Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2016	Nov. 02, 2016
Document and Entity Information
Entity Registrant Name	Willdan Group, Inc.
Entity Central Index Key	0001370450
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-30
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		8,325,365
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2016	Jan. 01, 2016
Current assets:
Cash and cash equivalents	$ 18,587,000	$ 16,487,000
Accounts receivable, net of allowance for doubtful accounts of $705,000 and $760,000 at September 30, 2016 and January 1, 2016, respectively	26,549,000	17,929,000
Costs and estimated earnings in excess of billings on uncompleted contracts	22,887,000	13,840,000
Other receivables	2,699,000	177,000
Prepaid expenses and other current assets	2,417,000	2,082,000
Total current assets	73,139,000	50,515,000
Equipment and leasehold improvements, net	4,424,000	3,684,000
Goodwill	22,264,000	16,097,000
Other intangible assets, net	6,489,000	1,545,000
Other assets	482,000	504,000
Total assets	106,798,000	72,345,000
Current liabilities:
Accounts payable	18,949,000	5,561,000
Accrued liabilities	15,886,000	10,334,000
Contingent consideration payable	1,925,000	1,420,000
Billings in excess of costs and estimated earnings on uncompleted contracts	8,687,000	6,218,000
Notes payable	5,210,000	4,039,000
Capital lease obligations	289,000	444,000
Total current liabilities	50,946,000	28,016,000
Contingent consideration payable	2,376,000	4,305,000
Notes payable	1,400,000	1,085,000
Capital lease obligations, less current portion	179,000	255,000
Deferred lease obligations	728,000	737,000
Deferred income taxes, net	3,490,000	331,000
Total liabilities	59,119,000	34,729,000
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; 8,323,000 and 7,904,000 shares issued and outstanding at September 30, 2016 and January 1, 2016, respectively	83,000	79,000
Additional paid-in capital	41,706,000	38,377,000
Retained earnings (accumulated deficit)	5,890,000	(840,000)
Total stockholders' equity	47,679,000	37,616,000
Total liabilities and stockholders' equity	$ 106,798,000	$ 72,345,000

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2016	Jan. 01, 2016
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 705,000	$ 760,000
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	8,323,000	7,904,000
Common stock, shares outstanding	8,283,000	7,904,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015	Sep. 30, 2016	Oct. 02, 2015
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Contract revenue	$ 58,660,000	$ 33,511,000	$ 151,516,000	$ 103,581,000
Direct costs of contract revenue (exclusive of depreciation and amortization shown separately below):
Salaries and wages	10,421,000	7,745,000	28,753,000	23,940,000
Subcontractor services and other direct costs	32,134,000	13,206,000	75,161,000	39,712,000
Total direct costs of contract revenue	42,555,000	20,951,000	103,914,000	63,652,000
General and administrative expenses:
Salaries and wages, payroll taxes and employee benefits	7,825,000	6,070,000	23,035,000	18,993,000
Facilities and facility related	1,039,000	1,207,000	2,978,000	3,203,000
Stock-based compensation	268,000	190,000	732,000	468,000
Depreciation and amortization	742,000	349,000	2,308,000	1,276,000
Other	3,178,000	3,103,000	9,694,000	8,915,000
Total general and administrative expenses	13,052,000	10,919,000	38,747,000	32,855,000
Income from operations	3,053,000	1,641,000	8,855,000	7,074,000
Other (expense) income:
Interest income		1,000		1,000
Interest expense	(43,000)	(234,000)	(137,000)	(342,000)
Other, net			2,000	18,000
Total other expense, net	(43,000)	(233,000)	(135,000)	(323,000)
Income before income taxes	3,010,000	1,408,000	8,720,000	6,751,000
Income tax expense	548,000	626,000	1,990,000	2,872,000
Net income	$ 2,462,000	$ 782,000	$ 6,730,000	$ 3,879,000
Earnings per share:
Basic (in dollars per share)	$ 0.30	$ 0.10	$ 0.82	$ 0.50
Diluted (in dollars per share)	$ 0.28	$ 0.10	$ 0.79	$ 0.48
Weighted-average shares outstanding:
Basic (in shares)	8,308,000	7,862,000	8,181,000	7,817,000
Diluted (in shares)	8,720,000	8,102,000	8,516,000	8,087,000

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 9 months ended Sep. 30, 2016 - USD ($)	Common Stock	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit)	Total
Balances at Jan. 01, 2016	$ 79,000	$ 38,377,000	$ (840,000)	$ 37,616,000
Balances (in shares) at Jan. 01, 2016	7,904,000			7,904,000
Increase (Decrease) in Stockholders' Equity
Shares of common stock issued in connection with employee stock purchase plan		209,000		$ 209,000
Shares of common stock issued in connection with employee stock purchase plan (in shares)	23,000
Shares of common stock issued in connection with incentive stock plan	$ 2,000	162,000		164,000
Shares of common stock issued in connection with incentive stock plan (in shares)	140,000
Stock issued to acquire business	$ 2,000	2,226,000		2,228,000
Stock issued to acquire business (in shares)	256,000
Stock-based compensation expense		732,000		732,000
Net income			6,730,000	6,730,000
Balances at Sep. 30, 2016	$ 83,000	$ 41,706,000	$ 5,890,000	$ 47,679,000
Balances (in shares) at Sep. 30, 2016	8,323,000			8,323,000

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015
Cash flows from operating activities:
Net income	$ 6,730,000	$ 3,879,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,314,000	1,276,000
Deferred income taxes	2,556,000	2,480,000
Loss on sale/disposal of equipment	3,000	8,000
Provision for doubtful accounts	92,000	431,000
Stock-based compensation	732,000	468,000
Accretion and fair value adjustments of contingent consideration	(139,000)	182,000
Changes in operating assets and liabilities, net of effects from business acquisitions:
Accounts receivable	5,148,000	(1,321,000)
Costs and estimated earnings in excess of billings on uncompleted contracts	(7,956,000)	(5,645,000)
Other receivables	(1,918,000)	63,000
Prepaid expenses and other current assets	(335,000)	583,000
Other assets	56,000	75,000
Accounts payable	1,760,000	2,697,000
Accrued liabilities	5,246,000	(1,857,000)
Billings in excess of costs and estimated earnings on uncompleted contracts	2,469,000	2,290,000
Deferred lease obligations	(9,000)	114,000
Net cash provided by operating activities	16,749,000	5,723,000
Cash flows from investing activities:
Purchase of equipment and leasehold improvements	(1,386,000)	(1,678,000)
Cash paid for acquisitions, net of cash acquired	(8,857,000)	(8,168,000)
Net cash used in investing activities	(10,243,000)	(9,846,000)
Cash flows from financing activities:
Payments on contingent consideration	(1,285,000)
Payments on notes payable	(3,083,000)	(1,628,000)
Proceeds from notes payable		2,000,000
Principal payments on capital lease obligations	(411,000)	(218,000)
Proceeds from stock option exercise	164,000	369,000
Proceeds from sales of common stock under employee stock purchase plan	209,000	78,000
Net cash (used in) provided by financing activities	(4,406,000)	601,000
Net increase (decrease) in cash and cash equivalents	2,100,000	(3,522,000)
Cash and cash equivalents at beginning of period	16,487,000	18,173,000
Cash and cash equivalents at end of period	18,587,000	14,651,000
Cash paid during the period for:
Interest	137,000	156,000
Income taxes	2,046,000	951,000
Supplemental disclosures of noncash investing and financing activities:
Issuance of notes payable related to business acquisitions	4,569,000	4,250,000
Issuance of common stock related to business acquisitions	2,228,000	1,485,000
Contingent consideration related to business acquisitions		6,110,000
Other receivable for working capital adjustment	604,000
Equipment acquired under capital lease	$ 186,000	$ 139,000

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

9 Months Ended

Sep. 30, 2016

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

WILLDAN GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016
(Unaudited)

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 condensed consolidated financial statements should be read in conjunction with Willdan Group, Inc.’s 2015 Annual Report on Form 10-K filed on March 15, 2016.

