0001558370-20-012964 | 10-Q | XBRL Viewer

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Oct. 02, 2020	Nov. 04, 2020
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Oct. 02, 2020
Entity File Number	001-33076
Entity Registrant Name	WILLDAN GROUP, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	14-1951112
Entity Address, Address Line One	2401 East Katella Avenue
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Anaheim
Entity Address, Postal Zip Code	92806
Entity Address, State or Province	CA
City Area Code	800
Local Phone Number	424-9144
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	WLDN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		12,073,949
Current Fiscal Year End Date	--01-01
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Entity Central Index Key	0001370450
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Oct. 02, 2020	Dec. 27, 2019
Current assets:
Cash and cash equivalents	$ 11,238	$ 5,452
Accounts receivable, net of allowance for doubtful accounts of $1,854 and $1,147 at October 2, 2020 and December 27, 2019, respectively	51,422	57,504
Contract assets	64,333	101,418
Other receivables	5,794	4,845
Prepaid expenses and other current assets	4,696	6,254
Total current assets	137,483	175,473
Equipment and leasehold improvements, net	12,614	12,051
Goodwill	130,625	127,647
Right-of-use assets	21,468	22,297
Other intangible assets, net	67,393	76,837
Other assets	15,582	16,296
Deferred income taxes, net	13,291	9,312
Total assets	398,456	439,913
Current liabilities:
Accounts payable	33,930	34,000
Accrued liabilities	37,630	67,615
Contingent consideration payable	6,684	5,155
Contract liabilities	7,157	5,563
Notes payable	13,861	13,720
Finance lease obligations	282	375
Lease liability	6,011	5,550
Total current liabilities	105,555	131,978
Contingent consideration payable	4,668	4,891
Notes payable	101,382	116,631
Finance lease obligations, less current portion	243	191
Lease liability, less current portion	16,869	18,411
Other noncurrent liabilities	363	533
Total liabilities	229,080	272,635
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 10,000 shares authorized, no shares issued and outstanding
Common stock, $0.01 par value, 40,000 shares authorized; 12,074 and 11,497 shares issued and outstanding at October 2, 2020 and December 27, 2019, respectively	121	115
Additional paid-in capital	145,344	132,547
Accumulated other comprehensive loss	(602)	(396)
Retained earnings	24,513	35,012
Total stockholders' equity	169,376	167,278
Total liabilities and stockholders' equity	$ 398,456	$ 439,913

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Oct. 02, 2020	Dec. 27, 2019
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 1,854	$ 1,147
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000	10,000
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	40,000
Common stock, shares issued	12,074	11,497
Common stock, shares outstanding	12,074	11,497

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Contract revenue	$ 104,508	$ 117,494	$ 294,083	$ 313,683
Direct costs of contract revenue (inclusive of directly related depreciation and amortization):
Salaries and wages	16,332	16,145	48,897	46,679
Subcontractor services and other direct costs	53,520	66,677	150,295	175,248
Total direct costs of contract revenue	69,852	82,822	199,192	221,927
General and administrative expenses:
Salaries and wages, payroll taxes and employee benefits	17,530	15,761	53,273	46,167
Facilities and facility related	2,661	2,250	7,997	6,069
Stock-based compensation	3,978	4,107	12,803	8,148
Depreciation and amortization	4,339	5,788	14,324	11,308
Other	4,547	5,471	17,003	16,230
Total general and administrative expenses	33,055	33,377	105,400	87,922
Income (Loss) from operations	1,601	1,295	(10,509)	3,834
Other income (expense):
Interest expense, net	(1,213)	(1,257)	(3,983)	(3,599)
Other, net	666	2	712	31
Total other income (expense), net	(547)	(1,255)	(3,271)	(3,568)
Income (Loss) before income taxes	1,054	40	(13,780)	266
Income tax benefit	(1,586)	(376)	(3,281)	(1,373)
Net income (loss)	2,640	416	(10,499)	1,639
Other comprehensive income (loss):
Unrealized gain (loss) on derivative contracts, net of tax	160	(42)	(206)	(480)
Comprehensive income (loss)	$ 2,800	$ 374	$ (10,705)	$ 1,159
Earnings (Loss) per share:
Basic	$ 0.22	$ 0.04	$ (0.90)	$ 0.15
Diluted	$ 0.21	$ 0.04	$ (0.90)	$ 0.14
Weighted-average shares outstanding:
Basic	11,992	11,217	11,723	11,097
Diluted	12,417	11,789	11,723	11,714

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss.	Retained Earnings	Total
Balances at Dec. 28, 2018	$ 110	$ 114,008		$ 30,171	$ 144,289
Balances (in shares) at Dec. 28, 2018	10,968
Increase (Decrease) in Stockholders' Equity
Shares of common stock issued in connection with employee stock purchase plan		749			749
Shares of common stock issued in connection with employee stock purchase plan (in shares)	28
Shares of common stock issued in connection with incentive stock plan		291			291
Shares of common stock issued in connection with incentive stock plan (in shares)	21
Shares used to pay taxes on stock grants	$ (1)	(2,515)			(2,516)
Shares used to pay taxes on stock grants (in shares)	(66)
Issuance of restricted stock award and units	$ 2	(2)
Issuance of restricted stock award and units (in shares)	175
Stock-based compensation expense		1,817			1,817
Net income (loss)				(417)	(417)
Unrealized gain (loss) on derivative contracts, net of tax			$ (219)		(219)
Balances at Mar. 29, 2019	$ 111	114,348	(219)	29,754	143,994
Balances (in shares) at Mar. 29, 2019	11,126
Balances at Dec. 28, 2018	$ 110	114,008		30,171	144,289
Balances (in shares) at Dec. 28, 2018	10,968
Increase (Decrease) in Stockholders' Equity
Net income (loss)					1,639
Unrealized gain (loss) on derivative contracts, net of tax					(480)
Balances at Sep. 27, 2019	$ 113	123,588	(480)	31,810	155,031
Balances (in shares) at Sep. 27, 2019	11,317
Balances at Mar. 29, 2019	$ 111	114,348	(219)	29,754	143,994
Balances (in shares) at Mar. 29, 2019	11,126
Increase (Decrease) in Stockholders' Equity
Shares of common stock issued in connection with incentive stock plan	$ 1	231			232
Shares of common stock issued in connection with incentive stock plan (in shares)	77
Unregistered sales of equity securities and use of proceeds		(346)			(346)
Unregistered sales of equity securities and use of proceeds (in shares)	(9)
Stock-based compensation expense		2,224			2,224
Net income (loss)				1,640	1,640
Unrealized gain (loss) on derivative contracts, net of tax			(219)		(219)
Balances at Jun. 28, 2019	$ 112	116,457	(438)	31,394	147,525
Balances (in shares) at Jun. 28, 2019	11,194
Increase (Decrease) in Stockholders' Equity
Shares of common stock issued in connection with employee stock purchase plan		991			991
Shares of common stock issued in connection with employee stock purchase plan (in shares)	34
Shares of common stock issued in connection with incentive stock plan		334			334
Shares of common stock issued in connection with incentive stock plan (in shares)	14
Issuance of restricted stock award and units (in shares)	22
Unregistered sales of stock	$ 1	1,699			1,700
Unregistered sales of stock (in shares)	53
Stock-based compensation expense		4,107			4,107
Net income (loss)				416	416
Unrealized gain (loss) on derivative contracts, net of tax			(42)		(42)
Balances at Sep. 27, 2019	$ 113	123,588	(480)	31,810	155,031
Balances (in shares) at Sep. 27, 2019	11,317
Balances at Dec. 27, 2019	$ 115	132,547	(396)	35,012	$ 167,278
Balances (in shares) at Dec. 27, 2019	11,497				11,497
Increase (Decrease) in Stockholders' Equity
Shares of common stock issued in connection with employee stock purchase plan		1,073			$ 1,073
Shares of common stock issued in connection with employee stock purchase plan (in shares)	40
Shares of common stock issued in connection with incentive stock plan		260			260
Shares of common stock issued in connection with incentive stock plan (in shares)	19
Shares used to pay taxes on stock grants	$ (1)	(2,866)			(2,867)
Shares used to pay taxes on stock grants (in shares)	(92)
Issuance of restricted stock award and units	$ 2	(1)			1
Issuance of restricted stock award and units (in shares)	176
Stock-based compensation expense		4,595			4,595
Net income (loss)				(8,154)	(8,154)
Unrealized gain (loss) on derivative contracts, net of tax			(449)		(449)
Balances at Apr. 03, 2020	$ 116	135,608	(845)	26,858	161,737
Balances (in shares) at Apr. 03, 2020	11,640
Balances at Dec. 27, 2019	$ 115	132,547	(396)	35,012	$ 167,278
Balances (in shares) at Dec. 27, 2019	11,497				11,497
Increase (Decrease) in Stockholders' Equity
Net income (loss)					$ (10,499)
Unrealized gain (loss) on derivative contracts, net of tax					(206)
Balances at Oct. 02, 2020	$ 121	145,344	(602)	24,513	$ 169,376
Balances (in shares) at Oct. 02, 2020	12,074				12,074
Balances at Apr. 03, 2020	$ 116	135,608	(845)	26,858	$ 161,737
Balances (in shares) at Apr. 03, 2020	11,640
Increase (Decrease) in Stockholders' Equity
Shares of common stock issued in connection with incentive stock plan	$ 1	330			331
Shares of common stock issued in connection with incentive stock plan (in shares)	63
Issuance of restricted stock award and units	$ 3	(3)
Issuance of restricted stock award and units (in shares)	309
Stock-based compensation expense		4,230			4,230
Net income (loss)				(4,985)	(4,985)
Unrealized gain (loss) on derivative contracts, net of tax			83		83
Balances at Jul. 03, 2020	$ 120	140,165	(762)	21,873	161,396
Balances (in shares) at Jul. 03, 2020	12,012
Increase (Decrease) in Stockholders' Equity
Shares of common stock issued in connection with employee stock purchase plan	$ 1	1,151			1,151
Shares of common stock issued in connection with employee stock purchase plan (in shares)	54
Shares of common stock issued in connection with incentive stock plan	$ 0	61			62
Shares of common stock issued in connection with incentive stock plan (in shares)	9
Shares used to pay taxes on stock grants	$ 0	(11)			(11)
Shares used to pay taxes on stock grants (in shares)	0
Stock-based compensation expense		3,978			3,978
Net income (loss)				2,640	2,640
Unrealized gain (loss) on derivative contracts, net of tax			160		160
Balances at Oct. 02, 2020	$ 121	$ 145,344	$ (602)	$ 24,513	$ 169,376
Balances (in shares) at Oct. 02, 2020	12,074				12,074

