PRESS RELEASES
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Willdan Group Reports Fourth Quarter and Fiscal Year 2018 Results
Investment Community Conference Call Today at
Fiscal Year 2018 Highlights
-
Consolidated Contract Revenue of
$272.3 million -
Net Revenue of
$139.6 million , an increase of 14.9% over prior year -
Net Income of
$10.0 million -
Diluted earnings per share of
$1.03 , including Lime transaction costs and new shares issued -
Adjusted diluted earnings per share of
$2.07 , above 2018 guidance of$1.98 to $2.03
Fourth Quarter 2018 Highlights
-
Consolidated Contract Revenue of
$86.4 million -
Net Revenue of
$40.2 million -
Net Income of
$1.2 million -
Diluted earnings per share of
$0.11 , including Lime transaction costs and new shares issued -
Adjusted diluted earnings per share of
$0.61 -
Adjusted EBITDA of
$6.6 million , an increase of 23.2%
For the fourth quarter of 2018,
“We completed fiscal 2018 with a strong quarter that included the
completion of our acquisition of Lime Energy,” said
Fourth Quarter 2018 Financial Highlights
Consolidated contract revenue for the fourth quarter of 2018 was
Net Revenue for the fourth quarter of 2018 was
Direct costs of contract revenue were
Total general and administrative expenses for the fourth quarter of 2018
was
Interest expense was
The Company recorded an income tax benefit of
Net income for the fourth quarter of 2018 was
Adjusted EBITDA (see “Use of Non-GAAP Financial Measures” below) was
Fiscal Year 2018 Financial Highlights
Consolidated contract revenue for fiscal 2018 was
Net Revenue for fiscal 2018 was
Direct costs of contract revenue were
Total general and administrative expenses for fiscal 2018 was
Interest expense was
Income tax expense was
Net income for fiscal 2018 was
Adjusted EBITDA (see “Use of Non-GAAP Financial Measures” below) was
Balance Sheet
Outlook
-
Net Revenue* of
$180 to $200 million -
Adjusted Diluted EPS* of
$2.35 - $2.45 - Effective tax rate of approximately 24%
- Diluted share count of 11.7 million shares
-
Depreciation of approximately
$4.5 million -
Amortization of approximately
$7.6 million -
Stock-based compensation of approximately
$11.9 million
*See “Use of Non-GAAP Financial Measures” below.
The financial targets do not include the effect of any transaction that
has not been completed as of this date. Over the long-term,
Conference Call Details and Investor Report
Chief Executive Officer
Interested parties may participate in the conference call by dialing 888-254-3590 and providing conference ID 7731627. 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 7731627. 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.
Use of Non-GAAP Financial Measures
“Net Revenue,” defined as contract revenue as reported in accordance
with GAAP minus subcontractor services and other direct costs, is a
non-GAAP financial measure, Net Revenue is a supplemental measure
that Willdan believes enhances investors’ ability to analyze Willdan’s
business trends and performance because it substantially measures the
work performed by Willdan’s employees. In the course of providing
services,
“Adjusted EBITDA,” defined as net income plus interest expense, income
tax expense, stock-based compensation, interest accretion, depreciation
and amortization, transaction costs and gain on sale of equipment, is a
non-GAAP financial measure. Adjusted EBITDA is a supplemental measure
used by Willdan’s management to measure Willdan’s operating performance.
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. A reconciliation of net income as reported in accordance with GAAP to Adjusted EBITDA is provided at the end of this press release.
“Adjusted Net Income,” defined as net income plus stock-based
compensation, intangible amortization and transaction costs is a
non-GAAP financial measure. “Adjusted Diluted EPS,” defined as net
income plus stock-based compensation, intangible amortization and
transaction costs, net of tax, all divided by the diluted
weighted-average shares outstanding, is a non-GAAP financial measure.
Adjusted Net Income and Adjusted Diluted EPS are supplemental measures
used by Willdan’s management to measure its operating performance.
