wldn_Current Folio_8K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

 


 

FORM 8-K

 


 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): March 9, 2017

 


 

WILLDAN GROUP, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

Delaware

    

001-33076

    

14-1951112

(State of other jurisdiction

of incorporation)

 

(Commission File Number)

 

(IRS Employer

Identification No.)

 

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

(Address of Principal Executive Offices)

 

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

 

Not Applicable

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

 


 

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

 

 

 

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

 

 

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

 

 

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

 

 

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

 

 

 

 

 


 

Item 2.02             Results of Operations and Financial Condition

 

Willdan Group, Inc. (“Willdan”) issued a press release on March 9, 2017.  The press release announced Willdan’s financial results for the fourth quarter and fiscal year ended December 30, 2016.  A copy of the press release is attached as Exhibit 99.1 hereto and is hereby incorporated by reference in its entirety.  The information in this Item 2.02 and the attached Exhibit 99.1 to this Current Report on Form 8-K is being furnished (not filed) pursuant to Item 2.02 of Form 8-K.

 

Item 9.01             Financial Statements and Exhibits

 

(d)          Exhibits.

 

99.1Press Release of Willdan Group, Inc. dated March 9, 2017.

 

2


 

SIGNATURES

 

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

 

 

 

 

 

WILLDAN GROUP, INC.

 

 

 

 

 

 

Date: March 9, 2017

By:

/s/ Stacy B. McLaughlin

 

 

Stacy B. McLaughlin

 

 

Chief Financial Officer

 

3


 

EXHIBIT INDEX

 

 

 

 

 

 

Exhibit No.

 

Document

 

 

 

 

99.1

 

 

Press Release of Willdan Group, Inc. dated March 9, 2017.

 

 

 

 

 

 

 

4


wldn_Ex99_1

Exhibit 99.1

 

WD_tagend_300rgb

 

Willdan Group Reports Fourth Quarter and Fiscal Year 2016 Financial Results

 

Investment Community Conference Call Today at 5:30 p.m. Eastern Time

 

 

ANAHEIM, Calif. – March 9, 2017 – Willdan Group, Inc. (“Willdan”) (NASDAQ: WLDN), a provider of professional technical and consulting services, today reported financial results for its fourth quarter and fiscal year ended December 30, 2016, and provided a business update.

 

Fiscal Year 2016 Highlights

 

·

Total contract revenue of $208.9 million, an increase of 55% over prior year

·

Net income of $8.3 million, an increase of 95% over prior year

·

Diluted earnings per share of $0.97, up 87% over prior year

·

EBITDA of $15.2 million, an increase of 49% over prior year

·

Cash flow from operations of  $21.6 million

 

Fourth Quarter 2016 Highlights

 

·

Total contract revenue of $57.4 million, an increase of 82% over prior year

·

Net income of $1.6 million, an increase of 313% over prior year

·

Diluted earnings per share of $0.18, an increase of 260% over prior year

·

EBITDA of $3.7 million, an increase of 108% over prior year

 

For the fourth quarter of 2016, Willdan reported total contract revenue of $57.4 million and net income of $1.6 million, or $0.18 per diluted share.  This compares with total contract revenue of $31.5 million and net income of $0.4 million, or $0.05 per diluted share, for the fourth quarter of 2015.  The increase in earnings per share in the fourth quarter of 2016 was primarily driven by higher total contract revenue, resulting from both organic growth and incremental revenue contributed by substantially all of the assets of Genesys Engineering P.C. (“Genesys”) acquired in March 2016.

 

“We executed well in the fourth quarter, delivering another quarter of significant year-over-year growth in revenue, earnings per share and EBITDA,” said Tom Brisbin, Willdan’s Chairman and Chief Executive Officer.  “We continue to deliver strong energy savings on all of our major long-term programs for utilities, while effectively ramping up the new programs we won in 2016.  We are seeing positive trends in demand for energy efficiency services nationwide, which is resulting in growth opportunities for Willdan in a number of new markets.  Our proven ability to deliver energy savings, combined with our expanded performance contracting capabilities, has positioned us well to maintain our current base of business, while winning new programs with public utilities, municipalities, universities and hospitals.  We expect to continue generating profitable growth in 2017 and the years ahead.”