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019
Cash flows from operating activities:
Net income (loss)	$ (10,499)	$ 1,639
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	14,324	11,624
Deferred income taxes, net	(4,389)	(285)
(Gain) loss on sale/disposal of equipment	(15)	(5)
Provision for doubtful accounts	1,066	256
Stock-based compensation	12,803	8,148
Accretion and fair value adjustments of contingent consideration	2,059	(540)
Changes in operating assets and liabilities, net of effects from business acquisitions:
Accounts receivable	5,016	13,491
Contract assets	33,591	(20,221)
Other receivables	(581)	(3,004)
Prepaid expenses and other current assets	1,387	1,060
Other assets	366	(336)
Accounts payable	(70)	(5,836)
Accrued liabilities	(30,034)	1,164
Contract liabilities	1,594	705
Right-of-use assets	259	429
Net cash provided by operating activities	26,877	8,289
Cash flows from investing activities:
Purchase of equipment and leasehold improvements	(3,976)	(5,636)
Proceeds from sale of equipment	19	45
Cash paid for acquisitions, net of cash acquired		(46,539)
Net cash used in investing activities	(3,957)	(52,130)
Cash flows from financing activities:
Change in excess of outstanding checks over bank balance		(1,514)
Payments on contingent consideration	(1,433)	(1,381)
Payments on notes payable	(187)	(1,371)
Payments on debt issuance costs	(327)	(749)
Borrowings under term loan facility and line of credit	24,000	105,000
Repayments under term loan facility and line of credit	(38,750)	(72,500)
Principal payments on finance leases	(435)	(338)
Proceeds from stock option exercise	652	858
Proceeds from sales of common stock under employee stock purchase plan	2,224	1,740
Shares used to pay taxes on stock grants	(2,879)	(2,862)
Restricted Stock Award and Units	1
Proceeds from unregistered sales of equity		1,699
Net cash (used in) provided by financing activities	(17,134)	28,582
Net increase (decrease) in cash and cash equivalents	5,786	(15,259)
Cash and cash equivalents at beginning of period	5,452	15,259
Cash and cash equivalents at end of period	11,238
Cash paid during the period for:
Interest	4,256	3,314
Income taxes	284	2,247
Supplemental disclosures of noncash investing and financing activities:
Loss on cash flow hedge valuations, net of tax	(206)	$ (480)
Equipment acquired under finance leases	$ 394

ORGANIZATION AND OPERATIONS OF THE COMPANY

9 Months Ended

Oct. 02, 2020

ORGANIZATION AND OPERATIONS OF THE COMPANY

ORGANIZATION AND OPERATIONS OF THE COMPANY

1. ORGANIZATION AND OPERATIONS OF THE COMPANY

Willdan Group, Inc. (“Willdan” or the “Company”) is a provider of professional, technical and consulting services to utilities, private industry, and public agencies at all levels of government. As resources and infrastructures undergo continuous change, the Company helps organizations and their communities evolve and thrive by providing a wide range of technical services for energy solutions and government infrastructure. Through engineering, program management, policy advisory, and software and data management, the Company designs and delivers trusted, comprehensive, innovative, and proven solutions to improve efficiency, resiliency, and sustainability in energy and infrastructure.

The Company’s broad portfolio of services operates within two financial reporting segments: (1) Energy and (2) Engineering and Consulting. The interfaces and synergies between these segments are important elements of the Company’s strategy to design and deliver trusted, comprehensive, innovative, and proven solutions for its customers.

The accounting policies followed by the Company are set forth in Part II, Item 8, Note 1, Organization and Operations of the Company, of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2019. In the opinion of management, all adjustments necessary to fairly state the Condensed Consolidated Financial Statements have been made. All such adjustments are of a normal, recurring nature. Certain information and footnote disclosures normally included in the Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These Condensed Consolidated Financial Statements and related notes thereto should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2019. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year.

Fiscal Years

The Company operates and reports its annual financial results based on 52 or 53-week periods ending on the Friday closest to December 31. 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 March 31, as applicable. Fiscal year 2020, which ends on January 1, 2021, will be comprised of 53 weeks, with the first quarter consisting of 14 weeks and the remaining quarters consisting of 13 weeks each. Fiscal year 2019, which ended on December 27, 2019 was comprised of 52 weeks, with all quarters presented consisting of 13 weeks. All references to years in the notes to consolidated financial statements represent fiscal years.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent 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.

Management’s Plans in Response to Covid-19

On January 30, 2020, the spread of a novel strain of coronavirus (“Covid-19”) was declared a Public Health Emergency of International Concern by the World Health Organization (“WHO”). On March 11, 2020, WHO characterized the Covid-19 outbreak as a pandemic. The Covid-19 pandemic has resulted in governmental authorities around the world implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place or total lock-down orders and business limitations and shutdowns (subject to exceptions for certain essential operations and businesses). Although some of these measures have since been lifted or scaled back,

ongoing resurgences of Covid-19 in the United States has resulted in the reimposition of certain restrictions and may lead to other restrictions being reimplemented in response to efforts to reduce the spread of Covid-19. The Covid-19 outbreak and restrictions intended to slow the spread of Covid-19 have caused economic and social disruption on an unprecedented scale. It is unclear how long these restrictions will remain in place and they may remain in place in some form for an extended period of time. Given the uncertainties associated with the duration of the pandemic, the Company cannot reasonably estimate the ultimate impacts of Covid-19 and efforts to limit its spread on its business, financial condition, results of operations or cash flows for the foreseeable future or whether the Company’s assumptions used to estimate its future liquidity requirements will be correct.

Health and Safety

In response to the Covid-19 pandemic, the Company has taken and will continue to take temporary precautionary measures intended to help minimize the risk of Covid-19 to its employees, including requiring the majority of its employees to work remotely, suspending non-essential travel and restricting in-person work-related meetings. The Company expects to continue to implement these measures until it has determined that the Covid-19 pandemic is adequately contained for purposes of its business, and may take further actions as government authorities require or recommend or as it determines to be in the best interests of its employees, customers, business partners and third-party service providers.

Financial Position and Results of Operations

The Covid-19 pandemic and efforts to limit its spread negatively impacted the Company’s business during the three and nine months ended October 2, 2020. In California and New York, the states in which the Company has historically derived a majority of its revenue, mandatory shutdown orders were issued in March 2020. In New York, phased re-openings began in June 2020 and the Company’s business in New York has been improving over the last fiscal quarter. All of the Company’s New York utility programs have restarted. In California, phased re-openings began in May 2020, were curtailed in July 2020 as a result of resurgences of Covid-19 cases, and phased re-openings subsequently resumed in September 2020. As a result, the most significant pandemic related impacts to the Company’s business are now occurring in California to its direct install business.

In the Energy segment, the Company has experienced and expects to continue to experience a negative impact on its direct install programs that serve small businesses as a result of restrictions put in place by governmental authorities that have required temporary shutdowns of all “non-essential” businesses. In fiscal 2019, the Company derived approximately 40% of its gross revenue from its direct install programs that serve small businesses, and a significant portion of its direct install work on these programs continues to recover as phased re-openings progress. The Company’s other programs, which generated approximately 60% of its revenue in fiscal 2019, are either businesses that have been determined to be “essential” by government authorities or have continued to progress during the pandemic. In addition, some of the Company’s programs in the Energy segment, particularly those related to improvements in public schools, were accelerated during the second quarter to take advantage of empty facilities.

In the Engineering and Consulting segment, the Company’s revenues have been minimally affected by Covid-19. The services in this segment have generally been deemed “essential” by the government and have continued to operate while abiding social distancing measures.

As of November 5, 2020, though some of the Company’s work has been suspended, none of its contracts have been cancelled and proposal activities for new programs have continued to advance.

In response to the Covid-19 pandemic and efforts to prevent its spread, the Company began taking a number of steps during the first quarter of fiscal 2020 aimed at preserving liquidity and positioning itself to resume its growth trajectory after work restrictions are lifted. These steps include:

●

Executing a reduction in workforce, primarily through an unpaid furlough, impacting approximately 300 members of staff. The largest reductions were a result of government-mandated work restrictions impacting the Company’s direct install programs in California and New York. During the Company’s second fiscal quarter, furloughed employees began to return to work as government authorities began lifting restrictions through phased re-openings and, by the end of the third fiscal quarter, the majority of the Company’s furloughed employees had returned to work;

●

A temporary freeze on all non-critical spending for travel, capital expenditures, and other discretionary expenses;

●

A temporary cash wage reduction for salaried employees, ranging from 0% for lower salary bands up to 75% for senior management, all of which had been restored by the end of July 2020;

●

Suspension of cash fees for the Company’s Board of Directors, which was lifted during the Company’s third fiscal quarter;

●

Implementing a temporary hiring freeze; and

●

Amending the Company’s credit facility for increased flexibility.