Willdan’s definitions of Net Revenue, Adjusted EBITDA, Adjusted Net
Income and Adjusted Diluted EPS have limitations as analytical tools and
may differ from other companies reporting similarly named measures or
from similarly named measures
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, as
amended, including statements regarding Willdan’s targets for fiscal
2019, Willdan’s ability to capitalize on increased energy efficiency
spending in large markets and expected benefits from Willdan’s pending
acquisition of
The above is not a complete list of factors or events that could cause
actual results to differ from Willdan’s expectations, and
WILLDAN GROUP, INC. AND SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
December 28, | December 29, | |||||
2018 | 2017 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 15,259,000 | $ | 14,424,000 | ||
Accounts receivable, net of allowance for doubtful accounts of $442,000 and $369,000 at December 28, 2018 and December 29, 2017, respectively | 61,346,000 | 38,441,000 | ||||
Contract assets | 51,851,000 | 24,732,000 | ||||
Other receivables | 1,893,000 | 1,833,000 | ||||
Prepaid expenses and other current assets | 5,745,000 | 3,760,000 | ||||
Total current assets | 136,094,000 | 83,190,000 | ||||
Equipment and leasehold improvements, net | 7,998,000 | 5,306,000 | ||||
Goodwill | 97,748,000 | 38,184,000 | ||||
Other intangible assets, net | 44,364,000 | 10,666,000 | ||||
Other assets | 3,311,000 | 826,000 | ||||
Deferred income taxes, net | 12,321,000 | — | ||||
Total assets | $ | 301,836,000 | $ | 138,172,000 | ||
Liabilities and Stockholders’ Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 36,829,000 | $ | 20,826,000 | ||
Accrued liabilities | 37,401,000 | 23,293,000 | ||||
Contingent consideration payable | 3,113,000 | 4,246,000 | ||||
Contract liabilities | 5,075,000 | 7,321,000 | ||||
Current portion of notes payable | 8,572,000 | 383,000 | ||||
Current portion of capital lease obligations | 320,000 | 289,000 | ||||
Total current liabilities | 91,310,000 | 56,358,000 | ||||
Contingent consideration payable | 1,616,000 | 5,062,000 | ||||
Notes payable | 63,139,000 | 2,500,000 | ||||
Capital lease obligations, less current portion | 224,000 | 160,000 | ||||
Deferred lease obligations | 724,000 | 614,000 | ||||
Deferred income taxes, net | — | 2,463,000 | ||||
Other noncurrent liabilities | 534,000 | 363,000 | ||||
Total liabilities | 157,547,000 | 67,520,000 | ||||
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;
10,968,000
and 8,799,000 shares issued and outstanding at December 28, 2018 and December 29, 2017, respectively |
110,000 | 88,000 | ||||
Additional paid-in capital | 114,008,000 | 50,976,000 | ||||
Retained earnings | 30,171,000 | 19,588,000 | ||||
Total stockholders’ equity | 144,289,000 | 70,652,000 | ||||
Total liabilities and stockholders’ equity | $ | 301,836,000 | $ | 138,172,000 | ||
WILLDAN GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
December 28, | December 29, | December 28, | December 29, | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Contract revenue | $ | 86,438,000 | $ | 64,161,000 | $ | 272,252,000 | $ | 273,352,000 | ||||||||
Direct costs of contract revenue (inclusive of directly related depreciation and amortization): | ||||||||||||||||
Salaries and wages | 13,230,000 | 11,149,000 | 46,588,000 | 44,743,000 | ||||||||||||
Subcontractor services and other direct costs | 46,240,000 | 33,038,000 | 132,693,000 | 151,919,000 | ||||||||||||
Total direct costs of contract revenue | 59,470,000 | 44,187,000 | 179,281,000 | 196,662,000 | ||||||||||||
General and administrative expenses: | ||||||||||||||||
Salaries and wages, payroll taxes and employee benefits | 13,373,000 | 10,442,000 | 45,248,000 | 36,534,000 | ||||||||||||
Facilities and facility related | 1,513,000 | 1,146,000 | 5,600,000 | 4,624,000 | ||||||||||||