 

Fourth Quarter 2016 Financial Highlights

 

Total contract revenue for the fourth quarter of 2016 was $57.4 million, an increase of 82.2% from $31.5 million for the fourth quarter of 2015.  The increase was primarily due to higher contract revenue from the Energy Efficiency Services segment, which increased $22.4 million, or 140.9%, from the fourth quarter of 2015.  Total contract revenue for the fourth quarter of 2016 included $13.1 million of revenue generated by substantially all of the assets of Genesys, which were acquired in March 2016.  Contract revenue for the Energy Efficiency Services, Engineering Services, Public Finance Services, and Homeland Security Services segments was $38.3 million, $15.4 million, $3.2 million and $0.5 million, respectively, in the fourth quarter of 2016.

 


 

Willdan Group

Page 2 of 10

Direct costs of contract revenue were $39.3 million for the fourth quarter of 2016, an increase of 113.5% from $18.4 million for the fourth quarter of 2015.  Included in direct costs of contract revenue for the fourth quarter of 2016 was incremental direct costs of contract revenue of $11.3 million attributable to substantially all of the assets of Genesys.  Excluding the direct costs of contract revenue attributable to substantially all of the assets of Genesys, direct costs of contract revenue increased by $9.6 million, primarily as a result of the increase in subcontractor services and production expenses in the Energy Efficiency Services segment.

 

Revenue, net of subcontractor services and other direct costs (see “Use of Non-GAAP Financial Measures” below), for the fourth quarter of 2016 was $28.4 million, an increase of 34.8% from $21.0 million for the fourth quarter of 2015.

 

Total general and administrative expenses for the fourth quarter of 2016 were $15.4 million, an increase of 21.8% from $12.6 million for the prior year period, due primarily to an increase in general and administrative expenses to support the growth of the Energy Efficiency Services and Engineering Services segments.

 

Income tax expense was $1.1 million for the fourth quarter of 2016, as compared to $0.2 million for the fourth quarter of 2015.  The effective tax rate in the fourth quarter of 2016 was 40.7%, which brought the annual effective tax rate for fiscal year 2016 in-line with the Company’s expectations.

 

Net income for the fourth quarter of 2016 was $1.6 million, or $0.18 per diluted share, as compared to net income of $0.4 million, or $0.05 per diluted share, for the fourth quarter of 2015. 

 

EBITDA (see “Use of Non-GAAP Financial Measures” below) was $3.7 million for the fourth quarter of 2016, as compared to $1.8 million for the fourth quarter of 2015.

 

Fiscal Year 2016 Financial Highlights

 

Total contract revenue in fiscal year 2016 was $208.9 million, an increase of 54.6% from $135.1 million in fiscal year 2015.  The increase was primarily due to higher contract revenue from the Energy Efficiency Services segment, which increased $67.8 million, or 91.4%, from fiscal year 2015.  Total contract revenue in fiscal year 2016 included $48.6 million of incremental contract revenue generated by substantially all of the assets of Genesys, which were acquired in March 2016.  Contract revenue for each of the Energy Efficiency Services, Engineering Services, Public Finance Services, and Homeland Security Services segments was $141.9 million, $52.3 million, $12.4 million and $2.4 million, respectively, in fiscal year 2016.

 

Direct costs of contract revenue were $143.3 million in fiscal year 2016, an increase of 74.5% from $82.1 million in fiscal year 2015.  Included in direct costs of contract revenue in fiscal year 2016 were incremental costs of revenue of $43.2 million attributable to the acquisition of substantially all of the assets of Genesys.  Excluding the direct costs of contract revenue attributable to the acquisition of substantially all of the assets of Genesys, direct costs of contract revenue increased by approximately $18.0 million, primarily as a result of the growth in subcontractor services and production expenses in the Energy Efficiency Services segment.

 

Revenue, net of subcontractor services and other direct costs, (see “Use of Non-GAAP Financial Measures” below) in fiscal year 2016 was $104.7 million, an increase of 23.3% from $84.9 million in fiscal year 2015.

 

General and administrative expenses in fiscal year 2016 were $54.1 million, an increase of 19.0% from $45.5 million for the prior year period, due primarily to an increase in general and administrative expenses to support the growth of the Energy Efficiency Services segment, including the acquisition of substantially all of the assets of Genesys.

