wldn_Current Folio_8K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

 


 

FORM 8-K

 


 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  November 2, 2017

 


 

WILLDAN GROUP, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

Delaware

    

001-33076

    

14-1951112

(State of other jurisdiction

of incorporation)

 

(Commission File Number)

 

(IRS Employer

Identification No.)

 

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

(Address of Principal Executive Offices)

 

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

 

Not Applicable

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


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

 

 

 

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

 

 

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

 

 

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

 

 

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

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 


 

Item 2.02             Results of Operations and Financial Condition

 

Willdan Group, Inc. (“Willdan”) issued a press release on November 2, 2017.  The press release announced Willdan’s financial results for the third quarter ended September 29, 2017.  A copy of the press release is attached as Exhibit 99.1 hereto and is hereby incorporated by reference in its entirety.  The information in this Item 2.02 and the attached Exhibit 99.1 to this Current Report on Form 8-K is being furnished (not filed) pursuant to Item 2.02 of Form 8-K.

 

Item 9.01             Financial Statements and Exhibits

 

(d)          Exhibits.

 

 

 

 

 

 

Exhibit No.

 

Document

 

 

 

 

99.1

 

 

Press Release of Willdan Group, Inc. dated November 2, 2017.

 

 

 

 

 

2


 

SIGNATURES

 

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

 

 

 

 

 

WILLDAN GROUP, INC.

 

 

 

 

 

 

Date: November 2, 2017

By:

/s/ Stacy B. McLaughlin

 

 

Stacy B. McLaughlin

 

 

Chief Financial Officer

 

 

3


wldn_Ex99_1

Exhibit 99.1

 

WD_tagend_300rgb

 

Willdan Group Reports Increased Revenues and Earnings for Third Quarter 2017

 

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

 

 

ANAHEIM, Calif. – November 2, 2017 – Willdan Group, Inc. (“Willdan”) (NASDAQ: WLDN), a provider of professional technical solutions, today reported financial results for its third quarter ended September 29, 2017 and updated its previously provided targets for fiscal year 2017.

 

Third Quarter 2017 Highlights

 

·

Total contract revenue of $69.0 million, an increase of 18% over prior year

·

Organic revenue growth (as defined below) was 16% in the third quarter

·

Income from operations of $4.2 million, an increase of 37% over prior year

·

Diluted earnings per share of $0.31

 

For the third quarter of 2017, Willdan reported total contract revenue of $69.0 million and net income of $2.9 million, or $0.31 per diluted share.  This compares with total contract revenue of $58.7 million and net income of $2.5 million, or $0.28 per diluted share, for the third quarter of 2016.  An increase in Willdan’s effective tax rate from 18% to 31% as a result of the absence of a renewal of the Section 179D tax deductions resulted in earnings per share increasing at a lower rate than operating income.

 

“We see positive trends across Willdan as a result of our disciplined focus on expanding into new geographies, new customers and new programs with existing customers,” said Tom Brisbin, Willdan’s Chairman and Chief Executive Officer.  “It’s a good year.  We have won all of our recompetes this year.  The new acquisition of Integral Analytics is doing well as demonstrated by the Hawaiian Electric press release on October 19, 2017.  The number of opportunities is accelerating due to our new capabilities and geographies.”

 

Third Quarter 2017 Financial Highlights

 

Total contract revenue for the third quarter of 2017 was $69.0 million, an increase of 17.6% from $58.7 million for the third quarter of 2016. That increase was primarily due to continuing strong demand for our services in the Energy Efficiency Services and Engineering Services segments.  The revenues for those segments for the third quarter of 2017   increased 19.2% and 16.1%, respectively, from the third quarter of 2016.  Also included in our total contract revenue and contract revenue in our Energy Efficiency Services segment for the third quarter of 2017 was incremental contract revenue of $0.5 million attributable to the acquisition of Integral Analytics, Inc. (“Integral Analystics”) that we completed on July 28, 2017.  As the economy continues to grow, utility customers and governmental agencies continue to see demand from their constituents for a greener, more productive supply of energy and investment in governmental infrastructure. Organic revenue growth was 16% in the third quarter. Organic revenue growth is calculated as revenue generated by Willdan and its acquisition targets in the applicable period of the current year divided by the revenue generated by Willdan and its acquisition targets in the same period of the prior year.

 

Direct costs of contract revenue were $48.7 million for the third quarter of 2017, an increase of $6.1 million, or 14.5%, from $42.6 million for the third quarter of 2016.  The increase was primarily due to the expanded revenue base from new contracts commencing during the quarter in the Energy Efficiency Services segment.