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, Utah, Washington and Washington, D.C. The Company enables its clients to provide a wide range of specialized services without having to incur and maintain the overhead necessary to develop staffing in-house. 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.

Principles of Consolidation

The consolidated financial statements include the accounts of Willdan Group, Inc. and its wholly-owned subsidiaries, Willdan Energy Solutions, Willdan Engineering, 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.


	Types of Contract
Segment	(Revenue Recognition Method)
Energy Efficiency Services	Unit-based and time-and-materials (percentage-of-completion method)
Engineering Services	Time-and-materials, unit-based and fixed price (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 condensed 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 September 30, 2016 and January 1, 2016, the Company had retained accounts receivable of approximately $5.1 million and $748,000, 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 September 30, 2016, the Company had $22.3 million of goodwill, which primarily relates to its Energy Efficiency Services reporting segment and the acquisition of the assets of Genesys, and the acquisitions of Abacus Resource Management Company (“Abacus”) and 360 Energy Engineers, LLC (“360 Energy”) and also relates to its Public Finance Services reporting segment and the acquisition of Economists.com, LLC (“Economists, 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 operations.

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, accounts payable, accrued liabilities, contingent consideration 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 and contingent consideration 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 $18.6 million of cash and cash equivalents as of September 30, 2016. The Company’s primary source of liquidity is cash generated from operations. The Company also has a revolving line of credit with BMO Harris Bank, National Association (“BMO”), which matures on March 24, 2017 (see Note 7). The Company intends to refinance its revolving line of credit prior to its maturity next year. 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.

Reclassifications

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.

Recent Accounting Pronouncements

Statement of Cash Flows

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Clarification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. ASU 2016-15 is effective for annual and interim reporting periods beginning after December 15, 2017 and early adoption is permitted. ASU 2016-15 provides for retrospective application for all periods presented. The Company does not believe the guidance will have a material impact on its consolidated financial statements.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which clarifies existing accounting literature relating to how and when revenue is recognized by an entity. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets and supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. In doing so, an entity will need to exercise a greater degree of judgment and make more estimates than under the current guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price, and allocating the transaction price to each separate performance obligation. ASU 2014-09 also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. In August 2015, the FASB issued Update 2015-14, which deferred the implementation of ASU 2014-09 for one year from the initial effective date. ASU 2014-09 is effective for public companies for interim and annual reporting periods beginning after December 15, 2017, and is to be applied either retrospectively or using the cumulative effect transition method, with early adoption not permitted. The Company has not yet selected a transition method, and is currently evaluating the impact the adoption of ASU 2014-09 will have on its consolidated financial statements and related disclosures.

Consolidations

In February 2015, the FASB issued Update 2015-02, which amends the consolidation requirements in Accounting Standards Codification 810 and changes the consolidation analysis required under GAAP. The standard became effective for the Company on January 2, 2016. The impact of the new standard on the Company’s consolidated financial statements was not material.

Leases

In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842). The FASB issued this update to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The updated guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of the update is permitted. The Company is evaluating the impact of the adoption of this update on its consolidated financial statements and related disclosures.

Stock Compensation

On March 30, 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which amends the current stock compensation guidance. The amendments simplify the accounting for the taxes related to stock based compensation, including adjustments to how excess tax benefits and a company's payments for tax withholdings should be classified. The standard is effective for fiscal periods beginning after December 15, 2016, with early adoption permitted. The Company has elected to early adopt ASU 2016-09 on a prospective basis, which did not have a material impact for the quarter ended September 30, 2016.

Proposed Accounting Standards

A variety of proposed or otherwise potential accounting standards are currently being studied by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, the Company has not yet determined the effect, if any, that the implementation of such proposed standards would have on its consolidated financial statements.

BUSINESS COMBINATIONS

9 Months Ended

Sep. 30, 2016

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

2.BUSINESS COMBINATIONS

On March 4, 2016, the Company and the Company’s wholly-owned subsidiary, Willdan Energy Solutions (“WES”) acquired substantially all of the assets of Genesys Engineering P.C. (“Genesys”) and assumed certain specified liabilities of Genesys (collectively, the “Purchase”) pursuant to an Asset Purchase and Merger Agreement, dated as of February 26, 2016 (the “Agreement”), by and among the Company, WES, WESGEN (as defined below), Genesys and Ronald W. Mineo (“Mineo”) and Robert J. Braun (“Braun” and, together with Mineo, the “Genesys Shareholders”). On March 5, 2016, pursuant to the terms of the Agreement, WESGEN, Inc., a non-affiliated corporation (“WESGEN”), merged (the “Merger” and, together with the Purchase, the “Acquisition”) with Genesys, with Genesys remaining as the surviving corporation. Genesys was acquired to strengthen our power engineering capability in the northeastern U.S., and also to increase client exposure and experience with universities.

Pursuant to the terms of the Agreement, WES or WESGEN, as applicable, paid the Genesys Shareholders an aggregate purchase price (the “Purchase Price”) of approximately $15.1 million, including post-closing working capital and tax adjustments. The Purchase Price consisted of (i) $6.0 million in cash, paid at closing, and $2.9 million paid in cash after closing for working capital and tax adjustments, (ii) a $0.6 million receivable payable to WES for working capital adjustments, (iii) 255,808 shares of Common Stock, par value $0.01 per share, of the Company (the “Common Stock”), with a fair value on the date of closing of $2.2 million, and (iv) $4.6 million in cash, payable in twenty-four (24) equal monthly installments beginning on March 26, 2016 (the “Installment Payments”). Until the third anniversary of the Closing Date (the “Closing Date”), the Genesys Shareholders are prohibited from transferring or disposing of any Common Stock received in connection with the Acquisition.

The Agreement contains customary representations and warranties regarding the Company, WES, WESGEN, Genesys and the Genesys Shareholders, indemnification provisions and other provisions customary for transactions of this nature. Pursuant to the terms of the Agreement, the Company and WES also provided guarantees to the Genesys Shareholders which guarantee certain of WESGEN’s and Genesys’ obligations under the Agreement, including the Installment Payments.

The Company used cash on hand to pay the $8.9 million due to the Genesys Shareholders.

Genesys continues to be a professional corporation organized under the laws of the State of New York, wholly-owned by one or more licensed engineers. Pursuant to New York law, the Company does not own capital stock of Genesys. The Company has entered into an agreement with the post-Closing Date owners of Genesys pursuant to which such owners will be prohibited from selling, transferring or encumbering their ownership interest in Genesys without the Company’s consent. Notwithstanding the Company’s rights regarding the transfer of Genesys’ stock, the Company does not have control over the professional decision making of Genesys. The Company has entered into an administrative services agreement with Genesys pursuant to which WES will provide Genesys with ongoing administrative, operational and other non-professional support services.

