PRESS RELEASES
<< Back
Willdan Group Reports Strong Fourth Quarter and Fiscal Year 2017 Results
Investment Community Conference Call Today at
Fiscal Year 2017 Highlights
-
Total contract revenue of
$273.4 million , an increase of 31% over prior year -
Net Revenue was
$121.4 million , an increase of 16% over prior year -
Net income of
$12.1 million , an increase of 46% over prior year -
Diluted earnings per share of
$1.32 , an increase of 36% over prior year
Fourth Quarter 2017 Highlights
-
Total contract revenue of
$64.2 million , an increase of 12% over prior year -
Income from operations of
$3.0 million , an increase of 11% over prior year -
Net income of
$3.3 million , an increase of 110% over prior year -
Diluted earnings per share of
$0.36 , an increase of 100% over prior year
For the fourth quarter of 2017,
“We had a strong year in 2017, surpassing our long-term 20% growth
targets,” said
Fourth Quarter 2017 Financial Highlights
Total contract revenue for the fourth quarter of 2017 was
Revenue, net of subcontractor services and other direct costs (see “Use
of Non-GAAP Financial Measures” below), for the fourth quarter of 2017
was
Direct costs of contract revenue were
Total general and administrative expenses for the fourth quarter of 2017
increased 10.3% to
We recorded an income tax benefit of
Net income for the fourth quarter of 2017 was
The growth in Net Revenue and improvement in project profitability
enabled Adjusted EBITDA (see “Use of Non-GAAP Financial Measures” below)
to increase 24.6% to
Fiscal Year 2017 Financial Highlights
Total contract revenue for fiscal year 2017 was
Direct costs of contract revenue increased 37.3% to
Net Revenue for fiscal year 2017 increased 16.0% to
Total general and administrative expenses for fiscal year 2017 were
We recorded income tax expense of
Net income for fiscal year 2017 was
The growth in Net Revenue enabled Adjusted EBITDA to grow 32.8% to 21.8
million for fiscal year 2017, compared with
Balance Sheet
Outlook
-
Total Net Revenue of
$130 - $140 million -
Diluted earnings per share before stock-based compensation expense of
$1.95 - $2.05 - Effective tax rate of approximately 23%
- Diluted share count of 9.3 million shares
-
Depreciation of approximately
$2.0 million -
Amortization of approximately
$3.0 million
Over the long-term,
Conference Call Details and Investor Report
Chief Executive Officer
Interested parties may participate in the conference call by dialing 866-548-4713 and providing conference ID 7721987. The conference call will be webcast simultaneously on Willdan’s website at www.willdan.com under Investors: Events and the replay will be archived for at least 12 months.
The telephonic replay of the conference call may be accessed following
the call by dialing 888-203-1112 and entering the passcode 7721987. The
replay will be available through
An Investor Report containing supplemental financial information can also be accessed on the home page of Willdan’s investor relations website.
About Willdan Group, Inc.
Willdan provides professional technical and consulting services,
including comprehensive energy efficiency services, for utilities,
private industry and public agencies throughout the
Use of Non-GAAP Financial Measures
“Net Revenue,” a non-GAAP financial measure, is a supplemental measure
that Willdan believes enhances investors’ ability to analyze our
business trend and performance because it substantially measures the
work performed by our employees. In the course of providing services,
Adjusted EBITDA is a supplemental measure used by Willdan’s management
to measure its operating performance.
Adjusted EBITDA has limitations as an analytical tool and should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s costs of capital, stock-based compensation, as well as the historical costs of depreciable assets. Willdan’s definition of Adjusted EBITDA may also differ from those of many companies reporting similarly named measures. Willdan believes Adjusted EBITDA is useful to investors, research analysts, investment bankers and lenders because it removes the impact of certain non-operational items from its operational results, which may facilitate comparison of its results from period to period. A reconciliation of net income as reported in accordance with GAAP to Adjusted EBITDA is provided at the end of this news release.
“Adjusted Net Income” is a supplemental measure used by Willdan’s
management to measure its operating performance.
“Adjusted Diluted EPS” is a supplemental measure used by Willdan’s
management to measure its operating performance.
Willdan’s definition of revenue, net of subcontractor services and other direct costs (Net Revenue), Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted EPS may differ from other companies reporting similarly named measures. These measures should be considered in addition to, and not as a substitute for, or superior to, other measures of financial performance prepared in accordance with GAAP, such as contract revenue and net income.