Stock-based compensation | 1,831,000 | 782,000 | 6,262,000 | 2,774,000 | ||||||||||||
Depreciation and amortization | 2,768,000 | 1,053,000 | 6,060,000 | 3,949,000 | ||||||||||||
Other | 5,804,000 | 3,557,000 | 17,030,000 | 15,105,000 | ||||||||||||
Total general and administrative expenses | 25,289,000 | 16,980,000 | 80,200,000 | 62,986,000 | ||||||||||||
Income from operations | 1,679,000 | 2,994,000 | 12,771,000 | 13,704,000 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense, net | (625,000 | ) | (23,000 | ) | (700,000 | ) | (111,000 | ) | ||||||||
Other, net | 54,000 | 42,000 | 90,000 | 98,000 | ||||||||||||
(571,000 | ) | 19,000 | (610,000 | ) | (13,000 | ) | ||||||||||
Income before income taxes | 1,108,000 | 3,013,000 | 12,161,000 | 13,691,000 | ||||||||||||
Income tax expense | (93,000 | ) | (277,000 | ) | 2,131,000 | 1,562,000 | ||||||||||
Net income | $ | 1,201,000 | $ | 3,290,000 | $ | 10,030,000 | $ | 12,129,000 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.11 | $ | 0.38 | $ | 1.08 | $ | 1.42 | ||||||||
Diluted | $ | 0.11 | $ | 0.36 | $ | 1.03 | $ | 1.32 | ||||||||
Weighted-average shares outstanding: | ||||||||||||||||
Basic | 10,662,000 | 8,689,000 | 9,264,000 | 8,541,000 | ||||||||||||
Diluted |
11,217,000 | 9,231,000 | 9,763,000 | 9,155,000 | ||||||||||||
WILLDAN GROUP, INC. AND SUBSIDIARIES | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||||||
Fiscal Year | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 10,030,000 | $ | 12,129,000 | $ | 8,299,000 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 6,211,000 | 4,082,000 | 3,220,000 | |||||||||
Deferred income taxes, net | (2,890,000 | ) | 621,000 | 1,225,000 | ||||||||
(Gain) loss on sale/disposal of equipment | (12,000 | ) | 27,000 | 4,000 | ||||||||
Provision for (recovery of) doubtful accounts | 470,000 | (189,000 | ) | 216,000 | ||||||||
Stock-based compensation | 6,262,000 | 2,774,000 | 1,239,000 | |||||||||
Accretion and fair value adjustments of contingent consideration | (1,426,000 | ) | 1,156,000 | 21,000 | ||||||||
Changes in operating assets and liabilities, net of effects from business acquisitions: | ||||||||||||
Accounts receivable | 3,177,000 | (7,412,000 | ) | 1,288,000 | ||||||||
Contract assets | (11,539,000 | ) | (5,744,000 | ) | (4,057,000 | ) | ||||||
Other receivables | 4,081,000 | (1,126,000 | ) | 82,000 | ||||||||
Prepaid expenses and other current assets | (154,000 | ) | (1,096,000 | ) | (519,000 | ) | ||||||
Other assets | (778,000 | ) | 25,000 | (169,000 | ) | |||||||
Accounts payable | (1,583,000 | ) | 3,186,000 | 206,000 | ||||||||
Accrued liabilities | (1,945,000 | ) | 4,329,000 | 8,409,000 | ||||||||
Contract liabilities | (2,272,000 | ) | (1,593,000 | ) | 2,159,000 | |||||||
Deferred lease obligations | (64,000 | ) | (100,000 | ) | (23,000 | ) | ||||||
Net cash provided by operating activities | 7,568,000 | 11,069,000 | 21,600,000 | |||||||||
Cash flows from investing activities: | ||||||||||||
Purchase of equipment and leasehold improvements | (2,105,000 | ) | (2,178,000 | ) | (1,662,000 | ) | ||||||
Proceeds from sale of equipment | 59,000 | 0 | 15,000 | |||||||||
Cash paid for acquisitions, net of cash acquired | (124,344,000 | ) | (14,603,000 | ) | (8,857,000 | ) | ||||||
Net cash used in investing activities | (126,390,000 | ) | (16,781,000 | ) | (10,504,000 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Payments on contingent consideration | (4,296,000 | ) | (1,709,000 | ) | (1,284,000 | ) | ||||||
Payments on notes payable | (477,000 | ) | (4,164,000 | ) | (4,378,000 | ) | ||||||
Payments on debt issuance costs | (1,300,000 | ) | — | — | ||||||||
Proceeds from notes payable | 1,805,000 | — | 733,000 | |||||||||
Borrowings under delayed draw term loan facility | 70,000,000 | 1,000,000 | — | |||||||||