The acquisition was 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 $6.2 million of goodwill resulting from the acquisition will be tax deductible. Consideration for the acquisition includes the following:


	Genesys
Cash paid, net of cash acquired	$	8,857,000
Other receivable for working capital adjustment		(604,000)
Issuance of common stock		2,228,000
Deferred purchase price, payable in 24 monthly installments		4,569,000
Total consideration	$	15,050,000

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


	Genesys
Current assets	$	14,952,000
Non-current assets		36,000
Cash		101,000
Property, plant and equipment		117,000
Liabilities		(12,643,000)
Customer relationships		3,260,000
Backlog		1,050,000
Tradename		1,690,000
Non-compete agreements		320,000
Goodwill		6,167,000
Net assets acquired	$	15,050,000

As of September 30, 2016, the Company obtained further information on the valuation of the assets acquired and liabilities assumed related to the Genesys acquisition and, in accordance with the authoritative guidance for business combinations, recorded purchase price adjustments as of the acquisition date to increase the fair values of intangible assets by $3.3 million and decrease other receivables by $0.3 million. These adjustments to the provisional purchase price allocations decreased goodwill by $3.0 million. As of September 30, 2016, the Company has not completed its final estimate of fair value of the assets acquired and liabilities assumed due to the timing of the transaction and incomplete information necessary to finalize such estimates of fair value. Therefore, the Company has preliminarily estimated the fair values of the assets acquired and the liabilities assumed.

The following unaudited pro forma financial information for the three and nine months ended September 30, 2016 and October 2, 2015 assumes the acquisition of the assets of Genesys occurred on January 2, 2015 as follows:


	Three Months Ended				Nine Months Ended
	September 30,		October 2,		September 30,		October 2,
In thousands (except per share data)	2016		2015		2016		2015
Pro forma revenue	$	58,660	$	41,220	$	160,328	$	124,289

Pro forma income from operations		3,053		1,734		9,676		7,014
Pro forma net income	$	2,462	$	963	$	7,254	$	4,020

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 January 2, 2015 and may not be indicative of future operating results.

During the three and nine months ended September 30, 2016, the acquisition of the assets of Genesys contributed $16.2 million and $35.6 million in revenue and $0.2 million and $0.6 million of income from operations, respectively.

Acquisition related costs of $165,000 were expensed as incurred in general and administrative expenses, of which $56,000 was recorded by the Company during the nine month period ended September 30, 2016. There were no acquisition costs recorded during the three month period ended September 30, 2016.

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, an Oregon-based energy engineering company. In addition, the Company and WES separately acquired substantially all of the assets of 360 Energy, a Kansas-based energy and engineering energy management consulting company. Cash payments based on the achievement of certain financial targets were included in the purchase price for each of the acquisitions. The Company has amended its Asset Purchase Agreement with 360 Energy to extend the term of the three-year performance goal for an additional year to the end of the Company’s 2018 fiscal year to allow 360 Energy to expand into additional geographical territories. As a result of this amendment, the Company has increased contingent consideration by $0.3 million. Additionally, the Company has evaluated the total contingent consideration and has determined that certain financial targets will not be met and, as a result, $0.4 million, net has been reversed out of short term contingent consideration.

- 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

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-Section 50
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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+ Details

GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2016

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

3.GOODWILL AND OTHER INTANGIBLE ASSETS

As of September 30, 2016, the Company had $22.3 million of goodwill, which primarily relates to the Energy Efficiency Services reporting segment and the acquisition of the assets of Genesys 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 September 30, 2016 were as follows:


	January 1,				September 30,
	2016		Additions		2016
Reporting Unit:
Energy Efficiency Services	$	15,348,000	$	6,167,000	$	21,515,000
Financial Services		749,000		—		749,000
	$	16,097,000	$	6,167,000	$	22,264,000

The gross amounts and accumulated amortization of the Company’s acquired identifiable intangible assets with finite useful lives as of September 30, 2016 included in other intangible assets, net in the accompanying condensed consolidated balance sheets, were as follows:


	September 30, 2016				January 1, 2016
	Gross		Accumulated		Gross		Accumulated		Amortization
	Amount		Amortization		Amount		Amortization		Period (yrs)
Backlog	$	1,398,000	$	551,000	$	348,000	$	340,000			5.0
Tradename		2,739,000		916,000		1,049,000		329,000	2.5	-	3.5
Non-compete agreements		1,331,000		392,000		1,011,000		194,000			4.0
Customer relationships		3,260,000		380,000		—		—			5.0
	$	8,728,000	$	2,239,000	$	2,408,000	$	863,000

The Company’s amortization expense for acquired identifiable intangible assets with finite useful lives was $0.4 million and $1.4 million for the fiscal three and nine months ended September 30, 2016, respectively as compared to $0.2 million and $0.7 million for the fiscal three and nine months ended October 2, 2015. Estimated amortization expense for acquired identifiable intangible assets for the remainder of fiscal 2016 is $0.5 million and the succeeding years are as follows:


Fiscal year:
2017	$	2,121,000
2018		1,951,000
2019		1,087,000
2020		674,000
2021		109,000
	$	5,942,000

As of September 30, 2016, the Company obtained further information on the valuation of the assets acquired and liabilities assumed related to the Genesys acquisition and in accordance with the authoritative guidance for business combinations, recorded purchase price adjustments as of the acquisition date to increase the fair values of intangible assets by $3.3 million and decrease other receivables by $0.3 million. These adjustments to the provisional purchase price allocations decreased goodwill by $3.0 million. As of September 30, 2016, the Company has not completed its final estimate of fair value of the assets acquired and liabilities assumed due to the timing of the transaction and incomplete information necessary to finalize such estimates of fair value. Therefore, the Company has preliminarily estimated the fair values of the assets acquired and the liabilities assumed.

- 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

Sep. 30, 2016

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
	September 30,		October 2,		September 30,		October 2,
	2016		2015		2016		2015
Net income	$	2,462,000	$	782,000	$	6,730,000	$	3,879,000
Weighted-average common shares outstanding		8,308,000		7,862,000		8,181,000		7,817,000
Effect of dilutive stock options and restricted stock awards		412,000		240,000		335,000		270,000
Weighted-average common stock outstanding-diluted		8,720,000		8,102,000		8,516,000		8,087,000
Earnings per share:
Basic	$	0.30	$	0.10	$	0.82	$	0.50
Diluted	$	0.28	$	0.10	$	0.79	$	0.48

For the three and nine months ended September 30, 2016, 412,000 and 335,000 options were excluded from the calculation of dilutive potential common shares, respectively, as compared to 240,000 and 270,000 options for each of the same periods last year. 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 2016 and 2015 periods. Accordingly, the inclusion of these options would have been anti-dilutive.