Forward Looking Statements
Statements in this press release that are not purely historical,
including statements regarding Willdan’s intentions, hopes, beliefs,
expectations, representations, projections, estimates, plans or
predictions of the future are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding Willdan’s targets for fiscal year 2018
and the expected benefits of Willdan’s acquisition of Integral
Analytics. The forward-looking statements involve risks and
uncertainties including, but not limited to, the risk that Willdan will
not be able to expand its services or meet the needs of customers in
markets in which it operates. It is important to note
that Willdan’s actual results could differ materially from those in any
such forward-looking statements. Factors that could cause actual results
to differ materially include, but are not limited to, Willdan’s ability
to adequately complete projects in a timely manner, Willdan’s ability to
compete successfully in the highly competitive energy efficiency
services market, changes in state, local and regional economies and
government budgets, Willdan’s ability to win new contracts, to renew
existing contracts (including with its two primary customers) and to
compete effectively for contracts awards through bidding processes and
Willdan’s ability to successfully integrate its acquisitions and execute
on its growth strategy. Willdan’s business could be affected by a number
of other factors, including the risk factors listed from time to time
in Willdan’s reports filed with the
| WILLDAN GROUP, INC. AND SUBSIDIARIES | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (Unaudited) | ||||||
| December 29, | December 30, | |||||
| 2017 | 2016 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 14,424,000 | $ | 22,668,000 | ||
| Accounts receivable, net of allowance for doubtful accounts of $369,000 and $785,000 at December 29, 2017 and December 30, 2016, respectively | 38,441,000 | 30,285,000 | ||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | 24,732,000 | 18,988,000 | ||||
| Other receivables | 1,833,000 | 699,000 | ||||
| Prepaid expenses and other current assets | 3,760,000 | 2,601,000 | ||||
| Total current assets | 83,190,000 | 75,241,000 | ||||
| Equipment and leasehold improvements, net | 5,306,000 | 4,511,000 | ||||
| Goodwill | 38,184,000 | 21,947,000 | ||||
| Other intangible assets, net | 10,666,000 | 5,941,000 | ||||
| Other assets | 826,000 | 707,000 | ||||
| Total assets | $ | 138,172,000 | $ | 108,347,000 | ||
| Liabilities and Stockholders’ Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 20,826,000 | $ | 17,395,000 | ||
| Accrued liabilities | 23,293,000 | 19,049,000 | ||||
| Contingent consideration payable | 4,246,000 | 1,925,000 | ||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 7,321,000 | 8,377,000 | ||||
| Notes payable | 383,000 | 3,972,000 | ||||
| Capital lease obligations | 289,000 | 334,000 | ||||
| Total current liabilities | 56,358,000 | 51,052,000 | ||||
| Contingent consideration payable | 5,062,000 | 2,537,000 | ||||
| Notes payable | 2,500,000 | 2,074,000 | ||||
| Capital lease obligations, less current portion | 160,000 | 210,000 | ||||
| Deferred lease obligations | 614,000 | 714,000 | ||||
| Deferred income taxes, net | 2,463,000 | 1,842,000 | ||||
| Other noncurrent liabilities | 363,000 | — | ||||
| Total liabilities | 67,520,000 | 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; 8,799,000 and 8,348,000 shares issued and outstanding at December 29, 2017 and December 30, 2016, respectively | 88,000 | 83,000 | ||||
| Additional paid-in capital | 50,976,000 | 42,376,000 | ||||
| Retained earnings | 19,588,000 | 7,459,000 | ||||
| Total stockholders’ equity | 70,652,000 | 49,918,000 | ||||
| Total liabilities and stockholders’ equity | $ | 138,172,000 | $ | 108,347,000 | ||
| WILLDAN GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| December 29, | December 30, | December 29, | December 30, | |||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Contract revenue | $ | 64,161,000 | $ | 57,425,000 | $ | 273,352,000 | $ | 208,941,000 | ||||||||
| Direct costs of contract revenue (inclusive of directly related depreciation and amortization): | ||||||||||||||||
| Salaries and wages | 11,149,000 | 10,271,000 | 44,743,000 | 39,024,000 | ||||||||||||
