UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

 


 

FORM 8-K

 


 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): March 26, 2013

 


 

WILLDAN GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-33076

 

14-1951112

(State of other jurisdiction
of incorporation)

 

(Commission File Number)

 

(IRS Employer
Identification No.)

 

2401 East Katella Avenue, Suite 300, Anaheim, California 92806

(Address of Principal Executive Offices)

 

Registrant’s telephone number, including area code: (800) 424-9144

 

Not Applicable

(Former name or former address, if changed since last report)

 


 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

 

o    Soliciting material pursuant to Rule 14A-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 2.02.                                        Results of Operation and Financial Condition

 

Willdan Group, Inc. (“Willdan”) issued a press release on March 26, 2013. The press release announced its financial results for the fourth quarter and fiscal year ended December 28, 2012. The press release is filed as Exhibit 99.1 and is hereby incorporated by reference in its entirety. The information in this Form 8-K and the exhibit attached hereto is being furnished (not filed) under Item 2.02 of Form 8-K.

 

Item 9.01                                           Financial Statements and Exhibits

 

(d)                                 Exhibits.

 

99.1                        Press Release of Willdan Group, Inc. dated March 26, 2013 (financial results for the fourth quarter and fiscal year ended December 28, 2012).

 

2



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

WILLDAN GROUP, INC.

 

 

 

 

 

 

Date: March 26, 2013

By:

/s/ Kimberly D. Gant

 

 

Kimberly D. Gant

 

 

Chief Financial Officer

 

3



 

EXHIBIT INDEX

 

Exhibit No.

 

Document

 

 

 

99.1

 

Press Release of Willdan Group, Inc. dated March 26, 2013 (Financial results for the fourth quarter and fiscal year ended December 28, 2012)

 

4


Exhibit 99.1

 

 

Willdan Reports Fourth Quarter 2012 and Fiscal Year 2012 Financial Results

 

ANAHEIM, Calif., March 26, 2013—(BUSINESS WIRE)—Willdan Group, Inc. (“Willdan”) (NASDAQ:WLDN), today announced financial results for its fourth quarter and fiscal year 2012 ended December 28, 2012.

 

For the fourth quarter of 2012, Willdan reported total contract revenue of $22.9 million and net income of $0.3 million, or $0.04 per basic and diluted share.

 

For the fiscal year ended December 28, 2012, Willdan reported total contract revenue of $93.4 million and a net loss of $17.3 million, or $2.37 per basic and diluted share.

 

Tom Brisbin, Willdan’s Chief Executive Officer, stated: “Our fourth quarter revenue and earnings were in line with our expectations. We continued to carefully manage expenses during the quarter and we generated positive cash flow from operations.”

 

Fourth Quarter 2012 Results

 

For the fourth quarter of fiscal 2012, revenue was $22.9 million, down $7.1 million, or 23.5%, from revenue of $30.0 million for the comparable period last year. On a sequential basis, revenue was up $1.4 million, or 6.5%, from the third quarter of 2012. Income from operations was $1.2 million for the fourth quarter of fiscal 2012, as compared to income from operations of $0.3 million for the comparable period last year. On a sequential basis, income from operations decreased $0.2 million from $1.4 million in the third quarter of 2012.

 

Net income was $0.3 million for the fourth quarter of fiscal 2012, as compared to a net loss of $0.8 million in the comparable period last year and net income of $0.8 million in the third quarter of 2012.

 

Basic and diluted earnings per share for the fourth quarter of fiscal 2012 were $0.04 as compared to basic and diluted loss per share of $0.11 for the comparable period last year.

 

Willdan generated $0.7 million in cash flow from operations in the fourth quarter of fiscal 2012.

 

Fiscal Year 2012 Results

 

Revenue for fiscal year 2012 was $93.4 million, a decrease of $13.7 million, or 12.8%, from revenue of $107.2 million for fiscal year 2011. Loss from operations was $19.3 million for fiscal year 2012 as compared to income from operations of $3.4 million for fiscal year 2011. Net loss was $17.3 million for fiscal year 2012, including a $15.2 million goodwill impairment charge, as compared to net income of $1.8 million for fiscal year 2011.

