Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 29, 2017	Nov. 02, 2017
Document and Entity Information
Entity Registrant Name	Willdan Group, Inc.
Entity Central Index Key	0001370450
Document Type	10-Q
Document Period End Date	Sep. 29, 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		8,763,682
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 29, 2017	Dec. 30, 2016
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
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

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 29, 2017	Dec. 30, 2016
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 516,000	$ 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	8,764,000	8,348,000
Common stock, shares outstanding	8,764,000	8,348,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 29, 2017	Sep. 30, 2016	Sep. 29, 2017	Sep. 30, 2016
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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 (in dollars per share)	$ 0.33	$ 0.30	$ 1.03	$ 0.82
Diluted (in dollars per share)	$ 0.31	$ 0.28	$ 0.97	$ 0.79
Weighted-average shares outstanding:
Basic (in shares)	8,730,000	8,308,000	8,580,000	8,181,000
Diluted (in shares)	9,248,000	8,720,000	9,138,000	8,516,000

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 9 months ended Sep. 29, 2017 - USD ($)	Common Stock	Additional Paid-in Capital	Retained Earnings	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	829,000		$ 830,000
Shares of common stock issued in connection with employee stock purchase plan (in shares)	62,000
Shares of common stock issued in connection with incentive stock plan	$ 3,000	1,748,000		1,751,000
Shares of common stock issued in connection with incentive stock plan (in shares)	263,000
Stock issued to acquire business	$ 1,000	3,098,000		3,099,000
Stock issued to acquire business (in shares)	91,000
Stock-based compensation expense		1,992,000		1,992,000
Net income			8,839,000	8,839,000
Balances at Sep. 29, 2017	$ 88,000	$ 50,043,000	$ 16,298,000	$ 66,429,000
Balances (in shares) at Sep. 29, 2017	8,764,000			8,764,000

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 29, 2017	Sep. 30, 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
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

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

9 Months Ended

Sep. 29, 2017

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

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

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments, which consist of only normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the consolidated results for the interim periods presented. The Company operates and reports its quarterly financial results based on the 13-week period ending on the Friday closest to March 31, June 30 and September 30 and the 13 or 14-week period ending on the Friday closest to December 31, as applicable, with consideration of business days. Results for the interim periods are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 30, 2016.

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 variety 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, Willdan Infrastructure, 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.

The Company accounts for variable interest entities in accordance with ASC 810, Consolidation (“ASC 810”). Under ASC 810, a variable interest entity (“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.

As of September 29, 2017, the Company had one VIE— Genesys Engineering, P.C. (“Genesys”). Pursuant to New York law, the Company does not own capital stock of Genesys and does not have control over the professional decision making of Genesys’ engineering services. Genesys has a sole shareholder who is a licensed engineer in New York (the “Shareholder”). The Company has entered into an administrative services agreement with Genesys pursuant to which Willdan Energy Solutions (“WES”), the Company’s wholly-owned subsidiary, will provide Genesys with ongoing administrative, operational and other non-professional support services. Genesys pays WES a service fee (the “Service Fee”), which consists of all of the costs incurred by WES to provide the administrative services to Genesys plus ten percent of such costs, as well as any other costs that relate to professional service supplies and personnel costs. The Company manages Genesys and has the power to direct the activities that most significantly impact Genesys’s performance, in addition to being obligated to absorb expected losses from Genesys. Accordingly, the Company is the primary beneficiary of Genesys and consolidates Genesys as a VIE.

Management also concluded there is no noncontrolling interest related to the consolidation of Genesys because management determined that (i) the Shareholder of Genesys does not have more than a nominal amount of equity investment at risk, (ii) WES absorbs the expected losses of Genesys through its deferral of Genesys’s Service Fees owed to WES, and the Company has, since entering into the administrative services agreement, had to continuously defer the Service Fees for Genesys, and (iii) the Company believes Genesys will continue to have a shortfall on payment of its Service Fees for the foreseeable future, leaving no expected residual returns for the Shareholder. For more information regarding Genesys, see Note 2 “Business Combinations.”

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-materials 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-materials 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 price 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 receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.

Retainage is included in accounts receivable in the accompanying consolidated financial statements. Retainage represents the billed amount that is retained by the customer, in accordance with the terms of the contract, generally until performance is substantially complete. At September 29, 2017 and December 30, 2016, the Company had retained accounts receivable of approximately $10.1 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

As of September 29, 2017, the Company had $5.6 million of cash and cash equivalents. 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.

The Company completed the acquisition of all of the outstanding shares of Integral Analytics, Inc. (“Integral Analytics”) on July 28, 2017. In connection with that acquisition, the Company paid $15.0 million in cash to the sellers of Integral Analytics upon the closing of the acquisition. For further discussion of the acquisition of Integral Analytics, see Note 2 “Business Combinations” below.

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 has included 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. 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 beginning fiscal year 2018, and the Company expects to use the Modified Retrospective 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 and related disclosures.

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

9 Months Ended

Sep. 29, 2017

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

2.BUSINESS COMBINATIONS

Acquisition of Integral Analytics

On July 28, 2017, the Company and the Company’s wholly-owned subsidiary, WES, acquired all of the outstanding shares of Integral Analytics, a data analytics and software company, pursuant to the Stock Purchase Agreement, dated July 28, 2017 (the “Purchase Agreement”), by and among Willdan Group, WES, Integral Analytics, the stockholders of Integral Analytics (the “IA Stockholders”) and the Sellers’ Representative (as defined therein).