| Subcontractor services and other direct costs | 33,038,000 | 29,075,000 | 151,919,000 | 104,236,000 | ||||||||||||
| Total direct costs of contract revenue | 44,187,000 | 39,346,000 | 196,662,000 | 143,260,000 | ||||||||||||
| General and administrative expenses: | ||||||||||||||||
| Salaries and wages, payroll taxes and employee benefits | 10,442,000 | 8,049,000 | 36,534,000 | 31,084,000 | ||||||||||||
| Facilities and facility related | 1,146,000 | 1,107,000 | 4,624,000 | 4,085,000 | ||||||||||||
| Stock-based compensation | 782,000 | 507,000 | 2,774,000 | 1,239,000 | ||||||||||||
| Depreciation and amortization | 1,053,000 | 896,000 | 3,949,000 | 3,204,000 | ||||||||||||
| Other | 3,557,000 | 4,831,000 | 15,105,000 | 14,525,000 | ||||||||||||
| Total general and administrative expenses | 16,980,000 | 15,390,000 | 62,986,000 | 54,137,000 | ||||||||||||
| Income from operations | 2,994,000 | 2,689,000 | 13,704,000 | 11,544,000 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense, net | (23,000 | ) | (42,000 | ) | (111,000 | ) | (179,000 | ) | ||||||||
| Other, net | 42,000 | — | 98,000 | 2,000 | ||||||||||||
| Total other expense, net | 19,000 | (42,000 | ) | (13,000 | ) | (177,000 | ) | |||||||||
| Income before income taxes | 3,013,000 | 2,647,000 | 13,691,000 | 11,367,000 | ||||||||||||
| Income tax expense | (277,000 | ) | 1,078,000 | 1,562,000 | 3,068,000 | |||||||||||
| Net income | $ | 3,290,000 | $ | 1,569,000 | $ | 12,129,000 | $ | 8,299,000 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.38 | $ | 0.19 | $ | 1.42 | $ | 1.01 | ||||||||
| Diluted | $ | 0.36 | $ | 0.18 | $ | 1.32 | $ | 0.97 | ||||||||
| Weighted-average shares outstanding: | ||||||||||||||||
| Basic | 8,689,000 | 8,334,000 | 8,541,000 | 8,219,000 | ||||||||||||
| Diluted | 9,231,000 | 8,959,000 | 9,155,000 | 8,565,000 | ||||||||||||
| WILLDAN GROUP, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
| Year Ended | ||||||||
| December 29, | December 30, | |||||||
| 2017 | 2016 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 12,129,000 | $ | 8,299,000 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 4,082,000 | 3,220,000 | ||||||
| Deferred income taxes, net | 621,000 | 1,225,000 | ||||||
| Loss (gain) on sale/disposal of equipment | 27,000 | 4,000 | ||||||
| (Recovery of) provision for doubtful accounts | (189,000 | ) | 216,000 | |||||
| Stock-based compensation | 2,774,000 | 1,239,000 | ||||||
| Accretion and fair value adjustments of contingent consideration | 1,156,000 | 21,000 | ||||||
| Changes in operating assets and liabilities, net of effects from business acquisitions: | ||||||||
| Accounts receivable | (7,412,000 | ) | 1,288,000 | |||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | (5,744,000 | ) | (4,057,000 | ) | ||||
| Other receivables | (1,126,000 | ) | 82,000 | |||||
| Prepaid expenses and other current assets | (1,096,000 | ) | (519,000 | ) | ||||
| Other assets | 25,000 | (169,000 | ) | |||||
| Accounts payable | 3,186,000 | 206,000 | ||||||
| Accrued liabilities | 4,329,000 | 8,409,000 | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | (1,593,000 | ) | 2,159,000 | |||||
| Deferred lease obligations | (100,000 | ) | (23,000 | ) | ||||
| Net cash provided by operating activities | 11,069,000 | 21,600,000 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchase of equipment and leasehold improvements | (2,178,000 | ) | (1,662,000 | ) | ||||
| Proceeds from sale of equipment | — | 15,000 | ||||||
| Cash paid for acquisitions, net of cash acquired | (14,603,000 | ) | (8,857,000 | ) | ||||
| Net cash used in investing activities | (16,781,000 | ) | (10,504,000 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payments on contingent consideration | (1,709,000 | ) | (1,284,000 | ) | ||||
| Payments on notes payable | (4,164,000 | ) | (4,378,000 | ) | ||||
| Proceeds from notes payable | — | 733,000 | ||||||
| Borrowings under line of credit | 1,000,000 | — | ||||||
| Principal payments on capital lease obligations | (390,000 | ) | (522,000 | ) | ||||
| Proceeds from stock option exercise | 1,901,000 | 327,000 | ||||||
| Proceeds from sales of common stock under employee stock purchase plan | 830,000 | 209,000 | ||||||
| Net cash used in financing activities | (2,532,000 | ) | (4,915,000 | ) | ||||
| Net (decrease) increase in cash and cash equivalents | (8,244,000 | ) | 6,181,000 | |||||