 

Revenue, net of subcontractor services and other direct costs (see “Use of Non-GAAP Financial Measures” below), for the third quarter of 2017 was $31.7 million, an increase of 19.5% from $26.5 million for the third quarter of 2016.

 


 

Willdan Group

Page 2 of 10

Total general and administrative expenses for the third quarter of 2017 increased 23.3% to $16.1 million, from $13.1 million for the prior year period, due primarily to the need for increased staffing in support of the continuing growth in our Energy Efficiency Services and Engineering Services segments, as well as an expansion of business development, M&A and other expenses aimed at accelerating growth and control.

 

Net income for the third quarter of 2017 was $2.9 million, or $0.31 per diluted share, as compared to net income of $2.5 million, or $0.28 per diluted share, for the third quarter of 2016.  The effective tax rate for the third quarter of 2017 was 30.9% compared to only 18.2% in the same period of 2016.  The increase in the effective tax rate is primarily due to the expiration of  tax deductions for energy efficiency projects in commercial buildings under Internal Revenue Code 179D.  The deductions were utilized in 2016 but have not been available in 2017.

 

The growth in revenue and improvement in project profitability enabled EBITDA (see “Use of Non-GAAP Financial Measures” below) to increase 45% to $5.8 million for the third quarter of 2017, as compared to $4.0 million for the third quarter of 2016.  EBITDA as a percentage of revenue, net of subcontractor services and other direct costs, was 18.3% in the third quarter of 2017, as compared with 14.9% for the third quarter of 2016.  EBITDA as a percentage of contract revenue, or EBITDA margin, was 8.4% in the third quarter of 2017, as compared to 6.8% for the third quarter of 2016.

 

Nine Months 2017 Financial Highlights

 

Total contract revenue for the nine months ended September 29, 2017 was $209.2 million, an increase of 38.1% from $151.5 million for the nine months ended September 30, 2016. $15.3 million of the increase was attributable to the acquisition of substantially all of the assets of Genesys Engineering, P.C. (“Genesys”) that we completed on March 4, 2016 and incremental contract revenue of $0.5 million attributable to the acquisition of Integral Analytics that was completed on July 28, 2017. The remaining increase was primarily due to  new projects and new customers in the Energy Efficiency and Engineering segments, which increased 48.6% and 17.9%, respectively, from the nine months ended September 30, 2016.  

 

Direct costs of contract revenue increased 46.7% to $152.5 million, or 72.9% of revenue,  for the nine months ended September 29, 2017, compared to $103.9 million, or 68.6% of revenue, for the nine months ended September 30, 2016.  $14.0 million of the increase in direct costs resulted from the acquisition of substantially all of the assets of Genesys, which also accounts for most of the increase in direct costs as a percentage of revenues, as Genesys’ projects tend to have a significantly higher percentage of equipment and subcontractor costs than much of the rest of Willdan’s business mix.

 

Revenue, net of subcontractor services and other direct costs, for the nine months ended September 29, 2017 increased 18.1% to $90.3 million, compared with $76.4 million for the nine months ended September 30, 2016.

 

Total general and administrative expenses for the nine months ended September 29, 2017 were $46.0 million, an increase of 18.7% from $38.7 million for the prior year period, primarily due to an increase in general and administrative expenses to support the growth of the Energy Efficiency Services segment.

 

Net income for the nine months ended September 29, 2017 was $8.8 million, or $0.97 per diluted share, as compared to net income of $6.7 million, or $0.79 per diluted share, for the nine months ended September 30, 2016.  Income tax expense was $1.8 million for the nine months ended September 29, 2017, as compared to $2.0 million for the nine months ended September 30, 2016.

 

The growth in revenues enabled EBITDA to grow 26.9% to $14.5 million for the nine months ended September 29, 2017, compared with $11.4 million for the nine months ended September 30, 2016.  EBITDA as a percentage of revenue, net of subcontractor services and other direct costs, was 16.1% for the nine months ended September 29, 2017, as compared with 15.0% for the nine months ended September 30, 2016.

 


 

Willdan Group

Page 3 of 10

Liquidity and Capital Resources

 

Willdan reported $5.6 million in cash and cash equivalents at September 29, 2017, as compared to $22.7 million at December 30, 2016.  The decrease in cash and cash equivalents was primarily due to cash paid for the acquisition of Integral Analytics of $15.0 million, payments of $4.9 million for contingent consideration and notes payable related to our prior acquisitions and $1.8 million for purchases of equipment and leasehold improvements, which was partially offset by cash proceeds from stock option exercises and sales of common stock under our employee stock purchase plan of $2.6 million and cash provided by operations of $2.0 million.