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

9 Months Ended

Sep. 30, 2016

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

5.EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Equipment and leasehold improvements consist of the following:


	September 30,		January 1,
	2016		2016
Furniture and fixtures	$	2,322,000	$	2,270,000
Computer hardware and software		7,543,000		6,496,000
Leasehold improvements		1,094,000		1,072,000
Equipment under capital leases		935,000		1,266,000
Automobiles, trucks, and field equipment		1,400,000		984,000
		13,294,000		12,088,000
Accumulated depreciation and amortization		(8,870,000)		(8,404,000)
Equipment and leasehold improvements, net	$	4,424,000	$	3,684,000

ACCRUED LIABILITIES

9 Months Ended

Sep. 30, 2016

ACCRUED LIABILITIES

ACCRUED LIABILITIES

6.ACCRUED LIABILITIES

Accrued liabilities consist of the following:


	September 30,		January 1,
	2016		2016
Accrued bonuses	$	1,643,000	$	922,000
Accrued interest		1,000		4,000
Paid leave bank		2,050,000		1,710,000
Compensation and payroll taxes		1,168,000		1,494,000
Accrued legal		185,000		523,000
Accrued workers’ compensation insurance		146,000		268,000
Accrued rent		170,000		169,000
Employee withholdings		662,000		942,000
Client deposits		223,000		106,000
Unvouchered accounts payable		9,357,000		3,061,000
Other		281,000		1,135,000
Total accrued liabilities	$	15,886,000	$	10,334,000

DEBT

9 Months Ended

Sep. 30, 2016

DEBT

DEBT

7.DEBT

Total debt obligations consist of the following:


	September 30,		January 1,
	2016		2016
Outstanding borrowings on delayed draw term loan	$	1,575,000	$	1,850,000
Notes payable for 360 Energy Engineers, LLC, 36 month term, bearing interest at 4%, payable in monthly principal and interest installments of $88,752 through December 2017.		1,285,000		2,033,000
Notes payable for Abacus, 24 month term, bearing interest at 4%, payable in monthly principal and interest installments of $54,281 through January 2017.		216,000		690,000
Notes payable for insurance, 11 month term, bearing interest at 2.773%, payable in monthly principal and interest installments of $55,868 through October 2016.		102,000		551,000
Deferred purchase price for the acquisition of the assets of Genesys, bearing interest at 0.650%, payable in monthly principal and interest installments of $191,667 through March 2018.		3,432,000		—
Total debt obligations		6,610,000		5,124,000
Less current portion		5,210,000		4,039,000
Debt obligations, less current portion	$	1,400,000	$	1,085,000

To finance the acquisitions of Abacus and 360 Energy on January 15, 2015, 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 September 30, 2016, and matures on March 24, 2017. Interest on the term loan is payable quarterly, beginning April 13, 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) $75,000 on the last day of December 2016 and (ii) all of the remaining outstanding principal amount on March 24, 2017. 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 $0.6 million and $0.6 million, 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 February 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 September 30, 2016 the Company had made principal payments of approximately $0.5 million on each of the Abacus Notes and as of September 30, 2016, the outstanding balance was approximately $0.1 million 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 $3.0 million. 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 31, 2015 and its December 31, 2017 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 September 30, 2016 the Company had made principal payments of approximately $1.7 million on the 360 Energy Note and the outstanding balance was $1.3 million as of September 30, 2016.

The Asset Purchase and Merger Agreement for the acquisition of the assets of Genesys dated March 4, 2016, included deferred payments to Robert J. Braun (“Braun”) and Ronald W. Mineo (“Mineo”) in the amount of $2.3 million (“Deferred Payments”), each. The Deferred Payments are to be paid in twenty-four (24) equal monthly installments in the amount of $95,834, inclusive of interest at the rate of 0.65% per annum. Payments commenced April 4, 2016 and conclude March 4, 2018. Through September 30, 2016 the Company made payments of $0.6 million inclusive of interest and as of September 30, 2016, the outstanding balances on the Deferred Payments to each of Messrs. Braun and Mineo was approximately $1.7 million.

BMO Credit Facility. The Company and its subsidiaries and Genesys, as guarantors, have entered into a credit agreement (as amended, the “BMO 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 $3.0 million. The $7.5 million revolving credit facility includes a $5.0 million standby letter of credit sub-facility. As of September 30, 2016, there were no outstanding borrowings under the revolving line of credit, approximately $1.0 million in letters of credit outstanding under the standby letter of credit sub-facility, approximately $1.6 million in loans outstanding under the delayed draw term loan facility and, after considering the BMO Credit Agreement’s borrowing base calculation and debt covenants (each as described below), $6.5 million under the revolving line of credit and $1.4 million under the delayed draw term loan facility were available for borrowing.

The term loan bears 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. Interest on the term loan is payable quarterly, beginning April 13, 2015 and was 3.3% as of September 30, 2016. 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) $75,000 on the last day of December 2016, and (ii) all of the remaining outstanding principal amount on March 24, 2017. The Company is currently in the process of negotiating a refinancing of the credit facility under the BMO Credit Agreement; however, the Company may not be able to refinance such facility on terms favorable to it or at all. In the event the Company does not refinance the credit facility, the Company intends to repay any outstanding amounts with cash on hand. 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 September 30, 2016, no cash amounts are restricted. The revolving line of credit matures on March 24, 2017 and term loans can be requested at any time prior to February 22, 2017, which would mature March 24, 2017.

Borrowings under the term loan facility and the revolving line of credit are guaranteed by all of the Company’s subsidiaries and Genesys (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 2.0; (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 the sum of (a) the Company’s tangible net worth as of December 31, 2015, plus (b) 50% of net income (only if positive) for each fiscal quarter ending after February 29, 2016, plus (c) the aggregate proceeds received by the Company from the issuance or sale of equity interests in the Company after February 29, 2016, minus (d) the aggregate dollar amount of stock repurchases after February 29, 2016, plus or minus, as applicable, (e) 80% of any adjustments to tangible net worth of the Company arising as a result of certain acquisitions identified to BMO Harris.

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 is no longer obligated to extend further credit to the Company under the BMO Credit Agreement. As of September 30, 2016, the Company was in compliance with the covenants under the BMO Credit Agreement.

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 1, 2016, the Company elected to finance its insurance premiums for the upcoming fiscal year.

COMMITMENTS	9 Months Ended
COMMITMENTS	Sep. 30, 2016
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 2019. The Company also leases certain office facilities under non-cancelable operating leases that expire at various dates through the year 2023. 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.

INCOME TAXES	9 Months Ended
INCOME TAXES	Sep. 30, 2016
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. During fiscal year 2015, the Company assessed the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. The Company has ultimately determined that it is not more-likely-than-not that the entire California net operating loss will be utilized prior to expiration. Significant pieces of objective evidence evaluated included the Company’s history of utilization of California net operating losses in prior years for each of its subsidiaries, as well as its forecasted amount of net operating loss utilization for certain members of the combined group. Based on this evaluation, as of January 1, 2016, the Company recorded a valuation allowance in the amount of $73,000 related to California net operating losses. There was no change to the valuation allowance as of September 30, 2016. For acquired business entities, if the Company identifies changes to acquired deferred tax asset valuation allowances or liabilities related to uncertain tax positions during the measurement period and they relate to new information obtained about facts and circumstances that existed as of the acquisition date, those changes are considered a measurement period adjustment and the Company records the offset to goodwill. The Company records all other changes to deferred tax asset valuation allowances and liabilities related to uncertain tax positions in current period income tax expense. 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 September 30, 2016, 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 $0.5 million and $2.0 million for the three and nine months ended September 30, 2016, respectively, as compared to $0.6 million and $2.9 million for the three and nine months ended October 2, 2015, respectively. During the nine months ended September 30, 2016, the Company determined that certain deductions related to energy efficient commercial building deductions were greater than what was estimated in the income tax provision for 2015. Accordingly, the Company has recorded a reduction of income tax expense of approximately $0.1 million and $0.6 million as a change in estimate for the three and nine month periods ended September 30, 2016, respectively. The difference between the tax expense recorded and the expense that would be recorded by applying the federal statutory rate primarily relates to energy efficient commercial building deductions, as well as certain expenses that are non-deductible for tax purposes, including meals and entertainment, lobbying and compensation expense related to incentive stock options.

SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2016

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 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 the Company’s 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 2015 Annual Report on Form 10-K filed on March 15, 2016. There were no intersegment sales in the three and nine month periods ended September 30, 2016 or October 2, 2015. 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 September 30, 2016 and as of and for the fiscal three and nine months ended October 2, 2015 is as follows:


	Energy				Public		Homeland
	Efficiency		Engineering		Finance		Security		Unallocated				Consolidated
	Services		Services		Services		Services		Corporate		Intersegment		Total
Fiscal Three Months Ended September 30, 2016
Contract revenue	$	41,988,000	$	12,906,000	$	3,199,000	$	567,000	$	—	$	—	$	58,660,000
Segment profit (loss) before income tax expense		1,058,000		1,857,000		287,000		4,000		(196,000)		—		3,010,000
Net income (loss)		895,000		1,508,000		221,000		5,000		(167,000)		—		2,462,000
Segment assets(1)		65,383,000		12,012,000		5,994,000		498,000		46,041,000		(23,130,000)		106,798,000
Fiscal Three Months Ended October 2, 2015
Contract revenue	$	17,811,000	$	11,584,000	$	3,286,000	$	830,000	$	—	$	—	$	33,511,000
Segment profit (loss) before income tax expense		(658,000)		1,268,000		536,000		257,000		5,000		—		1,408,000
Net income (loss)		(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 Nine Months Ended September 30, 2016
Contract revenue	$	103,574,000	$	36,863,000	$	9,206,000	$	1,873,000	$	—	$	—	$	151,516,000
Segment profit (loss) before income tax expense		4,257,000		4,941,000		294,000		92,000		(864,000)		—		8,720,000
Net income (loss)		3,285,000		3,814,000		227,000		71,000		(667,000)		—		6,730,000
Segment assets(1)		65,383,000		12,012,000		5,994,000		498,000		46,041,000		(23,130,000)		106,798,000
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

(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.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Topic 280
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Publisher FASB
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9054-108599

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-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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+ Details

CONTINGENCIES	9 Months Ended
CONTINGENCIES	Sep. 30, 2016
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 under the Company’s professional liability insurance policy which has limits of $5,000,000 per claim and $10,000,000 annual aggregate.

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

9 Months Ended

Sep. 30, 2016

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

Basis of Presentation

Principles of Consolidation

Accounting for Contracts


	Types of Contract
Segment	(Revenue Recognition Method)
Energy Efficiency Services	Unit-based and time-and-materials (percentage-of-completion method)
Engineering Services	Time-and-materials, unit-based and fixed price (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

Reclassifications

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.

Recent Accounting Pronouncements

Statement of Cash Flows

Revenue Recognition

Consolidations

Leases

Stock Compensation

Proposed Accounting Standards

BUSINESS COMBINATIONS (Tables)

9 Months Ended

Sep. 30, 2016

BUSINESS COMBINATIONS

Schedule of consideration for the acquisitions


	Genesys
Cash paid, net of cash acquired	$	8,857,000
Other receivable for working capital adjustment		(604,000)
Issuance of common stock		2,228,000
Deferred purchase price, payable in 24 monthly installments		4,569,000
Total consideration	$	15,050,000

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


	Genesys
Current assets	$	14,952,000
Non-current assets		36,000
Cash		101,000
Property, plant and equipment		117,000
Liabilities		(12,643,000)
Customer relationships		3,260,000
Backlog		1,050,000
Tradename		1,690,000
Non-compete agreements		320,000
Goodwill		6,167,000
Net assets acquired	$	15,050,000

Schedule of unaudited pro forma financial information


	Three Months Ended				Nine Months Ended
	September 30,		October 2,		September 30,		October 2,
In thousands (except per share data)	2016		2015		2016		2015
Pro forma revenue	$	58,660	$	41,220	$	160,328	$	124,289

Pro forma income from operations		3,053		1,734		9,676		7,014
Pro forma net income	$	2,462	$	963	$	7,254	$	4,020

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2016

GOODWILL AND OTHER INTANGIBLE ASSETS

Schedule of changes in carrying value of goodwill by reporting unit


	January 1,				September 30,
	2016		Additions		2016
Reporting Unit:
Energy Efficiency Services	$	15,348,000	$	6,167,000	$	21,515,000
Financial Services		749,000		—		749,000
	$	16,097,000	$	6,167,000	$	22,264,000

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


	September 30, 2016				January 1, 2016
	Gross		Accumulated		Gross		Accumulated		Amortization
	Amount		Amortization		Amount		Amortization		Period (yrs)
Backlog	$	1,398,000	$	551,000	$	348,000	$	340,000			5.0
Tradename		2,739,000		916,000		1,049,000		329,000	2.5	-	3.5
Non-compete agreements		1,331,000		392,000		1,011,000		194,000			4.0
Customer relationships		3,260,000		380,000		—		—			5.0
	$	8,728,000	$	2,239,000	$	2,408,000	$	863,000

Schedule of estimated amortization expense for acquired identifiable intangible assets


Fiscal year:
2017	$	2,121,000
2018		1,951,000
2019		1,087,000
2020		674,000
2021		109,000
	$	5,942,000

EARNINGS PER SHARE ("EPS") (Tables)

9 Months Ended

Sep. 30, 2016

EARNINGS PER SHARE (EPS)

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


	Three months ended				Nine months ended
	September 30,		October 2,		September 30,		October 2,
	2016		2015		2016		2015
Net income	$	2,462,000	$	782,000	$	6,730,000	$	3,879,000
Weighted-average common shares outstanding		8,308,000		7,862,000		8,181,000		7,817,000
Effect of dilutive stock options and restricted stock awards		412,000		240,000		335,000		270,000
Weighted-average common stock outstanding-diluted		8,720,000		8,102,000		8,516,000		8,087,000
Earnings per share:
Basic	$	0.30	$	0.10	$	0.82	$	0.50
Diluted	$	0.28	$	0.10	$	0.79	$	0.48

EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Tables)

9 Months Ended

Sep. 30, 2016

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Schedule of equipment and leasehold improvements


	September 30,		January 1,
	2016		2016
Furniture and fixtures	$	2,322,000	$	2,270,000
Computer hardware and software		7,543,000		6,496,000
Leasehold improvements		1,094,000		1,072,000
Equipment under capital leases		935,000		1,266,000
Automobiles, trucks, and field equipment		1,400,000		984,000
		13,294,000		12,088,000
Accumulated depreciation and amortization		(8,870,000)		(8,404,000)
Equipment and leasehold improvements, net	$	4,424,000	$	3,684,000

ACCRUED LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2016

ACCRUED LIABILITIES

Schedule of accrued liabilities


	September 30,		January 1,
	2016		2016
Accrued bonuses	$	1,643,000	$	922,000
Accrued interest		1,000		4,000
Paid leave bank		2,050,000		1,710,000
Compensation and payroll taxes		1,168,000		1,494,000
Accrued legal		185,000		523,000
Accrued workers’ compensation insurance		146,000		268,000
Accrued rent		170,000		169,000
Employee withholdings		662,000		942,000
Client deposits		223,000		106,000
Unvouchered accounts payable		9,357,000		3,061,000
Other		281,000		1,135,000
Total accrued liabilities	$	15,886,000	$	10,334,000