The Company believes that its financial position is sufficiently flexible to enable it to maneuver in the current economic environment. Throughout the fiscal year 2020, the Company enhanced liquidity by minimizing working capital and significantly improving cash collections. In addition, in May 2020, the Company amended its credit facility to modify, among other things, certain covenants to increase its financial flexibility. Combined with availability under its credit facility, the Company believes its enhanced liquidity position provides a cushion against liquidity disruptions. The Company may borrow additional amounts under its existing credit facility during its fourth fiscal quarter of 2020 to support an expectation of recovery from Covid-19 operating levels and the accompanying need for working capital as a result of the easing of Covid-19 restrictions.

Asset and liability valuation and other estimates used in preparation of financial statements

As of October 2, 2020, the Company did not have any impairment with respect to its goodwill or long-lived assets, including intangible assets. Because the full extent of the impact of the Covid-19 outbreak and efforts to slow its spread are unknown at this time, they could, under certain circumstances, cause impairment and result in a non-cash impairment charge being recorded in future periods.

Changes to the estimated future profitability of the business may require that the Company establish an additional valuation allowance against all or some portion of its net deferred tax assets.

Impact on Clients and Subcontractors and Other Risks

The Company primarily works for utilities, municipalities and other public agencies. The Company expects many governmental and other public agencies will have significant budget shortfalls for 2020 and potentially beyond as a result of the economic slowdown from the measures taken to mitigate the Covid-19 pandemic. Although none of the Company’s contracts with governmental or other public agencies were materially modified in the third fiscal quarter, these potential budget deficits could result in delayed funding for existing contracts with the Company, postponements of new contracts or price concessions. Further, most of the Company’s clients are not committed to purchase any minimum amount of services, as the Company agreements with them are based on a “purchase order” model. As a result, they may discontinue utilizing some or all of the Company’s services with little or no notice.

In addition, the Company relies on subcontractors and material suppliers to complete a substantial portion of its work, especially in its Energy segment. If the Company’s significant subcontractors and material suppliers suffer significant economic harm and must limit or cease operations or file for bankruptcy as a result of the current economic slowdown, the Company’s subcontractors and material suppliers may not be able to fulfill their contractual obligations satisfactorily and the Company may not have the ability to select its subcontractors and material suppliers of choice for new contracts. If the Company’s subcontractors and material suppliers are not able to fulfill their contractual obligations, it could result in a significant increase in costs for the Company to complete the projects or cause significant delays to the realization of revenues under those projects. The ultimate impact of Covid-19 on the Company’s financial condition and results of operations will depend on all of the factors noted above, including other factors that the Company may not be able to forecast at this time. See the risk factor “The Covid-19 pandemic and health and safety measures intended to slow its spread have adversely affected, and may continue to adversely affect, our business, results of operations and financial condition.” under Part II, Item 1A. “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2020. While Covid-19 has had, and the Company expects it to continue to have, an adverse effect on its business, financial condition and results of operations, it is unable to predict the extent of these impacts at this time.

RECENT ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Oct. 02, 2020

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

2. RECENT ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Recently Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires entities to report “expected” credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 will also require enhanced disclosures relating to significant estimates and judgments used in estimating credit losses, as well as the credit quality. The Company adopted this standard effective December 28, 2019. The adoption of this standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

Accounting Pronouncements Recently Issued

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 provides, among other things, guidance that modifications of contracts within the scope of Topic 470, Debt, should be accounted for by prospectively adjusting the effective interest rate; modifications of contracts within the scope of Topic 840, Leases, should be accounted for as a continuation of the existing contract; and, changes in the critical terms of hedging relationships, caused by reference rate reform, should not result in the de-designation of the instrument, provided certain criteria are met. The Company’s exposure to LIBOR rates includes its credit facilities and swap agreement. The amendments are effective as of March 12, 2020 through December 31, 2022. Adoption is permitted at any time. The Company is currently evaluating the impact this update will have on its Condensed Consolidated Financial Statements.

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 amends the accounting for income taxes by, among other things, removing: (i) The exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items (for example, discontinued operations or other comprehensive income); (ii) The exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (iii) The exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (iv) The exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, which for the Company is the first quarter of fiscal 2021. The Company is currently evaluating the impact this update will have on its Condensed Consolidated Financial Statements.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

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+ Details

REVENUES

9 Months Ended

Oct. 02, 2020

REVENUES

REVENUES

3. REVENUES

The Company enters into contracts with its clients that contain various types of pricing provisions, including fixed price, time-and-materials, and unit-based provisions. The Company recognizes revenues in accordance with ASU 2014-09, Revenue from Contracts with Customer, codified as ASC Topic 606 and the related amendments (collectively “ASC 606”). As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenues when (or as) the Company satisfies a performance obligation.

The following table reflects the Company’s two reportable segments and the types of contracts that each most commonly enters into for revenue generating activities.


Segment	Contract Type	Revenue Recognition Method
	Time-and-materials	Time-and-materials
Energy	Unit-based	Unit-based
	Software license	Unit-based
	Fixed price	Percentage-of-completion
	Time-and-materials	Time-and-materials
Engineering and Consulting	Unit-based	Unit-based
	Fixed price	Percentage-of-completion

Revenue on the vast majority of the Company’s contracts is recognized over time because of the continuous transfer of control to the customer. Revenue on fixed price contracts is recognized on the percentage-of-completion method based generally on the ratio of direct costs incurred-to-date to estimated total direct costs at completion. The Company uses the percentage-of-completion method to better match the level of work performed at a certain point in time in relation to the effort that will be required to complete a project. In addition, the percentage-of-completion method is a common method of revenue recognition in the Company’s industry.

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. Certain of the Company’s time-and-materials contracts are subject to maximum contract values and, accordingly, when revenue is expected to exceed the maximum contract value, these contracts are generally recognized under the percentage-of-completion method, consistent with fixed price contracts. 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 recognition for software licenses issued by the Energy segment is generally recognized at a point in time, utilizing the unit-based revenue recognition method, upon acceptance of the software by the customer and in recognition of the fulfillment of the performance obligation. Certain additional performance obligations beyond the base software license may be separated from the gross license fee and recognized on a straight-line basis over time. Revenue for amounts that have been billed but not earned is deferred, and such deferred revenue is referred to as contract liabilities in the accompanying condensed consolidated balance sheets.

To determine the proper revenue recognition method for contracts, the Company evaluates whether two or more contracts should be combined and accounted for as one single contract and whether the combined contract should be accounted for as one performance obligation. With respect to the Company’s contracts, it is rare that multiple contracts should be combined into a single performance obligation. This evaluation requires significant judgment and the decision to combine a group of contracts or separate a single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. Contracts are considered to have a single performance

obligation if the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts, which is mainly because the Company provides a significant service of integrating a complex set of tasks and components into a single project or capability.

The Company may enter into contracts that 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. Segmented contracts may comprise up to approximately 2.0% to 3.0% of the Company’s consolidated contract revenue.

Contracts that cover multiple phases or elements of the project or service lifecycle (development, construction and maintenance and support) may be considered to have multiple performance obligations even when they are part of a single contract. For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract. For the periods presented, the value of the separate performance obligations under contracts with multiple performance obligations (generally measurement and verification tasks under certain energy performance contracts) were not material. In cases where the Company does not provide the distinct good or service on a standalone basis, the primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which the Company forecasts the Company’s expected costs of satisfying a performance obligation and then adds an appropriate margin for the distinct good or service.

The Company provides quality of workmanship warranties to customers that are included in the sale and are not priced or sold separately or do not provide customers with a service in addition to assurance of compliance with agreed-upon specifications and industry standards. The Company does not consider these types of warranties to be separate performance obligations.

In some cases, the Company has a master service or blanket agreement with a customer under which each task order releases the Company to perform specific portions of the overall scope in the service contract. Each task order is typically accounted for as a separate contract because the task order establishes the enforceable rights and obligations, and payment terms.

Under ASC 606, variable consideration should be considered when determining the transaction price and estimates should be made for the variable consideration component of the transaction price, as well as assessing whether an estimate of variable consideration is constrained. For certain of the Company’s contracts, variable consideration can arise from modifications to the scope of services resulting from unapproved change orders or customer claims. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on assessments of legal enforceability, the Company’s performance, and all information (historical, current and forecasted) that is reasonably available to the Company.

Due to the nature of the work required to be performed on many of the Company’s performance obligations, the estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgment. As a significant change in one or more of these estimates could affect the profitability of the Company’s contracts, the Company reviews and updates the Company’s contract-related estimates regularly through a company-wide disciplined project review process in which management reviews the progress and execution of the Company’s performance obligations and the estimate at completion (EAC). As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule and the related changes in estimates of revenues and costs. Management must make assumptions and estimates

regarding labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, the performance of subcontractors, and the availability and timing of funding from the customer, among other variables.

The Company recognizes adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, the Company recognizes the full amount of estimated loss in the period it is identified.

Contracts are often modified to account for changes in contract specifications and requirements. The Company considers contract modifications to exist when the modification either creates new rights or obligations or changes the existing enforceable rights or obligations. Most of the Company’s contract modifications are for goods or services that are not distinct from existing contracts due to the significant integration provided in the context of the contract and are accounted for as if they were part of the original contract. The effect of a contract modification that is not distinct from the existing contract on the transaction price and the Company’s measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.

For contract modifications that result in the promise to deliver goods or services that are distinct from the existing contract and the increase in price of the contract is for the same amount as the standalone selling price of the additional goods or services included in the modification, the Company accounts for such contract modifications as a separate contract.

The Company includes claims to vendors, subcontractors and others as a receivable and a reduction in recognized costs when enforceability of the claim is established by the contract and the amounts are reasonably estimable and probable of being recovered. The amounts are recorded up to the extent of the lesser of the amounts management expects to recover or to costs incurred.

Billing practices are governed by the contract terms of each project based upon costs incurred, achievement of milestones or pre-agreed schedules. Billings do not necessarily correlate with revenue recognized using the percentage-of-completion method of revenue recognition.