Pursuant to the terms of the Purchase Agreement, WES will pay the IA Stockholders a maximum purchase price of $30.0 million, consisting of (i) $15.0 million in cash paid at closing (subject to certain post-closing tangible net asset value adjustments), (ii) 90,611 shares of common stock, par value $0.01 per share, of Willdan Group, Inc. (“Common Stock”) issued at closing, equaling $3.0 million, calculated based on the volume-weighted average price of shares of Common Stock for the ten trading days immediately prior to, but not including, the closing date of the acquisition of Integral Analytics (the “Closing Date”) and (iii) up to $12.0 million in cash for a percentage of sales attributable to the business of Integral Analytics during the three years after the Closing Date, as more fully described below (such potential payments of up to $12.0 million, being referred to as “Earn-Out Payments” and $12.0 million in respect thereof, being referred to as the “Maximum Payout”). The Company used cash on hand for the $15.0 million cash payment paid at closing.

The size of the Earn-Out Payments to be paid will be determined based on two factors. First, the IA Stockholders will receive 2% of gross contracted revenue for new work sold by the Company in close collaboration with Integral Analytics during the three years following the Closing Date (the “Earn-Out Period”). Second, the IA Stockholders will receive 20% of the gross contracted revenue specified in each executed and/or effective software licensing agreement, entered into by the Company or one of its affiliates that contains pricing either equal to or greater than standard pricing, of software offered for licensing by Integral Analytics during the Earn-Out Period. The amounts due to the IA Stockholders pursuant to these two factors will in no event, individually or in the aggregate, exceed the Maximum Payout. Earn-Out Payments will be made in quarterly installments for each year of the Earn-Out Period. For the purposes of both of these factors credit will be given to Integral Analytics for the gross contracted revenue in the quarter in which the contract/license is executed, regardless of when the receipt of payment thereunder is expected. The amount of gross contracted revenue for contracts with unfunded ceilings or of an indeterminate contractual value will be mutually agreed upon. Further, in the event of a change of control of WES during the Earn-Out Period, any then-unpaid amount of the Maximum Payout will be paid promptly to the IA Stockholders, even if such Earn-Out Payments have not been earned at that time. The Company has agreed to certain covenants regarding the operation of Integral Analytics during the Earn-Out Period, of which a violation by the Company could result in damages being paid to the IA Stockholders in respect of the Earn-Out. In addition, the Earn-Out Payments will be subject to certain subordination provisions in favor of BMO, the Company’s senior secured lender.

WES has also established a bonus pool for the employees of Integral Analytics to be paid based on Integral Analytics’ performance against certain targets.

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 $18.3 million of goodwill resulting from the acquisition will be tax deductible. Consideration for the acquisition includes the following preliminary information:


	Integral Analytics
Cash paid	$	15,000,000
Other payable for working capital adjustment		1,881,000
Issuance of common stock		3,099,000
Contingent consideration		5,400,000
Total consideration	$	25,380,000

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


	Integral Analytics
Current assets	$	711,000
Non-current assets		2,000
Cash		397,000
Property, plant and equipment		5,000
Liabilities		(946,000)
Customer relationships		1,510,000
Tradename		1,040,000
Developed Technology		2,760,000
In-process Technology		1,650,000
Goodwill		18,251,000
Net assets acquired	$	25,380,000

The following unaudited pro forma financial information for the three and nine months ended September 29, 2017 and September 30, 2016 assumes that acquisition of all the outstanding shares of Integral Analytics occurred on January 2, 2016 as follows:


	Three Months Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
In thousands (except per share data)	2017		2016		2017		2016
Pro forma revenue	$	69,149		59,869		211,279		163,290

Pro forma income from operations		3,916		2,511		8,787		8,158
Pro forma net income		2,705		2,054		6,913		6,186

This pro forma supplemental information does not purport to be indicative of what the company’s operating results would have been had this transaction occurred on January 2, 2016 and may not be indicative of future operating results.

During the three months ended September 29, 2017, the acquisition of all of the outstanding shares of Integral Analytics contributed $0.5 million in revenue and $0.4 million of loss from operations. Acquisition related costs of $194,000 were expensed as incurred in general and administrative expenses during the three month period ended September 29, 2017.

Acquisition of Substantially All of the Assets of Genesys

On March 4, 2016, the Company and the Company’s wholly-owned subsidiary, WES, acquired substantially all of the assets of 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, 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 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. Genesys has a sole shareholder who is a licensed engineer in New York (i.e. the Shareholder). The Company has entered into an agreement with the Shareholder pursuant to which the Shareholder will be prohibited from selling, transferring or encumbering the Shareholder’s ownership interest in Genesys without the Company’s consent. Notwithstanding the Company’s rights regarding the transfer of Genesys’s stock, the Company does not have control over the professional decision making of Genesys’s 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. Genesys pays WES the Service Fee, which consists of all of the costs incurred by WES to provide the administrative services to Genesys plus ten percent of such costs, as well as any other costs that relate to professional service supplies and personnel costs. As a result of the administrative services agreement, the Company absorbs the expected losses of Genesys through its deferral of Genesys’s Service Fees owed to WES.