 

Outlook

 

Willdan updated the following financial targets for fiscal year 2017:

 

·

Total contract revenue of $255 - $265 million

·

Diluted earnings per share of $1.12 - $1.18

·

Effective tax rate of approximately 40% for the remaining quarter

·

Diluted share count of 9.25 million shares

·

Depreciation of $1.6 million

·

Amortization of $2.7 million

 

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

 

Conference Call Details

 

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

 

Interested parties may participate in the conference call by dialing 888-394-8218 and providing conference ID 5266745.  The conference call will be webcast simultaneously on Willdan’s website at www.willdan.com under and the replay will be archived for at least 12 months.

 

The telephonic replay of the conference call may be accessed following the call by dialing 888-203-1112 and entering the passcode 5266745.  The replay will be available through November 16, 2017.

 

About Willdan Group, Inc.

 

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

 

Use of Non-GAAP Financial Measures

 

“Revenue, net of subcontractor services and other direct costs,” a non-GAAP financial measure, is a supplemental measure that Willdan believes enhances investors’ ability to analyze our business trend and performance because it substantially measures the work performed by our employees. In the course of providing services, Willdan routinely subcontracts various services. Generally, these subcontractor services and other direct costs are passed through to our clients and, in accordance with U.S. generally accepted accounting principles (“GAAP”) and industry practice, are included in our revenue when it is our contractual responsibility to procure or manage these activities. Because subcontractor services and other direct costs can vary significantly from project to project and period to period, changes in revenue may not necessarily


 

Willdan Group

Page 4 of 10

be indicative of our business trends. Accordingly, Willdan segregates costs from revenue to promote a better understanding of our business by evaluating revenue exclusive of costs associated with external service providers. A reconciliation of contract revenue as reported in accordance with GAAP to revenue, net of subcontractor services and other direct costs is provided at the end of this news release.

 

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

 

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

 

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

 

Forward Looking Statements

 

Statements in this press release that are not purely historical, including statements regarding Willdan’s intentions, hopes, beliefs, expectations, representations, projections, estimates, plans or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding Willdan’s targets for fiscal year 2017 and the expected benefits of Willdan’s recent acquisition of Integral Analytics. The forward-looking statements involve risks and uncertainties including, but not limited to, the risk that Willdan will not be able to expand its services or meet the needs of customers in markets in which it operates. It is important to note that Willdan’s actual results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, Willdan’s failure to execute on existing projects, inability to integrate recent acquisitions, including its recent acquisition of Integral Analytics, a slowdown in the local and regional economies of the states where Willdan conducts business, Willdan’s inability to successfully implement its tax strategy and the loss of or inability to hire additional qualified professionals. Willdan’s business could be affected by a number of other factors, including the risk factors listed from time to time in Willdan's SEC reports including, but not limited to, the Annual Report on Form 10-K filed for the year ended December 30, 2016 and the Quarterly Reports on Form 10-Q for the quarters ended June 30, 2017 and September 29, 2017. Willdan cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Willdan disclaims any obligation to, and does not undertake to, update or revise any forward-looking statements in this press release.

 


 

Willdan Group

Page 5 of 10

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

September 29,

 

December 30,

 

 

    

2017

    

2016

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

5,603,000

 

$

22,668,000

 

Accounts receivable, net of allowance for doubtful accounts of $516,000 and $785,000 at September 29, 2017 and December 30, 2016, respectively

 

 

36,084,000

 

 

30,285,000

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

 

27,188,000

 

 

18,988,000

 

Other receivables

 

 

1,778,000

 

 

699,000

 

Prepaid expenses and other current assets

 

 

2,831,000

 

 

2,601,000

 

Total current assets

 

 

73,484,000

 

 

75,241,000

 

Equipment and leasehold improvements, net

 

 

5,360,000

 

 

4,511,000

 

Goodwill

 

 

40,056,000

 

 

21,947,000

 

Other intangible assets, net

 

 

11,145,000

 

 

5,941,000

 

Other assets

 

 

807,000

 

 

707,000

 

Total assets

 

$

130,852,000

 

$

108,347,000

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

23,048,000

 

$

17,395,000

 

Accrued liabilities

 

 

17,755,000

 

 

19,049,000

 

Contingent consideration payable

 

 

777,000

 

 

1,925,000

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

 

7,102,000

 

 

8,377,000

 

Notes payable

 

 

1,276,000

 

 

3,972,000

 

Capital lease obligations

 

 

307,000

 

 

334,000

 

