Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2017	May 04, 2017
Document and Entity Information
Entity Registrant Name	Willdan Group, Inc.
Entity Central Index Key	0001370450
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-29
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		8,608,561
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2017	Dec. 30, 2016
Current assets:
Cash and cash equivalents	$ 19,440,000	$ 22,668,000
Accounts receivable, net of allowance for doubtful accounts of $793,000 and $785,000 at March 31, 2017 and December 30, 2016, respectively	31,240,000	30,285,000
Costs and estimated earnings in excess of billings on uncompleted contracts	29,179,000	18,988,000
Other receivables	228,000	699,000
Prepaid expenses and other current assets	3,160,000	2,601,000
Total current assets	83,247,000	75,241,000
Equipment and leasehold improvements, net	4,755,000	4,511,000
Goodwill	21,947,000	21,947,000
Other intangible assets, net	5,393,000	5,941,000
Other assets	682,000	707,000
Total assets	116,024,000	108,347,000
Current liabilities:
Accounts payable	19,870,000	17,395,000
Accrued liabilities	22,426,000	19,049,000
Contingent consideration payable	1,375,000	1,925,000
Billings in excess of costs and estimated earnings on uncompleted contracts	8,121,000	8,377,000
Notes payable	3,275,000	3,972,000
Capital lease obligations	293,000	334,000
Total current liabilities	55,360,000	51,052,000
Contingent consideration payable	1,745,000	2,537,000
Notes payable	1,500,000	2,074,000
Capital lease obligations, less current portion	162,000	210,000
Deferred lease obligations	708,000	714,000
Deferred income taxes, net	1,870,000	1,842,000
Total liabilities	61,345,000	58,429,000
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; 8,559,000 and 8,348,000 shares issued and outstanding at March 31, 2017 and December 30, 2016, respectively	86,000	83,000
Additional paid-in capital	44,493,000	42,376,000
Retained earnings (accumulated deficit)	10,100,000	7,459,000
Total stockholders' equity	54,679,000	49,918,000
Total liabilities and stockholders' equity	$ 116,024,000	$ 108,347,000

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Mar. 31, 2017	Dec. 30, 2016
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 793,000	$ 785,000
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	8,559,000	8,348,000
Common stock, shares outstanding	8,559,000	8,348,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Mar. 31, 2017	Apr. 01, 2016
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Contract revenue	$ 68,351,000	$ 33,915,000
Direct costs of contract revenue (exclusive of depreciation and amortization shown separately below):
Salaries and wages	10,801,000	8,534,000
Subcontractor services and other direct costs	39,895,000	11,733,000
Total direct costs of contract revenue	50,696,000	20,267,000
General and administrative expenses:
Salaries and wages, payroll taxes and employee benefits	9,315,000	6,761,000
Facilities and facility related	1,124,000	1,110,000
Stock-based compensation	476,000	207,000
Depreciation and amortization	909,000	610,000
Other	3,867,000	3,122,000
Total general and administrative expenses	15,691,000	11,810,000
Income from operations	1,964,000	1,838,000
Other income (expense)
Interest expense	(33,000)	(50,000)
Other, net	37,000	1,000
Total other (expense) income, net	4,000	(49,000)
Income before income taxes	1,968,000	1,789,000
Income tax expense (benefit)	(673,000)	711,000
Net income	$ 2,641,000	$ 1,078,000
Earnings per share:
Basic (in dollars per share)	$ 0.32	$ 0.13
Diluted (in dollars per share)	$ 0.30	$ 0.13
Weighted-average shares outstanding:
Basic (in shares)	8,281,000	7,996,000
Diluted (in shares)	8,854,000	8,244,000

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 3 months ended Mar. 31, 2017 - USD ($)	Common Stock	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit.)	Total
Balances at Dec. 30, 2016	$ 83,000	$ 42,376,000	$ 7,459,000	$ 49,918,000
Balances (in shares) at Dec. 30, 2016	8,348,000			8,348,000
Increase (Decrease) in Stockholders' Equity
Shares of common stock issued in connection with employee stock purchase plan	$ 1,000	343,000		$ 344,000
Shares of common stock issued in connection with employee stock purchase plan (in shares)	38,000
Shares of common stock issued in connection with incentive stock plan	$ 2,000	1,298,000		1,300,000
Shares of common stock issued in connection with incentive stock plan (in shares)	173,000
Stock-based compensation expense		476,000		476,000
Net income			2,641,000	2,641,000
Balances at Mar. 31, 2017	$ 86,000	$ 44,493,000	$ 10,100,000	$ 54,679,000
Balances (in shares) at Mar. 31, 2017	8,559,000			8,559,000

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2017	Apr. 01, 2016
Cash flows from operating activities:
Net income	$ 2,641,000	$ 1,078,000
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	919,000	610,000
Deferred income taxes, net	28,000	269,000
Provision for doubtful accounts	8,000	31,000
Stock-based compensation	476,000	207,000
Accretion and fair value adjustments of contingent consideration	167,000	(28,000)
Changes in operating assets and liabilities, net of effects from business acquisitions:
Accounts receivable	(963,000)	(2,259,000)
Costs and estimated earnings in excess of billings on uncompleted contracts	(10,191,000)	(2,231,000)
Other receivables	471,000	(20,000)
Prepaid expenses and other current assets	(559,000)	(236,000)
Other assets	25,000	10,000
Accounts payable	2,475,000	(636,000)
Accrued liabilities	3,377,000	(864,000)
Billings in excess of costs and estimated earnings on uncompleted contracts	(256,000)	2,410,000
Deferred lease obligations	(6,000)	32,000
Net cash provided by operating activities	(1,388,000)	(1,627,000)
Cash flows from investing activities:
Purchase of equipment and leasehold improvements	(583,000)	(257,000)
Cash paid for acquisitions, net of cash acquired		(8,857,000)
Net cash used in investing activities	(583,000)	(9,114,000)
Cash flows from financing activities:
Payments on contingent consideration	(1,508,000)
Payments on notes payable	(1,272,000)	(939,000)
Principal payments on capital lease obligations	(121,000)	(128,000)
Proceeds from stock option exercise	1,300,000	47,000
Proceeds from sales of common stock under employee stock purchase plan	344,000	113,000
Net cash (used in) provided by financing activities	(1,257,000)	(907,000)
Net increase (decrease) in cash and cash equivalents	(3,228,000)	(11,648,000)
Cash and cash equivalents at beginning of period	22,668,000	16,487,000
Cash and cash equivalents at end of period	19,440,000	4,839,000
Cash paid during the period for:
Interest	33,000	49,000
Income taxes	249,000	686,000
Supplemental disclosures of noncash investing and financing activities:
Issuance of notes payable related to business acquisitions		4,569,000
Issuance of common stock related to business acquisitions		2,230,000
Equipment acquired under capital leases	$ 32,000	$ 884,000