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 and nine months ended September 29, 2017, the acquisition of substantially all of the assets of Genesys contributed $14.9 million and $53.0 million in revenue and $0.1 million and $1.5 million of income from operations. There were no acquisition costs related to Genesys recorded during the three and nine months ended September 29, 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
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1497-128463

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 4
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4845-128472

Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479

Reference 10: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
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+ Details

GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 29, 2017

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

3.GOODWILL AND OTHER INTANGIBLE ASSETS

As of September 29, 2017, the Company had $40.1 million of goodwill, which primarily relates to the Energy Efficiency Services reporting segment and the acquisitions of substantially all of the assets of Genesys and 360 Energy Engineers, LLC (“360 Energy”) and the acquisitions of Integral Analytics and Abacus Resource Management Company (“Abacus”). A portion of the goodwill also relates to the Public Finance Services reporting segment and the acquisition of Economists.com, LLC. The changes in the carrying value of goodwill by reporting unit for the nine months ended September 29, 2017 were as follows:


	December 30,		Additions /		September 29,
Reporting Unit	2016		Adjustments		2017
Energy Efficiency Services	$	21,198,000	$	18,109,000	$	39,307,000
Financial Services		749,000		—		749,000
	$	21,947,000	$	18,109,000	$	40,056,000

The gross amounts and accumulated amortization of the Company’s acquired identifiable intangible assets with finite useful lives as of September 29, 2017 included in other intangible assets, net in the accompanying condensed consolidated balance sheets, were as follows:


	September 29, 2017				December 30, 2016
	Gross		Accumulated		Gross		Accumulated		Amortization
	Amount		Amortization		Amount		Amortization		Period (yrs)
Backlog	$	1,398,000	$	901,000	$	1,398,000	$	639,000			5.0
Tradename		3,779,000		1,818,000		2,739,000		1,142,000	2.5	-	6.0
Non-compete agreements		1,331,000		674,000		1,331,000		463,000			4.0
Developed Technology		2,760,000		58,000		—		—			8.0
In-process Technology		1,650,000		28,000		—		—			10.0
Customer relationships		4,770,000		1,064,000		3,260,000		543,000	5.0	-	8.0
	$	15,688,000	$	4,543,000	$	8,728,000	$	2,787,000

The Company’s amortization expense for acquired identifiable intangible assets with finite useful lives was $0.7 million and $1.8 million for the fiscal three and nine months ended September 29, 2017 as compared to $0.4 million and $1.4 million for the fiscal three and nine months ended September 30, 2016. Estimated amortization expense for acquired identifiable intangible assets for the remainder of fiscal year 2017 is $0.7 million and the succeeding years are as follows:


Fiscal year:
2018	$	2,823,000
2019		1,959,000
2020		1,546,000
2021		981,000
2022		872,000
Thereafter		2,236,000
	$	10,417,000

- 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)

9 Months Ended

Sep. 29, 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 and restricted stock awards using the treasury stock method.

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


	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
Weighted-average common shares outstanding		8,730,000		8,308,000		8,580,000		8,181,000
Effect of dilutive stock options and restricted stock awards		518,000		412,000		558,000		335,000
Weighted-average common shares outstanding-diluted		9,248,000		8,720,000		9,138,000		8,516,000
Earnings per share:
Basic	$	0.33	$	0.30	$	1.03	$	0.82
Diluted	$	0.31	$	0.28	$	0.97	$	0.79

For the three and nine months ended September 29, 2017, 137,000 and 89,000 options were excluded from the calculation of dilutive potential common shares, as compared to 280,000 and 330,000 options for the three and nine months ended September 30, 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, NET

9 Months Ended

Sep. 29, 2017

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

5.EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

Equipment and leasehold improvements consist of the following:


	September 29,		December 30,
	2017		2016
Furniture and fixtures	$	2,998,000	$	2,353,000
Computer hardware and software		8,131,000		7,686,000
Leasehold improvements		1,097,000		1,094,000
Equipment under capital leases		1,164,000		1,076,000
Automobiles, trucks, and field equipment		2,020,000		1,446,000
		15,410,000		13,655,000
Accumulated depreciation and amortization		(10,050,000)		(9,144,000)
Equipment and leasehold improvements, net	$	5,360,000	$	4,511,000

ACCRUED LIABILITIES

9 Months Ended

Sep. 29, 2017

ACCRUED LIABILITIES

ACCRUED LIABILITIES

6.ACCRUED LIABILITIES

Accrued liabilities consist of the following:


	September 29,		December 30,
	2017		2016
Accrued bonuses	$	1,444,000	$	2,090,000
Accrued interest		2,000		1,000
Paid leave bank		2,522,000		2,129,000
Compensation and payroll taxes		1,331,000		2,006,000
Accrued legal		120,000		177,000
Accrued workers’ compensation insurance		286,000		81,000
Accrued rent		177,000		166,000
Employee withholdings		1,130,000		1,337,000
Client deposits		177,000		139,000
Accrued subcontractor costs		9,393,000		8,100,000
Other		1,173,000		2,823,000
Total accrued liabilities	$	17,755,000	$	19,049,000

DEBT

9 Months Ended

Sep. 29, 2017

DEBT

DEBT

7.DEBT

Total debt obligations consist of the following:


	September 29,		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.		253,000		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.		67,000		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.		956,000		2,862,000
Total debt obligations		2,776,000		6,046,000
Less current portion		1,276,000		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 September 29, 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. As of September 29, 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 September 29, 2017, the Company had made principal payments of approximately $2.7 million on the 360 Energy Note and, as of September 29, 2017, the outstanding balance was $0.3 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 September 29, 2017, the Company made payments of $3.6 million inclusive of interest and, as of September 29, 2017, the aggregate outstanding balance on the Deferred Payments to Messrs. Braun and Mineo was approximately $1.0 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 $67,000 and $599,000 at September 29, 2017 and December 30, 2016, respectively.