Repayments under line of credit | (2,500,000 | ) | — | — | ||||||||
Principal payments on capital lease obligations | (367,000 | ) | (390,000 | ) | (522,000 | ) | ||||||
Proceeds from stock option exercise | 668,000 | 1,901,000 | 327,000 | |||||||||
Proceeds from sales of common stock under employee stock purchase plan | 1,300,000 | 830,000 | 209,000 | |||||||||
Proceeds from equity raise | 55,266,000 | — | — | |||||||||
Unregistered sales of equity securities and use of proceeds | (442,000 | ) | — | — | ||||||||
Net cash provided by (used in) financing activities | 119,657,000 | (2,532,000 | ) | (4,915,000 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 835,000 | (8,244,000 | ) | 6,181,000 | ||||||||
Cash and cash equivalents at beginning of period | 14,424,000 | 22,668,000 | 16,487,000 | |||||||||
Cash and cash equivalents at end of period | $ | 15,259,000 | $ | 14,424,000 | $ | 22,668,000 | ||||||
Supplemental disclosures of cash flow information: | ||||||||||||
Cash paid during the period for: | ||||||||||||
Interest | $ | 494,000 | $ | 111,000 | $ | 179,000 | ||||||
Income taxes | 3,163,000 | 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 | 943,000 | 5,400,000 | — | |||||||||
Other working capital adjustment | 63,000 | 113,000 | — | |||||||||
Equipment acquired under capital leases | 462,000 | 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 28, | December 29, | December 28, | December 29, | |||||||||
Consolidated | 2018 | 2017 | 2018 | 2017 | ||||||||
Contract revenue | $ | 86,438,000 | $ | 64,161,000 | $ | 272,252,000 | $ | 273,352,000 | ||||
Subcontractor services and other direct costs | 46,240,000 | 33,038,000 | 132,693,000 | 151,919,000 | ||||||||
Net Revenue | $ | 40,198,000 | $ | 31,123,000 | $ | 139,559,000 | $ | 121,433,000 | ||||
Three Months Ended | Year Ended | |||||||||||
December 28, | December 29, | December 28, | December 29, | |||||||||
Energy segment | 2018 | 2017 | 2018 | 2017 | ||||||||
Contract revenue | $ | 67,689,000 | $ | 45,731,000 | $ | 196,832,000 | $ | 199,609,000 | ||||
Subcontractor services and other direct costs | 42,132,000 | 27,895,000 | 114,545,000 | 133,328,000 | ||||||||
Net Revenue | $ | 25,557,000 | $ | 17,836,000 | $ | 82,287,000 | $ | 66,281,000 | ||||
Three Months Ended | Year Ended | |||||||||||
December 28, | December 29, | December 28, | December 29, | |||||||||
Engineering and Consulting segment | 2018 | 2017 | 2018 | 2017 | ||||||||
Contract revenue | $ | 18,749,000 | $ | 18,430,000 | $ | 75,420,000 | $ | 73,743,000 | ||||
Subcontractor services and other direct costs | 4,108,000 | 5,143,000 | 18,148,000 | 18,591,000 | ||||||||
Net Revenue | $ | 14,641,000 | $ | 13,287,000 | $ | 57,272,000 | $ | 55,152,000 | ||||
Willdan Group, Inc. and Subsidiaries | |||||||||||||||
Reconciliation of GAAP Net Income to Adjusted EBITDA | |||||||||||||||
(Non-GAAP Measure) |
|||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
December 28, | December 29, | December 28, | December 29, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 1,201,000 | $ | 3,290,000 | $ | 10,030,000 | $ | 12,129,000 | |||||||
Interest expense | 625,000 | 23,000 | 700,000 | 111,000 | |||||||||||
Income tax expense | (93,000 | ) | (277,000 | ) | 2,131,000 | 1,562,000 | |||||||||
Stock-based compensation | 1,831,000 | 782,000 | 6,262,000 | 2,774,000 | |||||||||||
Interest accretion(1) | (712,000 | ) | 377,000 | (1,425,000 | ) | 1,156,000 | |||||||||
Depreciation and amortization | 2,820,000 | 1,106,000 | 6,211,000 | 4,082,000 | |||||||||||
Transaction costs(2) | 906,000 | 38,000 | 1,527,000 | 178,000 | |||||||||||
Gain on sale of equipment | — | — | (14,000 | ) | — | ||||||||||
Adjusted EBITDA | $ | 6,578,000 | $ | 5,339,000 | $ | 25,422,000 | $ | 21,992,000 |
(1) Interest accretion represents the imputed interest and fair value
adjustments to estimated contingent consideration.