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 comprehensive income 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 historical credit losses have been 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, included in contract assets, represents amounts withheld from billings to the Company’s clients pursuant to provisions in the contracts and may not be paid to the Company until specific tasks are completed or the project is completed and, in some instances, for even longer periods. As of October 2, 2020 and December 27, 2019, contract assets included retainage of $5.9 million and $5.4 million, respectively.

In addition to the above, the Company derives revenue from software licenses and professional services and maintenance fees. In accordance with ASC 606, the Company performs an assessment of each contract to identify the performance obligations, determine the overall transaction price for the contract, allocate the transaction price to the performance obligations, and recognize the revenue when the performance obligations are satisfied.

The Company utilizes the residual approach by which it estimates the standalone selling price by reference to the total transaction price less the sum of the observable standalone selling prices of other goods or services promised in the contract. The software license revenue is typically recognized at a point in time when control is transferred to the client, which is defined as the point in time when the client can use and benefit from the license. The software license is delivered before related services are provided and is functional without services, updates, or technical support. Related professional services include training and support services in which the standalone selling price is determined based on an input measure of hours incurred to total estimated hours and is recognized over time, usually which is the life of the contract.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

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+ Details

SUPPLEMENTAL FINANCIAL STATEMENT DATA

9 Months Ended

Oct. 02, 2020

SUPPLEMENTAL FINANCIAL STATEMENT DATA

SUPPLEMENTAL FINANCIAL STATEMENT DATA

4. SUPPLEMENTAL FINANCIAL STATEMENT DATA

Accounts Receivable

From time to time, in connection with factoring agreements, the Company sells trade accounts receivable without recourse to third party purchasers in exchange for cash. During the nine months ended October 2, 2020 and September 27, 2019, the Company did not sell any trade accounts receivable.

Equipment and Leasehold Improvements


	October 2,		December 27,
	2020		2019
	(in thousands)
Furniture and fixtures	$	4,088	$	4,614
Computer hardware and software		16,962		14,789
Leasehold improvements		2,994		2,410
Equipment under finance leases		2,317		1,957
Automobiles, trucks, and field equipment		3,205		3,564
Subtotal		29,566		27,334
Accumulated depreciation and amortization		(16,952)		(15,283)
Equipment and leasehold improvements, net	$	12,614	$	12,051

Included in accumulated depreciation and amortization is $0.4 million and $0.5 million of amortization expense related to equipment held under finance leases in the nine months ended October 2, 2020 and fiscal year 2019, respectively.

Accrued Liabilities


	October 2,		December 27,
	2020		2019
	(in thousands)
Accrued subcontractor costs	$	22,448	$	45,366
Compensation and payroll taxes		2,871		3,286
Accrued bonuses		5,121		7,756
Other		3,710		4,630
Employee withholdings		2,485		3,463
Paid leave bank		995		3,114
Total accrued liabilities	$	37,630	$	67,615

Goodwill


	December 27,		Additional		Additions /		October 2,
	2019		Purchase Cost		Adjustments		2020
	(in thousands)
Reporting Unit:
Energy	$	126,898	$	—	$	2,977	$	129,876
Engineering and Consulting		749		—		—		749
	$	127,647	$	—	$	2,977	$	130,625

The Company tests for impairment, at a minimum, on an annual basis or earlier when certain events or changes in circumstances indicate that goodwill may more likely than not be impaired. The Company evaluated the current economic impact caused by the Covid-19 pandemic to assess a potential impairment of goodwill and noted that it does not believe it is more likely than not that goodwill was impaired as of October 2, 2020.

Intangible Assets


	October 2, 2020				December 27, 2019
	Gross		Accumulated		Gross		Accumulated		Amortization
	Amount		Amortization		Amount		Amortization		Period
	(in thousands)								(in years)
Finite:
Backlog	$	7,944	$	5,907	$	7,134	$	3,763	1.0
Tradename		15,911		6,471		13,351		4,882	2.5	-	6.0
Non-compete agreements		1,420		1,380		2,320		1,384	4.0	-	5.0
Developed technology		15,500		5,396		14,620		3,227	8.0
Customer relationships		58,149		12,687		60,733		8,065	5.0	-	8.0
Total finite intangible assets		98,924	$	31,841		98,158	$	21,321
In-process research and technology ⁽¹⁾		310		—		—		—
Total intangible assets	$	99,234	$	31,841	$	98,158	$	21,321

(1)

In-process research and technology will not be amortized until put into use.

DERIVATIVE FINANCIAL INSTRUMENTS

9 Months Ended

Oct. 02, 2020

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

5. DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses certain interest rate derivative contracts to hedge interest rate exposures on its variable rate debt. The Company’s hedging program is not designated for trading or speculative purposes.

The Company recognizes derivative instruments as either assets or liabilities on the accompanying consolidated balance sheets at fair value. The Company records changes in the fair value (i.e., gains or losses) of the derivatives that have been designated as cash flow hedges in its consolidated balance sheets as accumulated other comprehensive income (loss) and in its condensed consolidated statements of comprehensive (loss) income as a loss or gain on cash flow hedge valuation.

On January 31, 2019, the Company entered into an interest rate swap agreement that the Company designated as cash flow hedge to fix the variable interest rate on a portion of the Company’s Term A Loan (as defined below in Note 6. “Debt Obligations”). The interest rate swap agreement total notional amount of $35.0 million, has a fixed annual interest rate of 2.47% and expires on January 31, 2022. As of October 2, 2020, the effective portion of the Company’s interest rate swap agreement designated as a cash flow hedge before tax effects was $0.8 million, of which no amounts were reclassified from accumulated other comprehensive income to interest expense in the three and nine months ended October 2, 2020. The Company expects to reclassify $0.6 million from accumulated other comprehensive loss to interest expense within the next twelve months.

The fair values of the Company’s outstanding derivatives designated as hedging instruments were as follows:


		Fair Value of Derivative
		Instruments as of
	Balance Sheet Location	October 2, 2020		December 27, 2019
		(in thousands)
Interest rate swap agreement	Accrued liabilities	$	(638)	$	(241)
Interest rate swap agreement	Other noncurrent (liabilities) assets	$	(192)	$	(306)

The impact of the effective portions of derivative instruments in cash flow hedging relationships and fair value relationships on other comprehensive income were $0.2 million for the three and nine months ended October 2, 2020, as compared to $0.1 million and $0.5 million for the three and nine months ended September 27, 2019, respectively.

The accumulated balances and reporting period activities for the three and nine months ended October 2, 2020 related to reclassifications out of accumulated other comprehensive loss are summarized as follows:


	Gain (Loss) on		Accumulated Other
	Derivative Instruments		Comprehensive Loss
	(in thousands)
Balances at December 27, 2019	$	(396)	$	(396)
Other comprehensive loss before reclassifications		(568)		(568)
Amounts reclassified from accumulated other comprehensive income		—		—
Income tax benefit related to derivative instruments		119		119
Net current-period other comprehensive loss		(845)		(845)
Balances at April 3, 2020	$	(845)	$	(845)
Other comprehensive loss before reclassifications	$	105	$	105
Amounts reclassified from accumulated other comprehensive income:		—		—
Income tax benefit (expense) related to derivative instruments		(22)		(22)
Net current-period other comprehensive loss		83		83
Balances at July 3, 2020	$	(762)	$	(762)
Other comprehensive loss before reclassifications	$	179	$	179
Amounts reclassified from accumulated other comprehensive income		0		0
Income tax benefit (expense) related to derivative instruments		(19)		(19)
Net current-period other comprehensive loss		160		160
Balances at October 2, 2020	$	(602)	$	(602)

DEBT OBLIGATIONS

9 Months Ended

Oct. 02, 2020

DEBT OBLIGATIONS

DEBT OBLIGATIONS

6. DEBT OBLIGATIONS

Debt obligations, excluding obligations under finance leases (see Note 7, Leases, below), consisted of the following:


	October 2,		December 27,
	2020		2019
	(in thousands)
Outstanding borrowings on Term A Loan	$	87,500	$	95,000
Outstanding borrowings on Revolving Credit Facility		—		5,000
Outstanding borrowings on Delayed Draw Term Loan		27,750		30,000
Other debt agreements		874		1,060
Total debt		116,124		131,060
Issuance costs and debt discounts		(881)		(709)
Subtotal		115,243		130,351
Less current portion of long-term debt		13,861		13,720
Long-term debt portion	$	101,382	$	116,631

Credit Facilities

On June 26, 2019, the Company and certain of its subsidiaries entered into an Amended and Restated Credit Agreement (as amended by the First Amendment, dated as of August 15, 2019, and the Second Amendment, dated as of November 6, 2019, the “Credit Agreement”) with a syndicate of financial institutions as lenders and BMO Harris Bank, N.A. (“BMO”), as administrative agent. The Credit Agreement provides for (i) a $100.0 million secured term loan (the “Term A Loan”), (ii) up to $50.0 million in delayed draw secured term loans (the “Delayed Draw Term Loan”), and (iii) a $50.0 million secured revolving credit facility (the “Revolving Credit Facility” and, collectively with the Term A Loan and the Delayed Draw Term Loan, the “Credit Facilities”), each maturing on June 26, 2024. The Company’s obligations under the Credit Agreement are guaranteed by its present and future domestic subsidiaries, with limited exceptions.

Prior to the Third Amendment (as defined below), the Credit Agreement required the Company to comply with certain financial covenants, including requiring that the Company maintain a (i) total leverage ratio (the “Leverage Ratio”), defined as the ratio of total funded debt to Adjusted EBITDA (as defined in the Credit Agreement), of at least 3.50 to 1.00 through December 31, 2020, and 3.25 to 1.00 thereafter and (ii) fixed charge coverage ratio (“FCCR Ratio”), defined as the ratio of Adjusted EBITDA less Unfinanced Capital Expenditures (as defined in the Credit Agreement) to Fixed Charges (as defined in the Credit Agreement), of not less than 1.20 to 1.00, in each case tested quarterly.