COMMITMENTS	9 Months Ended
COMMITMENTS	Sep. 29, 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 2020. 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	9 Months Ended
INCOME TAXES	Sep. 29, 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 during the nine month period ended September 29, 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 September 29, 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 September 29, 2017. Based on management’s estimates and determination of an effective tax rate for the year, the Company recorded an income tax expense of $1.3 million and $1.8 million for the three and nine months ended September 29, 2017, as compared to an income tax expense of $0.5 million and $2.0 million for the three and nine months ended September 30, 2016, respectively. During the nine months ended September 29, 2017, the difference between the effective tax rate and the federal statutory rate is primarily attributable to tax deductions related to non-qualified stock option exercises which were significant in the nine months ended September 29, 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 non-qualified stock option exercises has been included as a reduction of 16.3% to the Company’s effective tax rate for the nine months ended September 29, 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

9 Months Ended

Sep. 29, 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 WES, provides energy efficiency consulting services to utilities, state agencies, municipalities, private industry and non-profit organizations. The Engineering Services segment consists of Willdan Engineering, Willdan Infrastructure and Public Agency Resources. The Engineering Services segment offers a broad range of engineering and planning services to the Company’s public and private sector clients. The Public Finance Services segment, which consists of Willdan Financial Services, provides expertise and support for the various financing techniques employed by public agencies to finance their operations and infrastructure along with the mandated reporting and other requirements associated with these financings. The Homeland Security Services segment, which consists of Willdan Homeland Solutions, provides national preparedness, homeland security consulting, public safety and emergency response services to cities, related municipal service agencies and other entities.

The accounting policies applied to determine the segment information are the same as those described in the summary of significant accounting policies included in the Company’s Annual Report on Form 10-K for the year ended December 30, 2016. There were no intersegment sales in the three and nine month periods ended September 29, 2017 and September 30, 2016. The Company’s chief operating decision maker evaluates the performance of each segment based upon income or loss from operations before income taxes. Certain segment asset information including expenditures for long-lived assets has not been presented as it is not reported to or reviewed by the chief operating decision maker. In addition, enterprise-wide service line contract revenue is not included as it is impracticable to report this information for each group of similar services.

Financial information with respect to the reportable segments as of and for the fiscal three and nine months ended September 29, 2017 and as of and for the fiscal three and nine months ended September 30, 2016 is as follows:


	Energy				Public		Homeland
	Efficiency		Engineering		Finance		Security		Unallocated				Consolidated
	Services		Services		Services		Services		Corporate		Intersegment		Total
Fiscal Three Months Ended September 29, 2017
Contract revenue	$	50,031,000	$	14,980,000	$	3,272,000	$	724,000	$	—	$	—	$	69,007,000
Segment profit (loss) before income tax expense		825,000		2,612,000		244,000		(55,000)		552,000		—		4,178,000
Net income (loss)		570,000		1,804,000		168,000		(38,000)		382,000		—		2,886,000
Segment assets(1)		74,955,000		12,439,000		6,809,000		799,000		58,980,000		(23,130,000)		130,852,000
Fiscal Three Months Ended September 30, 2016
Contract revenue	$	41,988,000	$	12,906,000	$	3,199,000	$	567,000	$	—	$	—	$	58,660,000
Segment profit (loss) before income tax expense		1,058,000		1,857,000		287,000		4,000		(196,000)		—		3,010,000
Net income (loss)		895,000		1,508,000		221,000		5,000		(167,000)		—		2,462,000
Segment assets(1)		65,383,000		12,012,000		5,994,000		498,000		46,041,000		(23,130,000)		106,798,000
Fiscal Nine Months Ended September 29, 2017
Contract revenue	$	153,877,000	$	43,467,000	$	9,973,000	$	1,874,000	$	—	$	—	$	209,191,000
Segment profit (loss) before income tax expense		3,519,000		6,230,000		1,061,000		(149,000)		17,000		—		10,678,000
Net income (loss)		2,913,000		5,157,000		878,000		(124,000)		15,000		—		8,839,000
Segment assets(1)		74,955,000		12,439,000		6,809,000		799,000		58,980,000		(23,130,000)		130,852,000
Fiscal Nine Months Ended September 30, 2016
Contract revenue	$	103,574,000	$	36,863,000	$	9,206,000	$	1,873,000	$	—	$	—	$	151,516,000
Segment profit (loss) before income tax expense		4,257,000		4,941,000		294,000		92,000		(864,000)		—		8,720,000
Net income (loss)		3,285,000		3,814,000		227,000		71,000		(667,000)		—		6,730,000
Segment assets(1)		65,383,000		12,012,000		5,994,000		498,000		46,041,000		(23,130,000)		106,798,000

(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
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-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
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

CONTINGENCIES	9 Months Ended
CONTINGENCIES	Sep. 29, 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 The Department of Water and Power of the City of Glendale, California (the “City of Glendale”) and the Company have settled within insurance policy limits, a lawsuit brought by the City of Glendale against the Company on July 16, 2014, relating to a project performed by Willdan Financial Services to prepare a Cost of Services Analysis for the City of Glendale. The Company denied all allegations asserted in the lawsuit. As part of the settlement, the City of Glendale voluntarily dismissed the lawsuit with prejudice on May 12, 2017 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 lawsuit. For more information regarding this lawsuit, see “Item 1. Legal Proceedings” in our Quarterly Report on Form 10-Q for the period ended March 31, 2017.

