Document and Entity Information	9 Months Ended
Document and Entity Information	Oct. 02, 2015	Nov. 11, 2015
Document and Entity Information
Entity Registrant Name	Willdan Group, Inc.
Entity Central Index Key	0001370450
Document Type	10-Q
Document Period End Date	Oct. 02, 2015
Amendment Flag	false
Current Fiscal Year End Date	--01-01
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		7,892,082
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Oct. 02, 2015	Jan. 02, 2015
Current assets:
Cash and cash equivalents	$ 15,997,000	$ 20,371,000
Accounts receivable, net of allowance for doubtful accounts of $1,039,000 and $662,000 at October 2, 2015 and January 2, 2015, respectively	15,124,000	13,189,000
Costs and estimated earnings in excess of billings on uncompleted contracts	18,305,000	12,170,000
Other receivables	145,000	208,000
Prepaid expenses and other current assets	1,702,000	2,244,000
Total current assets	51,273,000	48,182,000
Equipment and leasehold improvements, net	2,875,000	1,384,000
Goodwill	16,856,000
Other intangible assets, net	1,649,000
Other assets	460,000	535,000
Deferred income taxes	3,888,000	4,558,000
Total assets	77,001,000	54,659,000
Current liabilities:
Excess of outstanding checks over bank balance	1,346,000	2,198,000
Accounts payable	6,416,000	3,237,000
Accrued liabilities	9,285,000	10,668,000
Contingent consideration payable	2,552,000
Billings in excess of costs and estimated earnings on uncompleted contracts	6,223,000	3,863,000
Notes payable	3,479,000	355,000
Capital lease obligations	379,000	324,000
Deferred income taxes	4,941,000	3,131,000
Total current liabilities	34,621,000	23,776,000
Contingent consideration payable	3,740,000
Notes payable	1,498,000
Capital lease obligations	172,000	306,000
Deferred lease obligations	278,000	164,000
Total liabilities	40,309,000	24,246,000
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; 7,864,000 and 7,635,000 shares issued and outstanding at October 2, 2015 and January 2, 2015, respectively	79,000	76,000
Additional paid-in capital	37,833,000	35,436,000
Accumulated deficit	(1,220,000)	(5,099,000)
Total stockholders' equity	36,692,000	30,413,000
Total liabilities and stockholders' equity	$ 77,001,000	$ 54,659,000

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Oct. 02, 2015	Jan. 02, 2015
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 1,039,000	$ 662,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	7,864,000	7,635,000
Common stock, shares outstanding	7,864,000	7,635,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	Oct. 02, 2015	Sep. 26, 2014	Oct. 02, 2015	Sep. 26, 2014
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Contract revenue	$ 33,511,000	$ 28,187,000	$ 103,581,000	$ 77,843,000
Direct costs of contract revenue (exclusive of depreciation and amortization shown separately below):
Salaries and wages	7,745,000	7,290,000	23,940,000	20,495,000
Subcontractor services and other direct costs	13,206,000	9,179,000	39,712,000	25,471,000
Total direct costs of contract revenue	20,951,000	16,469,000	63,652,000	45,966,000
General and administrative expenses:
Salaries and wages, payroll taxes and employee benefits	6,070,000	5,444,000	18,993,000	15,376,000
Facilities and facilities related	1,207,000	1,084,000	3,203,000	3,271,000
Stock-based compensation	190,000	81,000	468,000	174,000
Depreciation and amortization	349,000	124,000	1,276,000	329,000
Other	3,103,000	2,334,000	8,915,000	6,823,000
Total general and administrative expenses	10,919,000	9,067,000	32,855,000	25,973,000
Income from operations	1,641,000	2,651,000	7,074,000	5,904,000
Other (expense) income:
Interest income	1,000	1,000	1,000	4,000
Interest expense	(234,000)	(4,000)	(342,000)	(11,000)
Other, net		49,000	18,000	116,000
Total other (expense) income, net	(233,000)	46,000	(323,000)	109,000
Income before income taxes	1,408,000	2,697,000	6,751,000	6,013,000
Income tax expense (benefit)	626,000	(1,464,000)	2,872,000	(1,356,000)
Net income	$ 782,000	$ 4,161,000	$ 3,879,000	$ 7,369,000
Earnings per share:
Basic	$ 0.10	$ 0.55	$ 0.50	$ 0.99
Diluted	$ 0.10	$ 0.53	$ 0.48	$ 0.96
Weighted-average shares outstanding:
Basic	7,862,000	7,507,000	7,817,000	7,440,000
Diluted	8,102,000	7,855,000	8,087,000	7,700,000

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)	Common Stock	Additional Paid-in Capital	Retained Earnings	Total
Balances at Jan. 02, 2015	$ 76,000	$ 35,436,000	$ (5,099,000)	$ 30,413,000
Balances (in shares) at Jan. 02, 2015	7,635,000			7,635,000
Increase (Decrease) in Stockholders' Equity
Shares of common stock issued in connection with employee stock purchase plan		78,000		78,000
Shares of common stock issued in connection with employee stock purchase plan (in shares)	6,000
Shares of common stock issued in connection with employee stock option exercise	1,000	368,000		369,000
Shares of common stock issued in connection with employee stock option exercise (in shares)	100,000
Stock issued to acquire businesses	2,000	1,483,000		1,485,000
Stock issued to acquire businesses (in shares)	123,000
Stock-based compensation		468,000		468,000
Net income			3,879,000	3,879,000
Balances at Oct. 02, 2015	$ 79,000	$ 37,833,000	$ (1,220,000)	$ 36,692,000
Balances (in shares) at Oct. 02, 2015	7,864,000			7,864,000

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	Oct. 02, 2015	Sep. 26, 2014
Cash flows from operating activities:
Net income	$ 3,879,000	$ 7,369,000
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	1,276,000	329,000
Deferred income taxes	2,480,000	(1,763,000)
Loss (gain) on sale of equipment	8,000	(3,000)
Provision for doubtful accounts	431,000	401,000
Stock-based compensation	468,000	174,000
Accretion of contingent consideration	182,000
Changes in operating assets and liabilities, net of effects from business acquisitions:
Accounts receivable	(1,321,000)	(1,334,000)
Costs and estimated earnings in excess of billings on uncompleted contracts	(5,645,000)	(4,411,000)
Other receivables	63,000	(676,000)
Prepaid expenses and other current assets	583,000	1,002,000
Other assets	75,000	(221,000)
Accounts payable	2,697,000	241,000
Changes in excess of outstanding checks over bank balance	(852,000)	(337,000)
Accrued liabilities	(1,857,000)	2,914,000
Billings in excess of costs and estimated earnings on uncompleted contracts	2,290,000	2,183,000
Deferred lease obligations	114,000	(86,000)
Net cash provided by operating activities	4,871,000	5,782,000
Cash flows from investing activities:
Purchase of equipment and leasehold improvements	(1,678,000)	(179,000)
Cash paid for acquisitions, net of cash acquired	(8,168,000)
Proceeds from sale of equipment		5,000
Net cash used in investing activities	(9,846,000)	(174,000)
Cash flows from financing activities:
Payments on notes payable	(1,628,000)	(517,000)
Proceeds from notes payable	2,000,000
Principal payments on capital lease obligations	(218,000)	(207,000)
Proceeds from stock option exercise	369,000	280,000
Proceeds from sales of common stock under employee stock purchase plan	78,000	76,000
Net cash provided by (used in) financing activities	601,000	(368,000)
Net (decrease) increase in cash and cash equivalents	(4,374,000)	5,240,000
Cash and cash equivalents at beginning of the period	20,371,000	8,134,000
Cash and cash equivalents at end of the period	15,997,000	13,374,000
Cash paid during the period for:
Interest	156,000	11,000
Income taxes	951,000	61,000
Supplemental disclosures of noncash investing and financing activities:
Issuance of notes payable related to business acquisitions	4,250,000
Issuance of common stock related to business acquisitions	1,485,000
Contingent consideration related to business acquisitions	6,110,000
Accretion Expense	182,000
Equipment acquired under capital lease obligations	$ 139,000	$ 476,000

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

9 Months Ended

Oct. 02, 2015

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

1.BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments, which consist of only normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the consolidated results for the interim periods presented. The Company operates and reports its quarterly financial results based on the 13-week period ending on the Friday closest to March 31, June 30 and September 30 and the 13 or 14-week period ending on the Friday closest to December 31, as applicable, with consideration of business days. Results for the interim periods are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The consolidated financial statements should be read in conjunction with Willdan Group, Inc.’s 2014 Annual Report on Form 10-K filed on March 31, 2015.

Nature of Business

Willdan Group, Inc. and subsidiaries (“Willdan Group” or the “Company”) is a provider of professional technical and consulting services, including comprehensive energy efficiency solutions, for utilities, private industry, and public agencies at all levels of government, primarily in California and New York. The Company also has operations in Arizona, Colorado, Florida, Illinois, Kansas, Oregon, Texas, Washington and Washington, D.C. The Company provides a broad range of complementary services including energy efficiency, engineering and planning, economic and financial consulting, and national preparedness and interoperability. The Company’s clients primarily consist of public and governmental agencies, including cities, counties, public utilities, redevelopment agencies, water districts, school districts and universities, state agencies, federal agencies, a variety of other special districts and agencies, private utilities and industry and tribal governments. The Company enables its clients to provide a wide range of specialized services without the clients having to incur and maintain the overhead necessary to develop staffing in-house.

Principles of Consolidation

The consolidated financial statements include the accounts of Willdan Group, Inc. and its wholly-owned subsidiaries, Willdan Engineering, Willdan Energy Solutions, Public Agency Resources, Willdan Financial Services and Willdan Homeland Solutions and their respective subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Accounting for Contracts

The Company enters into contracts with its clients that contain various types of pricing provisions, including fixed price, time-and-materials, unit-based and service related provisions. The following table reflects the Company’s four reportable segments and the types of contracts that each most commonly enters into for revenue generating activities.