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

3 Months Ended

Mar. 31, 2017

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

March 31, 2017
(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 2016 Annual Report on Form 10-K filed on March 10, 2017.

Nature of Business

Willdan Group, Inc. and subsidiaries (the “Company”) is a provider of professional technical and consulting services, including comprehensive energy efficiency services, 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, New Jersey, Ohio, 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.

As of March 30, 2017, the Company had one variable interest entity (“VIE”). The Company manages the VIE and has the power to direct the activities that most significantly impact the joint venture’s performance, in addition to being obligated to absorb expected losses or receive benefits from the joint venture. Accordingly, the Company is the primary beneficiary of this VIE and consolidates the entity.

The Company accounts for variable interest entities in accordance with ASC 810, Consolidation (“ASC 810”). Under ASC 810, a VIE is created when: (a) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by other parties, including the equity holders; (b) the entity’s equity holders as a group either (i) lack the direct or indirect ability to make decisions about the entity, (ii) are not obligated to absorb expected losses of the entity or (iii) do not have the right to receive expected residual returns of the entity; or (c) the entity’s equity holders have voting rights that are not proportionate to their economic interests, and the activities of the entity involve or are conducted on behalf of the equity holder with disproportionately few voting rights. If an entity is deemed to be a VIE pursuant to ASC 810, the enterprise that has both (i) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb the expected losses of the entity or right to receive benefits from the entity that could be potentially significant to the VIE is considered the primary beneficiary and must consolidate the VIE. In accordance with ASC 810, the Company performs ongoing reassessments of whether an enterprise is the primary beneficiary of a VIE.

Segment Information

Willdan Group, Inc. is a holding company with six wholly owned subsidiaries. The Company presents segment information externally consistent with the manner in which the Company’s chief operating decision maker reviews information to assess performance and allocate resources. Willdan Group, Inc. performs administrative functions on behalf of its subsidiaries, such as treasury, legal, accounting, information systems, human resources and certain business development activities, and earns revenue that is only incidental to the activities of the enterprise. As a result, Willdan Group, Inc. does not meet the definition of an operating segment. Three of the six Willdan Group, Inc. subsidiaries are aggregated into one reportable segment as they have similar economic characteristics including the nature of services, the methods used to provide services and the type of customers. The remaining three subsidiaries each comprise separate reporting segments.

Contract Accounting

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	Time-and-materials, unit-based and fixed price (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. Many of the Company’s fixed price contracts involve a high degree of subcontracted fixed price effort and are relatively short in duration, thereby lowering the risks of not properly estimating the percent complete. Revenue on time-and-materials and unit-based contracts is recognized as the work is performed in accordance with the specific rates and 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 allowances for doubtful accounts through specific identification of amounts considered to be uncollectible and potential write-offs, plus a non-specific allowance for other amounts for which some potential loss has been determined to be probable based on current and past experience. The Company’s credit risk is minimal with governmental entities and large public utilities, 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 March 31, 2017 and December 30, 2016, the Company had retained accounts receivable of approximately $6.2 million and $5.2 million, respectively.

Goodwill

Goodwill represents the excess of costs over fair value of the assets acquired. The Company completes its annual testing of goodwill as of the last day of the first month of its fourth fiscal quarter each year to determine whether there is impairment. 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. Impairment losses for reporting units are recognized to the extent that a reporting unit’s carrying amount exceeds its fair value.

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 $19.4 million of cash and cash equivalents as of March 31, 2017. 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, N.A. (“BMO”), which matures on January 20, 2020 (see Note 7). The Company believes that its cash and cash equivalents on hand, cash generated by operating activities and funds available under its line of credit (if needed and if available) will be sufficient to finance its operating activities for at least the next 12 months.

Recent Accounting Pronouncements

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, 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 FASB issued ASU 2014-09, Revenue from Contracts with Customers, 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 defers 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. In December 2016, the FASB issued ASU 2016-20, Revenue from Contracts with Customers (Topic 606), which further clarifies the current revenue recognition guidance. This update is intended to increase stakeholders’ awareness of the proposals and to expedite improvements to ASU 2014-09. The Company is continuing to evaluate the impact that the new standard will have on the contract portfolio. The Company’s approach will include a detailed review of contracts and comparing historical accounting policies and practices to the new standard. Because the standard may impact the Company’s business processes, systems and controls, the Company will also develop a comprehensive change management plan to guide the implementation if, and as needed. The Company will adopt the requirements of the new standard effective December 30, 2017 and the Company has not yet selected a transition method. The Company is currently evaluating the impact the adoption of ASU 2016-20 will have on the Company’s consolidated financial statements and related disclosures. The Company will adopt the requirements of the new standard effective December 30, 2017, and the Company has not yet selected a transition method.

Stock Compensation

In March 2016, the FASB issued ASU 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 elected to early adopt ASU 2016-09 on a prospective basis in 2016.

Business Combinations

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), which specifies the definition of a business that affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The Company does not believe the guidance will have a material impact on its consolidated financial statements.

Leases

In February 2016, the FASB issued ASU 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.

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

3 Months Ended

Mar. 31, 2017

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 Willdan Group, Inc., 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 the Company’s 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) 255,808 shares of common stock, par value $0.01 per share, of Willdan Group, Inc. (the “Common Stock”), with a fair value on the date of closing of $2.2 million, (iii) $4.6 million in cash, payable in twenty-four (24) equal monthly installments beginning on March 26, 2016 (the “Installment Payments”), and (iv) offset by a $0.6 million receivable paid to WES for working capital adjustments. 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 at closing.