 

Income tax expense remained flat year-over-year at $3.1 million for each of fiscal year 2016 and fiscal year 2015.  The effective tax rate for fiscal year 2016 was 27.0%, as compared to 42.0% for fiscal year 2015.  The reduction in the effective tax rate for fiscal year 2016 was primarily attributable to an increase in energy efficient building deductions for fiscal year 2016.  The Company recognized approximately $0.4 million in fiscal year 2016 in energy efficient building


 

Willdan Group

Page 3 of 10

deductions under Internal Revenue Code 179D. During fiscal year 2016, the Company also recorded a reduction of income tax expense of approximately $0.5 million as a change in estimate related to energy tax deductions earned for fiscal year 2015.  These reductions in income tax expense were offset by additional tax expense due to our increased profitability.

 

Net income in fiscal year 2016 was $8.3 million, or $0.97 per diluted share, as compared to net income of $4.3 million, or $0.52 per diluted share, in fiscal year 2015. 

 

EBITDA (see “Use of Non-GAAP Financial Measures” below) was $15.2 million in fiscal year 2016, as compared to $10.2 million in fiscal year 2015.

 

Cash flow from operations for fiscal year 2016 was $21.6 million.

 

Diluted earnings per share for fiscal year 2016 was $0.97, an increase of 87% over the prior year.

 

Balance Sheet

 

Willdan reported $22.7 million in cash and cash equivalents at December 30, 2016, as compared to $18.6 million at September 30, 2016.

 

Outlook

 

In prior years, Willdan benefited from the energy efficient building deduction under Internal Revenue Code 179D, which expired in 2016 and has not been renewed as of this date.  Accordingly, Willdan expects its effective tax rate to increase from 27% in fiscal year 2016 to approximately 38% in fiscal year 2017.

 

Willdan is providing the following financial targets for fiscal year 2017:

 

·

Total contract revenue of $230 - $245 million

·

Diluted earnings per share of $1.05 - $1.20

·

Annual effective tax rate of approximately 38%

·

Diluted share count of 9.0 million shares

·

Depreciation of $1.6 million

·

Amortization of $2.1 million

 

In fiscal year 2017, the Company’s diluted earnings per share is anticipated to be negatively affected by a  higher diluted share count, caused by an increase in share price over the last twelve months, and a higher effective tax rate as previously noted.  Without these two non-operational effects, our diluted earnings per share would be approximately $0.25 higher in 2017. 

 

For the first quarter, total contract revenue is expected to range from $42 to $47 million, and diluted earnings per share is expected to range from $0.12 to $0.14.

 

Over the long-term, Willdan continues to target both organic and acquisitive revenue growth of greater than 10%, resulting in total revenue growth of greater than 20% per year.

 

Conference Call Details

 

Chief Executive Officer Thomas Brisbin and Chief Financial Officer Stacy McLaughlin will host a conference call today, March 9, 2017, at 5:30 p.m. Eastern/2:30 p.m. Pacific to discuss Willdan’s financial results and provide a business update.

 


 

Willdan Group

Page 4 of 10

Interested parties may participate in the conference call by dialing 877-852-6580 (719-325-4891 for international callers) and providing conference ID 4415545.  The conference call will be webcast simultaneously on Willdan’s website at www.willdan.com under and the replay will be archived for at least 12 months.

 

The telephonic replay of the conference call may be accessed following the call by dialing 888-203-1112 and entering the passcode 4415545.  The replay will be available through March 23, 2017.

 

About Willdan Group, Inc.

 

Willdan provides professional consulting and technical services to utilities, public agencies and private industry throughout the United States. Willdan’s service offerings span a broad set of complementary disciplines that include energy efficiency and sustainability, engineering and planning, financial and economic consulting, and national preparedness. Willdan provides integrated technical solutions to extend the reach and resources of its clients, and provides all services through its subsidiaries specialized in each segment. For additional information, visit Willdan's website at www.willdan.com.

 

Use of Non-GAAP Financial Measures

 

“Revenue, net of subcontractor services and other direct costs,” a non-GAAP financial measure, is a supplemental measure that Willdan believes enhances investors' ability to analyze our business trend and performance because it substantially measures the work performed by our employees. In the course of providing services, Willdan routinely subcontracts various services. Generally, these subcontractor services and other direct costs are passed through to our clients and, in accordance with Generally Accepted Accounting Principles (“GAAP”) and industry practice, are included in our revenue when it is our contractual responsibility to procure or manage these activities. Because subcontractor services and other direct costs can vary significantly from project to project and period to period, changes in revenue may not necessarily be indicative of our business trends. Accordingly, Willdan segregates costs from revenue to promote a better understanding of our business by evaluating revenue exclusive of costs associated with external service providers. A reconciliation of contract revenue as reported in accordance with GAAP to revenue, net of subcontractor services and other direct costs is provided at the end of this news release.

