Diluted		7,401			7,297				7,383			7,294

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 income (loss) plus net interest expense, income tax expense (benefit), depreciation and amortization, goodwill impairment, lease abandonment expense, net and other non-recurring income and expense items occurring in such period. 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 non-recurring 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 the impact of certain non-recurring income and expense items from its operational results, 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 increased $7.8 million to $1.5 million for the six months ended June 28, 2013 from $(6.3) million for the comparable period last year.

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

		Six Months Ended
In thousands		June 28, 2013			June 29, 2012
Net income (loss)		$	1,087		$	(18,387	)
Interest income		(5		)	(2		)
Interest expense		77			52
Income tax expense (benefit)		41			(3,584		)
Loss on sale of assets		—			22
Depreciation and amortization		310			387
Impairment of goodwill		—			15,208
Lease abandonment expense, net		13			30
Adjusted EBITDA		$	1,523		$	(6,274	)

Liquidity and Capital Resources

Willdan had $8.5 million in cash and cash equivalents at June 28, 2013, compared with $10.0 million at December 28, 2012. Willdan has a $5.0 million revolving line of credit with Wells Fargo Bank, National Association, with no outstanding borrowings at June 28, 2013.

Conference Call and Webcast

Chief Executive Officer Thomas Brisbin and Chief Financial Officer Kimberly Gant plan to host a conference call on August 8, 2013 at 5:00 p.m. Eastern/2:00 p.m. Pacific, to discuss Willdan's financial results.

Interested parties may participate in the conference call by dialing 877-941-2332 (480-629-9867 for international callers). When prompted, ask for the "Willdan Group, Inc., Second Quarter 2013 Conference 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 22, 2013, by dialing 800-406-7325 (303-590-3030 for international callers). The replay access code is 4633799. The webcast replay will be archived for 12 months.

About Willdan Group, Inc.

Founded in 1964, Willdan is a provider of professional technical and consulting services to public agencies at all levels of government, public and private utilities and commercial and industrial firms. Willdan provides a broad range of services to clients throughout the United States, including engineering and planning, energy efficiency and sustainability, economic and financial consulting, and national preparedness and interoperability. 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 Annual Report on Form 10-K for the year ended December 28, 2012 filed on March 26, 2013 and the Quarterly Report on Form 10-Q for the quarter ended March 29, 2013 filed on May 9, 2013. 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.

WILLDAN GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
		June 28, 2013			December 28, 2012
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	8,475,000		$	10,006,000
Accounts receivable, net of allowance for doubtful accounts of $512,000 and $303,000 at June 28, 2013 and December 28, 2012, respectively		11,040,000			15,484,000
Costs and estimated earnings in excess of billings on uncompleted contracts		10,241,000			9,860,000
Other receivables		68,000			95,000
Prepaid expenses and other current assets		1,222,000			1,782,000
Total current assets		31,046,000			37,227,000
Equipment and leasehold improvements, net		762,000			979,000
Other intangible assets, net		—			12,000
Other assets		298,000			307,000
Deferred income taxes, net of current portion		3,452,000			3,452,000
Total assets		$	35,558,000		$	41,977,000
Liabilities and Stockholders' Equity
Current liabilities:
Excess of outstanding checks over bank balance		$	818,000		$	1,188,000
Borrowings under line of credit		—			3,000,000
Accounts payable		3,440,000			6,983,000
Accrued liabilities		5,110,000			5,306,000
Billings in excess of costs and estimated earnings on uncompleted contracts		3,559,000			3,419,000
Current portion of notes payable		169,000			628,000
Current portion of capital lease obligations		136,000			152,000
Current portion of deferred income taxes		3,452,000			3,452,000
Total current liabilities		16,684,000			24,128,000
Capital lease obligations, less current portion		74,000			124,000
Deferred lease obligations		237,000			374,000
Total liabilities		16,995,000			24,626,000
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: 7,353,000 and 7,335,000 shares issued and outstanding at June 28, 2013 and December 28, 2012, respectively		74,000			73,000
Additional paid-in capital		34,547,000			34,423,000
Accumulated (deficit) earnings		(16,058,000		)	(17,145,000		)
Total stockholders' equity		18,563,000			17,351,000
Total liabilities and stockholders' equity		$	35,558,000		$	41,977,000