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’ engineering services. 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 a business combination 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 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 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

During the three months ended March 31, 2017, the acquisition of substantially all of the assets of Genesys contributed $22.0 million in revenue and $0.8 million of income from operations. There were no acquisition costs recorded during the three months ended March 31, 2017.

- 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
-SubTopic 10
-Section 50
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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+ Details

GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2017

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

3.GOODWILL AND OTHER INTANGIBLE ASSETS

As of March 31, 2017, the Company had $21.9 million of goodwill, which primarily relates to the Energy Efficiency Services reporting segment and the acquisition of substantially all of the assets of Genesys and 360 Energy Engineers, LLC (“360 Energy”) and the acquisition of Abacus Resource Management Company (“Abacus”) and also relates to the Public Finance Services reporting segment and the acquisition of Economists.com LLC. There were no changes in the carrying value of goodwill by reporting unit for the three months ended March 31, 2017 as the following table indicates:


	December 30,						March 31,
	2016		Additions		Adjustments		2017
Reporting Unit:
Energy Efficiency Services	$	21,198,000	$	—	$	—	$	21,198,000
Financial Services		749,000		—		—		749,000
	$	21,947,000	$	—	$	—	$	21,947,000

The gross amounts and accumulated amortization of the Company’s acquired identifiable intangible assets with finite useful lives as of March 31, 2017 included in other intangible assets, net in the accompanying condensed consolidated balance sheets, were as follows:


	March 31, 2017				December 30, 2016
	Gross		Accumulated		Gross		Accumulated		Amortization
	Amount		Amortization		Amount		Amortization		Period (yrs)
Backlog	$	1,398,000	$	726,000	$	1,398,000	$	639,000			5.0
Tradename		2,739,000		1,370,000		2,739,000		1,142,000	2.5	-	3.5
Non-compete agreements		1,331,000		533,000		1,331,000		463,000			4.0
Customer relationships		3,260,000		706,000		3,260,000		543,000			5.0
	$	8,728,000	$	3,335,000	$	8,728,000	$	2,787,000

The Company’s amortization expense for acquired identifiable intangible assets with finite useful lives was $0.5 million for the fiscal three months ended March 31, 2017 as compared to $0.3 million for the fiscal three months ended April 1, 2016. Estimated amortization expense for acquired identifiable intangible assets for the remainder of fiscal 2017 is $1.6 million and the succeeding years are as follows:


Fiscal year:
2018	$	1,951,000
2019		1,087,000
2020		674,000
2021		109,000
	$	3,821,000

- 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)

3 Months Ended

Mar. 31, 2017

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
	March 31,		April 1,
	2017		2016
Net income	$	2,641,000	$	1,078,000
Weighted-average common shares outstanding		8,281,000		7,996,000
Effect of dilutive stock options and restricted stock awards		573,000		248,000
Weighted-average common stock outstanding-diluted		8,854,000		8,244,000
Earnings per share:
Basic	$	0.32	$	0.13
Diluted	$	0.30	$	0.13

For the three months ended March 31, 2017, 10,000 options were excluded from the calculation of dilutive potential common shares, as compared to 516,000 options for the three months ended April 1, 2016. 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 2017 and 2016 periods. Accordingly, the inclusion of these options would have been anti-dilutive.

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

3 Months Ended

Mar. 31, 2017

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

5.EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Equipment and leasehold improvements consist of the following:


	March 31,		December 30,
	2017		2016
Furniture and fixtures	$	2,705,000	$	2,353,000
Computer hardware and software		7,815,000		7,686,000
Leasehold improvements		1,116,000		1,094,000
Equipment under capital leases		972,000		1,076,000
Automobiles, trucks, and field equipment		1,526,000		1,446,000
		14,134,000		13,655,000
Accumulated depreciation and amortization		(9,379,000)		(9,144,000)
Equipment and leasehold improvements, net	$	4,755,000	$	4,511,000

ACCRUED LIABILITIES

3 Months Ended

Mar. 31, 2017

ACCRUED LIABILITIES

ACCRUED LIABILITIES

6.ACCRUED LIABILITIES

Accrued liabilities consist of the following:


	March 31,		December 30,
	2017		2016
Accrued bonuses	$	1,014,000	$	2,090,000
Accrued interest		2,000		1,000
Paid leave bank		2,291,000		2,129,000
Compensation and payroll taxes		1,243,000		2,006,000
Accrued legal		154,000		177,000
Accrued workers’ compensation insurance		185,000		81,000
Accrued rent		174,000		166,000
Employee withholdings		1,132,000		1,337,000
Client deposits		155,000		139,000
Unvouchered accounts payable		14,761,000		8,100,000
Other		1,315,000		2,823,000
Total accrued liabilities	$	22,426,000	$	19,049,000

DEBT

3 Months Ended

Mar. 31, 2017

DEBT

DEBT

7.DEBT

Total debt obligations consist of the following:


	March 31,		December 30,
	2017		2016
Outstanding borrowings on revolving credit facility	$	1,500,000	$	—
Outstanding borrowings on delayed draw term loan		—		1,500,000
Notes payable for 360 Energy, bearing interest at 4%, payable in monthly principal and interest installments of $88,752 through December 2017.		773,000		1,031,000
Notes payable for Abacus, bearing interest at 4%, payable in monthly principal and interest installments of $54,281 through January 2017.		—		54,000
Notes payable for insurance, bearing interest at 2.98%, payable in monthly principal and interest installments of $67,620 through October 2017.		400,000		599,000
Deferred purchase price for the acquisition of substantially all of the assets of Genesys, bearing interest at 0.650%, payable in monthly principal and interest installments of $191,667 through March 2018.		2,102,000		2,862,000
Total debt obligations		4,775,000		6,046,000
Less current portion		3,275,000		3,972,000
Debt obligations, less current portion	$	1,500,000	$	2,074,000

BMO Credit Facility. On January 20, 2017, Willdan Group, Inc. and each of its subsidiaries, as guarantors (the “Guarantors”), entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with BMO as lender. The Credit Agreement amends and extends the Company’s prior credit agreement with BMO (the “Prior Credit Agreement”), which was set to mature on March 24, 2017. The Credit Agreement provides for a $35.0 million revolving line of credit, including a $10.0 million standby letter of credit sub-facility, and matures on January 20, 2020. Subject to satisfying certain conditions described in the Credit Agreement, the Company may request that BMO increase the aggregate amount under the revolving line of credit by up to $25.0 million, for a total facility size of $60.0 million; however, BMO is not obligated to do so. Unlike the Prior Credit Agreement, the revolving line of credit is no longer subject to a borrowing base limitation and the Credit Agreement no longer includes a delayed draw term loan facility.