Segment	Types of Contract (Revenue Recognition Method)
Energy Efficiency Services	Unit-based and time-and-materials (percentage-of-completion method)
Engineering Services	Time-and-materials, fixed price and unit-based (percentage-of-completion method)
Public Finance Services	Service related contracts (proportional performance method)
Homeland Security Services	Service related contracts (proportional performance method)

Revenue on fixed price contracts is recognized on the percentage-of-completion method based generally on the ratio of direct costs (primarily exclusive of depreciation and amortization costs) incurred to date to estimated total direct costs at completion. Revenue on time-and-materials and unit-based contracts is recognized as the work is performed in accordance with the specific terms of the contract. The Company recognizes revenues for time-and-material contracts based upon the actual hours incurred during a reporting period at contractually agreed upon rates per hour and also includes in revenue all reimbursable costs incurred during a reporting period for which the Company has risk or on which the fee was based at the time of bid or negotiation. Certain of the Company’s time-and-material contracts are subject to maximum contract values and, accordingly, revenue under these contracts is generally recognized under the percentage-of-completion method, consistent with fixed priced contracts. Revenue on contracts that are not subject to maximum contract values is recognized based on the actual number of hours the Company spends on the projects plus any actual out-of-pocket costs of materials and other direct incidental expenditures that the Company incurs on the projects. In addition, revenue from overhead percentage recoveries and earned fees are included in revenue. Revenue is recognized as the related costs are incurred. For unit-based contracts, the Company recognizes the contract price of units of a basic production product as revenue when the production product is delivered during a period. Revenue for amounts that have been billed but not earned is deferred and such deferred revenue is referred to as billings in excess of costs and estimated earnings on uncompleted contracts in the accompanying consolidated balance sheets.

Adjustments to contract cost estimates are made in the periods in which the facts requiring such revisions become known. When the revised estimate, for contracts that are recognized under the percentage-of-completion method, indicates a loss, such loss is provided for currently in its entirety. Claims revenue is recognized only upon resolution of the claim. Change orders in dispute are evaluated as claims. Costs related to un-priced change orders are expensed when incurred and recognition of the related contract revenue is based on an evaluation of the probability of recovery of the costs. Estimated profit is recognized for un-priced change orders if realization of the expected price of the change order is probable.

The Company considers whether its contracts require combining for revenue recognition purposes. If certain criteria are met, revenues for related contracts may be recognized on a combined basis. With respect to the Company’s contracts, it is rare that such criteria are present. The Company may enter into certain contracts which include separate phases or elements. If each phase or element is negotiated separately based on the technical resources required and/or the supply and demand for the services being provided, the Company evaluates if the contracts should be segmented. If certain criteria are met, the contracts would be segmented which could result in revenues being assigned to the different elements or phases with different rates of profitability based on the relative value of each element or phase to the estimated total contract revenue.

Applying the percentage-of-completion method of recognizing revenue requires the Company to estimate the outcome of its long-term contracts. The Company forecasts such outcomes to the best of its knowledge and belief of current and expected conditions and its expected course of action. Differences between the Company's estimates and actual results often occur resulting in changes to reported revenue and earnings. Such changes could have a material effect on future consolidated financial statements. The Company did not have material revisions in estimates for contracts recognized using the percentage-of-completion method for any of the periods presented in the accompanying condensed consolidated financial statements.

Service-related contracts, including operations and maintenance services and a variety of technical assistance services, are accounted for over the period of performance, in proportion to the costs of performance. Award and incentive fees are recorded when they are fixed and determinable and consider customer contract terms.

Direct costs of contract revenue consist primarily of that portion of technical and nontechnical salaries and wages that has been incurred in connection with revenue producing projects. Direct costs of contract revenue also include production expenses, subcontractor services and other expenses that are incurred in connection with revenue producing projects.

Direct costs of contract revenue exclude that portion of technical and nontechnical salaries and wages related to marketing efforts, vacations, holidays and other time not spent directly generating revenue under existing contracts. Such costs are included in general and administrative expenses. Additionally, payroll taxes, bonuses and employee benefit costs for all Company personnel are included in general and administrative expenses in the accompanying consolidated statements of operations since no allocation of these costs is made to direct costs of contract revenue. No allocation of facilities costs is made to direct costs of contract revenue. Other companies may classify as direct costs of contract revenue some of the costs that the Company classifies as general and administrative costs. The Company expenses direct costs of contract revenue when incurred.

Included in revenue and costs are all reimbursable costs for which the Company has the risk or on which the fee was based at the time of bid or negotiation. No revenue or cost is recorded for costs in which the Company acts solely in the capacity of an agent and has no risks associated with such costs.

Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts based upon a review of all outstanding amounts on a quarterly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Credit risk is generally minimal with governmental entities, but disputes may arise related to these receivable amounts. Accounts receivables are written off when deemed uncollectible. Recoveries of accounts receivables previously written off are recorded when received.

Retainage is included in accounts receivable in the accompanying consolidated financial statements. Retainage represents the billed amount that is retained by the customer, in accordance with the terms of the contract, generally until performance is substantially complete. At October 2, 2015 and January 2, 2015, the Company had retained accounts receivable of approximately $738,000 and $700,000, respectively.

Goodwill

Goodwill represents the excess of costs over the fair value of the assets acquired. Goodwill, which has an indefinite useful life, is not amortized, but instead tested for impairment at least annually or more frequently if events and circumstances indicate that the asset might be impaired.

The Company tests goodwill at least annually for possible impairment. The Company completes annual testing of goodwill as of the last day of the first month of its fourth fiscal quarter each year to evaluate possible impairment. In addition to the annual test, the Company regularly evaluates whether events and circumstances have occurred that may indicate a potential impairment of goodwill. As of October 2, 2015, the Company had $16.9 million of goodwill, which primarily relates to its Energy Efficiency Services reporting segment and the acquisitions of Abacus and 360 Energy and also relates to its Public Finance Services reporting segment and the acquisition of Economists.com, LLC.

The Company tests goodwill for impairment at the level of its reporting units, which are components of its operating segments. The process of testing goodwill for impairment involves an optional qualitative assessment on goodwill impairment of its reporting units to determine whether a quantitative assessment is necessary. If a quantitative assessment is warranted, the Company will then determine the fair value of the applicable reporting units. To estimate the fair value of its reporting units, the Company uses both an income approach based on management’s estimates of future cash flows and other market data and a market approach based upon multiples of EBITDA earned by similar public companies.

Once the fair value is determined, the Company then compares the fair value of the reporting unit to its carrying value, including goodwill. If the fair value of the reporting unit is determined to be less than the carrying value, the Company performs an additional assessment to determine the extent of the impairment based on the implied fair value of goodwill compared with the carrying amount of the goodwill. In the event that the current implied fair value of the goodwill is less than the carrying value, an impairment charge is recognized.

Inherent in such fair value determinations are significant judgments and estimates, including but not limited to assumptions about future revenue, profitability and cash flows, operational plans and interpretation of current economic indicators and market valuations. To the extent these assumptions are incorrect or economic conditions that would impact the future operations of the reporting units change, any goodwill may be deemed to be impaired, and an impairment charge could result in a material adverse effect on the financial position or results of operation.

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash, cash equivalents, accounts receivable, costs and estimated earnings in excess of billings on uncompleted contracts, other receivables, prepaid expenses and other current assets, excess of outstanding checks over bank balance, accounts payable, accrued liabilities and billings in excess of costs and estimated earnings on uncompleted contracts, and approximate their fair values because of the relatively short period of time between the origination of these instruments and their expected realization or payment. The carrying amounts of debt obligations approximate their fair values since the terms are comparable to terms currently offered by local lending institutions for loans of similar terms to companies with comparable credit risk.

Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Liquidity

The Company had $16.0 million of cash and cash equivalents as of October 2, 2015. The Company’s primary sources of liquidity are cash generated from operations and its revolving line of credit with BMO Harris Bank, National Association (“BMO”), which matures on March 24, 2016, subject to extension to March 24, 2017 (see Note 7). The Company believes that its cash and cash equivalents on hand, cash generated by operating activities and funds available under its line of credit (if needed and if available) will be sufficient to finance its operating activities for at least the next 12 months.

Recent Accounting Pronouncements

Revenue Recognition

In May 2014, the FASB issued an amendment to the accounting guidance related to revenue recognition. Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606, provides for a single comprehensive principles based standard for the recognition of revenue across all industries through the application of the following five-step process: Step 1—Identify the contract(s) with a customer, Step 2—Identify the performance obligations in the contract, Step 3—Determine the transaction price, Step 4—Allocate the transaction price to the performance obligations in the contract, and Step 5—Recognize revenue when (or as) the entity satisfies a performance obligation. The new guidance is effective for annual periods beginning after December 15, 2017 and allows for either the prospective or retrospective methods of adoption. The Company is evaluating the impact that adopting this guidance will have on its consolidated financial statements, including the method of adoption.

Debt Issuance Costs

In April 2015, the FASB issued new accounting guidance which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. Prior to the issuance of the standard, debt issuance costs were required to be presented in the balance sheet as an asset. The guidance requires retrospective application and represents a change in accounting principle. The Company does not expect the guidance to have a material impact on its consolidated financial statements, as the application of this guidance affects classification only. This guidance will be effective for the Company’s fiscal year beginning after December 15, 2015.

Provisional Adjustments Recognized in Business Combination

In September 2015, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update that amends the retroactive requirement to apply adjustments made to provisional amounts recognized in a business combination. The update requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The Company early adopted this standard for business combinations with open measurement periods for which the accounting is not finalized as of October 2, 2015. As of October 2, 2015, the adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References+ Details

BUSINESS COMBINATIONS

9 Months Ended

Oct. 02, 2015

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

2.BUSINESS COMBINATIONS

On January 15, 2015, the Company and its wholly-owned subsidiary, Willdan Energy Solutions (“WES”) completed two separate acquisitions. The Company and WES acquired all of the outstanding shares of Abacus Resource Management Company (“Abacus”), an Oregon-based energy engineering company. In addition, the Company and WES also separately acquired substantially all of the assets of 360 Energy Engineers, LLC (“360 Energy”), a Kansas-based energy and engineering energy management consulting company.