 

Basic and diluted loss per share for fiscal year 2012 was $2.37, as compared to basic and diluted earnings per share of $0.25 and $0.24, respectively, for fiscal year 2011.

 



 

Willdan generated $5.3 million in cash flow from operations in the year ended December 28, 2012.

 

 

 

Three Months Ended

 

Twelve Months Ended

 

In thousands (except EPS data)

 

December 28,
2012

 

December 30,
 2011

 

December 28,
2012

 

December 30,
2011

 

Revenue

 

$

22,947

 

$

30,006

 

$

93,443

 

$

107,165

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

1,225

 

347

 

(19,255

)

3,401

 

Interest income

 

2

 

 

6

 

5

 

Interest expense

 

(26

)

(24

)

(106

)

(77

)

Other, net

 

7

 

(4

)

(28

)

1

 

Income tax expense (benefit)

 

908

 

1,098

 

(2,083

)

1,500

 

Net income (loss)

 

$

300

 

$

(779

)

$

(17,300

)

$

1,830

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share

 

 

 

 

 

 

 

 

 

Basic

 

$

0.04

 

$

(0.11

)

$

(2.37

)

$

0.25

 

Diluted

 

$

0.04

 

$

(0.11

)

$

(2.37

)

$

0.24

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

7,335

 

7,273

 

7,310

 

7,262

 

Diluted

 

7,343

 

7,273

 

7,310

 

7,485

 

 

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, goodwill impairment 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 operating income and 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 operating income or net income as an indicator of operating performance or any other GAAP measure.

 

Adjusted EBITDA decreased to $(3.3) million for fiscal year 2012 from $4.3 million for fiscal year 2011.

 



 

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

 

 

 

Twelve Months Ended

 

In thousands

 

December 28,
2012

 

December 30,
2011

 

 

 

 

 

 

 

Net (loss) income

 

$

(17,300

)

$

1,830

 

Interest income

 

(6

)

(5

)

Interest expense

 

106

 

77

 

Income tax (benefit) expense

 

(2,083

)

1,500

 

Lease abandonment expense

 

26

 

2

 

Depreciation and amortization

 

737

 

944

 

Impairment of goodwill

 

15,208

 

 

Loss on sale of assets

 

18

 

2

 

Adjusted EBITDA

 

$

(3,294

)

$

4,350

 

 

Liquidity and Capital Resources

 

Willdan had $10.0 million in cash and cash equivalents at December 28, 2012, compared with $3.0 million at December 30, 2011. Willdan has a $5.0 million revolving line of credit with Wells Fargo Bank, National Association (“Wells Fargo”), with $3.0 million in outstanding borrowings at December 28, 2012. In addition, the revolving line of credit is scheduled to expire on April 1, 2013. Wells Fargo may also refuse to renew the facility when it expires on April 1, 2013 and if they do so, Willdan will have to repay the outstanding balance of $3.0 million.

 

Willdan is currently in breach of the net income covenant in its revolving line of credit because it did not have net income of at least $250,000 measured on a rolling four quarter basis and it sustained net losses for two consecutive quarters in the past year. Additionally, Willdan’s ratio of funded debt to EBITDA exceeds the limits permitted under the line of credit. Because of these covenant breaches, Willdan’s ability to borrow additional funds under the line of credit is currently subject to Wells Fargo’s discretion. Although Willdan is seeking a waiver from Wells Fargo for the current breach of the covenants and to extend the maturity of the line of credit, Wells Fargo is not obligated to provide any waiver or modify the terms of the agreement and could choose to increase the interest rate of the outstanding indebtedness, accelerate the loans outstanding under the line of credit and/or terminate its commitments under the line of credit.