Borrowings under the Credit Agreement bear interest at a rate equal to either, at the Company’s option, (i) the highest of the prime rate, the Federal Funds Rate plus 0.5% or one-month LIBOR plus 1% (the “Base Rate”) or (ii) LIBOR, in each case plus an applicable margin ranging from 0.25% to 1.00% with respect to Base Rate borrowings and 1.25% to 2.00% with respect to LIBOR borrowings. The applicable margin will be based upon the consolidated leverage ratio of the Company. The Company will also be required to pay a commitment fee for the unused portion of the revolving line of credit, which will range from 0.20% to 0.35% per annum, and fees on any letters of credit drawn under the facility, which will range from 0.94% to 1.50%, in each case, depending on the Company’s consolidated leverage ratio.

Borrowings under the revolving line of credit are guaranteed by all of the Company’s direct and indirect subsidiaries and secured by substantially all of the Company’s and the Guarantors’ assets.

The Credit Agreement contains customary representations and affirmative covenants, including certain notice and financial reporting requirements. The Credit Agreement also requires compliance with financial covenants that require the Company to maintain a maximum total leverage ratio and a minimum fixed charge coverage ratio.

The Credit Agreement includes customary negative covenants, including (i) restrictions on the incurrence of additional indebtedness by the Company or the Guarantors and the incurrence of additional liens on property, (ii) restrictions on permitted acquisitions, including that the total consideration payable for all permitted acquisitions (including potential future earn-out obligations) shall not exceed $20.0 million during the term of the Credit Agreement and the total consideration for any individual permitted acquisition shall not exceed $10.0 million without BMO’s consent, and (iii) limitations on asset sales, mergers and acquisitions. Further, the Credit Agreement limits the payment of future dividends and distributions and share repurchases by the Company; however, the Company is permitted to repurchase up to $8.0 million of shares of common stock under certain conditions, including that, at the time of any such repurchase, (a) the Company is able to meet the financial covenant requirements under the Credit Agreement after giving effect to the share repurchase, (b) the Company has at least $5.0 million of liquidity (unrestricted cash or undrawn availability under the revolving line of credit), and (c) no default exists or would arise under the Credit Agreement after giving effect to such repurchase. In addition, the Credit Agreement includes customary events of default. Upon the occurrence of an event of default, the interest rate will be increased by 2.0%, BMO has the option to make any loans then outstanding under the Credit Agreement immediately due and payable, and BMO is no longer obligated to extend further credit to the Company under the Credit Agreement.

To finance the acquisitions of Abacus and substantially all of the assets of 360 Energy on January 15, 2015, the Company borrowed $2.0 million under its delayed draw term loan facility pursuant to the Company’s Prior Credit Agreement. On January 20, 2017, the remaining $1.5 million of borrowings outstanding under the delayed draw term loan facility was converted into $1.5 million of borrowings under the revolving credit facility pursuant to the Credit Agreement.

As of March 31, 2017, the Company was in compliance with the financial covenants under the Credit Agreement.

Notes Payable. 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 were fully amortizing and payable in equal monthly installments between January 15, 2015 and their January 15, 2017 maturity date. The Abacus Notes contain events of default provisions customary for documents of this nature. Mr. Kinzer and Mr. Rubbert have entered into a Subordination Agreement, dated as of January 15, 2015, in favor of BMO, pursuant to which any indebtedness under the Abacus Notes is subordinated to any indebtedness under the Credit Agreement. From issuance through March 31, 2017, the Company had made principal payments of approximately $0.6 million on each of the Abacus Notes and, as of March 31, 2017, there were no outstanding balances for either of the Abacus Notes.

On January 15, 2015, in connection with the completion of the acquisition of substantially all of the assets 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, pursuant to which any indebtedness under the 360 Energy Note is subordinated to any indebtedness under the Credit Agreement. From issuance through March 31, 2017, the Company had made principal payments of approximately $2.2 million on the 360 Energy Note and, as of March 31, 2017, the outstanding balance was $0.8 million.

Deferred Purchase Price. The Asset Purchase and Merger Agreement for the acquisition of substantially all of the assets of Genesys dated March 4, 2016, included deferred payments to Messrs. Braun and 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. From issuance through March 31, 2017, the Company made payments of $1.2 million inclusive of interest and, as of March 31, 2017, the outstanding balances on the Deferred Payments to each of Messrs. Braun and Mineo was approximately $1.1 million.

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 December 30, 2016, the Company elected to finance its insurance premiums for the upcoming fiscal year. The unpaid balance of the financed premiums totaled $400,000 and $599,000 for the three months ended March 31, 2017 and December 30, 2016, respectively.