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

9 Months Ended

Sep. 29, 2017

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY

Basis of Presentation

Principles of Consolidation

Segment Information

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

Recent Accounting Pronouncements

Statement of Cash Flows

Revenue Recognition

Stock Compensation

Business Combinations

Leases

Proposed Accounting Standards

BUSINESS COMBINATIONS (Tables)

9 Months Ended

Sep. 29, 2017

Genesys

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

Integral Analytics, Inc

Schedule of consideration for the acquisitions


	Integral Analytics
Cash paid	$	15,000,000
Other payable for working capital adjustment		1,881,000
Issuance of common stock		3,099,000
Contingent consideration		5,400,000
Total consideration	$	25,380,000

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


	Integral Analytics
Current assets	$	711,000
Non-current assets		2,000
Cash		397,000
Property, plant and equipment		5,000
Liabilities		(946,000)
Customer relationships		1,510,000
Tradename		1,040,000
Developed Technology		2,760,000
In-process Technology		1,650,000
Goodwill		18,251,000
Net assets acquired	$	25,380,000

Schedule of unaudited pro forma financial information


	Three Months Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
In thousands (except per share data)	2017		2016		2017		2016
Pro forma revenue	$	69,149		59,869		211,279		163,290

Pro forma income from operations		3,916		2,511		8,787		8,158
Pro forma net income		2,705		2,054		6,913		6,186

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 29, 2017

GOODWILL AND OTHER INTANGIBLE ASSETS

Schedule of changes in carrying value of goodwill by reporting unit


	December 30,		Additions /		September 29,
Reporting Unit	2016		Adjustments		2017
Energy Efficiency Services	$	21,198,000	$	18,109,000	$	39,307,000
Financial Services		749,000		—		749,000
	$	21,947,000	$	18,109,000	$	40,056,000

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


	September 29, 2017				December 30, 2016
	Gross		Accumulated		Gross		Accumulated		Amortization
	Amount		Amortization		Amount		Amortization		Period (yrs)
Backlog	$	1,398,000	$	901,000	$	1,398,000	$	639,000			5.0
Tradename		3,779,000		1,818,000		2,739,000		1,142,000	2.5	-	6.0
Non-compete agreements		1,331,000		674,000		1,331,000		463,000			4.0
Developed Technology		2,760,000		58,000		—		—			8.0
In-process Technology		1,650,000		28,000		—		—			10.0
Customer relationships		4,770,000		1,064,000		3,260,000		543,000	5.0	-	8.0
	$	15,688,000	$	4,543,000	$	8,728,000	$	2,787,000

Schedule of estimated amortization expense for acquired identifiable intangible assets


Fiscal year:
2018	$	2,823,000
2019		1,959,000
2020		1,546,000
2021		981,000
2022		872,000
Thereafter		2,236,000
	$	10,417,000

EARNINGS PER SHARE ("EPS") (Tables)

9 Months Ended

Sep. 29, 2017

EARNINGS PER SHARE (EPS)

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


	Three months ended				Nine months ended
	September 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
Weighted-average common shares outstanding		8,730,000		8,308,000		8,580,000		8,181,000
Effect of dilutive stock options and restricted stock awards		518,000		412,000		558,000		335,000
Weighted-average common shares outstanding-diluted		9,248,000		8,720,000		9,138,000		8,516,000
Earnings per share:
Basic	$	0.33	$	0.30	$	1.03	$	0.82
Diluted	$	0.31	$	0.28	$	0.97	$	0.79

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Tables)

9 Months Ended

Sep. 29, 2017

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

Schedule of equipment and leasehold improvements


	September 29,		December 30,
	2017		2016
Furniture and fixtures	$	2,998,000	$	2,353,000
Computer hardware and software		8,131,000		7,686,000
Leasehold improvements		1,097,000		1,094,000
Equipment under capital leases		1,164,000		1,076,000
Automobiles, trucks, and field equipment		2,020,000		1,446,000
		15,410,000		13,655,000
Accumulated depreciation and amortization		(10,050,000)		(9,144,000)
Equipment and leasehold improvements, net	$	5,360,000	$	4,511,000

ACCRUED LIABILITIES (Tables)

9 Months Ended

Sep. 29, 2017

ACCRUED LIABILITIES

Schedule of accrued liabilities


	September 29,		December 30,
	2017		2016
Accrued bonuses	$	1,444,000	$	2,090,000
Accrued interest		2,000		1,000
Paid leave bank		2,522,000		2,129,000
Compensation and payroll taxes		1,331,000		2,006,000
Accrued legal		120,000		177,000
Accrued workers’ compensation insurance		286,000		81,000
Accrued rent		177,000		166,000
Employee withholdings		1,130,000		1,337,000
Client deposits		177,000		139,000
Accrued subcontractor costs		9,393,000		8,100,000
Other		1,173,000		2,823,000
Total accrued liabilities	$	17,755,000	$	19,049,000

DEBT (Tables)

9 Months Ended

Sep. 29, 2017

DEBT

Schedule of debt obligations, excluding obligations under capital leases


	September 29,		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.		253,000		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.		67,000		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.		956,000		2,862,000
Total debt obligations		2,776,000		6,046,000
Less current portion		1,276,000		3,972,000
Debt obligations, less current portion	$	1,500,000	$	2,074,000

SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 29, 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 September 29, 2017
Contract revenue	$	50,031,000	$	14,980,000	$	3,272,000	$	724,000	$	—	$	—	$	69,007,000
Segment profit (loss) before income tax expense		825,000		2,612,000		244,000		(55,000)		552,000		—		4,178,000
Net income (loss)		570,000		1,804,000		168,000		(38,000)		382,000		—		2,886,000
Segment assets(1)		74,955,000		12,439,000		6,809,000		799,000		58,980,000		(23,130,000)		130,852,000
Fiscal Three Months Ended September 30, 2016
Contract revenue	$	41,988,000	$	12,906,000	$	3,199,000	$	567,000	$	—	$	—	$	58,660,000
Segment profit (loss) before income tax expense		1,058,000		1,857,000		287,000		4,000		(196,000)		—		3,010,000
Net income (loss)		895,000		1,508,000		221,000		5,000		(167,000)		—		2,462,000
Segment assets(1)		65,383,000		12,012,000		5,994,000		498,000		46,041,000		(23,130,000)		106,798,000
Fiscal Nine Months Ended September 29, 2017
Contract revenue	$	153,877,000	$	43,467,000	$	9,973,000	$	1,874,000	$	—	$	—	$	209,191,000
Segment profit (loss) before income tax expense		3,519,000		6,230,000		1,061,000		(149,000)		17,000		—		10,678,000
Net income (loss)		2,913,000		5,157,000		878,000		(124,000)		15,000		—		8,839,000
Segment assets(1)		74,955,000		12,439,000		6,809,000		799,000		58,980,000		(23,130,000)		130,852,000
Fiscal Nine Months Ended September 30, 2016
Contract revenue	$	103,574,000	$	36,863,000	$	9,206,000	$	1,873,000	$	—	$	—	$	151,516,000
Segment profit (loss) before income tax expense		4,257,000		4,941,000		294,000		92,000		(864,000)		—		8,720,000
Net income (loss)		3,285,000		3,814,000		227,000		71,000		(667,000)		—		6,730,000
Segment assets(1)		65,383,000		12,012,000		5,994,000		498,000		46,041,000		(23,130,000)		106,798,000