 

EBITDA is a supplemental measure used by Willdan’s management to measure its operating performance. Willdan defines EBITDA as net income (loss) plus interest expense (income), income tax expense (benefit), interest accretion and depreciation and amortization. EBITDA is not a measure of net income (loss) determined in accordance with U.S. generally accepted accounting principles, or GAAP. Willdan believes EBITDA is useful because it allows Willdan’s management to evaluate its operating performance and compare the results of its operations from period to period and against its peers without regard to its financing methods, capital structure and non-operating expenses. Willdan uses EBITDA to evaluate its performance for, among other things, budgeting, forecasting and incentive compensation purposes.

 

EBITDA has limitations as an analytical tool and should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP. Certain items excluded from EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s costs of capital, as well as the historical costs of depreciable assets. Willdan’s definition of EBITDA may also differ from those of many companies reporting similarly named measures. Willdan believes EBITDA is useful to investors, research analysts, investment bankers and lenders because it removes the impact of certain non-operational items from its operational results, which may facilitate comparison of its results from period to period.  A reconciliation of net income as reported in accordance with GAAP to EBITDA is provided at the end of this news release.

 

Willdan's definition of Revenue, net of subcontractor services and other direct costs, and EBITDA may differ from other companies reporting similarly named measures. These measures should be considered in addition to, and not as a substitute for, or superior to, other measures of financial performance prepared in accordance with GAAP, such as contract revenue and net income.

 


 

Willdan Group

Page 5 of 10

Forward Looking Statements

 

Statements in this press release that are not purely historical, including statements regarding Willdan's intentions, hopes, beliefs, expectations, representations, projections, estimates, plans or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties including, but not limited to, the risk that Willdan will not be able to expand its services or meet the needs of customers in markets in which it operates. It is important to note that Willdan's actual results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, Willdan’s failure to execute on existing projects, inability to integrate recent acquisitions, including its acquisition of substantially all of the assets of Genesys, a slowdown in the local and regional economies of the states where Willdan conducts business, Willdan’s inability to successfully implement its tax strategy and the loss of or inability to hire additional qualified professionals. Willdan's business could be affected by a number of other factors, including the risk factors listed from time to time in Willdan's SEC reports including, but not limited to, the Annual Report on Form 10-K filed for the year ended January 1, 2016. Willdan cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Willdan disclaims any obligation to, and does not undertake to, update or revise any forward-looking statements in this press release.


 

Willdan Group

Page 6 of 10

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

December 30,

 

January 1,

 

 

    

2016

    

2016

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

22,668,000

 

$

16,487,000

 

Accounts receivable, net of allowance for doubtful accounts of $785,000 and $760,000 at December 30, 2016 and January 1, 2016, respectively

 

 

30,285,000

 

 

17,929,000

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

 

18,988,000

 

 

13,840,000

 

Other receivables

 

 

699,000

 

 

177,000

 

Prepaid expenses and other current assets

 

 

2,601,000

 

 

2,082,000

 

Total current assets

 

 

75,241,000

 

 

50,515,000

 

Equipment and leasehold improvements, net

 

 

4,511,000

 

 

3,684,000

 

Goodwill

 

 

21,947,000

 

 

16,097,000

 

Other intangible assets, net

 

 

5,941,000

 

 

1,545,000

 

Other assets

 

 

707,000

 

 

504,000

 

Total assets

 

$

108,347,000

 

$

72,345,000

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

17,395,000

 

$

5,561,000

 

Accrued liabilities

 

 

19,049,000

 

 

10,334,000

 

Contingent consideration payable

 

 

1,925,000

 

 

1,420,000

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

 

8,377,000

 

 

6,218,000

 

Notes payable

 

 

3,972,000

 

 

4,039,000

 

Capital lease obligations

 

 

334,000

 

 

444,000

 

Total current liabilities

 

 

51,052,000

 

 

28,016,000

 

Contingent consideration payable

 

 

2,537,000

 

 

4,305,000

 

Notes payable

 

 

2,074,000

 

 

1,085,000

 

Capital lease obligations, less current portion

 

 

210,000

 

 

255,000

 

Deferred lease obligations

 

 

714,000

 

 

737,000

 

Deferred income taxes, net

 

 

1,842,000

 