COMMITMENTS	3 Months Ended
COMMITMENTS	Mar. 31, 2017
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 member 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	3 Months Ended
INCOME TAXES	Mar. 31, 2017
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 each fiscal year, management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. For fiscal year 2016, the Company ultimately determined that it was more-likely-than-not that the entire California net operating loss will not 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 the Company’s forecasted amount of net operating loss utilization for certain members of the combined group. As a result, the Company recorded a valuation allowance in the amount of $72,000 at the end of fiscal year 2016 related to California net operating losses. There was no change to the valuation allowance as of March 31, 2017. 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 March 31, 2017, the Company recorded a liability of $0.3 million for uncertain tax positions related to miscellaneous tax deductions taken in open tax years. Included in this amount are $0.1 million of tax benefits that, if recognized, would affect the effective tax rate. No interest and penalties have been recorded related to unrecognized tax benefits as of March 31, 2017. Based on management’s estimates and determination of an effective tax rate for the year, the Company recorded an income tax benefit of $0.7 million for the three months ended March 31, 2017, as compared to an income tax expense of $0.7 million for the three months ended April 1, 2016. During the three months ended March 31, 2017, the difference between the tax benefit recorded and the expense that would be recorded by applying the federal statutory rate is primarily attributable to tax deductions related to stock option exercises which were significant in the three months ended March 31, 2017. In accordance with ASU 2016-09 (see Note 1 “—Basis of Presentation, Organization and Operations of the Company”), the income tax benefit related to stock option exercises has been included as a reduction of 55.5% to the Company’s effective tax rate for the quarter ended March 31, 2017. The effective tax rate also varies from the federal statutory rate due to the impact of state income tax expense, an adjustment to the estimate of the deferred tax asset related to stock options from fiscal year 2016, and certain expenses that are non-deductible for tax purposes, including meals and entertainment, compensation expense related to incentive stock options, and employee gifts.

SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2017

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 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 2016 Annual Report on Form 10-K filed on March 10, 2017. There were no intersegment sales in the three month periods ended March 31, 2017 and April 1, 2016. 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 months ended March 31, 2017 and as of and for the fiscal three months ended April 1, 2016 is as follows:


	Energy				Public		Homeland
	Efficiency		Engineering		Finance		Security		Unallocated				Consolidated
	Services		Services		Services		Services		Corporate		Intersegment		Total
Fiscal Three Months Ended March 31, 2017
Contract revenue	$	50,114,000	$	14,376,000	$	3,238,000	$	623,000	$	—	$	—	$	68,351,000
Segment profit (loss) before income tax expense		283,000		1,991,000		186,000		(26,000)		(466,000)		—		1,968,000
Net income (loss)		379,000		2,673,000		249,000		(35,000)		(625,000)		—		2,641,000
Segment assets(1)		74,185,000		13,059,000		5,834,000		796,000		45,280,000		(23,130,000)		116,024,000
Fiscal Three Months Ended April 1, 2016
Contract revenue	$	18,979,000	$	11,262,000	$	2,989,000	$	685,000	$	—	$	—	$	33,915,000
Segment profit (loss) before income tax expense		890,000		1,067,000		50,000		25,000		(243,000)		—		1,789,000
Net income (loss)		536,000		643,000		30,000		15,000		(146,000)		—		1,078,000
Segment assets(1)		66,886,000		13,983,000		5,964,000		1,369,000		28,310,000		(23,130,000)		93,382,000

(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
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 33
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 29
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599

+ Details

CONTINGENCIES	3 Months Ended
CONTINGENCIES	Mar. 31, 2017
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 alleged 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 City of Glendale sought monetary damages. The Company denied the allegations asserted in the lawsuit. The City of Glendale and the Company have settled this suit within insurance policy limits. The City of Glendale agreed to voluntarily dismiss the suit with prejudice and agreed to release any and all claims that it may have against the Company, whether known or unknown, pertaining to the subject matter of the suit. The settlement does not impose any restrictions on the Company.

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

3 Months Ended

Mar. 31, 2017

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

Basis of Presentation

Principles of Consolidation

Segment Information

Accounting for Contracts

Contract Accounting


	Types of Contract
Segment	(Revenue Recognition Method)
Energy Efficiency Services	Time-and-materials, unit-based and fixed price (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

New Accounting Pronouncements

Recent Accounting Pronouncements

Statement of Cash Flows

Revenue Recognition

Stock Compensation

Business Combinations

Leases

Proposed Accounting Standards

BUSINESS COMBINATIONS (Tables)

3 Months Ended

Mar. 31, 2017

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

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2017

GOODWILL AND OTHER INTANGIBLE ASSETS

Schedule of changes in carrying value of goodwill by reporting unit


	December 30,						March 31,
	2016		Additions		Adjustments		2017
Reporting Unit:
Energy Efficiency Services	$	21,198,000	$	—	$	—	$	21,198,000
Financial Services		749,000		—		—		749,000
	$	21,947,000	$	—	$	—	$	21,947,000

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


	March 31, 2017				December 30, 2016
	Gross		Accumulated		Gross		Accumulated		Amortization
	Amount		Amortization		Amount		Amortization		Period (yrs)
Backlog	$	1,398,000	$	726,000	$	1,398,000	$	639,000			5.0
Tradename		2,739,000		1,370,000		2,739,000		1,142,000	2.5	-	3.5
Non-compete agreements		1,331,000		533,000		1,331,000		463,000			4.0
Customer relationships		3,260,000		706,000		3,260,000		543,000			5.0
	$	8,728,000	$	3,335,000	$	8,728,000	$	2,787,000

Schedule of estimated amortization expense for acquired identifiable intangible assets


Fiscal year:
2018	$	1,951,000
2019		1,087,000
2020		674,000
2021		109,000
	$	3,821,000

EARNINGS PER SHARE ("EPS") (Tables)

3 Months Ended

Mar. 31, 2017

EARNINGS PER SHARE (EPS)

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


	Three months ended
	March 31,		April 1,
	2017		2016
Net income	$	2,641,000	$	1,078,000
Weighted-average common shares outstanding		8,281,000		7,996,000
Effect of dilutive stock options and restricted stock awards		573,000		248,000
Weighted-average common stock outstanding-diluted		8,854,000		8,244,000
Earnings per share:
Basic	$	0.32	$	0.13
Diluted	$	0.30	$	0.13

EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Tables)

3 Months Ended

Mar. 31, 2017

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Schedule of equipment and leasehold improvements


	March 31,		December 30,
	2017		2016
Furniture and fixtures	$	2,705,000	$	2,353,000
Computer hardware and software		7,815,000		7,686,000
Leasehold improvements		1,116,000		1,094,000
Equipment under capital leases		972,000		1,076,000
Automobiles, trucks, and field equipment		1,526,000		1,446,000
		14,134,000		13,655,000
Accumulated depreciation and amortization		(9,379,000)		(9,144,000)
Equipment and leasehold improvements, net	$	4,755,000	$	4,511,000