(1)

Segment assets represent segment assets, net of intercompany receivables.

BASIS OF PRESENTATION, ORGANIZATION AND OPERATIONS OF THE COMPANY - Fiscal Years (Details)	9 Months Ended
	Sep. 29, 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		9 Months Ended
	Apr. 26, 2016	Sep. 29, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 29, 2017 USD ($) entity subsidiary segment	Sep. 30, 2016 USD ($)	Dec. 30, 2016 USD ($)
Accounting for Contracts
Number of VIE \| entity				1
Percentage on costs incurred to provide administrative services	10.00%			10.00%
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		$ 8,691,000	$ 7,825,000	$ 26,092,000	$ 23,035,000
Facilities costs		1,235,000	$ 1,039,000	3,478,000	$ 2,978,000
Revenue or cost recorded by the entity when acting solely as an agent				0
Retained accounts receivable		$ 10,100,000		$ 10,100,000		$ 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 ($)		9 Months Ended
	Jul. 28, 2017	Sep. 29, 2017	Dec. 30, 2016	Sep. 30, 2016	Jan. 01, 2016
Basis of Presentation
Goodwill		$ 40,056,000	$ 21,947,000
Liquidity
Cash and cash equivalents		$ 5,603,000	$ 22,668,000	$ 18,587,000	$ 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
Integral Analytics, Inc
Basis of Presentation
Goodwill	$ 18,251,000
Liquidity
Cash paid at closing	$ 15,000,000

BUSINESS COMBINATIONS (Details)				4 Months Ended
BUSINESS COMBINATIONS (Details)	Jul. 28, 2017 USD ($) item $ / shares shares	Mar. 04, 2016 USD ($) shares	Feb. 26, 2016 USD ($) installment	Jul. 01, 2016 USD ($)	Sep. 29, 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
Common stock shares issued \| shares		255,808
Common stock value			2,200,000
Cash payable in installments			$ 4,600,000
Number of monthly installments \| installment			24
Integral Analytics, Inc
BUSINESS COMBINATIONS
Cash paid at closing	$ 15,000,000
Number of trading days	10 days
Earn-out payments period	3 years
Number of factors determining size of earn-out payments \| item	2
Earn-out payments first factor	2.00%
Earn-out payments second factor	20.00%
Integral Analytics, Inc \| Maximum
BUSINESS COMBINATIONS
Purchase price	$ 30,000,000
Earn-out payments	$ 12,000,000
Common Stock \| Integral Analytics, Inc
BUSINESS COMBINATIONS
Common stock shares issued \| shares	90,611
Common stock, par value (in dollars per share) \| $ / shares	$ 0.01
Common stock value	$ 3,000,000

BUSINESS COMBINATIONS (Acquisitions) (Details)				3 Months Ended		9 Months Ended
BUSINESS COMBINATIONS (Acquisitions) (Details)	Jul. 28, 2017 USD ($)	Mar. 04, 2016 USD ($) shares	Feb. 26, 2016 USD ($)	Sep. 29, 2017 USD ($) installment	Sep. 30, 2016 USD ($)	Sep. 29, 2017 USD ($) installment	Sep. 30, 2016 USD ($)	Dec. 30, 2016 USD ($)
Consideration for acquisitions
Cash paid, net of cash acquired						$ 14,603,000	$ 8,857,000
Other payable for working capital adjustment						1,881,000
Other receivable for working capital adjustment							(604,000)
Allocation of acquired assets
Goodwill				$ 40,056,000		40,056,000		$ 21,947,000
Revenue and Income from operations
Revenues				69,007,000	$ 58,660,000	209,191,000	151,516,000
Operating Income (Loss)				$ 4,183,000	3,053,000	$ 10,710,000	8,855,000
Genesys
Consideration for acquisitions
Cash paid, net of cash acquired		$ 8,857,000
Other receivable for working capital adjustment		(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
Number of monthly installment payments \| installment				24		24
Common stock shares issued \| shares		255,808
Tax deductible goodwill		$ 6,200,000
Allocation of acquired assets
Current assets		14,952,000
Non-current assets		36,000
Cash		101,000
Property, plant and equipment		117,000
Liabilities		(12,643,000)
Goodwill		6,167,000
Net assets acquired		15,050,000
Revenue and Income from operations
Revenues				$ 14,900,000		$ 53,000,000
Operating Income (Loss)				100,000		1,500,000
Acquisition costs				0		0
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
Integral Analytics, Inc
BUSINESS COMBINATIONS
Contingent consideration	$ 5,400,000
Consideration for acquisitions
Cash paid, net of cash acquired	15,000,000
Other payable for working capital adjustment	1,881,000
Issuance of common stock	3,099,000
Contingent consideration	5,400,000
Tax deductible goodwill	18,300,000
Allocation of acquired assets
Current assets	711,000
Non-current assets	2,000
Cash	397,000
Property, plant and equipment	5,000
Liabilities	(946,000)
Goodwill	18,251,000
Net assets acquired	25,380,000
Unaudited pro forma financial information
Pro forma revenue				69,149,000	59,869,000	211,279,000	163,290,000
Pro forma income from operations				3,916,000	2,511,000	8,787,000	8,158,000
Pro forma net income				2,705,000	$ 2,054,000	$ 6,913,000	$ 6,186,000
Revenue and Income from operations
Revenues				500,000
Operating Income (Loss)				(400,000)
Integral Analytics, Inc \| General and administrative expenses
Revenue and Income from operations
Acquisition costs				$ 194,000
Integral Analytics, Inc \| Customer relationships
Allocation of acquired assets
Intangible assets	1,510,000
Integral Analytics, Inc \| Tradename
Allocation of acquired assets
Intangible assets	1,040,000
Integral Analytics, Inc \| Developed Technology
Allocation of acquired assets
Intangible assets	2,760,000
Integral Analytics, Inc \| In-process Technology
Allocation of acquired assets
Intangible assets	$ 1,650,000