| Cash and cash equivalents at beginning of period | 22,668,000 | 16,487,000 | ||||||
| Cash and cash equivalents at end of period | $ | 14,424,000 | $ | 22,668,000 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | 111,000 | $ | 179,000 | ||||
| Income taxes | 2,750,000 | 1,875,000 | ||||||
| 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 | 3,100,000 | 2,228,000 | ||||||
| Contingent consideration related to business acquisitions | 5,400,000 | — | ||||||
| Other payable for working capital adjustment | 113,000 | — | ||||||
| Equipment acquired under capital leases | 294,000 | 373,000 | ||||||
| Willdan Group, Inc. and Subsidiaries | ||||||||||||
| Reconciliation of GAAP Revenue to Net Revenue | ||||||||||||
|
(Non-GAAP Measure) |
||||||||||||
| Three Months Ended | Year Ended | |||||||||||
| December 29, | December 30, | December 29, | December 30, | |||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Contract revenue | $ | 64,161,000 | $ | 57,425,000 | $ | 273,352,000 | $ | 208,941,000 | ||||
| Subcontractor services and other direct costs | 33,038,000 | 29,075,000 | 151,919,000 | 104,236,000 | ||||||||
| Net Revenue | $ | 31,123,000 | $ | 28,350,000 | $ | 121,433,000 | $ | 104,705,000 | ||||
| Willdan Group, Inc. and Subsidiaries | |||||||||||||
| Reconciliation of GAAP Net Income to Adjusted EBITDA | |||||||||||||
|
(Non-GAAP Measure) |
|||||||||||||
| Three Months Ended | Year Ended | ||||||||||||
| December 29, | December 30, | December 29, | December 30, | ||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||
| Net income | $ | 3,290,000 | $ | 1,569,000 | $ | 12,129,000 | $ | 8,299,000 | |||||
| Interest expense | 23,000 | 42,000 | 111,000 | 179,000 | |||||||||
| Income tax expense (benefit) | (277,000 | ) | 1,078,000 | 1,562,000 | 3,068,000 | ||||||||
| Stock-based compensation | 782,000 | 507,000 | 2,774,000 | 1,239,000 | |||||||||
| Interest accretion(1) | 377,000 | 161,000 | 1,156,000 | 439,000 | |||||||||
| Depreciation and amortization | 1,106,000 | 896,000 | 4,082,000 | 3,204,000 | |||||||||
| Adjusted EBITDA | $ | 5,301,000 | $ | 4,253,000 | $ | 21,814,000 | $ | 16,428,000 | |||||
|
_____________________________ |
|||||||||||||
| (1) | Interest accretion represents the imputed interest on the earn-out payments to be paid by us in connection with the acquisitions of Abacus Resource Management Company and substantially all of the assets of 360 Energy Engineers, LLC in January 2015 and the acquisition of Integral Analytics in July 2017. | |
| Willdan Group, Inc. and Subsidiaries | ||||||||||||||
| Reconciliation of GAAP Net Income to Adjusted Net Income and Adjusted Diluted EPS | ||||||||||||||
|
(Non-GAAP Measure) |
||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||
| December 29, | December 30, | December 29, | December 30, | |||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||
| Net income | $ | 3,290,000 | $ | 1,569,000 | $ | 12,129,000 | $ | 8,299,000 | ||||||
| Adjustment for remeasurement of deferred tax liabilities | (1,277,000 | ) | — | (1,277,000 | ) | — | ||||||||
| Adjustment for stock-based compensation | 782,000 | 507,000 | 2,774,000 | 1,239,000 | ||||||||||
| Adjusted Net Income | 2,795,000 | 2,076,000 | 13,626,000 | 9,538,000 | ||||||||||
| Diluted weighted-average shares outstanding | 9,231,000 | 8,959,000 | 9,155,000 | 8,565,000 | ||||||||||
| Diluted earnings per share | $ | 0.36 | $ | 0.18 | $ | 1.32 | $ | 0.97 | ||||||
| Impact of adjustment: | ||||||||||||||
| Remeasurement of deferred tax liabilities | (0.14 | ) | — | (0.14 | ) | — | ||||||||
| Stock-based compensation | 0.08 | 0.06 | 0.30 | 0.14 | ||||||||||
| Adjusted Diluted EPS | $ | 0.30 | $ | 0.23 | $ | 1.49 | $ | 1.11 | ||||||
| Willdan Group, Inc. and Subsidiaries | ||||||
| Reconciliation of Diluted EPS to Adjusted Diluted EPS Guidance | ||||||
|
(Non-GAAP Measure) |
||||||
| 2018 Guidance | ||||||
| High | Low | |||||
| Diluted earnings per share | $ | 1.60 | $ | 1.70 | ||
| Stock-based compensation expense | 0.35 | 0.35 | ||||
| Adjusted Diluted EPS | $ | 1.95 | $ | 2.05 | ||
View source version on businesswire.com: http://www.businesswire.com/news/home/20180308006367/en/
Source:
Willdan Group, Inc.
Stacy McLaughlin
Chief Financial
Officer
Tel: 714-940-6300
smclaughlin@willdan.com
Or
Investor/Media
Contact
Financial Profiles, Inc.
Tony Rossi
Tel:
310-622-8221
trossi@finprofiles.com