ACCRUED LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2017

ACCRUED LIABILITIES

Schedule of accrued liabilities


	March 31,		December 30,
	2017		2016
Accrued bonuses	$	1,014,000	$	2,090,000
Accrued interest		2,000		1,000
Paid leave bank		2,291,000		2,129,000
Compensation and payroll taxes		1,243,000		2,006,000
Accrued legal		154,000		177,000
Accrued workers’ compensation insurance		185,000		81,000
Accrued rent		174,000		166,000
Employee withholdings		1,132,000		1,337,000
Client deposits		155,000		139,000
Unvouchered accounts payable		14,761,000		8,100,000
Other		1,315,000		2,823,000
Total accrued liabilities	$	22,426,000	$	19,049,000

DEBT (Tables)

3 Months Ended

Mar. 31, 2017

DEBT

Schedule of debt obligations, excluding obligations under capital leases


	March 31,		December 30,
	2017		2016
Outstanding borrowings on revolving credit facility	$	1,500,000	$	—
Outstanding borrowings on delayed draw term loan		—		1,500,000
Notes payable for 360 Energy, bearing interest at 4%, payable in monthly principal and interest installments of $88,752 through December 2017.		773,000		1,031,000
Notes payable for Abacus, bearing interest at 4%, payable in monthly principal and interest installments of $54,281 through January 2017.		—		54,000
Notes payable for insurance, bearing interest at 2.98%, payable in monthly principal and interest installments of $67,620 through October 2017.		400,000		599,000
Deferred purchase price for the acquisition of substantially all of the assets of Genesys, bearing interest at 0.650%, payable in monthly principal and interest installments of $191,667 through March 2018.		2,102,000		2,862,000
Total debt obligations		4,775,000		6,046,000
Less current portion		3,275,000		3,972,000
Debt obligations, less current portion	$	1,500,000	$	2,074,000

SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2017

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 March 31, 2017
Contract revenue	$	50,114,000	$	14,376,000	$	3,238,000	$	623,000	$	—	$	—	$	68,351,000
Segment profit (loss) before income tax expense		283,000		1,991,000		186,000		(26,000)		(466,000)		—		1,968,000
Net income (loss)		379,000		2,673,000		249,000		(35,000)		(625,000)		—		2,641,000
Segment assets(1)		74,185,000		13,059,000		5,834,000		796,000		45,280,000		(23,130,000)		116,024,000
Fiscal Three Months Ended April 1, 2016
Contract revenue	$	18,979,000	$	11,262,000	$	2,989,000	$	685,000	$	—	$	—	$	33,915,000
Segment profit (loss) before income tax expense		890,000		1,067,000		50,000		25,000		(243,000)		—		1,789,000
Net income (loss)		536,000		643,000		30,000		15,000		(146,000)		—		1,078,000
Segment assets(1)		66,886,000		13,983,000		5,964,000		1,369,000		28,310,000		(23,130,000)		93,382,000

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY - Fiscal Years (Details)	3 Months Ended
	Mar. 31, 2017
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
	Mar. 31, 2017 USD ($) entity subsidiary segment	Apr. 01, 2016 USD ($)	Dec. 30, 2016 USD ($)
Accounting for Contracts
Number of VIE \| entity	1
Number of subsidiaries aggregated as one reporting segment \| subsidiary	3
Number of reportable segments into which three of the six subsidiaries are aggregated \| segment	1
Number of subsidiaries each of which comprise separate reporting segments \| subsidiary	3
Payroll taxes, bonuses and employee benefit costs for all Company personnel	$ 9,315,000	$ 6,761,000
Facilities costs	1,124,000	$ 1,110,000
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	$ 6,200,000		$ 5,200,000
Number of wholly owned subsidiaries \| subsidiary	6
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 ($)	3 Months Ended
	Mar. 31, 2017	Dec. 30, 2016	Apr. 01, 2016	Jan. 01, 2016
BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY
Goodwill	$ 21,947,000	$ 21,947,000
Liquidity
Cash and cash equivalents	$ 19,440,000	$ 22,668,000	$ 4,839,000	$ 16,487,000
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 ($)	Mar. 31, 2017 $ / shares	Dec. 30, 2016 $ / shares
BUSINESS COMBINATIONS
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