DEBT OBLIGATIONS (Tables)

9 Months Ended

Sep. 30, 2016

DEBT

Schedule of debt obligations, excluding obligations under capital leases


	September 30,		January 1,
	2016		2016
Outstanding borrowings on delayed draw term loan	$	1,575,000	$	1,850,000
Notes payable for 360 Energy Engineers, LLC, 36 month term, bearing interest at 4%, payable in monthly principal and interest installments of $88,752 through December 2017.		1,285,000		2,033,000
Notes payable for Abacus, 24 month term, bearing interest at 4%, payable in monthly principal and interest installments of $54,281 through January 2017.		216,000		690,000
Notes payable for insurance, 11 month term, bearing interest at 2.773%, payable in monthly principal and interest installments of $55,868 through October 2016.		102,000		551,000
Deferred purchase price for the acquisition of the assets of Genesys, bearing interest at 0.650%, payable in monthly principal and interest installments of $191,667 through March 2018.		3,432,000		—
Total debt obligations		6,610,000		5,124,000
Less current portion		5,210,000		4,039,000
Debt obligations, less current portion	$	1,400,000	$	1,085,000

SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2016

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 September 30, 2016
Contract revenue	$	41,988,000	$	12,906,000	$	3,199,000	$	567,000	$	—	$	—	$	58,660,000
Segment profit (loss) before income tax expense		1,058,000		1,857,000		287,000		4,000		(196,000)		—		3,010,000
Net income (loss)		895,000		1,508,000		221,000		5,000		(167,000)		—		2,462,000
Segment assets(1)		65,383,000		12,012,000		5,994,000		498,000		46,041,000		(23,130,000)		106,798,000
Fiscal Three Months Ended October 2, 2015
Contract revenue	$	17,811,000	$	11,584,000	$	3,286,000	$	830,000	$	—	$	—	$	33,511,000
Segment profit (loss) before income tax expense		(658,000)		1,268,000		536,000		257,000		5,000		—		1,408,000
Net income (loss)		(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 Nine Months Ended September 30, 2016
Contract revenue	$	103,574,000	$	36,863,000	$	9,206,000	$	1,873,000	$	—	$	—	$	151,516,000
Segment profit (loss) before income tax expense		4,257,000		4,941,000		294,000		92,000		(864,000)		—		8,720,000
Net income (loss)		3,285,000		3,814,000		227,000		71,000		(667,000)		—		6,730,000
Segment assets(1)		65,383,000		12,012,000		5,994,000		498,000		46,041,000		(23,130,000)		106,798,000
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

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY - Fiscal Years (Details)	9 Months Ended
	Sep. 30, 2016
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 - Accounting for Contracts (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($)	Oct. 02, 2015 USD ($)	Sep. 30, 2016 USD ($) segment	Oct. 02, 2015 USD ($)	Jan. 01, 2016 USD ($)
Accounting for Contracts
Payroll taxes, bonuses and employee benefit costs for all Company personnel	$ 7,825,000	$ 6,070,000	$ 23,035,000	$ 18,993,000
Facilities costs	1,039,000	$ 1,207,000	2,978,000	$ 3,203,000
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	$ 5,100,000		$ 5,100,000		$ 748,000
Number of reportable segments \| segment			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 - Liquidity (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Jan. 01, 2016	Oct. 02, 2015	Jan. 02, 2015
BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY
Goodwill	$ 22,264,000	$ 16,097,000
Liquidity
Cash and cash equivalents	$ 18,587,000	$ 16,487,000	$ 14,651,000	$ 18,173,000
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

BUSINESS COMBINATIONS (Details)			4 Months Ended
BUSINESS COMBINATIONS (Details)	Mar. 04, 2016 USD ($) shares	Feb. 26, 2016 USD ($) installment $ / shares	Jul. 01, 2016 USD ($)	Sep. 30, 2016 USD ($) $ / shares	Jan. 01, 2016 $ / shares
BUSINESS COMBINATIONS
Receivable for working capital				$ 604,000
Common stock, par value (in dollars per share) \| $ / shares				$ 0.01	$ 0.01
Genesys
BUSINESS COMBINATIONS
Purchase price	$ 15,050,000	$ 15,100,000
Cash paid at closing		$ 6,000,000	$ 2,900,000
Receivable for working capital	$ 604,000
Common stock shares issued \| shares	255,808
Common stock, par value (in dollars per share) \| $ / shares		$ 0.01
Common stock value		$ 2,200,000
Cash payable in installments		$ 4,600,000
Number of monthly installments \| installment		24
Tax deductible goodwill	$ 6,200,000

BUSINESS COMBINATIONS (Acquisitions) (Details) - USD ($)				3 Months Ended		9 Months Ended		21 Months Ended
	Mar. 04, 2016	Feb. 26, 2016	Jan. 15, 2015	Sep. 30, 2016	Oct. 02, 2015	Sep. 30, 2016	Oct. 02, 2015	Sep. 30, 2016	Jan. 01, 2016
BUSINESS COMBINATIONS
Fair values of intangible assets						$ 3,300,000
Decreased other receivables						(300,000)
Increased contingent consideration			$ 300,000	$ 300,000
Decrease in goodwill						(3,000,000)
Consideration for acquisitions
Cash paid, net of cash acquired						8,857,000	$ 8,168,000
Other receivable for working capital receivable				(604,000)		(604,000)		$ (604,000)
Short term contingent consideration reversal				1,925,000		1,925,000		1,925,000	$ 1,420,000
Short term contingent consideration reversal				(400,000)
Allocation of acquired assets
Goodwill				22,264,000		22,264,000		22,264,000	$ 16,097,000
Unaudited pro forma financial information
Pro forma revenue				58,660,000	$ 41,220,000	160,328,000	124,289,000
Pro forma income from operations				3,053,000	1,734,000	9,676,000	7,014,000
Pro forma net income				2,462,000	963,000	7,254,000	4,020,000
Revenue and Income from operations
Revenues				58,660,000	33,511,000	151,516,000	103,581,000
Operating Income (Loss)				3,053,000	$ 1,641,000	8,855,000	$ 7,074,000
General and Administrative Expense
Revenue and Income from operations
Acquisition costs				0		56,000		$ 165,000
Genesys
BUSINESS COMBINATIONS
Fair values of intangible assets				3,300,000
Decreased other receivables				(300,000)
Decrease in goodwill				(3,000,000)
Consideration for acquisitions
Cash paid, net of cash acquired	$ 8,857,000
Other receivable for working capital receivable	(604,000)
Issuance of common stock	2,228,000
Deferred purchase price, payable in 24 monthly installments	4,569,000
Total consideration	15,050,000	$ 15,100,000
Allocation of acquired assets
Current assets	14,952,000
Non-current assets	36,000
Cash	101,000
Property, plant and equipment	117,000
Liabilities	12,643,000
Goodwill	6,167,000
Net assets acquired	15,050,000
Revenue and Income from operations
Revenues				16,200,000		35,600,000
Operating Income (Loss)				$ 200,000		$ 600,000
Genesys \| Customer relationships
Allocation of acquired assets
Intangible assets	3,260,000
Genesys \| Backlog
Allocation of acquired assets
Intangible assets	1,050,000
Genesys \| Tradename
Allocation of acquired assets
Intangible assets	1,690,000
Genesys \| Non-compete agreements
Allocation of acquired assets
Intangible assets	$ 320,000