 

331,000

 

Total liabilities

 

 

58,429,000

 

 

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; 8,348,000 and 7,904,000 shares issued and outstanding at December 30, 2016 and January 1, 2016, respectively

 

 

83,000

 

 

79,000

 

Additional paid-in capital

 

 

42,376,000

 

 

38,377,000

 

Retained earnings (accumulated deficit)

 

 

7,459,000

 

 

(840,000)

 

Total stockholders’ equity

 

 

49,918,000

 

 

37,616,000

 

Total liabilities and stockholders’ equity

 

$

108,347,000

 

$

72,345,000

 


 

Willdan Group

Page 7 of 10

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 30,

    

January 1,

 

December 30,

    

January 1,

 

 

    

2016

 

2016

    

2016

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract revenue

 

$

57,425,000

 

$

31,522,000

    

$

208,941,000

 

$

135,103,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and wages

 

 

10,271,000

 

 

7,940,000

 

 

39,024,000

 

 

31,880,000

 

Subcontractor services and other direct costs

 

 

29,075,000

 

 

10,488,000

 

 

104,236,000

 

 

50,200,000

 

Total direct costs of contract revenue

 

 

39,346,000

 

 

18,428,000

 

 

143,260,000

 

 

82,080,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and wages, payroll taxes and employee benefits

 

 

8,049,000

 

 

6,748,000

 

 

31,084,000

 

 

25,741,000

 

Facilities and facility related

 

 

1,107,000

 

 

1,043,000

 

 

4,085,000

 

 

4,246,000

 

Stock-based compensation

 

 

507,000

 

 

309,000

 

 

1,239,000

 

 

777,000

 

Depreciation and amortization

 

 

896,000

 

 

796,000

 

 

3,204,000

 

 

2,072,000

 

Other

 

 

4,831,000

 

 

3,742,000

 

 

14,525,000

 

 

12,657,000

 

Total general and administrative expenses

 

 

15,390,000

 

 

12,638,000

 

 

54,137,000

 

 

45,493,000

 

Income from operations

 

 

2,689,000

 

 

456,000

 

 

11,544,000

 

 

7,530,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 —

 

 

(1,000)

 

 

 —

 

 

 —

 

Interest expense

 

 

(42,000)

 

 

135,000

 

 

(179,000)

 

 

(207,000)

 

Other, net

 

 

 —

 

 

 —

 

 

2,000

 

 

18,000

 

Total other expense, net

 

 

(42,000)

 

 

134,000

 

 

(177,000)

 

 

(189,000)

 

Income before income taxes

 

 

2,647,000

 

 

590,000

 

 

11,367,000

 

 

7,341,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

1,078,000

 

 

210,000

 

 

3,068,000

 

 

3,082,000

 

Net income

 

$

1,569,000

 

$

380,000

 

$

8,299,000

 

$

4,259,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.19

 

$

0.05

 

$

1.01

 

$

0.54

 

Diluted

 

$

0.18

 

$

0.05

 

$

0.97

 

$

0.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

8,334,000

 

 

7,888,000

 

 

8,219,000

 

 

7,834,000

 

Diluted

 

 

8,959,000

 

 

8,132,000

 

 

8,565,000

 

 

8,113,000

 

 


 

Willdan Group

Page 8 of 10

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

December 30,

    

January 1,

 

 

 

    

2016

 

2016

    

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

8,299,000

 

$

4,259,000

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,220,000

 

 

2,072,000

 

 

Deferred income taxes

 

 

1,225,000

 

 

1,758,000

 

 

Lease abandonment expense (recovery), net

 

 

 —

 

 

(44,000)

 

 

Loss on sale/disposal of equipment

 

 

4,000

 

 

(37,000)

 

 

Provision for doubtful accounts

 

 

216,000

 

 

659,000

 

 

Stock-based compensation

 

 

1,239,000

 

 

777,000

 

 

Accretion and fair value adjustments of contingent consideration

 

 

21,000

 

 

547,000

 

 

Changes in operating assets and liabilities, net of effects from business acquisitions:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

1,288,000

 

 

(4,354,000)

 

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

 

(4,057,000)

 

 

(1,180,000)

 

 

Other receivables

 

 

82,000

 

 

31,000

 

 

Prepaid expenses and other current assets

 

 

(519,000)

 

 

203,000

 

 

Other assets

 

 

(169,000)

 

 

31,000

 

 

Accounts payable

 

