ANAHEIM, Calif.--(BUSINESS WIRE)-- Willdan Group, Inc. ("Willdan") (NASDAQ:WLDN) today announced financial results for its third quarter ended September 27, 2013.

For the third quarter of 2013, Willdan reported total contract revenue of $21.2 million and net income of $0.8 million, or $0.11 per share.

Tom Brisbin, Willdan's Chief Executive Officer, stated: "While third quarter revenue declined slightly from the year-ago period, we reported positive earnings and cash flow for the quarter. Our energy projects have continued to ramp up as planned and we continue to expect a profitable year."

Third Quarter 2013 Results

For the third quarter of fiscal 2013, revenue was $21.2 million, down $0.4 million, or 1.8%, from the comparable period last year. On a sequential basis, revenue was up $0.7 million, or 3.3%, from the second quarter of 2013. Income from operations was $0.9 million for the third quarter of fiscal 2013, as compared to income from operations of $1.4 million for the comparable period last year and $0.7 million for the second quarter of 2013.

Net income was $0.8 million for the third quarter of 2013, the same as for the comparable period last year. Net income was $0.7 million for the second quarter of 2013.

Basic and diluted earnings per share for the third quarter of fiscal 2013 and the comparable period last year were $0.11.

Willdan generated $1.8 million in cash flow from operations in the third quarter of fiscal 2013.

Nine Months 2013 Results

For the nine months ended September 27, 2013, revenue was $63.0 million, as compared to $70.5 million for the comparable period last year. Income from operations was $2.1 million for the nine months ended September 27, 2013 as compared to a loss from operations of $20.5 million for the comparable period last year. Net income was $1.9 million for the nine months ended September 27, 2013 as compared to a net loss of $17.6 million for the comparable period last year.

Basic and diluted earnings per share for the nine months ended September 27, 2013 were $0.26, as compared to a basic and diluted loss per share of $2.41 for the comparable period last year.

Willdan generated $4.2 million in cash flow from operations in the nine months ended September 27, 2013.

				Three Months Ended										Nine Months Ended
				September 27,					September 28,					September 27,					September 28,
In thousands (except per share data)				2013					2012					2013					2012
Revenue				$	21,167				$	21,547				$	63,048				$	70,496
Income (loss) from operations				882					1,420					2,057					(20,480		)
Interest income				3					2					8					4
Interest expense				(9		)			(28		)			(86		)			(80		)
Other, net				10					(14		)			35					(35		)
Income tax expense (benefit)				44					593					85					(2,991		)
Net income (loss)				$	842				$	787				$	1,929				$	(17,600	)
Earnings (loss) per share
Basic				$	0.11				$	0.11				$	0.26				$	(2.41	)
Diluted				$	0.11				$	0.11				$	0.26				$	(2.41	)
Weighted average shares outstanding:
Basic				7,359					7,315					7,349					7,303
Diluted				7,526					7,315					7,443					7,303

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 $7.3 million to $2.6 million for the nine months ended September 27, 2013 from $(4.7) million for the comparable period last year.

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

				Nine Months Ended
				September 27,				September 28,
In thousands				2013				2012
Net income (loss)				$	1,929			$	(17,600	)
Interest income				(8		)		(4		)
Interest expense				86				80
Income tax expense (benefit)				85				(2,991		)
(Gain) loss on sale of assets				(3		)		17
Depreciation and amortization				452				569
Impairment of goodwill				—				15,208
Lease abandonment expense, net				13				27
Adjusted EBITDA				$	2,554			$	(4,694	)

Liquidity and Capital Resources

Willdan had $10.4 million in cash and cash equivalents, including restricted cash, at September 27, 2013. Willdan has available a $5.0 million revolving line of credit with Wells Fargo Bank, National Association, with no outstanding borrowings at September 27, 2013.

Conference Call and Webcast

Chief Executive Officer Thomas Brisbin and Chief Financial Officer Kimberly Gant plan to host a conference call on November 7, 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 877-941-6010 (480-629-9772 for international callers). When prompted, ask for the "Willdan Group, Inc., Third 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 November 22, 2013, by dialing 800-406-7325 (303-590-3030 for international callers). The replay access code is 4645884. 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
			September 27,					December 28,
			2013					2012
			(unaudited)
Assets
Current assets:
Cash and cash equivalents, including restricted cash			$	10,354,000				$	10,006,000
Accounts receivable, net of allowance for doubtful accounts of $589,000 and $303,000 at September 27, 2013 and December 28, 2012, respectively			10,393,000					15,484,000
Costs and estimated earnings in excess of billings on uncompleted contracts			9,565,000					9,860,000
Other receivables			62,000					95,000
Prepaid expenses and other current assets			1,570,000					1,782,000
Total current assets			31,944,000					37,227,000
Equipment and leasehold improvements, net			774,000					979,000
Other intangible assets, net			—					12,000
Other assets			314,000					307,000
Deferred income taxes, net of current portion			3,452,000					3,452,000
Total assets			$	36,484,000				$	41,977,000
Liabilities and Stockholders' Equity
Current liabilities:
Excess of outstanding checks over bank balance			$	1,169,000				$	1,188,000
Borrowings under line of credit			—					3,000,000
Accounts payable			3,432,000					6,983,000
Accrued liabilities			5,926,000					5,306,000
Billings in excess of costs and estimated earnings on uncompleted contracts			2,614,000					3,419,000
Current portion of notes payable			24,000					628,000
Current portion of capital lease obligations			140,000					152,000
Current portion of deferred income taxes			3,452,000					3,452,000
Total current liabilities			16,757,000					24,128,000
Capital lease obligations, less current portion			86,000					124,000
Deferred lease obligations			155,000					374,000
Total liabilities			16,998,000					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: 7,375,000 and 7,335,000 shares issued and outstanding at September 27, 2013 and December 28, 2012, respectively			74,000					73,000
Additional paid-in capital			34,628,000					34,423,000
Accumulated (deficit) earnings			(15,216,000		)			(17,145,000		)
Total stockholders' equity			19,486,000					17,351,000
Total liabilities and stockholders' equity			$	36,484,000				$	41,977,000