The Credit Agreement also contains other customary restrictive covenants including (i) restrictions on the incurrence of additional indebtedness and additional liens on property, (ii) restrictions on permitted acquisitions and other investments and (iii) limitations on asset sales, mergers and acquisitions. Further, the Credit Agreement limits the Company’s payment of future dividends and distributions and share repurchases by the Company. Subject to certain exceptions, borrowings under the Credit Agreement are also subject to mandatory prepayment from (a) any issuances of debt or equity securities, (b) any sale or disposition of assets, (c) insurance and condemnation proceeds (d) representation and warranty insurance proceeds related to insurance policies issued in connection with acquisitions and (e) excess cash flow. The Credit Agreement includes customary events of default.

Third Amendment to the Credit Agreement

On May 6, 2020, the Company entered into the Third Amendment to the Amended and Restated Credit Agreement (the “Third Amendment”) which, among other things, amends or suspends certain covenants contained in the Credit Agreement from March 5, 2020 until the earlier of (i) July 2, 2021 and (ii) the last day of the fiscal quarter in which the Company delivers an irrevocable election to terminate the covenant relief granted by the Third Amendment (the “Covenant Relief Period”).

The Third Amendment increases the maximum Leverage Ratio the Company is permitted to maintain during the Covenant Relief Period and replaces the covenant to maintain a minimum FCCR Ratio during the Covenant Relief Period with a requirement to maintain a minimum Adjusted EBITDA (as defined in the Third Amendment). During the Covenant Relief Period, no further delayed draw term loans may be borrowed under the Credit Facilities and the Company is prohibited from engaging in share repurchases or making any Permitted Acquisitions (as defined in the Credit Agreement). Additionally, during the Covenant Relief Period, the aggregate amount of all capital expenditures made by the Company may not exceed $7.0 million, and the Company is prohibited from making any earn-out payments if, after giving effect to such earn-out payment, the Company’s liquidity would be less than $5.0 million or the aggregate amount of all earn-out payments made by the Company during the Covenant Relief Period would exceed $7.0 million.

As part of the Third Amendment, borrowings under the Credit Agreement bear interest (A) from March 5, 2020 until the date of the Third Amendment, at a rate equal to one-month LIBOR plus 2.0%, (B) from the date of the Third Amendment until the date the administrative agent receives the Company’s financial statements for the quarter ended July 3, 2020, at a rate equal to one-month LIBOR, plus an applicable margin of 2.50% and (C) at all other times during the Covenant Relief Period, 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 1.00% or (ii) one-month LIBOR, in each case plus an applicable margin ranging from 0.125% to 1.50% with respect to Base Rate borrowings and 1.125% to 2.50% with respect to LIBOR borrowings, depending on the Leverage Ratio; provided, that one-month LIBOR shall not be less than 0.75% during the Covenant Relief Period. During the Covenant Relief Period, the Company will pay a commitment fee for the unused portion of the Revolving Credit Facility and the delayed draw term loan facility, which ranges from 0.15% to 0.45% per annum depending on the Leverage Ratio, and fees on the face amount of any letters of credit outstanding under the Revolving Credit Facility, which range from 0.84% to 2.50% per annum, in each case, depending on whether such letter of credit is a performance or financial letter of credit and the Leverage Ratio.

After the Covenant Relief Period, borrowings under the Credit Agreement will bear interest at a rate equal to either, at the Company’s option, (i) the Base Rate or (ii) one-month LIBOR, in each case plus an applicable margin ranging from 0.125% to 1.00% with respect to Base Rate borrowings and 1.125% to 2.00% with respect to LIBOR borrowings, depending on the Leverage Ratio; provided, that one-month LIBOR shall not be less than 0.00%. After the Covenant Relief Period, the Company will pay a commitment fee for the unused portion of the Revolving Credit Facility and the delayed draft term loan facility, which will range from 0.15% to 0.35% per annum depending on the Leverage Ratio, and fees on the face amount of any letters of credit outstanding under the Revolving Credit Facility, which will range from 0.84% to 2.00% per annum, in each case, depending on whether such letter of credit is a performance or financial letter of credit and the Leverage Ratio.

As of October 2, 2020, the Company was in compliance with all covenants contained in the Credit Agreement.

Other Debt Agreements

Software Agreements

The Company finances, from time to time, software costs by entering into unsecured notes payable with software providers. During the fiscal year ended December 28, 2018, the Company elected to finance its IBM software costs of $0.2 million with a note payable bearing interest at an annual rate of 4.656%, payable in monthly principal and

interest installments of $6,000 through November 2021. As of October 2, 2020, and December 27, 2019, the unpaid balance related to the IBM software agreement totaled $75,000 and $133,000, respectively.

Utility Customer Agreement

In connection with the acquisition of substantially all of the assets of Onsite Energy, the Company assumed a contract dispute settlement agreement between Onsite Energy and one of its utility customers dated December 20, 2018 (the “Utility Customer Agreement”) where Onsite Energy agreed to pay $1.7 million, bearing interest at an imputed annual rate of 4.332%, payable in quarterly principal and interest installments through June 2021. As of October 2, 2020 and December 27, 2019, the unpaid balance of the Utility Customer Agreement totaled $0.8 million and $0.9 million, respectively.

LEASES

9 Months Ended

Oct. 02, 2020

LEASES

LEASES

7. LEASES

The Company leases certain office facilities under long-term, non-cancellable operating leases that expire at various dates through the year 2027. In addition, the Company is obligated under finance leases for certain furniture and office equipment that expire at various dates through the year 2022.

From time to time, the Company enters into non-cancelable leases for some of our facility and equipment needs. These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of facilities and equipment rather than purchasing them. The Company’s leases have remaining terms ranging from one to eight years, some of which may include options to extend the leases for up to five years, and some of which may include options to terminate the leases within one year. Currently, all of the Company’s leases contain fixed payment terms. The Company may decide to cancel or terminate a lease before the end of its term, in which case we are typically liable to the lessor for the remaining lease payments under the term of the lease. Additionally, all of our month-to-month leases are cancelable by the Company or the lessor, at any time, and are not included in our right-of-use asset or lease liability. As of October 2, 2020, the Company had no leases with residual value guarantees. Typically, the Company has purchase options on the equipment underlying its long-term leases. The Company may exercise some of these purchase options when the need for equipment is on-going and the purchase option price is attractive. Nonperformance-related default covenants, cross-default provisions, subjective default provisions and material adverse change clauses contained in material lease agreements, if any, are also evaluated to determine whether those clauses affect lease classification in accordance with “ASC” Topic 842-10-25. Leases are accounted for as operating or financing leases, depending on the terms of the lease.

Financing Leases

The Company leases certain equipment under financing leases. The economic substance of the leases is a financing transaction for acquisition of equipment and leasehold improvements. Accordingly, the right-of-use assets for these leases are included in the balance sheets in equipment and leasehold improvements, net of accumulated depreciation, with a corresponding amount recorded in current portion of financing lease obligations or noncurrent portion of financing lease obligations, as appropriate. The financing lease assets are amortized over the life of the lease or, if shorter, the life of the leased asset, on a straight-line basis and included in depreciation expense. The interest associated with financing lease obligations is included in interest expense.

Right-of-use assets

Operating leases are included in right-of-use assets, and current portion of lease liability and noncurrent portion of lease liability, as appropriate. Right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate to calculate present value, the Company determines this rate by estimating the Company’s incremental borrowing rate at the lease commencement date. The right-of-use asset also includes any lease payments made and initial direct costs incurred at lease commencement and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

The following is a summary of the lease expense:


	Three Months Ended				Nine Months Ended
	October 2,		September 27,		October 2,		September 27,
	2020		2019		2020		2019
	(in thousands)				(in thousands)
Operating lease cost	$	1,761	$	1,288	$	5,269	$	3,558
Finance lease cost:
Amortization of assets		146		242		456		366
Interest on lease liabilities		6		19		23		28
Total net lease cost	$	1,913	$	1,549	$	5,748	$	3,952

The following is a summary of lease information presented on the Company’s consolidated balance sheet:


	October 2,			December 27,
	2020			2019
	(in thousands)
Operating leases:
Right-of-use assets	$	21,468		$	22,297

Lease liability	$	6,011		$	5,550
Lease liability, less current portion		16,869			18,411
Total lease liabilities	$	22,880		$	23,961

Finance leases (included in equipment and leasehold improvements, net):
Equipment and leasehold improvements, net	$	2,317		$	1,957
Accumulated depreciation		(1,712)			(1,291)
Total equipment and leasehold improvements, net	$	605		$	666

Finance lease obligations	$	282		$	375
Finance lease obligations, less current portion		243			191
Total finance lease obligations	$	525		$	566

Weighted average remaining lease term (in years):
Operating Leases		4.56			4.59
Finance Leases		1.96			1.47

Weighted average discount rate:
Operating Leases		4.45	%		5.14	%
Finance Leases		4.01	%		4.80	%

Rent expense for all facility operating leases were $1.8 million and $5.3 million for the three and nine months ended October 2, 2020, respectively, as compared to $1.3 million and $3.6 million for the three and nine months ended September 27, 2019.