 

Conference Call and Webcast

 

Chief Executive Officer Thomas Brisbin and Chief Financial Officer Kimberly Gant plan to host a conference call today, March 26, 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 877-941-0844 (480-629-9835 for international callers).  When prompted, ask for the “Willdan Group, Inc., Fourth Quarter 2012 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 April 9, 2013, by dialing 800-358-3474 (303-590-3030 for international callers).  The replay access code is 4599738.  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 to be filed for the year ended December 28, 2012. 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

 

CONSOLIDATED BALANCE SHEETS

 

 

 

December 28,
2012

 

December 30,
2011

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

10,006,000

 

$

3,001,000

 

Accounts receivable, net of allowance for doubtful accounts of $303,000 and $421,000 at December 28, 2012 and December 30, 2011, respectively

 

15,484,000

 

16,782,000

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

9,860,000

 

20,672,000

 

Other receivables

 

95,000

 

175,000

 

Prepaid expenses and other current assets

 

1,782,000

 

1,724,000

 

Total current assets

 

37,227,000

 

42,354,000

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

979,000

 

1,217,000

 

Goodwill

 

 

15,208,000

 

Other intangible assets, net

 

12,000

 

49,000

 

Other assets

 

307,000

 

383,000

 

Deferred income taxes

 

3,452,000

 

5,100,000

 

Total assets

 

$

41,977,000

 

$

64,311,000

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Excess of outstanding checks over bank balance

 

$

1,188,000

 

$

1,777,000

 

Borrowings under line of credit

 

3,000,000

 

256,000

 

Accounts payable

 

6,983,000

 

8,182,000

 

Accrued liabilities

 

5,306,000

 

10,192,000

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

3,419,000

 

752,000

 

Current portion of notes payable

 

628,000

 

600,000

 

Current portion of capital lease obligations

 

152,000

 

163,000

 

Current portion of deferred income taxes

 

3,452,000

 

7,349,000

 

Total current liabilities

 

24,128,000

 

29,271,000

 

 

 

 

 

 

 

Notes payable, less current portion

 

 

77,000

 

Capital lease obligations, less current portion

 

124,000

 

136,000

 

Deferred lease obligations

 

374,000

 

534,000

 

Total liabilities

 

24,626,000

 

30,018,000

 

 

 

 

 

 

 

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; 7,335,000 and 7,274,000 shares issued and outstanding at December 28, 2012 and December 30, 2011, respectively

 

73,000

 

73,000

 

Additional paid-in capital

 

34,423,000

 

34,065,000

 

Accumulated (deficit) earnings

 

(17,145,000

)

155,000

 

Total stockholders’ equity

 

17,351,000

 

34,293,000

 

Total liabilities and stockholders’ equity

 

$

41,977,000

 

$

64,311,000

 

 



 

WILLDAN GROUP, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Fiscal Year

 

 

 

2012

 

2011

 

2010

 

 

 

 

 

 

 

 

 

Contract revenue

 

$

93,443,000

 

$

107,165,000

 

$

77,896,000

 

 

 

 

 

 

 

 

 

Direct costs of contract revenue (exclusive of depreciation and amortization shown separately below):

 

 

 

 

 

 

 

Salaries and wages

 

23,218,000

 

25,714,000

 

21,607,000

 

Subconsultant services and other direct costs

 

35,741,000

 

39,013,000

 

20,415,000

 

Total direct costs of contract revenue

 

58,959,000

 

64,727,000

 

42,022,000

 

 

 

 

 

 

 

 

 

General and administrative expenses:

 

 

 

 

 

 

 

Salaries and wages, payroll taxes and employee benefits

 

22,421,000

 

22,594,000

 

17,582,000

 

Facilities and facility related

 

4,871,000

 

4,875,000

 

4,290,000

 

Stock-based compensation

 

227,000

 

201,000

 

235,000

 

Depreciation and amortization

 

671,000

 

877,000

 

1,042,000

 

Lease abandonment (recovery), net

 

26,000

 

2,000

 

(68,000

)

Impairment of goodwill

 

15,208,000

 

 

 

Other

 

10,315,000

 

10,488,000

 

9,719,000

 

Total general and administrative expenses

 

53,739,000

 

39,037,000

 

32,800,000

 

(Loss) income from operations

 

(19,255,000

)

3,401,000

 

3,074,000

 

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

Interest income

 

6,000

 

5,000

 

12,000

 

Interest expense

 

(106,000

)

(77,000

)

(54,000

)

Other, net

 

(28,000

)

1,000

 

32,000

 

Total other (expense) income, net

 

(128,000

)

(71,000

)

(10,000

)

(Loss) income before income taxes

 

(19,383,000

)

3,330,000

 

3,064,000

 

 

 

 

 

 

 