Pursuant to the terms of the Stock Purchase Agreement, dated as of January 15, 2015, by and between the Company, WES, Abacus and the selling shareholders of Abacus (the “Abacus Shareholders”), WES will pay the Abacus Shareholders a maximum purchase price of $6.1 million, consisting of (i) $2.5 million in cash which was paid at closing, with the balance of $0.6 million paid after closing, (ii) 75,758 shares of Common Stock, par value $0.01 per share, of the Company (“Common Stock”) with a fair value of $0.9 million which were issued at closing, (iii) $1.25 million aggregate principal amount of promissory notes issued to the Abacus Shareholders at closing and (iv) up to $1.4 million in cash, based on the achievement of certain financial targets by Abacus at the end of the Company’s 2015 and 2016 fiscal years.

Pursuant to the terms of the Asset Purchase Agreement, dated January 15, 2015, by and between the Company, WES and 360 Energy, WES will pay 360 Energy a maximum purchase price of $15.0 million, consisting of (i) $4.9 million in cash which was paid at closing, (ii) 47,348 shares of Common Stock with a fair value of $0.6 million which were issued at closing, (iii) $3.0 million aggregate principal amount of promissory note issued to 360 Energy at closing and (iv) up to $6.5 million in cash, based on the achievement of certain financial targets by WES’s division made up of the assets acquired from, and the former employees of 360 Energy at the end of the Company’s 2015, 2016 and 2017 fiscal years. The Company provided a guaranty to 360 Energy which guarantees WES’s obligations under the promissory note issued to 360 Energy.

To finance the acquisitions of Abacus and 360 Energy, the Company borrowed $2.0 million under its delayed draw term loan facility. The Company used cash on hand to pay the remaining $5.4 million due at closing.

On April 3, 2015, the Company’s wholly-owned subsidiary, Willdan Financial Services (“WFS”) acquired substantially all of the assets of Economists.com, LLC ("Economists LLC"), a Texas-based economic analysis and financial solutions firm serving the municipal and public sectors. Pursuant to the terms of the Asset Purchase Agreement, dated April 3, 2015, by and between WFS and Economists LLC, WFS will pay Economists LLC a maximum purchase price of $1.1 million, consisting of (i) $0.5 million in cash which was paid at closing and (ii) up to $0.6 million in cash, based on the achievement of certain financial targets by the WFS division made up of the assets acquired from, and the former employees of Economists LLC at the end of the Company’s 2015, 2016 and 2017 fiscal years. The Company used cash on hand to pay the $0.5 million due at closing.

The acquisitions were accounted for as business combinations in accordance with ASC 805. Under ASC 805, the Company recorded the acquired assets and assumed liabilities at their estimated fair value with the excess allocated to goodwill. Goodwill represents the value the Company expects to achieve through the operational synergies and the expansion of the Company into new markets. The Company estimates that the entire $16.9 million of goodwill resulting from the acquisitions will be tax deductible. Consideration for the acquisitions includes the following:


	360 Energy		Abacus		Economists, LLC		Total

Cash paid	$	4,875,000	$	3,135,000	$	490,000	$	8,500,000
Issuance of common stock		571,000		914,000		—		1,485,000
Issuance of notes payable		3,000,000		1,250,000		—		4,250,000
Contingent consideration		5,061,000		681,000		368,000		6,110,000
Total consideration	$	13,507,000	$	5,980,000	$	858,000	$	20,345,000

The following table summarizes the preliminary amounts for the acquired assets recorded at their estimated fair value as of the acquisition date:


	360 Energy		Abacus		Economists, LLC		Total

Cash acquired	$	—	$	332,000	$	—	$	332,000
Property, plant and equipment		153,000		104,000		—		257,000
Backlog		158,000		161,000		—		319,000
Tradename		666,000		366,000		—		1,032,000
Non-compete agreements		876,000		137,000		—		1,013,000
Other assets, net		41,000		495,000		—		536,000
Goodwill		11,613,000		4,385,000		858,000		16,856,000
Net assets acquired	$	13,507,000	$	5,980,000	$	858,000	$	20,345,000

As of October 2, 2015, the Company had not completed its final estimate of fair value of the assets acquired and liabilities assumed due to the timing of such transactions and incomplete information necessary to finalize such estimates of fair value. Accordingly, the Company has preliminarily estimated the fair values of the assets acquired and the liabilities assumed. The Company will finalize the fair value estimates within twelve months of the acquisition date.

The acquisition date fair value of the intangible asset relating to tradenames was estimated using comparable values ascribed in other recent market transactions as well as taking into account Abacus’s, 360 Energy’s and Economists LLC’s market position in their respective markets. These assets are deemed to have a finite life. As of October 2, 2015, the Company has contingent consideration payable of $6.3 million related to these acquisitions, which includes $0.2 million of accretion related to the contingent consideration. Contingent consideration is subject to change for each reporting period through settlement. The Company measures the contingent earn-out liabilities at fair value on the date of acquisition and on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy. The Company uses a probability-weighted discounted income approach as a valuation technique to convert future estimated cash flows to a single present value amount. The significant unobservable inputs used in the fair value measurements are operating income projections over the earn-out period, and the probability outcome percentages assigned to each scenario. Significant increases or decreases to either of these inputs in isolation would result in a significantly higher or lower liability, with a higher liability capped by the contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and amount paid will be recorded in earnings.

The following unaudited pro forma financial information for the three and nine months ended October 2, 2015 and September 26, 2014 assumes the acquisitions of Abacus and 360 Energy occurred on December 28, 2013 as follows:


	Three Months Ended				Nine Months Ended
	October 2,		September 26,		October 2,		September 26,
In thousands (except per share data)	2015		2014		2015		2014
Pro forma revenue	$	33,511	$	35,529	$	104,054	$	95,232

Pro forma income from operations		1,641		4,749		7,486		8,745
Pro forma net income	$	882	$	7,326	$	4,340	$	10,717

Earnings per share:
Basic	$	0.11	$	0.98	$	0.56	$	1.44
Diluted	$	0.11	$	0.93	$	0.54	$	1.39

Weighted average shares outstanding:
Basic		7,862		7,507		7,817		7,440
Diluted		8,102		7,855		8,087		7,700

This pro forma supplemental information does not purport to be indicative of what the company’s operating results would have been had these transactions occurred on December 28, 2013 and may not be indicative of future operating results.

During the nine months ended October 2, 2015, the acquisitions of Abacus and 360 Energy contributed $18.5 million in revenue and $0.7 million of income from operations.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

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+ Details

GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Oct. 02, 2015

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

3.GOODWILL AND OTHER INTANGIBLE ASSETS

As of October 2, 2015, the Company had $16.9 million of goodwill, which primarily relates to the Energy Efficiency Services reporting segment and the acquisitions of Abacus and 360 Energy and also relates to the Public Finance Services reporting segment and the acquisition of Economists LLC. The changes in the carrying value of goodwill by reporting unit for the nine months ended October 2, 2015 were as follows:


	January 2,				October 2,
	2015		Additions		2015
Reporting Unit:
Energy Efficiency Services	$	—	$	15,998,000	$	15,998,000
Financial Services	$	—	$	858,000	$	858,000

	$	—	$	16,856,000	$	16,856,000

The gross amounts and accumulated amortization of the Company’s acquired identifiable intangible assets with finite useful lives as of October 2, 2015 included in intangible assets, net in the accompanying condensed consolidated balance sheets, were as follows:


	October 2, 2015				January 2, 2015
	Gross		Accumulated		Gross		Accumulated		Amortization
	Amount		Amortization		Amount		Amortization		Period (yrs)
Backlog	$	319,000	$	318,000	$	—	$	—			1
Tradename		1,032,000		253,000		—		—	2.5	-	3.5
Non-compete agreements		1,013,000		144,000		—		—			5
	$	2,364,000	$	715,000	$	—	$	—

The Company’s amortization expense for acquired identifiable intangible assets with finite useful lives was $0.2 million and $0.7 million for the fiscal three and nine months ended October 2, 2015, respectively, as compared to no amortization expense for the fiscal three and nine months ended September 26, 2014. Estimated amortization expense for acquired identifiable intangible assets for the remainder of fiscal 2015 and the succeeding years is as follows:


Fiscal year:
2015	$	136,000
2016		539,000
2017		466,000
2018		298,000
2019		210,000
	$	1,649,000

The purchase price allocations as described in Note 2 are preliminary as of October 2, 2015. Accordingly goodwill and intangible assets presented in this footnote will be updated should there be purchase price allocation adjustments as the allocations are finalized.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References+ Details

EARNINGS PER SHARE (EPS)

9 Months Ended

Oct. 02, 2015

EARNINGS PER SHARE (EPS)

EARNINGS PER SHARE (EPS)

4.EARNINGS PER SHARE (EPS)

Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted EPS is computed by dividing net income by the weighted-average number of common shares outstanding and dilutive potential common shares for the period. Potential common shares include the weighted-average dilutive effects of outstanding stock options using the treasury stock method.

The following table sets forth the number of weighted-average shares used to compute basic and diluted EPS:


	Three months ended				Nine months ended
	October 2,		September 26,		October 2,		September 26,
	2015		2014		2015		2014
Net income	$	782,000	$	4,161,000	$	3,879,000	$	7,369,000
Weighted-average common shares outstanding		7,862,000		7,507,000		7,817,000		7,440,000
Effect of dilutive stock options and restricted stock awards		240,000		348,000		270,000		260,000
Weighted-average common stock outstanding-diluted		8,102,000		7,855,000		8,087,000		7,700,000
Earnings per share:
Basic	$	0.10	$	0.55	$	0.50	$	0.99
Diluted	$	0.10	$	0.53	$	0.48	$	0.96

For each of the three and nine months ended October 2, 2015, 350,000 and 256,000 options, respectively, were excluded from the calculation of dilutive potential common shares. For the three and nine months ended September 26, 2014, 2,000 and 231,000 options, respectively, were excluded from the calculation of dilutive potential common shares. These options were not included in the computation of dilutive potential common shares because the assumed proceeds per share exceeded the average market price per share for the 2015 and 2014 periods. Accordingly, the inclusion of these options would have been anti-dilutive.