GOODWILL AND OTHER INTANGIBLE ASSETS - Carrying Value of Goodwill by Reporting Unit (Details)	9 Months Ended
	Sep. 30, 2016 USD ($)
Changes in carrying value of goodwill
Goodwill at beginning of period	$ 16,097,000
Additional Purchase Cost	6,167,000
Goodwill at end of period	22,264,000
Energy Efficiency Services
Changes in carrying value of goodwill
Goodwill at beginning of period	15,348,000
Additional Purchase Cost	6,167,000
Goodwill at end of period	21,515,000
Public Finance Services
Changes in carrying value of goodwill
Goodwill at beginning of period	749,000
Additional Purchase Cost	0
Goodwill at end of period	$ 749,000

GOODWILL AND OTHER INTANGIBLE ASSETS - Gross Amount and Amortization (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015	Sep. 30, 2016	Oct. 02, 2015	Jan. 01, 2016
Goodwill and other intangible assets
Goodwill	$ 22,264,000		$ 22,264,000		$ 16,097,000
Gross Amount	8,728,000		8,728,000		2,408,000
Accumulated Amortization	2,239,000		2,239,000		863,000
Amortization expense for acquired identifiable intangible assets	400,000	$ 200,000	1,400,000	$ 700,000
Fair values of intangible assets			3,300,000
Decreased other receivables			(300,000)
Decrease in goodwill			(3,000,000)
Estimated amortization expense for acquired identifiable intangible assets
Remainder of fiscal year 2016	500,000		500,000
2017	2,121,000		2,121,000
2018	1,951,000		1,951,000
2019	1,087,000		1,087,000
2020	674,000		674,000
2021	109,000		109,000
Total estimated amortization expense	5,942,000		5,942,000
Backlog
Goodwill and other intangible assets
Gross Amount	1,398,000		1,398,000		348,000
Accumulated Amortization	551,000		$ 551,000		340,000
Backlog \| Maximum
Goodwill and other intangible assets
Amortization Period (in years)			5 years
Non-compete agreements
Goodwill and other intangible assets
Gross Amount	1,331,000		$ 1,331,000		1,011,000
Accumulated Amortization	392,000		$ 392,000		194,000
Amortization Period (in years)			4 years
Customer relationships
Goodwill and other intangible assets
Gross Amount	3,260,000		$ 3,260,000
Accumulated Amortization	380,000		$ 380,000
Amortization Period (in years)			5 years
Training materials/courses
Goodwill and other intangible assets
Gross Amount	2,739,000		$ 2,739,000		1,049,000
Accumulated Amortization	$ 916,000		$ 916,000		$ 329,000
Training materials/courses \| Minimum
Goodwill and other intangible assets
Amortization Period (in years)			2 years 6 months
Training materials/courses \| Maximum
Goodwill and other intangible assets
Amortization Period (in years)			3 years 6 months

EARNINGS PER SHARE (EPS) (Details) - USD ($)	3 Months Ended		9 Months Ended
EARNINGS PER SHARE (EPS) (Details) - USD ($)	Sep. 30, 2016	Oct. 02, 2015	Sep. 30, 2016	Oct. 02, 2015
Earnings per share
Net income	$ 2,462,000	$ 782,000	$ 6,730,000	$ 3,879,000
Weighted-average common shares outstanding (in shares)	8,308,000	7,862,000	8,181,000	7,817,000
Effect of dilutive stock options and restricted stock awards (in shares)	412,000	240,000	335,000	270,000
Weighted-average common shares outstanding-diluted (in shares)	8,720,000	8,102,000	8,516,000	8,087,000
Earnings per share:
Basic (in dollars per share)	$ 0.30	$ 0.10	$ 0.82	$ 0.50
Diluted (in dollars per share)	$ 0.28	$ 0.10	$ 0.79	$ 0.48
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)	412,000	240,000	335,000	270,000

EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details) - USD ($)	Sep. 30, 2016	Jan. 01, 2016
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	$ 13,294,000	$ 12,088,000
Accumulated depreciation and amortization	(8,870,000)	(8,404,000)
Equipment and leasehold improvements, net	4,424,000	3,684,000
Furniture and fixtures
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	2,322,000	2,270,000
Computer hardware and software
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	7,543,000	6,496,000
Leasehold improvements
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	1,094,000	1,072,000
Equipment under capital leases
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	935,000	1,266,000
Automobiles, trucks, and field equipment
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	$ 1,400,000	$ 984,000

ACCRUED LIABILITIES (Details) - USD ($)	Sep. 30, 2016	Jan. 01, 2016
ACCRUED LIABILITIES
Accrued bonuses	$ 1,643,000	$ 922,000
Accrued interest	1,000	4,000
Paid leave bank	2,050,000	1,710,000
Compensation and payroll taxes	1,168,000	1,494,000
Accrued legal	185,000	523,000
Accrued workers' compensation insurance	146,000	268,000
Accrued rent	170,000	169,000
Employee withholdings	662,000	942,000
Client deposits	223,000	106,000
Unvouchered accounts payable	9,357,000	3,061,000
Other	281,000	1,135,000
Total accrued liabilities	$ 15,886,000	$ 10,334,000

DEBT - Obligations (Details) - USD ($)	9 Months Ended	12 Months Ended
DEBT - Obligations (Details) - USD ($)	Sep. 30, 2016	Jan. 01, 2016
Debt Obligations
Total debt obligations, excluding capital lease obligations	$ 6,610,000	$ 5,124,000
Less current portion	5,210,000	4,039,000
Outstanding balance	1,400,000	1,085,000
Term Note
Debt Obligations
Total debt obligations, excluding capital lease obligations	1,575,000	1,850,000
360 Energy Engineers LLC
Debt Obligations
Total debt obligations, excluding capital lease obligations	$ 1,285,000	$ 2,033,000
Maturity term	36 months	36 months
Interest rate (as a percent)	4.00%	4.00%
Monthly principal and interest installment (in dollars)	$ 88,752	$ 88,752
Notes payable for Abacus
Debt Obligations
Total debt obligations, excluding capital lease obligations	216,000	$ 690,000
Outstanding balance	$ 100,000
Maturity term	24 months	24 months
Interest rate (as a percent)	4.00%	4.00%
Monthly principal and interest installment (in dollars)	$ 54,281	$ 54,281
Notes payable for insurance
Debt Obligations
Total debt obligations, excluding capital lease obligations	$ 102,000	$ 551,000
Maturity term	11 months	11 months
Interest rate (as a percent)	2.773%	2.773%
Monthly principal and interest installment (in dollars)	$ 55,868	$ 55,868
Installment payable to genesys
Debt Obligations
Total debt obligations, excluding capital lease obligations	$ 3,432,000
Interest rate (as a percent)	0.65%	0.65%
Monthly principal and interest installment (in dollars)	$ 191,667	$ 191,667