(2) Transaction
costs represents acquisition and acquisition related costs.
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 28, | December 29, | December 28, | December 29, | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||
Net income | $ | 1,201,000 | $ | 3,290,000 | $ | 10,030,000 | $ | 12,129,000 | ||||||
Adjustment for stock-based compensation | 1,831,000 | 782,000 | 6,262,000 | 2,774,000 | ||||||||||
Tax effect on stock-based compensation | 154,000 | 72,000 | (1,097,000 | ) | (316,000 | ) | ||||||||
Adjustment for intangible amortization | 2,340,000 | 669,000 | 4,488,000 | 2,426,000 | ||||||||||
Tax effect on intangible amortization | 196,000 | 62,000 | (786,000 | ) | (277,000 | ) | ||||||||
Adjustment for transaction costs | 906,000 | 38,000 | 1,527,000 | 178,000 | ||||||||||
Tax effect on transaction costs | 76,000 | 3,000 | (268,000 | ) | (20,000 | ) | ||||||||
Adjusted Net Income | 6,704,000 | 4,916,000 | 20,156,000 | 16,894,000 | ||||||||||
Diluted weighted-average shares outstanding | 11,217,000 | 9,231,000 | 9,763,000 | 9,155,000 | ||||||||||
Diluted earnings per share | $ | 0.11 | $ | 0.36 | $ | 1.03 | $ | 1.32 | ||||||
Impact of adjustment: | ||||||||||||||
Stock-based compensation per share | 0.16 | 0.08 | 0.64 | 0.30 | ||||||||||
Tax effect on stock-based compensation per share | 0.02 | 0.01 | (0.11 | ) | (0.03 | ) | ||||||||
Intangible amortization per share | 0.21 | 0.07 | 0.46 | 0.26 | ||||||||||
Tax effect on intangible amortization per share | 0.02 | 0.01 | (0.08 | ) | (0.03 | ) | ||||||||
Transaction costs per share | 0.08 | 0.00 | 0.16 | 0.02 | ||||||||||
Tax effect on transaction costs per share | 0.01 | 0.00 | (0.03 | ) | (0.00 | ) | ||||||||
Adjusted Diluted EPS | $ | 0.61 | $ | 0.53 | $ | 2.07 | $ | 1.84 | ||||||
Willdan Group, Inc. and Subsidiaries | ||||||||
Reconciliation of Diluted EPS to Adjusted Diluted EPS Target | ||||||||
(Non-GAAP Measure) |
||||||||
2019 Target | ||||||||
High | Low | |||||||
Net income | $ | 13,923,000 | $ | 12,753,000 | ||||
Adjustment for stock-based compensation | 11,900,000 | 11,900,000 | ||||||
Tax effect on stock-based compensation | (2,856,000 | ) | (2,856,000 | ) | ||||
Adjustment for intangible amortization | 7,600,000 | 7,600,000 | ||||||
Tax effect on intangible amortization | (1,824,000 | ) | (1,824,000 | ) | ||||
Adjustment for transaction costs | — | — | ||||||
Tax effect on transaction costs | — | — | ||||||
Adjusted Net Income | 28,743,000 | 27,573,000 | ||||||
Diluted weighted-average shares outstanding | 11,700,000 | 11,700,000 | ||||||
Diluted earnings per share | $ | 1.19 | $ | 1.09 | ||||
Impact of adjustment: | ||||||||
Stock-based compensation per share | 1.01 | 1.01 | ||||||
Tax effect on stock-based compensation per share | (0.24 | ) | (0.24 | ) | ||||
Intangible amortization per share | 0.65 | 0.65 | ||||||
Tax effect on intangible amortization per share | (0.16 | ) | (0.16 | ) | ||||
Transaction costs per share | — | — | ||||||
Tax effect on transaction costs per share | — | — | ||||||
Adjusted Diluted EPS | $ | 2.45 | $ | 2.35 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190307005844/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