- Definition

The entire disclosure for earnings per share.

+ References+ Details

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

9 Months Ended

Oct. 02, 2015

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

5.EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Equipment and leasehold improvements consist of the following:


	October 2,		January 2,
	2015		2015
Furniture and fixtures	$	3,255,000	$	2,994,000
Computer hardware and software		6,398,000		5,667,000
Leasehold improvements		529,000		785,000
Equipment under capital leases		1,025,000		919,000
Automobiles, trucks, and field equipment		769,000		677,000
		11,976,000		11,042,000
Accumulated depreciation and amortization		(9,101,000)		(9,658,000)
Equipment and leasehold improvements, net	$	2,875,000	$	1,384,000

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details

ACCRUED LIABILITIES

9 Months Ended

Oct. 02, 2015

ACCRUED LIABILITIES

ACCRUED LIABILITIES

6.ACCRUED LIABILITIES

Accrued liabilities consist of the following:


	October 2,		January 2,
	2015		2015
Accrued bonuses	$	753,000	$	1,450,000
Accrued interest		4,000		—
Paid leave bank		1,799,000		1,404,000
Compensation and payroll taxes		1,019,000		1,371,000
Accrued legal		823,000		556,000
Accrued workers’ compensation insurance		208,000		192,000
Accrued rent		94,000		149,000
Employee withholdings		551,000		637,000
Client deposits		1,405,000		79,000
Unvouchered accounts payable		2,455,000		4,462,000
Other		174,000		368,000
Total accrued liabilities	$	9,285,000	$	10,668,000

DEBT

9 Months Ended

Oct. 02, 2015

DEBT

DEBT

7.DEBT

Notes payable consist of the following:


	October 2,		January 2,
	2015		2015
BMO term note	$	1,850,000	$	—
Notes payable related to acquisitions		3,119,000		—
Notes payable related to insurance		7,000		352,000
Other		1,000		3,000
Total notes payable		4,977,000		355,000
Less current portion		3,479,000		355,000
Notes payable, less current portion	$	1,498,000	$	—

To finance the acquisitions of Abacus and 360 Energy, the Company borrowed $2.0 million under its delayed draw term loan facility pursuant to the BMO Credit Agreement described below. The term loan bears interest at the LIBOR rate plus an applicable margin ranging between 2.25% and 2.75%, set at the LIBOR rate plus 2.50% as of October 2, 2015, and matures on March 24, 2016, subject to extension as described below. Interest on the term loan is payable quarterly, beginning April 13, 2015 and was 2.83% as of October 2, 2015. Principal on the term loan is payable on the last day of each March, June, September and December in each year, with the amount of each such principal installment equal to: (i) $50,000 on the last day of December 2015 and (ii) all of the remaining outstanding principal amount on March 24, 2016. The term loan is governed by the terms of the BMO Credit Agreement.

On January 15, 2015, in connection with the completion of the acquisition of Abacus, WES issued promissory notes to Mark Kinzer (the “Kinzer Note”) and Steve Rubbert (the “Rubbert Note” and, together with the Kinzer Note, the “Abacus Notes”). The initial outstanding principal amounts of the Kinzer Note and the Rubbert Note were $625,000 and $625,000, respectively. The Abacus Notes provide for a fixed interest rate of 4% per annum. The Abacus Notes are fully amortizing and payable in equal monthly installments between January 15, 2015 and their January 15, 2017 maturity date. The Abacus Notes contain events of default provisions customary for documents of this nature. Mr. Kinzer and Mr. Rubbert have entered into a Subordination Agreement, dated as of January 15, 2015, in favor of BMO Harris, pursuant to which any indebtedness under the Abacus Notes is subordinated to any indebtedness under the BMO Credit Agreement. Through October 2, 2015 the Company had made payments of approximately $203,000 on each of the Abacus Notes and as of October 2, 2015, the outstanding balance was $422,000 on each of the Abacus Notes.

On January 15, 2015, in connection with the completion of the acquisition of 360 Energy, WES issued a promissory note to 360 Energy (the “360 Energy Note”). The initial outstanding principal amount of the 360 Energy Note was $3,000,000. The 360 Energy Note provides for a fixed interest rate of 4% per annum. The 360 Energy Note is fully amortizing and payable in equal monthly installments between January 15, 2015 and its January 15, 2018 maturity date. The 360 Energy Note contains events of default provisions customary for documents of this nature. 360 Energy has entered into a Subordination Agreement, dated as of January 15, 2015, in favor of BMO Harris, pursuant to which any indebtedness under the 360 Energy Note is subordinated to any indebtedness under the BMO Credit Agreement. Through October 2, 2015 the Company had made payments of approximately $723,000 on the 360 Energy Note and the outstanding balance was $2,277,000 as of October 2, 2015.

BMO Credit Facility: On March 24, 2014, the Company and its subsidiaries, as guarantors, entered into a credit agreement with BMO Harris Bank, N.A., or BMO, that provides for a revolving line of credit of up to $7.5 million, subject to a borrowing base calculation, and a delayed draw term loan facility of up to $2.5 million. The $7.5 million revolving credit facility includes a $5.0 million standby letter of credit sub-facility. On January 15, 2015, the Company and its subsidiaries, as guarantors, entered into the Second Amendment (the “Second Amendment”) to the Credit Agreement (as amended, the “BMO Credit Agreement”) to, among other things, permit the acquisitions of Abacus and 360 Energy, the incurrence of the notes and guarantees issued in connection with the acquisitions of Abacus and 360 Energy and to add Abacus as a guarantor under the BMO Credit Agreement. The Second Amendment also increased the amount available to the Company for borrowing under the delayed draw term loan facility from $2.5 million to $3.0 million. To finance the acquisitions of Abacus and 360 Energy, the Company borrowed $2.0 million under the delayed draw term loan facility. As of October 2, 2015, there were no outstanding borrowings under the revolving line of credit and approximately $1.85 million in loans outstanding under the term loan facility. After considering the credit agreement’s borrowing base calculation and debt covenants (each as described below), $7.5 million under the revolving line of credit and $1.15 million under the delayed draw term loan facility were available for borrowing.

As described below, the term loan bears interest at the LIBOR rate plus an applicable margin ranging between 2.25% and 2.75%, set at the LIBOR rate plus 2.50% and matures on March 24, 2016, subject to extension as described below. Interest on the term loan is payable quarterly, beginning April 13, 2015 and was 2.83% as of October 2, 2015. Principal on the term loan is payable on the last day of each March, June, September, and December in each year, with the amount of each such principal installment equal to: (i) $50,000 on the last day of December 2015 and (ii) all of the remaining outstanding principal amount on March 24, 2016. The term loan is governed by the terms of the BMO Credit Agreement.

All borrowings under the revolving line of credit are limited to a borrowing base equal to roughly 75% of the eligible accounts receivable plus 50% of the lower of cost or market value of the Company’s eligible inventory, each term as defined in the BMO Credit Agreement. Under the BMO Credit Agreement, as of October 2, 2015, no cash amounts are restricted. The revolving line of credit matures on March 24, 2016 and term loans can be requested at any time prior to February 23, 2016, which would mature on March 24, 2016. Subject to certain conditions, including that the Company is not in default under the BMO Credit Agreement and that our trailing twelve month EBITDA (as defined in the BMO Credit Agreement) is not less than $10.0 million as of the end of the third fiscal quarter of 2015, we have the option to request that the maturity date be extended by one year to March 24, 2017 and term loans could accordingly be requested at any time prior to February 22, 2017. As of October 2, 2015, we were in compliance with the covenants and conditions that would allow an extension to March 24, 2017 and intend to request that the maturity date be extended by one year to March 24, 2017.

The Second Amendment also increased the interest rate under the delayed draw term loan facility by 25 basis points. Giving effect to the Second Amendment, borrowings under the delayed draw term loan facility bear interest, at the Company’s option, at (a) the base rate plus an applicable margin ranging between 1.25% and 1.75%, or (b) the LIBOR rate plus an applicable margin ranging between 2.25% and 2.75%. Borrowings under the revolving line of credit bear interest, at the Company’s option, at (a) the base rate plus an applicable margin ranging between 0.75% and 1.25%, or (b) the LIBOR rate plus an applicable margin ranging between 1.75% and 2.25%. The applicable margin is determined based on the Company’s total leverage ratio.

Borrowings under the term loan facility and the revolving line of credit are guaranteed by all of the Company's subsidiaries (the “Guarantors”) and secured by all of the Company’s and the Guarantors' accounts receivable and other rights to payment, general intangibles, inventory and equipment. Pursuant to the BMO Credit Agreement, the Company also must pay a fee of up to 0.3% on unused commitments and customary fees on any letters of credit drawn under the facility.

The BMO Credit Agreement contains customary representations and affirmative covenants, including financial covenants that require the Company to maintain (i) a maximum total leverage ratio, measured as total funded debt (measured as the sum of all obligations for borrowed money, including subordinated debt, plus all capital lease obligations) plus capital leases plus financial letters of credit divided by a trailing twelve month EBITDA ( as defined in the BMO Credit Agreement) measured on a rolling basis of not more than 2.25 for the first four fiscal quarters after the acquisitions of Abacus and 360 Energy, and not more than 2.0 thereafter; (ii) a minimum fixed charge coverage ratio (measured as the sum of EBITDA plus rent expense less unfinanced capital expenditures divided by the sum of rent expense plus principal payments plus cash taxes plus cash interest plus restricted payments plus distributions) of not less than 1.25; and (iii) a minimum tangible net worth of at least (x) the greater of (1) $5.0 million and (2) 85% of the Company’s actual tangible net worth as of March 31, 2015, plus (y) an amount equal to 50% of net income for the first fiscal quarter of 2015, and 50% of net income (only if positive) for each fiscal quarter ending thereafter, plus or minus (z) 80% of any adjustments to the Company’s tangible net worth arising as a result of the consummation of the acquisitions of Abacus and 360 Energy.