BUSINESS COMBINATIONS (Acquisitions) (Details)			3 Months Ended		4 Months Ended
BUSINESS COMBINATIONS (Acquisitions) (Details)	Mar. 04, 2016 USD ($) shares	Feb. 26, 2016 USD ($) installment	Mar. 31, 2017 USD ($)	Apr. 01, 2016 USD ($)	Jul. 01, 2016 USD ($)	Dec. 30, 2016 USD ($)
Consideration for acquisitions
Cash paid, net of cash acquired				$ 8,857,000
Short term contingent consideration reversal			$ 1,375,000			$ 1,925,000
Allocation of acquired assets
Goodwill			21,947,000			$ 21,947,000
Revenue and Income from operations
Revenues			68,351,000	33,915,000
Operating Income (Loss)			1,964,000	$ 1,838,000
Acquisition costs			0
Genesys
Consideration for acquisitions
Cash paid at closing		$ 6,000,000			$ 2,900,000
Cash paid, net of cash acquired	$ 8,857,000
Other receivable for working capital receivable	(604,000)
Issuance of common stock	2,228,000
Issuance of notes payable	4,569,000
Deferred purchase price, payable in 24 monthly installments	4,569,000
Total consideration	$ 15,050,000	$ 15,100,000
Common stock shares issued \| shares	255,808
Tax deductible goodwill	$ 6,200,000
Number of monthly installments \| installment		24
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			22,000,000
Operating Income (Loss)			$ 800,000
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)	3 Months Ended
	Mar. 31, 2017 USD ($)
Changes in carrying value of goodwill
Goodwill at beginning of period	$ 21,947,000
Goodwill at end of period	21,947,000
Energy Efficiency Services
Changes in carrying value of goodwill
Goodwill at beginning of period	21,198,000
Goodwill at end of period	21,198,000
Financial 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
	Mar. 31, 2017	Apr. 01, 2016	Dec. 30, 2016
Goodwill and other intangible assets
Gross Amount	$ 8,728,000		$ 8,728,000
Accumulated Amortization	3,335,000		2,787,000
Amortization expense for acquired identifiable intangible assets	500,000	$ 300,000
Remainder of fiscal year 2017	1,600,000
Estimated amortization expense for acquired identifiable intangible assets
2018	1,951,000
2019	1,087,000
2020	674,000
2021	109,000
Total estimated amortization expense	3,821,000
Backlog
Goodwill and other intangible assets
Gross Amount	1,398,000		1,398,000
Accumulated Amortization	$ 726,000		639,000
Backlog \| Maximum
Goodwill and other intangible assets
Amortization Period (in years)	5 years
Tradename
Goodwill and other intangible assets
Gross Amount	$ 2,739,000		2,739,000
Accumulated Amortization	$ 1,370,000		1,142,000
Tradename \| Minimum
Goodwill and other intangible assets
Amortization Period (in years)	2 years 6 months
Tradename \| Maximum
Goodwill and other intangible assets
Amortization Period (in years)	3 years 6 months
Non-compete agreements
Goodwill and other intangible assets
Gross Amount	$ 1,331,000		1,331,000
Accumulated Amortization	$ 533,000		463,000
Amortization Period (in years)	4 years
Customer relationships
Goodwill and other intangible assets
Gross Amount	$ 3,260,000		3,260,000
Accumulated Amortization	$ 706,000		$ 543,000
Amortization Period (in years)	5 years

EARNINGS PER SHARE (EPS) (Details) - USD ($)	3 Months Ended
EARNINGS PER SHARE (EPS) (Details) - USD ($)	Mar. 31, 2017	Apr. 01, 2016
Earnings per share
Net income	$ 2,641,000	$ 1,078,000
Weighted-average common shares outstanding (in shares)	8,281,000	7,996,000
Effect of dilutive stock options and restricted stock awards (in shares)	573,000	248,000
Weighted-average common shares outstanding-diluted (in shares)	8,854,000	8,244,000
Earnings per share:
Basic (in dollars per share)	$ 0.32	$ 0.13
Diluted (in dollars per share)	$ 0.30	$ 0.13
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)	10,000	516,000

EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details) - USD ($)	Mar. 31, 2017	Dec. 30, 2016
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	$ 14,134,000	$ 13,655,000
Accumulated depreciation and amortization	(9,379,000)	(9,144,000)
Equipment and leasehold improvements, net	4,755,000	4,511,000
Furniture and fixtures
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	2,705,000	2,353,000
Computer hardware and software
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	7,815,000	7,686,000
Leasehold improvements
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	1,116,000	1,094,000
Equipment under capital leases
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	972,000	1,076,000
Automobiles, trucks, and field equipment
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	$ 1,526,000	$ 1,446,000

ACCRUED LIABILITIES (Details) - USD ($)	Mar. 31, 2017	Dec. 30, 2016
ACCRUED LIABILITIES
Accrued bonuses	$ 1,014,000	$ 2,090,000
Accrued interest	2,000	1,000
Paid leave bank	2,291,000	2,129,000
Compensation and payroll taxes	1,243,000	2,006,000
Accrued legal	154,000	177,000
Accrued workers' compensation insurance	185,000	81,000
Accrued rent	174,000	166,000
Employee withholdings	1,132,000	1,337,000
Client deposits	155,000	139,000
Unvouchered accounts payable	14,761,000	8,100,000
Other	1,315,000	2,823,000
Total accrued liabilities	$ 22,426,000	$ 19,049,000

DEBT - Obligations (Details) - USD ($)	3 Months Ended
DEBT - Obligations (Details) - USD ($)	Mar. 31, 2017	Dec. 30, 2016
Debt Obligations
Total debt obligations, excluding capital lease obligations	$ 4,775,000	$ 6,046,000
Less current portion	3,275,000	3,972,000
Outstanding balance	1,500,000	2,074,000
Revolving line of credit
Debt Obligations
Total debt obligations, excluding capital lease obligations	1,500,000
Term Note
Debt Obligations
Total debt obligations, excluding capital lease obligations		1,500,000
360 Energy Engineers LLC
Debt Obligations
Total debt obligations, excluding capital lease obligations	$ 773,000	1,031,000
Interest rate (as a percent)	4.00%
Monthly principal and interest installment (in dollars)	$ 88,752
Notes payable for Abacus
Debt Obligations
Total debt obligations, excluding capital lease obligations		54,000
Interest rate (as a percent)	4.00%
Monthly principal and interest installment (in dollars)	$ 54,281
Notes payable for insurance
Debt Obligations
Total debt obligations, excluding capital lease obligations	$ 400,000	599,000
Interest rate (as a percent)	2.98%
Monthly principal and interest installment (in dollars)	$ 67,620
Notes payable for Genesys
Debt Obligations
Total debt obligations, excluding capital lease obligations	$ 2,102,000	$ 2,862,000
Interest rate (as a percent)	0.65%
Monthly principal and interest installment (in dollars)	$ 191,667