WILLDAN GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
			Three Months Ended								Nine Months Ended
			September 27,				September 28,				September 27,				September 28,
			2013				2012				2013				2012
Contract revenue			$	21,167,000			$	21,547,000			$	63,048,000			$	70,496,000
Direct costs of contract revenue (exclusive of depreciation and amortization shown separately below):
Salaries and wages			6,136,000				5,680,000				18,108,000				17,613,000
Subconsultant services and other direct costs			5,836,000				5,610,000				17,336,000				27,987,000
Total direct costs of contract revenue			11,972,000				11,290,000				35,444,000				45,600,000
General and administrative expenses:
Salaries and wages, payroll taxes and employee benefits			4,947,000				5,075,000				15,433,000				17,342,000
Facilities and facilities related			1,167,000				1,224,000				3,504,000				3,659,000
Stock-based compensation			36,000				50,000				124,000				181,000
Depreciation and amortization			125,000				163,000				401,000				518,000
Lease abandonment (recovery), net			—				(3,000		)		13,000				27,000
Impairment of goodwill			—				—				—				15,208,000
Other			2,038,000				2,328,000				6,072,000				8,441,000
Total general and administrative expenses			8,313,000				8,837,000				25,547,000				45,376,000
Income (loss) from operations			882,000				1,420,000				2,057,000				(20,480,000		)
Other income (expense), net:
Interest income			3,000				2,000				8,000				4,000
Interest expense			(9,000		)		(28,000		)		(86,000		)		(80,000		)
Other, net			10,000				(14,000		)		35,000				(35,000		)
Total other expense (income), net			4,000				(40,000		)		(43,000		)		(111,000		)
Income (loss) before income tax expense (benefit)			886,000				1,380,000				2,014,000				(20,591,000		)
Income tax expense (benefit)			44,000				593,000				85,000				(2,991,000		)
Net income (loss)			$	842,000			$	787,000			$	1,929,000			$	(17,600,000	)
Earnings (loss) per share:
Basic			$	0.11			$	0.11			$	0.26			$	(2.41	)
Diluted			$	0.11			$	0.11			$	0.26			$	(2.41	)
Weighted-average shares outstanding:
Basic			7,359,000				7,315,000				7,349,000				7,303,000
Diluted			7,526,000				7,315,000				7,443,000				7,303,000

WILLDAN GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
				Nine Months Ended
				September 27,					September 28,
				2013					2012
Cash flows from operating activities:
Net income (loss)				$	1,929,000				$	(17,600,000	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization				452,000					569,000
Deferred income taxes				—					(3,584,000		)
Impairment of goodwill				—					15,208,000
Lease abandonment expense, net				13,000					27,000
(Gain) loss on sale of equipment				(3,000		)			17,000
Provision for doubtful accounts				219,000					793,000
Stock-based compensation				118,000					181,000
Changes in operating assets and liabilities:
Accounts receivable				4,872,000					1,910,000
Costs and estimated earnings in excess of billings on uncompleted contracts				295,000					9,518,000
Other receivables				33,000					47,000
Prepaid expenses and other current assets				212,000					652,000
Other assets				(7,000		)			30,000
Accounts payable				(3,551,000		)			(3,236,000		)
Accrued liabilities				620,000					(2,656,000		)
Billings in excess of costs and estimated earnings on uncompleted contracts				(805,000		)			2,855,000
Deferred lease obligations				(232,000		)			(126,000		)
Net cash provided by operating activities				4,165,000					4,605,000
Cash flows from investing activities:
Purchase of equipment and leasehold improvements				(248,000		)			(275,000		)
Proceeds from sale of equipment				16,000					14,000
Net cash used in investing activities				(232,000		)			(261,000		)
Cash flows from financing activities:
Changes in excess of outstanding checks over bank balance				(19,000		)			(281,000		)
Payments on notes payable				(604,000		)			(582,000		)
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				(50,000		)			(126,000		)
Proceeds from stock option exercise				15,000					10,000
Proceeds from sales of common stock under employee stock purchase plan				73,000					120,000
Net cash (used in) provided by financing activities				(3,585,000		)			1,885,000
Net increase in cash and cash equivalents				348,000					6,229,000
Cash and cash equivalents, including restricted cash, at beginning of the period				10,006,000					3,001,000
Cash and cash equivalents, including restricted cash, at end of the period				$	10,354,000				$	9,230,000
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest				$	86,000				$	79,000
Income taxes				164,000					59,000
Supplemental disclosures of noncash investing and financing activities:
Equipment acquired under capital lease obligations				$	60,000				$	93,000

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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