GOODWILL AND OTHER INTANGIBLE ASSETS - Carrying Value of Goodwill by Reporting Unit (Details)	9 Months Ended
	Sep. 29, 2017 USD ($)
Changes in carrying value of goodwill
Goodwill at beginning of period	$ 21,947,000
Additional Purchase Cost	18,109,000
Goodwill at end of period	40,056,000
Energy Efficiency Services
Changes in carrying value of goodwill
Goodwill at beginning of period	21,198,000
Additional Purchase Cost	18,109,000
Goodwill at end of period	39,307,000
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		9 Months Ended
	Sep. 29, 2017	Sep. 30, 2016	Sep. 29, 2017	Sep. 30, 2016	Dec. 30, 2016
Goodwill and other intangible assets
Gross Amount	$ 15,688,000		$ 15,688,000		$ 8,728,000
Accumulated Amortization	4,543,000		4,543,000		2,787,000
Amortization expense for acquired identifiable intangible assets	700,000	$ 400,000	1,800,000	$ 1,400,000
Remainder of fiscal year 2017	700,000		700,000
Estimated amortization expense for acquired identifiable intangible assets
2018	2,823,000		2,823,000
2019	1,959,000		1,959,000
2020	1,546,000		1,546,000
2021	981,000		981,000
2022	872,000		872,000
Thereafter	2,236,000		2,236,000
Total estimated amortization expense	10,417,000		10,417,000
Backlog
Goodwill and other intangible assets
Gross Amount	1,398,000		1,398,000		1,398,000
Accumulated Amortization	901,000		$ 901,000		639,000
Backlog \| Maximum
Goodwill and other intangible assets
Amortization Period (in years)			5 years
Tradename
Goodwill and other intangible assets
Gross Amount	3,779,000		$ 3,779,000		2,739,000
Accumulated Amortization	1,818,000		$ 1,818,000		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)			6 years
Non-compete agreements
Goodwill and other intangible assets
Gross Amount	1,331,000		$ 1,331,000		1,331,000
Accumulated Amortization	674,000		$ 674,000		463,000
Amortization Period (in years)			4 years
Developed Technology
Goodwill and other intangible assets
Gross Amount	2,760,000		$ 2,760,000
Accumulated Amortization	58,000		$ 58,000
Amortization Period (in years)			8 years
In-process Technology
Goodwill and other intangible assets
Gross Amount	1,650,000		$ 1,650,000
Accumulated Amortization	28,000		$ 28,000
Amortization Period (in years)			10 years
Customer relationships
Goodwill and other intangible assets
Gross Amount	4,770,000		$ 4,770,000		3,260,000
Accumulated Amortization	$ 1,064,000		$ 1,064,000		$ 543,000
Customer relationships \| Minimum
Goodwill and other intangible assets
Amortization Period (in years)			5 years
Customer relationships \| Maximum
Goodwill and other intangible assets
Amortization Period (in years)			8 years

EARNINGS PER SHARE (EPS) (Details) - USD ($)	3 Months Ended		9 Months Ended
EARNINGS PER SHARE (EPS) (Details) - USD ($)	Sep. 29, 2017	Sep. 30, 2016	Sep. 29, 2017	Sep. 30, 2016
Earnings per share
Net income	$ 2,886,000	$ 2,462,000	$ 8,839,000	$ 6,730,000
Weighted-average common shares outstanding (in shares)	8,730,000	8,308,000	8,580,000	8,181,000
Effect of dilutive stock options and restricted stock awards (in shares)	518,000	412,000	558,000	335,000
Weighted-average common shares outstanding-diluted (in shares)	9,248,000	8,720,000	9,138,000	8,516,000
Earnings per share:
Basic (in dollars per share)	$ 0.33	$ 0.30	$ 1.03	$ 0.82
Diluted (in dollars per share)	$ 0.31	$ 0.28	$ 0.97	$ 0.79
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)	137,000	280,000	89,000	330,000

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Details) - USD ($)	Sep. 29, 2017	Dec. 30, 2016
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	$ 15,410,000	$ 13,655,000
Accumulated depreciation and amortization	(10,050,000)	(9,144,000)
Equipment and leasehold improvements, net	5,360,000	4,511,000
Furniture and fixtures
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	2,998,000	2,353,000
Computer hardware and software
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	8,131,000	7,686,000
Leasehold improvements
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	1,097,000	1,094,000
Equipment under capital leases
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	1,164,000	1,076,000
Automobiles, trucks, and field equipment
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	$ 2,020,000	$ 1,446,000