DEBT - Line of credit (Details) - USD ($)			3 Months Ended		27 Months Ended
DEBT - Line of credit (Details) - USD ($)	Jan. 20, 2017	Mar. 04, 2016	Mar. 31, 2017	Apr. 01, 2016	Mar. 31, 2017	Dec. 30, 2016	Jan. 15, 2015
Line of Credit
Payment on note			$ 1,272,000	$ 939,000
Total debt obligations, excluding capital lease obligations			4,775,000		$ 4,775,000	$ 6,046,000
Genesys \| Braun
Line of Credit
Deferred payments		$ 2,300,000
Deferred payments outstanding			1,100,000
Genesys \| Mineo
Line of Credit
Deferred payments		2,300,000
Deferred payments outstanding			$ 1,100,000
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			$ 1,200,000
Federal Funds Effective Swap Rate [Member] \| BMO
Line of Credit
Spread on floating interest rate (as a percent)			0.50%
Abacus Notes
Line of Credit
Interest rate (as a percent)							4.00%
Kinzer Note
Line of Credit
Amount borrowed to finance acquisition							$ 600,000
Payment on note					600,000
Outstanding balance			$ 0		0
Rubbert Note
Line of Credit
Amount borrowed to finance acquisition							600,000
Payment on note					600,000
Outstanding balance			0		0
360 Energy Note
Line of Credit
Amount borrowed to finance acquisition							$ 3,000,000
Interest rate (as a percent)							4.00%
Payment on note			2,200,000
Outstanding balance			800,000		800,000
Revolving Credit Facility \| BMO
Line of Credit
Maximum borrowing capacity	$ 35,000,000
Revolving Credit Facility \| Abacus and 360 Energy \| BMO
Line of Credit
Amount borrowed to finance acquisition							$ 1,500,000
Revolving line of credit
Line of Credit
Total debt obligations, excluding capital lease obligations			$ 1,500,000		$ 1,500,000
Revolving line of credit \| BMO
Line of Credit
Repurchase of common stock	8,000,000
Standby letter of credit sub-facility \| BMO
Line of Credit
Maximum borrowing capacity	10,000,000
Credit Agreement \| BMO
Line of Credit
The aggregate amount under the revolving line of credit	25,000,000
The aggregate amount under the revolving line of credit for a total facility	60,000,000
Earn-out obligations	20,000,000
Total consideration for all permitted acquisitions	$ 10,000,000
Percentage of increased interest rate in case of default	2.00%
Credit Agreement \| Maximum \| BMO
Line of Credit
Fee on unused commitments (as a percent)	0.35%
Commitment fee (as a percent)	1.50%
Credit Agreement \| Minimum \| BMO
Line of Credit
Fee on unused commitments (as a percent)	0.20%
Commitment fee (as a percent)	0.94%
Unrestricted cash or undrawn availability under the revolving line of credit	$ 5,000,000
Credit Agreement \| Federal Funds Effective Swap Rate [Member] \| Base rate \| BMO
Line of Credit
Spread on floating interest rate (as a percent)			0.50%
Credit Agreement \| Base rate \| LIBOR \| Maximum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)			2.00%
Credit Agreement \| Base rate \| LIBOR \| Minimum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)			1.25%
Credit Agreement \| LIBOR \| Base rate \| BMO
Line of Credit
Spread on floating interest rate (as a percent)			1.00%
Credit Agreement \| LIBOR \| Base rate \| Maximum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)			1.00%
Credit Agreement \| LIBOR \| Base rate \| Minimum \| BMO
Line of Credit
Spread on floating interest rate (as a percent)			0.25%
Term Note
Line of Credit
Total debt obligations, excluding capital lease obligations						1,500,000
Term Note \| Abacus and 360 Energy \| BMO
Line of Credit
Amount borrowed to finance acquisition	$ 1,500,000						$ 2,000,000
Notes payable for insurance
Line of Credit
Interest rate (as a percent)			2.98%		2.98%
Total debt obligations, excluding capital lease obligations			$ 400,000		$ 400,000	$ 599,000

COMMITMENTS - Benefit Plans (Details)	3 Months Ended
COMMITMENTS - Benefit Plans (Details)	Mar. 31, 2017 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 (Details) - USD ($)	3 Months Ended
INCOME TAXES (Details) - USD ($)	Mar. 31, 2017	Apr. 01, 2016	Dec. 30, 2016
INCOME TAXES
Valuation reserve related to California net operating losses			$ 72,000
Liability for uncertain tax positions	$ 300,000
Unrecognized tax benefits	100,000
Interest and penalties related to unrecognized tax benefits	0
Income tax expense (benefit)	$ (673,000)	$ 711,000
Reduction of effective tax rate	55.50%

SEGMENT INFORMATION (Details)	3 Months Ended
SEGMENT INFORMATION (Details)	Mar. 31, 2017 USD ($) segment	Apr. 01, 2016 USD ($)	Dec. 30, 2016 USD ($)
SEGMENT INFORMATION
Number of reporting segments \| segment	4
Segment reconciliation
Contract revenue	$ 68,351,000	$ 33,915,000
Depreciation and amortization	909,000	610,000
Segment profit (loss) before income tax expense	1,968,000	1,789,000
Income tax expense (benefit)	(673,000)	711,000
Net income (loss)	2,641,000	1,078,000
Segment assets(1)	116,024,000	93,382,000	$ 108,347,000
Intersegment
Segment reconciliation
Contract revenue	0	0
Reporting Segments \| Energy Efficiency Services
Segment reconciliation
Contract revenue	50,114,000	18,979,000
Segment profit (loss) before income tax expense	283,000	890,000
Net income (loss)	379,000	536,000
Segment assets(1)	74,185,000	66,886,000
Reporting Segments \| Engineering Services
Segment reconciliation
Contract revenue	14,376,000	11,262,000
Segment profit (loss) before income tax expense	1,991,000	1,067,000
Net income (loss)	2,673,000	643,000
Segment assets(1)	13,059,000	13,983,000
Reporting Segments \| Financial Services
Segment reconciliation
Contract revenue	3,238,000	2,989,000
Segment profit (loss) before income tax expense	186,000	50,000
Net income (loss)	249,000	30,000
Segment assets(1)	5,834,000	5,964,000
Reporting Segments \| Homeland Security Services
Segment reconciliation
Contract revenue	623,000	685,000
Segment profit (loss) before income tax expense	(26,000)	25,000
Net income (loss)	(35,000)	15,000
Segment assets(1)	796,000	1,369,000
Unallocated Corporate
Segment reconciliation
Segment profit (loss) before income tax expense	(466,000)	(243,000)
Net income (loss)	(625,000)	(146,000)
Segment assets(1)	45,280,000	28,310,000
Intersegment
Segment reconciliation
Segment assets(1)	$ (23,130,000)	$ (23,130,000)

CONTINGENCIES (Details)	Jul. 16, 2014 USD ($)
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