The BMO Credit Agreement also includes customary negative covenants, including (i) restrictions on the incurrence of additional indebtedness by the Company or the Guarantors other than indebtedness existing on the date of the BMO Credit Agreement, (ii) restrictions on the total consideration for all permitted acquisitions (including potential future earn-out obligations) shall not exceed $1.5 million during the term of the agreement and the total consideration for any individual permitted acquisition shall not exceed $750,000 without BMO’s consent, and (iii) limitations on asset sales, mergers and acquisitions. In addition, the credit agreement includes customary events of default. Upon the occurrence of an event of default, the interest rate may be increased by 2.0%, BMO has the option to make any loans then outstanding under the BMO Credit Agreement immediately due and payable, and BMO would no longer be obligated to extend further credit to the Company under the BMO Credit Agreement. As of October 2, 2015 the Company was in compliance with the covenants under the BMO Credit Agreement that would allow for an extension of the maturity date to March 24, 2017 and intends to request that the maturity date be extended by one year to March 24, 2017.

Insurance Premiums. The Company has also financed, from time to time, insurance premiums by entering into unsecured notes payable with insurance companies. During the Company’s annual insurance renewals in the fourth quarter of its fiscal year ended January 2, 2015, the Company elected to finance its insurance premiums for the upcoming fiscal year.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References+ Details

COMMITMENTS	9 Months Ended
COMMITMENTS	Oct. 02, 2015
COMMITMENTS
COMMITMENTS	8.COMMITMENTS Leases The Company is obligated under capital leases for certain furniture and office equipment that expire at various dates through the year 2018. The Company also leases certain office facilities under non-cancelable operating leases that expire at various dates through the year 2023 and is committed under a non-cancelable operating lease for the lease of an automobile through the year 2017. Employee Benefit Plans The Company has a qualified profit sharing plan pursuant to Code Section 401(a) and qualified cash or deferred arrangement pursuant to Code Section 401(k) covering substantially all employees. Employees may elect to contribute up to 50% of compensation limited to the amount allowed by tax laws. Company contributions are made solely at the discretion of the Company’s board of directors. The Company has a discretionary bonus plan for regional managers, division managers and others as determined by the Company president. Bonuses are awarded if certain financial goals are achieved. The financial goals are not stated in the plan; rather they are judgmentally determined each year. In addition, the board of directors may declare discretionary bonuses to key employees and all employees are eligible for bonuses for outstanding performance. The Company’s compensation committee of the board of directors determines the compensation of the president and chief executive officer. Post Employment Health Benefits In May 2006, the Company’s board of directors approved providing lifetime health insurance coverage for Win Westfall, the Company’s former chief executive officer and current chairman of the board of directors, and his spouse and for Linda Heil, the widow of the Company’s former chief executive officer, Dan Heil. These benefits relate to past services provided to the Company. Accordingly, there is no unamortized compensation cost for the benefits.

- Definition

The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights.

+ References+ Details

INCOME TAXES	9 Months Ended
INCOME TAXES	Oct. 02, 2015
INCOME TAXES
INCOME TAXES	9.INCOME TAXES Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial reporting basis and tax basis of the Company’s assets and liabilities, subject to a judgmental assessment of the recoverability of deferred tax assets. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets may not be realized. Significant judgment is applied when assessing the need for valuation allowances. Areas of estimation include the Company’s consideration of future taxable income and ongoing prudent and feasible tax planning strategies. Should a change in circumstances lead to a change in judgment about the utilization of deferred tax assets in future years, the Company would adjust the related valuation allowances in the period that the change in circumstances occurs, along with a corresponding increase or charge to income. As of October 2, 2015, the Company believes it is more likely than not that it will be able to realize all of its deferred tax assets. Accordingly, no valuation allowance is recorded as of the balance sheet date. The Company will continue to assess the need for a valuation allowance in the future. The Company recognizes the tax benefit from uncertain tax positions if it is more likely than not that the tax positions will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. As of October 2, 2015, the Company has not recorded a liability for uncertain tax positions. Based on management’s estimates and determination of an effective tax rate for the year, the Company recorded an income tax expense of $0.6 million and $2.9 million for the three and nine months ended October 2, 2015, respectively, as compared to an income tax benefit of $1.5 million and $1.4 million for the three and nine months ended September 26, 2014, respectively. The difference between the tax expense recorded at October 2, 2015 and the expense that would be recorded by applying the federal statutory rate primarily relates to state income taxes and certain expenses that are non-deductible for tax purposes, including meals and entertainment, lobbying and compensation expense related to incentive stock options. Additionally, the income tax expense in the nine months ended October 2, 2015 reflects an adjustment to the tax effected value of deferred tax assets and liabilities resulting from changes in the estimated effective state income tax rate.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References+ Details

SEGMENT INFORMATION

9 Months Ended

Oct. 02, 2015

SEGMENT INFORMATION

SEGMENT INFORMATION

10.SEGMENT INFORMATION

The Company has four reporting segments: Energy Efficiency Services, Engineering Services, Public Finance Services and Homeland Security Services. The Energy Efficiency Services segment, which consists of Willdan Energy Solutions, provides energy efficiency and sustainability consulting services to utilities, state agencies, municipalities, private industry and non-profit organizations. The Engineering Services segment consists of Willdan Engineering, Willdan Infrastructure and Public Agency Resources. The Engineering Services segment offers a broad range of engineering and planning services to our public and private sector clients. The Public Finance Services segment, which consists of Willdan Financial Services, provides expertise and support for the various financing techniques employed by public agencies to finance their operations and infrastructure along with the mandated reporting and other requirements associated with these financings. The Homeland Security Services segment, which consists of Willdan Homeland Solutions, provides national preparedness, homeland security consulting, public safety and emergency response services to cities, related municipal service agencies and other entities.

The accounting policies applied to determine the segment information are the same as those described in the summary of significant accounting policies included in the Company’s 2014 Annual Report on Form 10-K filed on March 31, 2015. There were no intersegment sales in the three and nine month periods ended October 2, 2015 and September 26, 2014. Management evaluates the performance of each segment based upon income or loss from operations before income taxes. Certain segment asset information including expenditures for long-lived assets has not been presented as it is not reported to or reviewed by the chief operating decision maker. In addition, enterprise-wide service line contract revenue is not included as it is impracticable to report this information for each group of similar services.

Financial information with respect to the reportable segments as of and for the fiscal three and nine months ended October 2, 2015 and as of and for the fiscal three and nine months ended September 26, 2014 is as follows:


	Energy				Public		Homeland
	Efficiency		Engineering		Finance		Security		Unallocated				Consolidated
	Services		Services		Services		Services		Corporate		Intersegment		Total
Fiscal Three Months Ended October 2, 2015
Contract revenue	$	17,811,000	$	11,584,000	$	3,286,000	$	830,000	$	—	$	—	$	33,511,000
Segment (loss) profit before income tax expense		(658,000)		1,268,000		536,000		257,000		5,000		—		1,408,000
Net (loss) income		(392,000)		877,000		144,000		148,000		5,000		—		782,000
Segment assets(1)		38,406,000		14,450,000		5,387,000		624,000		41,264,000		(23,130,000)		77,001,000
Fiscal Three Months Ended September 26, 2014
Contract revenue	$	13,558,000	$	11,093,000	$	2,822,000	$	714,000	$	—	$	—	$	28,187,000
Segment profit before income tax expense		1,141,000		1,812,000		368,000		76,000		(700,000)		—		2,697,000
Net income (loss)		1,983,000		2,485,000		495,000		133,000		(935,000)		—		4,161,000
Segment assets(1)		16,547,000		10,597,000		3,726,000		699,000		41,881,000		(23,130,000)		50,320,000
Fiscal Nine Months Ended October 2, 2015
Contract revenue	$	58,254,000	$	33,893,000	$	8,982,000	$	2,452,000	$	—	$	—	$	103,581,000
Segment profit (loss) before income tax expense		2,724,000		3,427,000		728,000		333,000		(461,000)		—		6,751,000
Net income (loss)		1,567,000		2,081,000		304,000		192,000		(265,000)		—		3,879,000
Segment assets(1)		38,406,000		14,450,000		5,387,000		624,000		41,264,000		(23,130,000)		77,001,000
Fiscal Nine Months Ended September 26, 2014
Contract revenue	$	37,617,000	$	29,511,000	$	8,003,000	$	2,712,000	$	—	$	—	$	77,843,000
Segment profit before income tax expense		3,193,000		2,954,000		618,000		248,000		(1,000,000)		—		6,013,000
Net income (loss)		3,964,000		3,592,000		739,000		300,000		(1,226,000)		—		7,369,000
Segment assets(1)		16,547,000		10,597,000		3,726,000		699,000		41,881,000		(23,130,000)		50,320,000

(1)

Segment assets represent segment assets, net of intercompany receivables.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

CONTINGENCIES	9 Months Ended
CONTINGENCIES	Oct. 02, 2015
CONTINGENCIES
CONTINGENCIES	11.CONTINGENCIES Claims and Lawsuits The Company is subject to claims and lawsuits from time to time, including those alleging professional errors or omissions that arise in the ordinary course of business against firms that operate in the engineering and consulting professions. The Company carries professional liability insurance, subject to certain deductibles and policy limits, for such claims as they arise and may from time to time establish reserves for litigation that is considered probable of a loss. In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and discloses the amount accrued and an estimate of any reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for the Company’s financial statements not to be misleading. The Company does not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. Because litigation outcomes are inherently unpredictable, the Company’s evaluation of legal proceedings often involves a series of complex assessments by management about future events and can rely heavily on estimates and assumptions. If the assessments indicate that loss contingencies that could be material to any one of the Company’s financial statements are not probable, but are reasonably possible, or are probable, but cannot be estimated, then the Company will disclose the nature of the loss contingencies, together with an estimate of the possible loss or a statement that such loss is not reasonably estimable. While the consequences of certain unresolved proceedings are not presently determinable, and a reasonable estimate of the probable and reasonably possible loss or range of loss in excess of amounts accrued for such proceedings cannot be made, an adverse outcome from such proceedings could have a material adverse effect on the Company’s earnings in any given reporting period. However, in the opinion of the Company’s management, after consulting with legal counsel, and taking into account insurance coverage, the ultimate liability related to current outstanding claims and lawsuits is not expected to have a material adverse effect on the Company’s financial statements. City of Glendale v. Willdan Financial Services, Superior Court of California, Los Angeles County A complaint was filed against the Company on July 16, 2014 relating to a project performed by Willdan Financial Services to prepare a Cost of Services Analysis (a “COSA”) for the Department of Water and Power of the City of Glendale, California (the “City of Glendale”). The purpose of the COSA was to assist the City of Glendale in setting water rates for property owners. The lawsuit alleges that the City of Glendale suffered damages due to mistakes in the COSA, as follows: the City of Glendale received less revenue than anticipated in an amount exceeding $9,000,000; the City of Glendale was required to retain another consultant to prepare a new COSA at the cost of $130,000; and the City of Glendale incurred costs associated with noticing and conducting public hearings at a cost of $83,052. The Company denies the allegations asserted in the lawsuit and will vigorously defend against the claims. Additionally, this matter is covered by the Company’s professional liability insurance policy up to its policy limits.