ACCRUED LIABILITIES (Details) - USD ($)	Sep. 29, 2017	Dec. 30, 2016
ACCRUED LIABILITIES
Accrued bonuses	$ 1,444,000	$ 2,090,000
Accrued interest	2,000	1,000
Paid leave bank	2,522,000	2,129,000
Compensation and payroll taxes	1,331,000	2,006,000
Accrued legal	120,000	177,000
Accrued workers' compensation insurance	286,000	81,000
Accrued rent	177,000	166,000
Employee withholdings	1,130,000	1,337,000
Client deposits	177,000	139,000
Accrued subcontractor costs	9,393,000	8,100,000
Other	1,173,000	2,823,000
Total accrued liabilities	$ 17,755,000	$ 19,049,000

DEBT - Obligations (Details) - USD ($)	9 Months Ended
DEBT - Obligations (Details) - USD ($)	Sep. 29, 2017	Dec. 30, 2016
Debt Obligations
Total debt obligations, excluding capital lease obligations	$ 2,776,000	$ 6,046,000
Less current portion	1,276,000	3,972,000
Debt obligations, less current portion	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	$ 253,000	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	$ 67,000	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	$ 956,000	$ 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 ($)			9 Months Ended
DEBT - Line of credit (Details) - USD ($)	Jan. 20, 2017	Mar. 04, 2016	Sep. 29, 2017	Sep. 30, 2016	Dec. 30, 2016	Jan. 15, 2015
Line of Credit
Payment on note			$ 3,270,000	$ 3,083,000
Total debt obligations, excluding capital lease obligations			$ 2,776,000		$ 6,046,000
Genesys \| Braun
Line of Credit
Deferred payments		$ 2,300,000
Genesys \| Mineo
Line of Credit
Deferred payments		2,300,000
Genesys \| Braun 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			$ 3,600,000
Deferred payments outstanding			$ 1,000,000
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
Outstanding balance			$ 0
Rubbert Note
Line of Credit
Amount borrowed to finance acquisition						600,000
Outstanding balance			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			2,700,000
Outstanding balance			300,000
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
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%
Total debt obligations, excluding capital lease obligations			$ 67,000		$ 599,000

COMMITMENTS - Benefit Plans (Details)	9 Months Ended
COMMITMENTS - Benefit Plans (Details)	Sep. 29, 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)	3 Months Ended		9 Months Ended
INCOME TAXES (Details)	Sep. 29, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 29, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 30, 2016 USD ($)
INCOME TAXES
Valuation reserve related to California net operating losses					$ 72,000
Liability for uncertain tax positions	$ 300,000		$ 300,000
Unrecognized tax benefits	100,000		100,000
Interest and penalties related to unrecognized tax benefits			0
Income tax expense	$ 1,292,000	$ 548,000	$ 1,839,000	$ 1,990,000
Reduction in effective tax rate			16.3
Valuation allowance change			$ 0

SEGMENT INFORMATION (Details)	3 Months Ended		9 Months Ended
SEGMENT INFORMATION (Details)	Sep. 29, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 29, 2017 USD ($) segment	Sep. 30, 2016 USD ($)	Dec. 30, 2016 USD ($)
SEGMENT INFORMATION
Number of reporting segments \| segment			4
Segment reconciliation
Contract revenue	$ 69,007,000	$ 58,660,000	$ 209,191,000	$ 151,516,000
Depreciation and amortization	1,053,000	742,000	2,896,000	2,308,000
Segment profit (loss) before income tax expense	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 (loss)	2,886,000	2,462,000	8,839,000	6,730,000
Segment assets(1)	130,852,000	106,798,000	130,852,000	106,798,000	$ 108,347,000
Intersegment
Segment reconciliation
Contract revenue	0	0	0	0
Reporting Segments \| Energy Efficiency Services
Segment reconciliation
Contract revenue	50,031,000	41,988,000	153,877,000	103,574,000
Segment profit (loss) before income tax expense	825,000	1,058,000	3,519,000	4,257,000
Net income (loss)	570,000	895,000	2,913,000	3,285,000
Segment assets(1)	74,955,000	65,383,000	74,955,000	65,383,000
Reporting Segments \| Engineering Services
Segment reconciliation
Contract revenue	14,980,000	12,906,000	43,467,000	36,863,000
Segment profit (loss) before income tax expense	2,612,000	1,857,000	6,230,000	4,941,000
Net income (loss)	1,804,000	1,508,000	5,157,000	3,814,000
Segment assets(1)	12,439,000	12,012,000	12,439,000	12,012,000
Reporting Segments \| Financial Services
Segment reconciliation
Contract revenue	3,272,000	3,199,000	9,973,000	9,206,000
Segment profit (loss) before income tax expense	244,000	287,000	1,061,000	294,000
Net income (loss)	168,000	221,000	878,000	227,000
Segment assets(1)	6,809,000	5,994,000	6,809,000	5,994,000
Reporting Segments \| Homeland Security Services
Segment reconciliation
Contract revenue	724,000	567,000	1,874,000	1,873,000
Segment profit (loss) before income tax expense	(55,000)	4,000	(149,000)	92,000
Net income (loss)	(38,000)	5,000	(124,000)	71,000
Segment assets(1)	799,000	498,000	799,000	498,000
Unallocated Corporate
Segment reconciliation
Segment profit (loss) before income tax expense	552,000	(196,000)	17,000	(864,000)
Net income (loss)	382,000	(167,000)	15,000	(667,000)
Segment assets(1)	58,980,000	46,041,000	58,980,000	46,041,000
Intersegment
Segment reconciliation
Segment assets(1)	$ (23,130,000)	$ (23,130,000)	$ (23,130,000)	$ (23,130,000)