The following is a summary of other information and supplemental cash flow information related to finance and operating leases:


	Nine Months Ended
	October 2,		September 27,
	2020		2019

	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$	5,162	$	3,645
Operating cash flow from finance leases		23		98
Financing cash flow from finance leases		435		338

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	3,007	$	3,029

The following is a summary of the maturities of lease liabilities as of October 2, 2020:


	Operating		Finance
	(in thousands)
Fiscal year:
Remainder of 2020	$	1,810	$	41
2021		6,597		307
2022		5,754		147
2023		3,917		35
2024		2,600		14
2025 and thereafter		4,577		2
Total lease payments	$	25,255	$	546
Less: Imputed interest		(2,375)		(21)
Total lease obligations		22,880		525
Less: Current obligations		6,011		282
Noncurrent lease obligations	$	16,869	$	243

The imputed interest for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the operating lease payments to their present value.

COMMITMENTS AND VARIABLE INTEREST ENTITIES

9 Months Ended

Oct. 02, 2020

COMMITMENTS AND VARIABLE INTEREST ENTITIES

COMMITMENTS AND VARIABLE INTEREST ENTITIES

8. COMMITMENTS AND VARIABLE INTEREST ENTITIES

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 all employees. Employees may elect to contribute up to 50% of their 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 also had a defined contribution plan (the “Plan”) covering employees who have completed three months of service and who have attained 21 years of age. The Company elected to make matching contributions equal to 50% of the participants’ contributions to the Plan up to 6% of the individual participant’s compensation. Under the defined contribution plan, the Company may make discretionary matching contributions to employee accounts.

During the nine months ended October 2, 2020 and September 27, 2019, the Company made matching contributions of $0.9 million and $1.6 million, respectively.

Variable Interest Entities

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.

Genesys continues to be a professional corporation organized under the laws of the State of New York, wholly-owned by one or more licensed engineers. Pursuant to New York law, the Company does not own capital stock of Genesys. The Company has entered into an agreement with the Shareholder of Genesys 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 a 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 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. In addition, the Company concluded there is no noncontrolling interest related to the consolidation of Genesys because the Company 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 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. As of October 2, 2020, the Company had one VIE — Genesys.

SEGMENT AND GEOGRAPHICAL INFORMATION

9 Months Ended

Oct. 02, 2020

SEGMENT AND GEOGRAPHICAL INFORMATION

SEGMENT AND GEOGRAPHICAL INFORMATION

9. SEGMENT AND GEOGRAPHICAL INFORMATION

Segment Information

The Company’s two segments are Energy and Engineering and Consulting, and the Company’s chief operating decision maker, which continues to be its chief executive officer, receives and reviews financial information in this format.

There were no intersegment sales during the three and nine months ended October 2, 2020 and September 27, 2019. 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 is as follows:


			Engineering		Unallocated				Consolidated
	Energy		& Consulting		Corporate		Intersegment		Total
	(in thousands)
Fiscal Three Months Ended October 2, 2020
Contract revenue	$	87,888	$	16,620	$	-	$	-	$	104,508
Depreciation and amortization		4,072		267		-		-		4,339
Interest expense, net		7		-		1,206		-		1,213
Segment profit (loss) before income tax expense		3,203		2,757		(4,906)		-		1,054
Income tax expense (benefit)		(437)		1,300		(2,449)		-		(1,586)
Net income (loss)		3,641		1,457		(2,458)		-		2,640
Segment assets ⁽¹⁾		348,350		22,755		50,481		(23,130)		398,456
Fiscal Three Months Ended September 27, 2019
Contract revenue	$	97,934	$	19,560	$	-	$	-	$	117,494
Depreciation and amortization		5,425		363		-		-		5,788
Interest expense, net		20		-		1,237		-		1,257
Segment profit (loss) before income tax expense		1,669		2,586		(4,215)		-		40
Income tax expense (benefit)		461		715		(1,552)		-		(376)
Net income (loss)		1,208		1,871		(2,663)		-		416
Segment assets ⁽¹⁾		246,675		23,366		115,701		(23,130)		362,612
Fiscal Nine Months Ended October 2, 2020
Contract revenue		242,394		51,689		-		-		294,083
Depreciation and amortization		13,499		825		-		-		14,324
Interest expense, net		26		-		3,957		-		3,983
Segment profit (loss) before income tax expense		(6,490)		7,953		(15,243)		-		(13,780)
Income tax expense (benefit)		(1,545)		1,894		(3,630)		-		(3,281)
Net income (loss)		(4,944)		6,059		(11,614)		-		(10,499)
Segment assets ⁽¹⁾		348,350		22,755		50,481		(23,130)		398,456
Fiscal Nine Months Ended September 27, 2019
Contract revenue		257,910		55,773		-		-		313,683
Depreciation and amortization		10,353		955		-		-		11,308
Interest expense, net		20		-		3,579		-		3,599
Segment profit (loss) before income tax expense		2,316		6,603		(8,653)		-		266
Income tax expense (benefit)		640		1,825		(3,838)		-		(1,373)
Net income (loss)		1,676		4,779		(4,816)		-		1,639
Segment assets ⁽¹⁾		246,675		23,366		115,701		(23,130)		362,612

(1)	Segment assets are presented net of intercompany receivables.


	Three months ended October 2, 2020
	Energy		Engineering and Consulting		Total
	(in thousands)
Contract Type
Time-and-materials	$	10,936	$	13,719	$	24,655
Unit-based		43,010		2,082		45,092
Fixed price		33,941		820		34,761
Total⁽¹⁾	$	87,887	$	16,621	$	104,508

Client Type
Commercial	$	9,967	$	1,300	$	11,267
Government		14,737		14,657		29,394
Utilities⁽²⁾		63,183		664		63,846
Total⁽¹⁾	$	87,887	$	16,621	$	104,508

Geography ⁽³⁾
Domestic	$	87,887	$	16,621	$	104,508

	Nine months ended October 2, 2020
	Energy		Engineering and Consulting		Total
	(in thousands)
Contract Type
Time-and-materials	$	37,072	$	41,499	$	78,571
Unit-based		122,800		7,180		129,979
Fixed price		82,522		3,011		85,531
Total⁽¹⁾	$	242,394	$	51,689	$	294,083

Client Type
Commercial	$	27,585	$	3,978	$	31,562
Government		58,167		46,390		104,556
Utilities⁽²⁾		156,642		1,321		157,963
Total⁽¹⁾	$	242,394	$	51,689	$	294,083

Geography ⁽³⁾
Domestic	$	242,394	$	51,689	$	294,083

(1)

Amounts may not add to the totals due to rounding.

(2)

Includes the portion of revenue related to small business programs paid by the end user/customer.

(3)

Revenue from the Company’s foreign operations were immaterial for the three and nine months ended October 2, 2020.


	Three months ended September 29, 2019
	Energy		Engineering and Consulting		Total
	(in thousands)
Contract Type
Time-and-materials	$	2,806	$	14,970	$	17,776
Unit-based		67,759		3,556		71,315
Fixed price		27,422		981		28,403
Total ⁽¹⁾	$	97,987	$	19,507	$	117,494

Client Type
Commercial	$	12,028	$	1,550	$	13,578
Government		17,955		17,921		35,876
Utilities ⁽²⁾		68,004		36		68,040
Total ⁽¹⁾	$	97,987	$	19,507		117,494

Geography ⁽³⁾
Domestic	$	97,987	$	19,507		117,494

	Nine months ended September 27, 2019
	Energy		Engineering and Consulting		Total
	(in thousands)
Contract Type
Time-and-materials	$	10,154	$	42,624	$	52,778
Unit-based		188,388		10,719		199,107
Fixed price		59,420		2,378		61,798
Total ⁽¹⁾	$	257,962	$	55,721	$	313,683

Client Type
Commercial	$	28,063	$	4,176	$	32,239
Government		41,400		51,251		92,651
Utilities ⁽²⁾		188,499		294		188,793
Total ⁽¹⁾	$	257,962	$	55,721		313,683

Geography ⁽³⁾
Domestic	$	257,962	$	55,721		313,683

(1)

Amounts may not add to the totals due to rounding.

(2)

Includes the portion of revenue related to small business programs paid by the end user/customer.

(3)

Revenue from the Company’s foreign operations were immaterial for the three and nine months ended September 27, 2019.

Geographical Information

Substantially all of the Company’s consolidated revenue was derived from its operations in the U.S. The Company operates through a nationwide network of offices spread across 24 states and the District of Columbia. Revenues from the Company’s Canadian operations were not material for the three and nine months ended October 2, 2020. For the three months and nine months ended September 27, 2019, the Company did not have foreign revenues.

Customer Concentration

For the three and nine months ended October 2, 2020, the Company’s top 10 customers accounted for 46.7% and 48.6%, respectively, of the Company’s consolidated contract revenue. For the three and nine months ended September 27, 2019, the Company’s top 10 customers accounted for 52.0% and 50.2%, respectively, of the Company’s consolidated contract revenue.

For the three months ended October 2, 2020, the Company did not have any individual customers that accounted for more than 10% of its consolidated contract revenues. For the nine months ended October 2, 2020, the Company had one customer, Los Angeles Department of Water and Power (“LADWP”), that accounted for 12.8% of its consolidated contract revenues. For the three and nine months ended September 27, 2019, the Company derived 11.7% and 15.2%, respectively, of its consolidated contract revenue from one customer, LADWP.

On a segment basis, the Company also had individual customers that accounted for more than 10% of its segment contract revenues. For the three months ended October 2, 2020, no single customer accounted for 10% or more of its Energy segment revenues. For the nine months ended October 2, 2020, the company derived 26.8% of its Energy segment revenues from two customers, LADWP and DASNY. For the three and nine months ended October 2, 2020, the Company derived 18.7% and 19.6%, respectively, of its Engineering and Consulting segment revenues from one customer, the City of Elk Grove. For the three and nine months ended September 27, 2019, the Company derived 24.5% and 30.5%, respectively, of its Energy segment revenues from two customers, LADWP and Consolidated Edison of New York, and 27.4% and 26.7%, respectively, of its Engineering and Consulting segment revenues from one customer, the City of Elk Grove.