DEBT - Line of credit (Details) - USD ($)			3 Months Ended	7 Months Ended	9 Months Ended			12 Months Ended
DEBT - Line of credit (Details) - USD ($)	Mar. 04, 2016	Jan. 15, 2015	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2016	Oct. 02, 2015	Jan. 01, 2016
Line of Credit
Payment on note					$ 3,083,000		$ 1,628,000
Genesys \| Braun
Line of Credit
Deferred payments	$ 2,300,000
Deferred payments outstanding			$ 1,700,000
Genesys \| Mineo
Line of Credit
Deferred payments	2,200,000
Deferred payments outstanding			1,700,000
Genesys \| Bruan and Mineo
Line of Credit
Number of monthly installments					24 months
Amount of each installment	$ 95,834
Interest rate on deferred payment (as a percent)	0.65%
Interest and principal payments				$ 600,000
Abacus Notes
Line of Credit
Interest rate (as a percent)		4.00%
Payment on note						$ 500,000
Kinzer Note
Line of Credit
Initial outstanding principal		$ 600,000
Rubbert Note
Line of Credit
Initial outstanding principal		600,000
360 Energy Note
Line of Credit
Initial outstanding principal		$ 3,000,000
Interest rate (as a percent)		4.00%
Payment on note								$ 1,700,000
Outstanding balance			1,300,000	1,300,000	$ 1,300,000	1,300,000
Revolving Credit Facility
Line of Credit
Maximum total leverage ratio of total funded debt to EBITDA thereafter		2.0
Minimum fixed charge coverage ratio		1.25
Step up amount equal to net income required to be maintained (as a percent)		50.00%
Revolving Credit Facility \| BMO
Line of Credit
Restricted cash			0	0	0	0
Adjustment to tangible net worth arising from acquisition (as a percent)		80.00%
Percentage of increased interest rate in case of default		2.00%
Revolving Credit Facility \| Maximum \| BMO
Line of Credit
Total consideration for all permitted acquisitions		$ 1,500,000
Total consideration for individual permitted acquisitions		750,000
Revolving Credit Facility \| Genesys \| BMO
Line of Credit
Maximum borrowing capacity			7,500,000	7,500,000	7,500,000	7,500,000
Borrowings outstanding			0	0	$ 0	0
Revolving line of credit \| BMO
Line of Credit
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%
Revolving line of credit \| Maximum \| BMO
Line of Credit
Fee on unused commitments (as a percent)					0.30%
Revolving line of credit \| Genesys \| BMO
Line of Credit
Amount available for borrowing			6,500,000	6,500,000	$ 6,500,000	6,500,000
Revolving line of credit \| Base rate \| Genesys \| Maximum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)					1.25%
Revolving line of credit \| Base rate \| Genesys \| Minimum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)					0.75%
Revolving line of credit \| LIBOR \| Genesys \| Maximum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)					2.25%
Revolving line of credit \| LIBOR \| Genesys \| Minimum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)					1.75%
Standby letter of credit sub-facility \| Genesys \| BMO
Line of Credit
Maximum borrowing capacity			5,000,000	5,000,000	$ 5,000,000	5,000,000
Borrowings outstanding			$ 1,000,000	$ 1,000,000	$ 1,000,000	$ 1,000,000
Term Note \| BMO
Line of Credit
Frequency of repayment					quarterly
Quarterly payment					$ 75,000
Term Note \| Genesys \| BMO
Line of Credit
Interest rate at end of period (as a percent)			3.30%	3.30%	3.30%	3.30%
Quarterly payment					$ 75,000
Maximum borrowing capacity		3,000,000
Borrowings outstanding			$ 1,600,000	$ 1,600,000	1,600,000	$ 1,600,000
Amount available for borrowing			$ 1,400,000	$ 1,400,000	$ 1,400,000	$ 1,400,000
Term Note \| Abacus and 360 Energy \| BMO
Line of Credit
Initial outstanding principal		$ 2,000,000
Term Note \| Base rate \| Genesys \| Maximum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)					1.75%
Term Note \| Base rate \| Genesys \| Minimum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)					1.25%
Term Note \| LIBOR \| BMO
Line of Credit
Spread on floating interest rate (as a percent)					2.50%
Term Note \| LIBOR \| Maximum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)					2.75%
Term Note \| LIBOR \| Minimum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)					2.25%
Term Note \| LIBOR \| Genesys \| Maximum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)					2.75%
Term Note \| LIBOR \| Genesys \| Minimum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)					2.25%

COMMITMENTS - Benefit Plans (Details)	9 Months Ended
COMMITMENTS - Benefit Plans (Details)	Sep. 30, 2016 USD ($)
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 - Operating Loss Carryovers and Unrecognized Tax Benefits (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015	Sep. 30, 2016	Oct. 02, 2015	Jan. 01, 2016
INCOME TAXES
Valuation reserve related to California net operating losses					$ 73,000
Valuation allowance change			$ 0
Income tax expense	$ 548,000	$ 626,000	$ 1,990,000	$ 2,872,000

SEGMENT INFORMATION (Details)	3 Months Ended		9 Months Ended
SEGMENT INFORMATION (Details)	Sep. 30, 2016 USD ($)	Oct. 02, 2015 USD ($)	Sep. 30, 2016 USD ($) segment	Oct. 02, 2015 USD ($)	Jan. 01, 2016 USD ($)
SEGMENT INFORMATION
Number of reporting segments \| segment			4
Segment reconciliation
Contract revenue	$ 58,660,000	$ 33,511,000	$ 151,516,000	$ 103,581,000
Segment profit (loss) before income taxes	3,010,000	1,408,000	8,720,000	6,751,000
Net income (loss)	2,462,000	782,000	6,730,000	3,879,000
Segment assets	106,798,000	77,001,000	106,798,000	77,001,000	$ 72,345,000
Intersegment
Segment reconciliation
Contract revenue	0	0	0	0
Reporting Segments \| Engineering Services
Segment reconciliation
Contract revenue	12,906,000	11,584,000	36,863,000	33,893,000
Segment profit (loss) before income taxes	1,857,000	1,268,000	4,941,000	3,427,000
Net income (loss)	1,508,000	877,000	3,814,000	2,081,000
Segment assets	12,012,000	14,450,000	12,012,000	14,450,000
Reporting Segments \| Energy Efficiency Services
Segment reconciliation
Contract revenue	41,988,000	17,811,000	103,574,000	58,254,000
Segment profit (loss) before income taxes	1,058,000	(658,000)	4,257,000	2,724,000
Net income (loss)	895,000	(392,000)	3,285,000	1,567,000
Segment assets	65,383,000	38,406,000	65,383,000	38,406,000
Reporting Segments \| Public Finance Services
Segment reconciliation
Contract revenue	3,199,000	3,286,000	9,206,000	8,982,000
Segment profit (loss) before income taxes	287,000	536,000	294,000	728,000
Net income (loss)	221,000	144,000	227,000	304,000
Segment assets	5,994,000	5,387,000	5,994,000	5,387,000
Reporting Segments \| Homeland Security Services
Segment reconciliation
Contract revenue	567,000	830,000	1,873,000	2,452,000
Segment profit (loss) before income taxes	4,000	257,000	92,000	333,000
Net income (loss)	5,000	148,000	71,000	192,000
Segment assets	498,000	624,000	498,000	624,000
Unallocated Corporate
Segment reconciliation
Segment profit (loss) before income taxes	(196,000)	5,000	(864,000)	(461,000)
Net income (loss)	(167,000)	5,000	(667,000)	(265,000)
Segment assets	46,041,000	41,264,000	46,041,000	41,264,000
Intersegment
Segment reconciliation
Segment assets	$ (23,130,000)	$ (23,130,000)	$ (23,130,000)	$ (23,130,000)

CONTINGENCIES (Details) - USD ($)		9 Months Ended
CONTINGENCIES (Details) - USD ($)	Jul. 16, 2014	Sep. 30, 2016
Contingencies
Maximum coverage per professional liability claim		$ 5,000,000
Annual aggregate coverage limit		$ 10,000,000
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