WILLDAN GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
		Three Months Ended							Six Months Ended
		June 28,			June 29,				June 28,			June 29,
		2013			2012				2013			2012
Contract revenue		$	20,496,000		$	23,481,000			$	41,881,000		$	48,949,000
Direct costs of contract revenue (exclusive of depreciation and amortization shown separately below):
Salaries and wages		6,129,000			5,976,000				11,972,000			11,933,000
Subconsultant services and other direct costs		5,309,000			11,140,000				11,500,000			22,377,000
Total direct costs of contract revenue		11,438,000			17,116,000				23,472,000			34,310,000
General and administrative expenses:
Salaries and wages, payroll taxes and employee benefits		4,948,000			5,839,000				10,486,000			12,267,000
Facilities and facilities related		1,149,000			1,240,000				2,337,000			2,435,000
Stock-based compensation		38,000			77,000				88,000			131,000
Depreciation and amortization		127,000			181,000				276,000			355,000
Lease abandonment, net		—			26,000				13,000			30,000
Impairment of goodwill		—			15,208,000				—			15,208,000
Other		2,078,000			3,377,000				4,034,000			6,113,000
Total general and administrative expenses		8,340,000			25,948,000				17,234,000			36,539,000
Income (loss) from operations		718,000			(19,583,000		)		1,175,000			(21,900,000		)
Other income (expense), net:
Interest income		2,000			1,000				5,000			2,000
Interest expense		(50,000		)	(30,000		)		(77,000		)	(52,000		)
Other, net		10,000			(21,000		)		25,000			(21,000		)
Total other expense, net		(38,000		)	(50,000		)		(47,000		)	(71,000		)
Income (loss) before income taxes		680,000			(19,633,000		)		1,128,000			(21,971,000		)
Income tax (benefit) expense		(8,000		)	(2,657,000		)		41,000			(3,584,000		)
Net income (loss)		$	688,000		$	(16,976,000	)		$	1,087,000		$	(18,387,000	)
Earnings per share:
Basic and diluted		$	0.09		$	(2.33	)		$	0.15		$	(2.52	)
Weighted-average shares outstanding:
Basic		7,353,000			7,297,000				7,336,000			7,294,000
Diluted		7,401,000			7,297,000				7,383,000			7,294,000

WILLDAN GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
		Six Months Ended
		June 28, 2013				June 29, 2012
Cash flows from operating activities:
Net income (loss)		$	1,087,000			$	(18,387,000	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		310,000				387,000
Deferred income taxes		—				(3,584,000		)
Impairment of goodwill		—				15,208,000
Lease abandonment expense, net		13,000				30,000
Loss on sale of equipment		(6,000		)		22,000
Provision for doubtful accounts		162,000				432,000
Stock-based compensation		88,000				131,000
Changes in operating assets and liabilities:
Accounts receivable		4,282,000				(5,498,000		)
Costs and estimated earnings in excess of billings on uncompleted contracts		(381,000		)		10,066,000
Other receivables		27,000				89,000
Prepaid expenses and other current assets		560,000				231,000
Other assets		9,000				34,000
Accounts payable		(3,543,000		)		2,826,000
Accrued liabilities		(196,000		)		(2,045,000		)
Billings in excess of costs and estimated earnings on uncompleted contracts		140,000				1,063,000
Deferred lease obligations		(150,000		)		(86,000		)
Net cash provided by operating activities		2,402,000				919,000
Cash flows from investing activities:
Purchase of equipment and leasehold improvements		(86,000		)		(220,000		)
Proceeds from sale of equipment		11,000				8,000
Net cash used in investing activities		(75,000		)		(212,000		)
Cash flows from financing activities:
Changes in excess of outstanding checks over bank balance		(370,000		)		(448,000		)
Payments on notes payable		(459,000		)		(489,000		)
Borrowings under line of credit		266,000				11,663,000
Repayments on line of credit		(3,266,000		)		(8,919,000		)
Principal payments on capital lease obligations		(66,000		)		(88,000		)
Proceeds from sales of common stock under employee stock purchase plan		37,000				75,000
Net cash (used in) provided by financing activities		(3,858,000		)		1,794,000
Net increase in cash and cash equivalents		(1,531,000		)		2,501,000
Cash and cash equivalents at beginning of the period		10,006,000				3,001,000
Cash and cash equivalents at end of the period		$	8,475,000			$	5,502,000
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest		$	81,000			$	51,000
Income taxes		155,000				45,000
Supplemental disclosures of noncash investing and financing activities:
Equipment acquired under capital lease obligations		$	7,000			$	10,000

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

Source: Willdan Group, Inc.

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