The Company’s largest clients are based in California and New York. For the three and nine months ended October 2, 2020, services provided to clients in California accounted for 32.3%, and 40.2%, respectively, of the Company’s consolidated contract revenue, and services provided to clients in New York accounted for 19.2%, and 18.4%, respectively, of the Company’s consolidated contract revenue. For the three and nine months ended September 27, 2019, services provided to clients in California accounted for 39.7% and 28.0%, respectively, of the Company’s consolidated contract revenue, and services provided to clients in New York accounted for 20.7%, and 19.6%, respectively, of the Company’s consolidated contract revenue.

- 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/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

INCOME TAXES

9 Months Ended

Oct. 02, 2020

INCOME TAXES

INCOME TAXES

10. 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, the Company assesses the available positive and negative evidence to evaluate if it is more likely than not that the deferred tax assets will be realized. Beginning in fiscal year 2017, the Company 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 its 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 $86,000 at the end of fiscal year 2018 related to California net operating losses. As of October 2, 2020, the Company assessed all available positive and negative evidence available to determine whether, based on the weight of that evidence, there was a change in judgment related to the utilization of deferred tax assets in future years. The Company concluded that as of October 2, 2020, the valuation allowance for the Company’s deferred tax assets was appropriate in accordance with ASC 740. Consequently, there was no change to the valuation allowance during the nine months ended October 2, 2020. For the nine months ended September 27, 2019, the Company did not have a change in the valuation allowance.

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 October 2, 2020, the Company recorded a liability of $0.1 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. Interest and penalties of $0.02 million have been recorded related to unrecognized tax benefits as of October 2, 2020.

Based on the Company’s estimates and determination of an effective tax rate for the year, the Company recorded an income tax benefit of $1.6 million and $3.3 million for the three and nine months ended October 2, 2020, respectively, as compared to an income tax benefit of $0.4 million and $1.4 million for the three and nine months ended September 27, 2019, respectively. During the three and nine months ended October 2, 2020, the difference between the effective tax rate and the federal statutory rate was primarily attributable to state taxes, the recognition of tax deductions related to the vesting of performance-based restricted stock units, nondeductible executive compensation, research and development tax credits, and the commercial building energy efficiency deduction. For the three and nine months ended September 27, 2019, the difference between the effective tax rate and the federal statutory rate was primarily attributable to state taxes, the recognition of tax deductions related to the vesting of performance-based restricted stock units, nondeductible executive compensation and research and development tax credits.

During the nine months ended October 2, 2020, the Internal Revenue Service finalized its audit of the Company’s tax return for the fiscal year ended December 30, 2016. There were no changes made by the Internal Revenue Service to the tax return filed.

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748) which includes a number of provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. Under ASC 740, the effects of new legislation are recognized upon enactment. Accordingly, the effects of the CARES Act have been incorporated into the income tax provision computation for the nine months ended October 2, 2020. The Company anticipates deferring the employer side social security payments for payroll paid for the remainder of 2020. These provisions did not have a material impact on the income tax provision.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

EARNINGS PER SHARE (EPS)

9 Months Ended

Oct. 02, 2020

EARNINGS PER SHARE (EPS)

EARNINGS PER SHARE (EPS)

11. 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
	October 2,		September 27,		October 2,		September 27,
	2020		2019		2020		2019
	(in thousands, except per share amounts)
Net income (loss)	$	2,640	$	416	$	(10,499)	$	1,639
Weighted-average common shares outstanding		11,992		11,217		11,723		11,097
Effect of dilutive stock options and restricted stock awards		425		572		—		617
Weighted-average common shares outstanding-diluted		12,417		11,789		11,723		11,714
Earnings (Loss) per share:
Basic	$	0.22	$	0.04	$	(0.90)	$	0.15
Diluted	$	0.21	$	0.04	$	(0.90)	$	0.14

For the nine months ended October 2, 2020, the Company reported a net loss, and accordingly, all outstanding equity awards have been excluded because including them would have been anti-dilutive. For the three months ended October 2, 2020, 329,000 options were excluded from the calculation of dilutive potential common shares because including them would have been anti-dilutive and 155,000 options were excluded from the calculation for the three and nine months ended September 27, 2019.

BUSINESS COMBINATIONS

9 Months Ended

Oct. 02, 2020

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

12. BUSINESS COMBINATIONS

Acquisition of E3, Inc.

On October 28, 2019, the Company, through its wholly-owned subsidiary, WES acquired all of the capital stock of Energy and Environmental Economics, Inc. (“E3, Inc.”), pursuant to the terms of a stock purchase agreement (the “Stock Purchase Agreement”) by and among the Company, WES, E3, Inc., each of the stockholders of E3, Inc. (the “E3, Inc. Stockholders”) and Ren Orans, as seller representative of the E3, Inc. Stockholders. E3, Inc. is an energy consulting firm that helps utilities, regulators, policy makers, developers, and investors make strategic decisions as they implement new public policies, respond to technological advances, and address customers’ shifting expectations in clean energy. The Company believes that E3 will provide Willdan and our clients with visibility into future market trends and position it to advise clients on upcoming policy, electrification, and decarbonization. E3, Inc.’s financial information is included within the Energy segment beginning in the fourth quarter of fiscal year 2019. The Company expects to finalize the purchase price allocation with respect to this transaction during the fourth quarter of fiscal 2020.

The Company agreed to pay up to $44.0 million for the purchase of all of the capital stock of E3, Inc., which purchase price consists of (i) $27.0 million in cash paid on the E3, Inc.on October 28, 2019 (the “E3, Inc. Closing Date”) (subject to holdbacks and adjustments), (ii) $5.0 million in shares of the Company’s common stock, based on the volume-weighted average price per share of the Company’s common stock for the ten trading days immediately following, but not including, the E3, Inc. Closing Date and (iii) up to $12.0 million in cash if E3, Inc. exceeds certain financial targets during the three years after the E3, Inc. 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 amount of the Earn-Out Payments to be paid will be determined based on E3, Inc.’s earnings before interest, taxes, depreciation and amortization (“EBITDA”). The E3, Inc. Stockholders will receive Earn-Out Payments in each of the three years after the E3, Inc. Closing Date (the “Earn-Out Period”) based on the amount by which E3, Inc.’s EBITDA exceeds certain targets. The amounts due to the E3, Inc. Stockholders as Earn-Out Payments will in no event, individually or in the aggregate, exceed the Maximum Payout. Earn-Out Payments will be made in annual installments for each of the three years of the Earn-Out Period. In addition, the Earn-Out Payments will be subject to certain subordination provisions in favor of the lenders under the Company’s Credit Agreement.

The Purchase Agreement also contains customary representations and warranties regarding WES, the Company, E3, Inc. and the E3, Inc. Stockholders, indemnification provisions and other provisions customary for transactions of this nature.

The Company borrowed $30.0 million under its Delayed Draw Term Loan on October 28, 2019 to fund the $27.0 million cash payment paid on the E3, Inc. Closing Date.

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, the expansion into new markets and the acquired company’s assembled work force. The Company estimates that the entire $22.7 million of goodwill resulting from the acquisition will be tax deductible.

Preliminary consideration for the acquisition includes the following:


	E3, Inc.
		(in thousands)
Cash paid	$	25,217
Other working capital adjustment		1,973
Issuance of common stock		5,000
Contingent Consideration		7,680
Total consideration	$	39,870

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


	E3, Inc.
		(in thousands)
Current assets	$	5,273
Non-current assets ⁽¹⁾		341
Cash		2,264
Equipment and leasehold improvements, net		409
Right-of-use assets		7,641
Current lease liability		(750)
Non-current lease liability		(7,300)
Liabilities		(4,735)
Backlog		2,600
Customer relationships		6,050
Tradename		4,200
Developed technology		880
In-progress research & development		310
Goodwill		22,687
Net assets acquired	$	39,870

(1)

Excluded from non-current assets are equipment and leasehold improvements, net, right-of-use assets, customer relationships, tradename, backlog and goodwill.

During the nine months ended October 2, 2020, the Company made adjustments, primarily related to other working capital and contingent consideration, to the consideration paid for E3, Inc. which resulted in an adjustment to the preliminary purchase price allocation of E3, Inc. The adjustments resulted in an aggregate increase of $5.6 million in the net carrying value of right of use assets, non-current lease liability, backlog, tradename, developed technology, in-progress research and development, goodwill and an aggregate decrease of $5.0 million in the net carrying value of current assets, current lease liability, liabilities, customer relationships, and non-compete. The change in the fair value of intangible assets resulted in a decrease in the amortization expense of $0.1 million for the three and nine months ended October 2, 2020.

During the three and nine months ended October 2, 2020, the acquisition of E3, Inc. contributed $5.3 million and $17.1 million in revenue, and contributed $0.6 million and $3.1 million in income from operations, respectively.

Acquisition of Onsite Energy Corporation

On July 2, 2019, the Company acquired substantially all of the assets and liabilities of Onsite Energy Corporation (“Onsite Energy”), an energy efficiency services and project implementation firm that specializes in energy

upgrades and commissioning for industrial facilities. The Company believes the acquisition will expand its presence in the California-based industrial energy management services. Pursuant to the terms of the Asset Purchase Agreement, dated July 2, 2019, by and between WES and Onsite Energy, WES will pay a maximum aggregate purchase price of $26.4 million, subject to certain holdback and working capital adjustments, to be paid in cash. Onsite Energy’s financial information is included within the Energy segment. The Company finalized the purchase price allocation with respect to this transaction in the second quarter of 2020.

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, the expansion into new markets and the acquired company’s assembled work force. The Company estimates that the entire $8.6 million of goodwill resulting from the acquisition will be tax deductible.