Total current liabilities

 

 

50,265,000

 

 

51,052,000

 

Contingent consideration payable

 

 

8,205,000

 

 

2,537,000

 

Notes payable

 

 

1,500,000

 

 

2,074,000

 

Capital lease obligations, less current portion

 

 

177,000

 

 

210,000

 

Deferred lease obligations

 

 

650,000

 

 

714,000

 

Deferred income taxes, net

 

 

3,626,000

 

 

1,842,000

 

Total liabilities

 

 

64,423,000

 

 

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; 8,764,000 and 8,348,000 shares issued and outstanding at September 29, 2017 and December 30, 2016, respectively

 

 

88,000

 

 

83,000

 

Additional paid-in capital

 

 

50,043,000

 

 

42,376,000

 

Retained earnings

 

 

16,298,000

 

 

7,459,000

 

Total stockholders’ equity

 

 

66,429,000

 

 

49,918,000

 

Total liabilities and stockholders’ equity

 

$

130,852,000

 

$

108,347,000

 


 

Willdan Group

Page 6 of 10

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 29,

    

September 30,

 

September 29,

    

September 30,

 

 

    

2017

 

2016

    

2017

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract revenue

 

$

69,007,000

 

$

58,660,000

    

$

209,191,000

 

$

151,516,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct costs of contract revenue (inclusive of directly related depreciation and amortization):

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and wages

 

 

11,425,000

 

 

10,421,000

 

 

33,594,000

 

 

28,753,000

 

Subcontractor services and other direct costs

 

 

37,310,000

 

 

32,134,000

 

 

118,881,000

 

 

75,161,000

 

Total direct costs of contract revenue

 

 

48,735,000

 

 

42,555,000

 

 

152,475,000

 

 

103,914,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and wages, payroll taxes and employee benefits

 

 

8,691,000

 

 

7,825,000

 

 

26,092,000

 

 

23,035,000

 

Facilities and facility related

 

 

1,235,000

 

 

1,039,000

 

 

3,478,000

 

 

2,978,000

 

Stock-based compensation

 

 

896,000

 

 

268,000

 

 

1,992,000

 

 

732,000

 

Depreciation and amortization

 

 

1,053,000

 

 

742,000

 

 

2,896,000

 

 

2,308,000

 

Other

 

 

4,214,000

 

 

3,178,000

 

 

11,548,000

 

 

9,694,000

 

Total general and administrative expenses

 

 

16,089,000

 

 

13,052,000

 

 

46,006,000

 

 

38,747,000

 

Income from operations

 

 

4,183,000

 

 

3,053,000

 

 

10,710,000

 

 

8,855,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(23,000)

 

 

(43,000)

 

 

(88,000)

 

 

(137,000)

 

Other, net

 

 

18,000

 

 

 —

 

 

56,000

 

 

2,000

 

Total other expense, net

 

 

(5,000)

 

 

(43,000)

 

 

(32,000)

 

 

(135,000)

 

Income before income taxes

 

 

4,178,000

 

 

3,010,000

 

 

10,678,000

 

 

8,720,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

1,292,000

 

 

548,000

 

 

1,839,000

 

 

1,990,000

 

Net income

 

$

2,886,000

 

$

2,462,000

 

$

8,839,000

 

$

6,730,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.33

 

$

0.30

 

$

1.03

 

$

0.82

 

Diluted

 

$

0.31

 

$

0.28

 

$

0.97

 

$

0.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

8,730,000

 

 

8,308,000

 

 

8,580,000

 

 

8,181,000

 

Diluted

 

 

9,248,000

 

 

8,720,000

 

 

9,138,000

 

 

8,516,000

 

 


 

Willdan Group

Page 7 of 10

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

September 29,

  

September 30,

 

   

2017

 

2016

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

8,839,000

 

$

6,730,000

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

 

 

 

 

 

 

Depreciation and amortization

 

 

2,976,000

 

 

2,314,000

Deferred income taxes, net

 

 

1,784,000

 

 

2,556,000

Loss on sale/disposal of equipment

 

 

26,000

 

 

3,000

(Recovery of) provision for doubtful accounts

 

 

(98,000)

 

 

92,000

Stock-based compensation

 

 

1,992,000

 

 

732,000

Accretion and fair value adjustments of contingent consideration

 

 

779,000

 

 

(139,000)

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

 

 

 

 

 

 

Accounts receivable

 

 

(5,061,000)

 

 

5,148,000

Costs and estimated earnings in excess of billings on uncompleted contracts

 

 

(8,200,000)

 

 

(7,956,000)

Other receivables

 