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY (Policies)

9 Months Ended

Oct. 02, 2015

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

Basis of Presentation

Principles of Consolidation

Accounting for Contracts


Segment	Types of Contract (Revenue Recognition Method)
Energy Efficiency Services	Unit-based and time-and-materials (percentage-of-completion method)
Engineering Services	Time-and-materials, fixed price and unit-based (percentage-of-completion method)
Public Finance Services	Service related contracts (proportional performance method)
Homeland Security Services	Service related contracts (proportional performance method)

Goodwill

Fair Value of Financial Instruments

Use of Estimates

Liquidity

Recent Accounting Pronouncements

Revenue Recognition

Debt Issuance Costs

Provisional Adjustments Recognized in Business Combination

- Definition

Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary.

+ References+ Details

- Definition

Disclosure of accounting policy for reporting when there is a substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time (generally a year from the balance sheet date). Disclose: (a) pertinent conditions and events giving rise to the assessment of substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time, (b) the possible effects of such conditions and events, (c) management's evaluation of the significance of those conditions and events and any mitigating factors, (d) possible discontinuance of operations, (e) management's plans (including relevant prospective financial information), and (f) information about the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities. If management's plans alleviate the substantial doubt about the entity's ability to continue as a going concern, disclosure of the principal conditions and events that initially raised the substantial doubt about the entity's ability to continue as a going concern would be expected to be considered. Disclose whether operations for the current or prior years generated sufficient cash to cover current obligations, whether waivers were obtained from creditors relating to the company's default under the provisions of debt agreements and possible effects of such conditions and events, such as: whether there is a possible need to obtain additional financing (debt or equity) or to liquidate certain holdings to offset future cash flow deficiencies. Disclose appropriate parent company information when parent is dependent upon remittances from subsidiaries to satisfy its obligations.

+ References+ Details

BUSINESS COMBINATIONS (Tables)

9 Months Ended

Oct. 02, 2015

BUSINESS COMBINATIONS

Schedule of consideration for the acquisitions


	360 Energy		Abacus		Economists, LLC		Total

Cash paid	$	4,875,000	$	3,135,000	$	490,000	$	8,500,000
Issuance of common stock		571,000		914,000		—		1,485,000
Issuance of notes payable		3,000,000		1,250,000		—		4,250,000
Contingent consideration		5,061,000		681,000		368,000		6,110,000
Total consideration	$	13,507,000	$	5,980,000	$	858,000	$	20,345,000

Schedule of preliminary amounts for the acquired assets recorded at their estimated fair value as of the acquisition date


	360 Energy		Abacus		Economists, LLC		Total

Cash acquired	$	—	$	332,000	$	—	$	332,000
Property, plant and equipment		153,000		104,000		—		257,000
Backlog		158,000		161,000		—		319,000
Tradename		666,000		366,000		—		1,032,000
Non-compete agreements		876,000		137,000		—		1,013,000
Other assets, net		41,000		495,000		—		536,000
Goodwill		11,613,000		4,385,000		858,000		16,856,000
Net assets acquired	$	13,507,000	$	5,980,000	$	858,000	$	20,345,000

Schedule of unaudited pro forma financial information


	Three Months Ended				Nine Months Ended
	October 2,		September 26,		October 2,		September 26,
In thousands (except per share data)	2015		2014		2015		2014
Pro forma revenue	$	33,511	$	35,529	$	104,054	$	95,232

Pro forma income from operations		1,641		4,749		7,486		8,745
Pro forma net income	$	882	$	7,326	$	4,340	$	10,717

Earnings per share:
Basic	$	0.11	$	0.98	$	0.56	$	1.44
Diluted	$	0.11	$	0.93	$	0.54	$	1.39

Weighted average shares outstanding:
Basic		7,862		7,507		7,817		7,440
Diluted		8,102		7,855		8,087		7,700

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Oct. 02, 2015

GOODWILL AND OTHER INTANGIBLE ASSETS

Schedule of changes in carrying value of goodwill by reporting unit


	January 2,				October 2,
	2015		Additions		2015
Reporting Unit:
Energy Efficiency Services	$	—	$	15,998,000	$	15,998,000
Financial Services	$	—	$	858,000	$	858,000

	$	—	$	16,856,000	$	16,856,000

Schedule of gross amounts and accumulated amortization of the Company's acquired identifiable intangible assets with finite useful lives


	October 2, 2015				January 2, 2015
	Gross		Accumulated		Gross		Accumulated		Amortization
	Amount		Amortization		Amount		Amortization		Period (yrs)
Backlog	$	319,000	$	318,000	$	—	$	—			1
Tradename		1,032,000		253,000		—		—	2.5	-	3.5
Non-compete agreements		1,013,000		144,000		—		—			5
	$	2,364,000	$	715,000	$	—	$	—

Schedule of estimated amortization expense for acquired identifiable intangible assets


Fiscal year:
2015	$	136,000
2016		539,000
2017		466,000
2018		298,000
2019		210,000
	$	1,649,000

EARNINGS PER SHARE (EPS) (Tables)

9 Months Ended

Oct. 02, 2015

EARNINGS PER SHARE (EPS)

Schedule of number of weighted-average shares used to compute basic and diluted EPS


	Three months ended				Nine months ended
	October 2,		September 26,		October 2,		September 26,
	2015		2014		2015		2014
Net income	$	782,000	$	4,161,000	$	3,879,000	$	7,369,000
Weighted-average common shares outstanding		7,862,000		7,507,000		7,817,000		7,440,000
Effect of dilutive stock options and restricted stock awards		240,000		348,000		270,000		260,000
Weighted-average common stock outstanding-diluted		8,102,000		7,855,000		8,087,000		7,700,000
Earnings per share:
Basic	$	0.10	$	0.55	$	0.50	$	0.99
Diluted	$	0.10	$	0.53	$	0.48	$	0.96

EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Tables)

9 Months Ended

Oct. 02, 2015

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Schedule of equipment and leasehold improvements


	October 2,		January 2,
	2015		2015
Furniture and fixtures	$	3,255,000	$	2,994,000
Computer hardware and software		6,398,000		5,667,000
Leasehold improvements		529,000		785,000
Equipment under capital leases		1,025,000		919,000
Automobiles, trucks, and field equipment		769,000		677,000
		11,976,000		11,042,000
Accumulated depreciation and amortization		(9,101,000)		(9,658,000)
Equipment and leasehold improvements, net	$	2,875,000	$	1,384,000

ACCRUED LIABILITIES (Tables)

9 Months Ended

Oct. 02, 2015

ACCRUED LIABILITIES

Schedule of accrued liabilities


	October 2,		January 2,
	2015		2015
Accrued bonuses	$	753,000	$	1,450,000
Accrued interest		4,000		—
Paid leave bank		1,799,000		1,404,000
Compensation and payroll taxes		1,019,000		1,371,000
Accrued legal		823,000		556,000
Accrued workers’ compensation insurance		208,000		192,000
Accrued rent		94,000		149,000
Employee withholdings		551,000		637,000
Client deposits		1,405,000		79,000
Unvouchered accounts payable		2,455,000		4,462,000
Other		174,000		368,000
Total accrued liabilities	$	9,285,000	$	10,668,000

DEBT (Tables)

9 Months Ended

Oct. 02, 2015

DEBT

Schedule of notes payable


	October 2,		January 2,
	2015		2015
BMO term note	$	1,850,000	$	—
Notes payable related to acquisitions		3,119,000		—
Notes payable related to insurance		7,000		352,000
Other		1,000		3,000
Total notes payable		4,977,000		355,000
Less current portion		3,479,000		355,000
Notes payable, less current portion	$	1,498,000	$	—

SEGMENT INFORMATION (Tables)

9 Months Ended

Oct. 02, 2015

SEGMENT INFORMATION

Schedule of financial information with respect to the reportable segments


	Energy				Public		Homeland
	Efficiency		Engineering		Finance		Security		Unallocated				Consolidated
	Services		Services		Services		Services		Corporate		Intersegment		Total
Fiscal Three Months Ended October 2, 2015
Contract revenue	$	17,811,000	$	11,584,000	$	3,286,000	$	830,000	$	—	$	—	$	33,511,000
Segment (loss) profit before income tax expense		(658,000)		1,268,000		536,000		257,000		5,000		—		1,408,000
Net (loss) income		(392,000)		877,000		144,000		148,000		5,000		—		782,000
Segment assets(1)		38,406,000		14,450,000		5,387,000		624,000		41,264,000		(23,130,000)		77,001,000
Fiscal Three Months Ended September 26, 2014
Contract revenue	$	13,558,000	$	11,093,000	$	2,822,000	$	714,000	$	—	$	—	$	28,187,000
Segment profit before income tax expense		1,141,000		1,812,000		368,000		76,000		(700,000)		—		2,697,000
Net income (loss)		1,983,000		2,485,000		495,000		133,000		(935,000)		—		4,161,000
Segment assets(1)		16,547,000		10,597,000		3,726,000		699,000		41,881,000		(23,130,000)		50,320,000
Fiscal Nine Months Ended October 2, 2015
Contract revenue	$	58,254,000	$	33,893,000	$	8,982,000	$	2,452,000	$	—	$	—	$	103,581,000
Segment profit (loss) before income tax expense		2,724,000		3,427,000		728,000		333,000		(461,000)		—		6,751,000
Net income (loss)		1,567,000		2,081,000		304,000		192,000		(265,000)		—		3,879,000
Segment assets(1)		38,406,000		14,450,000		5,387,000		624,000		41,264,000		(23,130,000)		77,001,000
Fiscal Nine Months Ended September 26, 2014
Contract revenue	$	37,617,000	$	29,511,000	$	8,003,000	$	2,712,000	$	—	$	—	$	77,843,000
Segment profit before income tax expense		3,193,000		2,954,000		618,000		248,000		(1,000,000)		—		6,013,000
Net income (loss)		3,964,000		3,592,000		739,000		300,000		(1,226,000)		—		7,369,000
Segment assets(1)		16,547,000		10,597,000		3,726,000		699,000		41,881,000		(23,130,000)		50,320,000