 

206,000

 

 

1,842,000

 

 

Accrued liabilities

 

 

8,409,000

 

 

(1,320,000)

 

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

 

2,159,000

 

 

2,285,000

 

 

Deferred lease obligations

 

 

(23,000)

 

 

573,000

 

 

Net cash provided by operating activities

 

 

21,600,000

 

 

8,102,000

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of equipment and leasehold improvements

 

 

(1,662,000)

 

 

(2,475,000)

 

 

Proceeds from sale of equipment

 

 

15,000

 

 

7,000

 

 

Cash paid for acquisitions, net of cash acquired

 

 

(8,857,000)

 

 

(8,168,000)

 

 

Net cash used in investing activities

 

 

(10,504,000)

 

 

(10,636,000)

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Payments on contingent consideration

 

 

(1,284,000)

 

 

 —

 

 

Payments on notes payable

 

 

(4,378,000)

 

 

(2,090,000)

 

 

Proceeds from notes payable

 

 

733,000

 

 

2,606,000

 

 

Principal payments on capital lease obligations

 

 

(522,000)

 

 

(350,000)

 

 

Proceeds from stock option exercise

 

 

327,000

 

 

512,000

 

 

Proceeds from sales of common stock under employee stock purchase plan

 

 

209,000

 

 

170,000

 

 

Net cash (used in) provided by financing activities

 

 

(4,915,000)

 

 

848,000

 

 

Net increase (decrease) in cash and cash equivalents

 

 

6,181,000

 

 

(1,686,000)

 

 

Cash and cash equivalents at beginning of period

 

 

16,487,000

 

 

18,173,000

 

 

Cash and cash equivalents at end of period

 

$

22,668,000

 

$

16,487,000

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

Interest

 

$

179,000

 

$

203,000

 

 

Income taxes

 

 

1,875,000

 

 

949,000

 

 

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

 

 

 —

 

 

5,178,000

 

 

Equipment acquired under capital leases

 

 

373,000

 

 

420,000

 

 

 


 

Willdan Group

Page 9 of 10

Willdan Group, Inc. and Subsidiaries

Reconciliation of GAAP Revenue and “Revenue, Net of Subcontractor Services and Other Direct Costs”

(Non-GAAP Measure)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 30,

 

January 1,

 

December 30,

 

January 1,

 

 

    

2016

    

2016

    

2016

    

2016

 

Contract revenue

 

$

57,425,000

 

$

31,522,000

 

$

208,941,000

 

$

135,103,000

 

Subcontractor services and other direct costs

 

 

29,075,000

 

 

10,488,000

 

 

104,236,000

 

 

50,200,000

 

Revenue, net of subcontractor services and other direct costs

 

$

28,350,000

 

$

21,034,000

 

$

104,705,000

 

$

84,903,000

 

 


 

Willdan Group

Page 10 of 10

Willdan Group, Inc. and Subsidiaries

Reconciliation of GAAP Net Income to EBITDA

(Non-GAAP Measure)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 30,

    

January 1,

 

December 30,

    

January 1,

 

 

    

2016

 

2016

    

2016

 

2016

 

Net income

    

$

1,569,000

 

$

380,000

 

$

8,299,000

 

$

4,259,000

 

Interest income

 

 

 —

 

 

1,000

 

 

 —

 

 

 —

 

Interest expense

 

 

42,000

 

 

(135,000)

 

 

179,000

 

 

207,000

 

Income tax expense

 

 

1,078,000

 

 

210,000

 

 

3,068,000

 

 

3,082,000

 

Interest accretion(1)

 

 

161,000

 

 

547,000

 

 

439,000

 

 

547,000

 

Depreciation and amortization

 

 

896,000

 

 

796,000

 

 

3,204,000

 

 

2,072,000

 

EBITDA

 

$

3,746,000

 

$

1,799,000

 

$

15,189,000

 

$

10,167,000

 


(1)

Interest accretion represents the imputed interest on the earn-out payments to be paid by us in connection with our acquisitions of Abacus and 360 Energy in January 2015. 


 

Willdan Group

Page 11 of 10

Contact:

 

Willdan Group, Inc.

Stacy McLaughlin

Chief Financial Officer

Tel: 714-940-6300

smclaughlin@willdan.com 

 

Or

 

Investor/Media Contact

Financial Profiles, Inc.

Tony Rossi

Tel: 310-622-8221

trossi@finprofiles.com