 

(1,071,000)

 

 

(1,918,000)

Prepaid expenses and other current assets

 

 

(167,000)

 

 

(335,000)

Other assets

 

 

44,000

 

 

56,000

Accounts payable

 

 

5,408,000

 

 

1,760,000

Accrued liabilities

 

 

(3,340,000)

 

 

5,246,000

Billings in excess of costs and estimated earnings on uncompleted contracts

 

 

(1,812,000)

 

 

2,469,000

Deferred lease obligations

 

 

(64,000)

 

 

(9,000)

Net cash provided by operating activities

 

 

2,035,000

 

 

16,749,000

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of equipment and leasehold improvements

 

 

(1,826,000)

 

 

(1,386,000)

Cash paid for acquisitions, net of cash acquired

 

 

(14,603,000)

 

 

(8,857,000)

Net cash used in investing activities

 

 

(16,429,000)

 

 

(10,243,000)

Cash flows from financing activities:

 

 

 

 

 

 

Payments on contingent consideration

 

 

(1,659,000)

 

 

(1,285,000)

Payments on notes payable

 

 

(3,270,000)

 

 

(3,083,000)

Principal payments on capital lease obligations

 

 

(323,000)

 

 

(411,000)

Proceeds from stock option exercise

 

 

1,751,000

 

 

164,000

Proceeds from sales of common stock under employee stock purchase plan

 

 

830,000

 

 

209,000

Net cash used in financing activities

 

 

(2,671,000)

 

 

(4,406,000)

Net (decrease) increase in cash and cash equivalents

 

 

(17,065,000)

 

 

2,100,000

Cash and cash equivalents at beginning of period

 

 

22,668,000

 

 

16,487,000

Cash and cash equivalents at end of period

 

$

5,603,000

 

$

18,587,000

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

Interest

 

$

88,000

 

$

137,000

Income taxes

 

 

2,142,000

 

 

2,046,000

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

 

 

3,099,000

 

 

2,228,000

Contingent consideration related to business acquisitions

 

 

5,400,000

 

 

 —

Other payable for working capital adjustment

 

 

1,881,000

 

 

 —

Other receivable for working capital adjustment

 

 

 —

 

 

604,000

Equipment acquired under capital leases

 

 

263,000

 

 

186,000

 


 

Willdan Group

Page 8 of 10

Willdan Group, Inc. and Subsidiaries

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

(Non-GAAP Measure)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 29,

 

September 30,

 

September 29,

 

September 30,

 

 

    

2017

    

2016

    

2017

    

2016

 

Contract revenue

 

$

69,007,000

 

$

58,660,000

 

$

209,191,000

 

$

151,516,000

 

Subcontractor services and other direct costs

 

 

37,310,000

 

 

32,134,000

 

 

118,881,000

 

 

75,161,000

 

Revenue, net of subcontractor services and other direct costs

 

$

31,697,000

 

$

26,526,000

 

$

90,310,000

 

$

76,355,000

 

 


 

Willdan Group

Page 9 of 10

Willdan Group, Inc. and Subsidiaries

Reconciliation of GAAP Net Income to EBITDA

(Non-GAAP Measure)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 29,

    

September 30,

 

September 29,

    

September 30,

 

 

    

2017

 

2016

    

2017

 

2016

 

Net income

    

$

2,886,000

 

$

2,462,000

 

$

8,839,000

 

$

6,730,000

 

Interest expense

 

 

23,000

 

 

43,000

 

 

88,000

 

 

137,000

 

Income tax expense

 

 

1,292,000

 

 

548,000

 

 

1,839,000

 

 

1,990,000

 

Interest accretion(1)

 

 

498,000

 

 

168,000

 

 

779,000

 

 

278,000

 

Depreciation and amortization

 

 

1,106,000

 

 

742,000

 

 

2,976,000

 

 

2,308,000

 

EBITDA

 

$

5,805,000

 

$

3,963,000

 

$

14,521,000

 

$

11,443,000

 


(1)

Interest accretion represents the imputed interest on the earn-out payments to be paid by us in connection with our acquisitions of Abacus Resource Management Company, Economists.com, LLC, Integral Analytics and substantially all of the assets of 360 Energy Engineers, LLC. 


 

Willdan Group

Page 10 of 10

Contact:

 

Willdan Group, Inc.

Stacy McLaughlin

Chief Financial Officer

Tel: 714-940-6300

smclaughlin@willdan.com 

 

Or

 

Investor/Media Contact

Financial Profiles, Inc.

Tony Rossi

Tel: 310-622-8221

trossi@finprofiles.com