 

 

Income tax (benefit) expense

 

(2,083,000

)

1,500,000

 

344,000

 

Net (loss) income

 

$

(17,300,000

)

$

1,830,000

 

$

2,720,000

 

 

 

 

 

 

 

 

 

(Loss) earnings per share:

 

 

 

 

 

 

 

Basic

 

$

(2.37

)

$

0.25

 

$

0.38

 

Diluted

 

$

(2.37

)

$

0.24

 

$

0.37

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

Basic

 

7,310,000

 

7,262,000

 

7,233,000

 

Diluted

 

7,310,000

 

7,485,000

 

7,311,000

 

 



 

 WILLDAN GROUP, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

Fiscal Year

 

 

 

2012

 

2011

 

2009

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net (loss) income

 

$

(17,300,000

)

$

1,830,000

 

$

2,720,000

 

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Non-cash revenue from subcontractor settlement

 

 

(902,000

)

 

Depreciation and amortization

 

737,000

 

944,000

 

1,053,000

 

Deferred income taxes

 

(2,249,000

)

1,465,000

 

389,000

 

Goodwill impairment

 

15,208,000

 

 

 

Lease abandonment expense (recovery), net

 

26,000

 

2,000

 

(68,000

)

Loss (gain) on sale of equipment

 

18,000

 

2,000

 

(17,000

)

Provision for doubtful accounts

 

673,000

 

209,000

 

20,000

 

Stock-based compensation

 

227,000

 

201,000

 

235,000

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

625,000

 

(2,507,000

)

(4,407,000

)

Costs and estimated earnings in excess of billings on uncompleted contracts

 

10,812,000

 

(8,427,000

)

(4,694,000

)

Income tax receivable

 

 

 

51,000

 

Other receivables

 

80,000

 

1,000

 

(103,000

)

Prepaid expenses and other current assets

 

(58,000

)

(10,000

)

(214,000

)

Other assets

 

76,000

 

24,000

 

(89,000

)

Accounts payable

 

(1,199,000

)

2,802,000

 

3,923,000

 

Accrued liabilities

 

(4,886,000

)

4,206,000

 

1,476,000

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

2,667,000

 

(289,000

)

11,000

 

Deferred lease obligations

 

(186,000

)

(234,000

)

(189,000

)

Net cash provided by (used in) operating activities

 

5,271,000

 

(683,000

)

97,000

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of equipment and leasehold improvements

 

(359,000

)

(395,000

)

(685,000

)

Proceeds from sale of equipment

 

20,000

 

6,000

 

40,000

 

Payments related to business acquisitions

 

 

(2,733,000

)

(2,104,000

)

Net cash used in investing activities

 

(339,000

)

(3,122,000

)

(2,749,000

)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Changes in excess of outstanding checks over bank balance

 

(589,000

)

554,000

 

735,000

 

Payments on notes payable

 

(663,000

)

(211,000

)

(17,000

)

Proceeds from notes payable

 

614,000

 

667,000

 

214,000

 

Borrowings under line of credit

 

11,663,000

 

33,965,000

 

14,123,000

 

Repayments of line of credit

 

(8,919,000

)

(34,709,000

)

(14,123,000

)

Principal payments on capital leases

 

(164,000

)

(202,000

)

(173,000

)

Proceeds from stock option exercise

 

11,000

 

7,000

 

3,000

 

Proceeds from sales of common stock under employee stock purchase plan

 

120,000

 

93,000

 

87,000

 

Net cash provided by financing activities

 

2,073,000

 

164,000

 

849,000

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

7,005,000

 

(3,641,000

)

(1,803,000

)

Cash and cash equivalents at beginning of the year

 

3,001,000

 

6,642,000

 

8,445,000

 

Cash and cash equivalents at end of the year

 

$

10,006,000

 

$

3,001,000

 

$

6,642,000

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

Interest

 

$

106,000

 

$

77,000

 

$

52,000

 

Income taxes

 

139,000

 

70,000

 

48,000

 

Supplemental disclosures of noncash investing and financing activities:

 

 

 

 

 

 

 

Equipment acquired under capital leases

 

$

151,000

 

$

247,000

 

$

240,000

 

 



 

Contact:

 

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