- Definition

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

+ References+ Details

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY (Details)	9 Months Ended
	Oct. 02, 2015
Basis of Presentation
Length of quarters ending on the Friday closest to March 31, June 30 and September 30	91 days
Minimum
Basis of Presentation
Length of quarter ending on the Friday closest to December 31	91 days
Maximum
Basis of Presentation
Length of quarter ending on the Friday closest to December 31	98 days

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY (Details 2) (USD $)	3 Months Ended		9 Months Ended
	Oct. 02, 2015	Sep. 26, 2014	Oct. 02, 2015 segment	Sep. 26, 2014	Jan. 02, 2015
Accounting for Contracts
Payroll taxes, bonuses and employee benefit costs for all Company personnel	$ 6,070,000	$ 5,444,000	$ 18,993,000	$ 15,376,000
Facilities costs	1,207,000	1,084,000	3,203,000	3,271,000
Revenue of the entity recorded in which it acts solely in the capacity of an agent			0
Costs recorded for costs to the entity in which it acts solely in the capacity of an agent			0
Retained accounts receivable	738,000		738,000		700,000
Number of Reportable Segments			4
Cost of Sales
Accounting for Contracts
Payroll taxes, bonuses and employee benefit costs for all Company personnel			0
Facilities costs			$ 0

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY (Details 3) (USD $)	9 Months Ended
	Oct. 02, 2015	Jan. 02, 2015	Sep. 26, 2014	Dec. 27, 2013
BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY
Goodwill	$ 16,856,000
Liquidity
Cash and cash equivalents	$ 15,997,000	$ 20,371,000	$ 13,374,000	$ 8,134,000
Minimum period over which cash and cash equivalents on hand, cash generated by operating activities and funds available under line of credit will be sufficient to finance operating activities	12 months

- Definition

Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation.

+ References+ Details

BUSINESS COMBINATIONS (Details) (USD $) Share data in Thousands, except Per Share data, unless otherwise specified	0 Months Ended	3 Months Ended		9 Months Ended							0 Months Ended	9 Months Ended		0 Months Ended	5 Months Ended	9 Months Ended		0 Months Ended					9 Months Ended		0 Months Ended					0 Months Ended	9 Months Ended		0 Months Ended
	Jan. 15, 2015 item	Oct. 02, 2015	Sep. 26, 2014	Oct. 02, 2015	Sep. 26, 2014	Jan. 02, 2015	Oct. 02, 2015 Backlog	Oct. 02, 2015 Tradename	Oct. 02, 2015 Non-compete agreements	Oct. 02, 2015 Abacus, 360 Energy and Economist, LLC	Jan. 15, 2015 Abacus and 360 Energy	Oct. 02, 2015 Abacus and 360 Energy	Jan. 15, 2015 Abacus and 360 Energy Term Note BMO	Jan. 15, 2015 Abacus	Jul. 03, 2015 Abacus	Oct. 02, 2015 Abacus	Jan. 15, 2015 Abacus	Jan. 15, 2015 Abacus Common Stock	Jan. 15, 2015 Abacus Maximum	Oct. 02, 2015 Abacus Backlog	Oct. 02, 2015 Abacus Tradename	Oct. 02, 2015 Abacus Non-compete agreements	Oct. 02, 2015 360 Energy	Jan. 15, 2015 360 Energy	Jan. 15, 2015 360 Energy Common Stock	Jan. 15, 2015 360 Energy Maximum	Oct. 02, 2015 360 Energy Backlog	Oct. 02, 2015 360 Energy Tradename	Oct. 02, 2015 360 Energy Non-compete agreements	Apr. 03, 2015 Economists LLC	Oct. 02, 2015 Economists LLC	Apr. 03, 2015 Economists LLC	Apr. 03, 2015 Economists LLC Maximum
BUSINESS COMBINATIONS
Number of acquisitions	2
Consideration in Common Stock (in shares)																		75,758							47,348
Par value (in dollars per share)		$ 0.01		$ 0.01		$ 0.01
Maximum contingent consideration to be paid																	$ 1,400,000							$ 6,500,000								$ 600,000
Amount borrowed to finance acquisition													2,000,000
Cash on hand											5,400,000																			500,000
Tax deductible goodwill										16,900,000
Consideration for acquisitions
Cash paid				8,500,000										2,500,000	600,000	3,135,000							4,875,000								490,000
Issuance of common stock				1,485,000												914,000							571,000
Issuance of notes payable				4,250,000												1,250,000							3,000,000
Contingent consideration		6,110,000		6,110,000												681,000							5,061,000								368,000
Total consideration				20,345,000												5,980,000			6,100,000				13,507,000			15,000,000					858,000		1,100,000
Contingent consideration including accretion related to contingent consideration										6,300,000
Accretion of contingent consideration				182,000
Allocation of acquired assets
Cash acquired		332,000		332,000												332,000
Property, plant and equipment		257,000		257,000												104,000							153,000
Intangible assets							319,000	1,032,000	1,013,000											161,000	366,000	137,000					158,000	666,000	876,000
Other assets, net		536,000		536,000												495,000							41,000
Goodwill		16,856,000		16,856,000												4,385,000							11,613,000								858,000
Net assets acquired		20,345,000		20,345,000												5,980,000							13,507,000								858,000
Unaudited pro forma financial information
Pro forma revenue		33,511,000	35,529,000	104,054,000	95,232,000
Pro forma income from operations		1,641,000	4,749,000	7,486,000	8,745,000
Pro forma net income		882,000	7,326,000	4,340,000	10,717,000
Earnings per share:
Basic (in dollars per share)		$ 0.11	$ 0.98	$ 0.56	$ 1.44
Diluted (in dollars per share)		$ 0.11	$ 0.93	$ 0.54	$ 1.39
Weighted-average shares outstanding:
Basic (in shares)		7,862	7,507	7,817	7,440
Diluted (in shares)		8,102	7,855	8,087	7,700
Revenue and Income from operations
Revenue		33,511,000	28,187,000	103,581,000	77,843,000							18,500,000
Income from operations		$ 1,641,000	$ 2,651,000	$ 7,074,000	$ 5,904,000							$ 700,000

GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $)	9 Months Ended
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $)	Oct. 02, 2015
Changes in carrying value of goodwill
Additions	$ 16,856,000
Goodwill at end of period	16,856,000
Energy Efficiency Services
Changes in carrying value of goodwill
Additions	15,998,000
Goodwill at end of period	15,998,000
Public Finance Services
Changes in carrying value of goodwill
Additions	858,000
Goodwill at end of period	$ 858,000

GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) (USD $)	3 Months Ended		9 Months Ended
	Oct. 02, 2015	Sep. 26, 2014	Oct. 02, 2015	Sep. 26, 2014
Goodwill and other intangible assets
Gross Amount	$ 2,364,000		$ 2,364,000
Accumulated Amortization	715,000		715,000
Amortization expense for acquired identifiable intangible assets	200,000	0	700,000	0
Estimated amortization expense for acquired identifiable intangible assets
2015	136,000		136,000
2016	539,000		539,000
2017	466,000		466,000
2018	298,000		298,000
2019	210,000		210,000
Total estimated amortization expense	1,649,000		1,649,000
Backlog
Goodwill and other intangible assets
Gross Amount	319,000		319,000
Accumulated Amortization	318,000		318,000
Backlog \| Maximum
Goodwill and other intangible assets
Amortization Period			1 year
Training materials/courses
Goodwill and other intangible assets
Gross Amount	1,032,000		1,032,000
Accumulated Amortization	253,000		253,000
Training materials/courses \| Minimum
Goodwill and other intangible assets
Amortization Period			2 years 6 months
Training materials/courses \| Maximum
Goodwill and other intangible assets
Amortization Period			3 years 6 months
Non-compete agreements
Goodwill and other intangible assets
Gross Amount	1,013,000		1,013,000
Accumulated Amortization	$ 144,000		$ 144,000
Amortization Period			5 years

EARNINGS PER SHARE (EPS) (Details) (USD $)	3 Months Ended		9 Months Ended
EARNINGS PER SHARE (EPS) (Details) (USD $)	Oct. 02, 2015	Sep. 26, 2014	Oct. 02, 2015	Sep. 26, 2014
Earnings per share
Net income	$ 782,000	$ 4,161,000	$ 3,879,000	$ 7,369,000
Weighted-average common shares outstanding (in shares)	7,862,000	7,507,000	7,817,000	7,440,000
Effect of dilutive stock options (in shares)	240,000	348,000	270,000	260,000
Weighted-average common shares outstanding-diluted (in shares)	8,102,000	7,855,000	8,087,000	7,700,000
Earnings per share:
Basic (in dollars per share)	$ 0.10	$ 0.55	$ 0.50	$ 0.99
Diluted (in dollars per share)	$ 0.10	$ 0.53	$ 0.48	$ 0.96
Stock options
Anti-dilutive securities excluded from the computation of earnings per share
Number of awards excluded from calculation of dilutive potential common shares (in shares)	350,000	2,000	256,000	231,000

EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details) (USD $)	Oct. 02, 2015	Jan. 02, 2015
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, Gross	$ 11,976,000	$ 11,042,000
Accumulated depreciation and amortization	(9,101,000)	(9,658,000)
Equipment and leasehold improvements, net	2,875,000	1,384,000
Furniture and fixtures
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, Gross	3,255,000	2,994,000
Computer hardware and software
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, Gross	6,398,000	5,667,000
Leasehold improvements
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, Gross	529,000	785,000
Equipment under capital leases
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, Gross	1,025,000	919,000
Automobiles, trucks, and field equipment
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, Gross	$ 769,000	$ 677,000

ACCRUED LIABILITIES (Details) (USD $)	Oct. 02, 2015	Jan. 02, 2015
ACCRUED LIABILITIES
Accrued bonuses	$ 753,000	$ 1,450,000
Accrued interest	4,000
Paid leave bank	1,799,000	1,404,000
Compensation and payroll taxes	1,019,000	1,371,000
Accrued legal	823,000	556,000
Accrued workers' compensation insurance	208,000	192,000
Accrued rent	94,000	149,000
Employee withholdings	551,000	637,000
Client deposits	1,405,000	79,000
Unvouchered accounts payable	2,455,000	4,462,000
Other	174,000	368,000
Total accrued liabilities	$ 9,285,000	$ 10,668,000

DEBT (Details) (USD $)	Oct. 02, 2015	Jan. 02, 2015
Notes Payable
Total notes payable	$ 4,977,000	$ 355,000
Less current portion	3,479,000	355,000
Notes payable, less current portion	1,498,000
Term Note
Notes Payable
Total notes payable	1,850,000
Notes payable related to acquisitions
Notes Payable
Total notes payable	3,119,000
Notes payable related to insurance
Notes Payable
Total notes payable	7,000	352,000
Other
Notes Payable
Total notes payable	$ 1,000	$ 3,000

DEBT (Details 2) (USD $)	9 Months Ended			9 Months Ended				9 Months Ended		0 Months Ended			0 Months Ended	3 Months Ended	0 Months Ended	3 Months Ended						0 Months Ended	3 Months Ended	9 Months Ended				3 Months Ended			0 Months Ended	3 Months Ended	0 Months Ended	3 Months Ended
DEBT (Details 2) (USD $)	Oct. 02, 2015	Sep. 26, 2014	Jan. 02, 2015	Oct. 02, 2015 Abacus Notes	Jan. 15, 2015 Abacus Notes	Jan. 15, 2015 Kinzer Note	Jan. 15, 2015 Rubbert Note	Oct. 02, 2015 360 Energy Note	Jan. 15, 2015 360 Energy Note	Jan. 15, 2015 Revolving Credit Facility BMO	Oct. 02, 2015 Revolving Credit Facility BMO	Mar. 24, 2014 Revolving Credit Facility BMO	Jan. 15, 2015 Revolving Credit Facility Maximum BMO	Oct. 02, 2015 Revolving line of credit BMO	Jan. 15, 2015 Revolving line of credit Maximum BMO	Oct. 02, 2015 Revolving line of credit Base rate Maximum BMO	Oct. 02, 2015 Revolving line of credit Base rate Minimum BMO	Oct. 02, 2015 Revolving line of credit LIBOR Maximum BMO	Oct. 02, 2015 Revolving line of credit LIBOR Minimum BMO	Mar. 24, 2014 Standby letter of credit sub-facility BMO	Oct. 02, 2015 Term Note	Jan. 15, 2015 Term Note BMO	Oct. 02, 2015 Term Note BMO	Oct. 02, 2015 Term Note BMO	Jan. 15, 2015 Term Note BMO	Mar. 24, 2014 Term Note BMO	Jan. 15, 2015 Term Note Abacus and 360 Energy BMO	Oct. 02, 2015 Term Note Base rate Maximum BMO	Oct. 02, 2015 Term Note Base rate Minimum BMO	Oct. 02, 2015 Term Note LIBOR BMO	Jan. 15, 2015 Term Note LIBOR Maximum BMO	Oct. 02, 2015 Term Note LIBOR Maximum BMO	Jan. 15, 2015 Term Note LIBOR Minimum BMO	Oct. 02, 2015 Term Note LIBOR Minimum BMO
Line of Credit
Amount borrowed to finance acquisition						$ 625,000	$ 625,000		$ 3,000,000																		$ 2,000,000
Interest rate at end of period (as a percent)																							2.83%	2.83%
Amount of quarterly principal payments in 2015																						50,000	50,000
Interest rate (as a percent)					4.00%				4.00%
Payment on note	1,628,000	517,000		203,000				723,000
Outstanding balance	4,977,000		355,000	422,000				2,277,000													1,850,000
Maximum borrowing capacity												7,500,000								5,000,000					3,000,000	2,500,000
Borrowings outstanding																							1,850,000	1,850,000
Amount available for borrowing														7,500,000									1,150,000	1,150,000
Percentage of eligible accounts receivable used to determine maximum borrowing base														75.00%
Percentage of the lower of cost or market value of eligible inventory used to determine maximum borrowing base														50.00%
Restricted cash											0
Increase in interest rate (as a percent)																								25.00%
Spread on floating interest rate (as a percent)																1.25%	0.75%	2.25%	1.75%									1.75%	1.25%	2.50%	2.75%	2.75%	2.25%	2.25%
Fee on unused commitments (as a percent)															0.30%
Maximum total leverage ratio of total funded debt to EBITDA for first four fiscal quarters after acquisition										2.25
Maximum total leverage ratio of total funded debt to EBITDA thereafter										2.0
Minimum fixed charge coverage ratio										1.25
Minimum tangible net worth required to be maintained										5,000,000
Minimum tangible net worth required to be maintained (as a percent)										85.00%
Step up amount equal to net income required to be maintained (as a percent)										50.00%
Step up amount equal to net income required to be maintained after first quarter of current fiscal year (as a percent)										50.00%
Adjustment to tangible net worth arising from acquisition (as a percent)										80.00%
Total consideration for all permitted acquisitions													1,500,000
Total consideration for individual permitted acquisitions													$ 750,000
Percentage of increased interest rate in case of default										2.00%

COMMITMENTS (Details) (USD $)	9 Months Ended
COMMITMENTS (Details) (USD $)	Oct. 02, 2015
Employee Benefit Plans
Maximum employee contribution as a percentage of compensation under 401 (k) Plan	50.00%
Post Employment Health Benefits
Unamortized compensation cost	$ 0

INCOME TAXES (Details) (USD $)	3 Months Ended		9 Months Ended
INCOME TAXES (Details) (USD $)	Oct. 02, 2015	Sep. 26, 2014	Oct. 02, 2015	Sep. 26, 2014
INCOME TAXES
Deferred tax assets valuation allowance	$ 0		$ 0
Income tax (benefit) expense	$ 626,000	$ (1,464,000)	$ 2,872,000	$ (1,356,000)

SEGMENT INFORMATION (Details) (USD $)	3 Months Ended		9 Months Ended
SEGMENT INFORMATION (Details) (USD $)	Oct. 02, 2015	Sep. 26, 2014	Oct. 02, 2015 segment	Sep. 26, 2014	Jan. 02, 2015
SEGMENT INFORMATION
Number of reporting segments			4
Contract revenue	$ 33,511,000	$ 28,187,000	$ 103,581,000	$ 77,843,000
Segment profit (loss) before income taxes	1,408,000	2,697,000	6,751,000	6,013,000
Net income (loss)	782,000	4,161,000	3,879,000	7,369,000
Segment assets(1)	77,001,000	50,320,000	77,001,000	50,320,000	54,659,000
Reporting Segments \| Energy Efficiency Services
SEGMENT INFORMATION
Contract revenue	17,811,000	13,558,000	58,254,000	37,617,000
Segment profit (loss) before income taxes	(658,000)	1,141,000	2,724,000	3,193,000
Net income (loss)	(392,000)	1,983,000	1,567,000	3,964,000
Segment assets(1)	38,406,000	16,547,000	38,406,000	16,547,000
Reporting Segments \| Engineering Services
SEGMENT INFORMATION
Contract revenue	11,584,000	11,093,000	33,893,000	29,511,000
Segment profit (loss) before income taxes	1,268,000	1,812,000	3,427,000	2,954,000
Net income (loss)	877,000	2,485,000	2,081,000	3,592,000
Segment assets(1)	14,450,000	10,597,000	14,450,000	10,597,000
Reporting Segments \| Public Finance Services
SEGMENT INFORMATION
Contract revenue	3,286,000	2,822,000	8,982,000	8,003,000
Segment profit (loss) before income taxes	536,000	368,000	728,000	618,000
Net income (loss)	144,000	495,000	304,000	739,000
Segment assets(1)	5,387,000	3,726,000	5,387,000	3,726,000
Reporting Segments \| Homeland Security Services
SEGMENT INFORMATION
Contract revenue	830,000	714,000	2,452,000	2,712,000
Segment profit (loss) before income taxes	257,000	76,000	333,000	248,000
Net income (loss)	148,000	133,000	192,000	300,000
Segment assets(1)	624,000	699,000	624,000	699,000
Unallocated Corporate
SEGMENT INFORMATION
Segment profit (loss) before income taxes	5,000	(700,000)	(461,000)	(1,000,000)
Net income (loss)	5,000	(935,000)	(265,000)	(1,226,000)
Segment assets(1)	41,264,000	41,881,000	41,264,000	41,881,000
Intersegment
SEGMENT INFORMATION
Segment assets(1)	$ (23,130,000)	$ (23,130,000)	$ (23,130,000)	$ (23,130,000)

CONTINGENCIES (Details) (COSA, Subsidiaries, USD $)	0 Months Ended
CONTINGENCIES (Details) (COSA, Subsidiaries, USD $)	Jul. 16, 2014
COSA \| Subsidiaries
Contingencies
Minimum revenue shortfall alleged in lawsuit	$ 9,000,000
Alleged cost to retain another consultant	130,000
Alleged costs associated with noticing and conducting public hearings	$ 83,052