Consideration for the acquisition includes the following:


	Onsite Energy
		(in thousands)
Cash paid	$	24,905
Other working capital adjustment		-
Total consideration	$	24,905

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


	Onsite Energy
		(in thousands)
Current assets	$	19,058
Non-current assets ⁽¹⁾		10
Equipment and leasehold improvements, net		39
Right-of-use assets		828
Current lease liability		(168)
Non-current lease liability		(660)
Liabilities		(12,222)
Backlog		1,510
Customer relationships		7,050
Tradename		860
Goodwill		8,600
Net assets acquired	$	24,905

(1)

Excluded from non-current assets are equipment and leasehold improvements, net, right-of-use assets, customer relationships, tradename, backlog and goodwill.

During the nine months ended October 2, 2020, the Company made adjustments, primarily related to other working capital, to the consideration paid for Onsite Energy which resulted in an adjustment to the purchase price allocation of Onsite Energy. The adjustments resulted in an aggregate increase of $3.5 million in the net carrying value of backlog, tradename and goodwill and an aggregate decrease of $3.5 million in the net carrying value of current assets and goodwill. The increase in the fair value of intangible assets did not result in any changes in the amortization expense for the three months ended October 2, 2020 and resulted in a $0.7 million change of the amortization expense for the nine months ended October 2, 2020.

The acquisition related costs associated with Onsite Energy included in other general and administrative expenses in the consolidated statements of comprehensive income were not material for either the three or nine months ended October 2, 2020.

During the three and nine months ended October 2, 2020, the acquisition of Onsite Energy contributed $2.8 million $7.4 million in revenue, respectively, and contributed $1.0 million in income from operations.

Acquisition of The Weidt Group

On March 8, 2019, the Company acquired substantially all of the assets of the energy practice division of The Weidt Group Inc. (“The Weidt Group”). The Company believes the acquisition will expand its presence in the upper Midwest and better position the Company to help utilities make their grids more resilient. Pursuant to the terms of the Asset Purchase Agreement, dated March 8, 2019, by and among the Company, WES and The Weidt Group, WES paid a cash purchase price of $22.1 million, inclusive of working capital adjustments. The Weidt Group’s financial information is included within the Energy segment. The Company finalized the purchase price allocation with respect to this transaction in the first quarter of 2020.

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, the expansion into new markets and the acquired company’s assembled work force. The Company estimates that the entire $11.5 million of goodwill resulting from the acquisition will be tax deductible.

Consideration for the acquisition includes the following:


	The Weidt Group
		(in thousands)
Cash paid	$	22,136
Other working capital adjustment		-
Total consideration	$	22,136

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


	The Weidt Group
		(in thousands)
Current assets	$	2,317
Non-current assets ⁽¹⁾		25
Equipment and leasehold improvements, net		198
Right-of-use assets		1,730
Current lease liability		(245)
Non-current lease liability		(1,533)
Liabilities		(612)
Backlog		750
Customer relationships		4,240
Tradename		550
Developed technology		3,170
Goodwill		11,546
Net assets acquired	$	22,136

(1)

Excluded from non-current assets are equipment and leasehold improvements, net, right-of-use assets, customer relationships, tradename, developed technology, backlog and goodwill.

The acquisition related costs associated with The Weidt Group included in other general and administrative expenses in the consolidated statements of comprehensive income were not material for either the three or nine months ended October 2, 2020.

During the three and nine months ended October 2, 2020, the acquisition of The Weidt Group contributed $3.7 million and $11.0 million in revenue, and contributed $0.5 million and $1.3 million in income from operations, respectively.

The following unaudited pro forma financial information for the three and nine months ended October 2, 2020 and September 27, 2019 assumes that the acquisitions of substantially all of the assets and liabilities of E3, Inc., Onsite Energy and The Weidt Group occurred on the first day of the year prior to the year of acquisition:


	Three Months Ended				Nine Months Ended
	October 2,		September 27,		October 2,		September 27,
	2020		2019		2020		2019
	(in thousands, except per share data)
Pro forma revenue	$	104,508	$	122,505	$	294,083	$	341,914

Pro forma income (loss) from operations	$	1,601	$	(998)	$	(10,509)	$	5,317
Pro forma net income (loss)⁽¹⁾	$	924	$	(23,429)	$	(12,085)	$	(19,820)

Earnings (Loss) per share:
Basic	$	0.08	$	(2.06)	$	(1.03)	$	(1.76)
Diluted	$	0.07	$	(1.96)	$	(1.03)	$	(1.67)

Weighted average shares outstanding:
Basic		11,992		11,379		11,723		11,259
Diluted		12,417		11,951		11,723		11,876

(1)

Adjustments to pro forma net income include income from operations, amortization and interest expenses.

This pro forma supplemental information does not purport to be indicative of what the Company’s operating results would have been had the acquisition of all the capital stock of E3, Inc. and that the acquisitions of substantially all of the assets and liabilities of Onsite Energy and The Weidt Group each occurred on the first day of the year prior to the year of acquisition and may not be indicative of future operating results.

During the three and nine months ended October 2, 2020, the acquisition of E3, Inc., Onsite Energy and The Weidt Group contributed $11.8 million and $35.5 million in revenue, and contributed $2.1 million and $5.4 million in income from operations, respectively.

CONTINGENCIES

9 Months Ended

Oct. 02, 2020

CONTINGENCIES

CONTINGENCIES

13. 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.

SUBSEQUENT EVENTS

9 Months Ended

Oct. 02, 2020

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

14. SUBSEQUENT EVENTS

In accordance with ASC Topic 855, Subsequent Events, the Company evaluates subsequent events up until the date the condensed consolidated financial statements are issued. As of November 5, 2020, there were no subsequent events required to be reported.

ORGANIZATION AND OPERATIONS OF THE COMPANY (Policies)

9 Months Ended

Oct. 02, 2020

ORGANIZATION AND OPERATIONS OF THE COMPANY

Basis of Presentation

Fiscal Years

Fiscal Years

Use of Estimates

Use of Estimates

Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

Accounting Pronouncements Recently Issued

Contract Accounting

The following table reflects the Company’s two reportable segments and the types of contracts that each most commonly enters into for revenue generating activities.


Segment	Contract Type	Revenue Recognition Method
	Time-and-materials	Time-and-materials
Energy	Unit-based	Unit-based
	Software license	Unit-based
	Fixed price	Percentage-of-completion
	Time-and-materials	Time-and-materials
Engineering and Consulting	Unit-based	Unit-based
	Fixed price	Percentage-of-completion

REVENUES (Tables)

9 Months Ended

Oct. 02, 2020

REVENUES

Schedule of contracts by reportable segments and type of contracts


Segment	Contract Type	Revenue Recognition Method
	Time-and-materials	Time-and-materials
Energy	Unit-based	Unit-based
	Software license	Unit-based
	Fixed price	Percentage-of-completion
	Time-and-materials	Time-and-materials
Engineering and Consulting	Unit-based	Unit-based
	Fixed price	Percentage-of-completion

SUPPLEMENTAL FINANCIAL STATEMENT DATA (Tables)

9 Months Ended

Oct. 02, 2020

SUPPLEMENTAL FINANCIAL STATEMENT DATA

Schedule of equipment and leasehold improvements


	October 2,		December 27,
	2020		2019
	(in thousands)
Furniture and fixtures	$	4,088	$	4,614
Computer hardware and software		16,962		14,789
Leasehold improvements		2,994		2,410
Equipment under finance leases		2,317		1,957
Automobiles, trucks, and field equipment		3,205		3,564
Subtotal		29,566		27,334
Accumulated depreciation and amortization		(16,952)		(15,283)
Equipment and leasehold improvements, net	$	12,614	$	12,051

Schedule of accrued liabilities


	October 2,		December 27,
	2020		2019
	(in thousands)
Accrued subcontractor costs	$	22,448	$	45,366
Compensation and payroll taxes		2,871		3,286
Accrued bonuses		5,121		7,756
Other		3,710		4,630
Employee withholdings		2,485		3,463
Paid leave bank		995		3,114
Total accrued liabilities	$	37,630	$	67,615

Schedule of changes in the carrying value of goodwill by reporting unit


	December 27,		Additional		Additions /		October 2,
	2019		Purchase Cost		Adjustments		2020
	(in thousands)
Reporting Unit:
Energy	$	126,898	$	—	$	2,977	$	129,876
Engineering and Consulting		749		—		—		749
	$	127,647	$	—	$	2,977	$	130,625

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


	October 2, 2020				December 27, 2019
	Gross		Accumulated		Gross		Accumulated		Amortization
	Amount		Amortization		Amount		Amortization		Period
	(in thousands)								(in years)
Finite:
Backlog	$	7,944	$	5,907	$	7,134	$	3,763	1.0
Tradename		15,911		6,471		13,351		4,882	2.5	-	6.0
Non-compete agreements		1,420		1,380		2,320		1,384	4.0	-	5.0
Developed technology		15,500		5,396		14,620		3,227	8.0
Customer relationships		58,149		12,687		60,733		8,065	5.0	-	8.0
Total finite intangible assets		98,924	$	31,841		98,158	$	21,321
In-process research and technology ⁽¹⁾		310		—		—		—
Total intangible assets	$	99,234	$	31,841	$	98,158	$	21,321

(1)

In-process research and technology will not be amortized until put into use.

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Oct. 02, 2020

DERIVATIVE FINANCIAL INSTRUMENTS

Schedule of fair values of outstanding derivatives designated as hedging instruments


		Fair Value of Derivative
		Instruments as of
	Balance Sheet Location	October 2, 2020		December 27, 2019
		(in thousands)
Interest rate swap agreement	Accrued liabilities	$	(638)	$	(241)
Interest rate swap agreement	Other noncurrent (liabilities) assets	$	(192)	$	(306)

Schedule of accumulated other comprehensive income (loss)


	Gain (Loss) on		Accumulated Other
	Derivative Instruments		Comprehensive Loss
	(in thousands)
Balances at December 27, 2019	$	(396)	$	(396)
Other comprehensive loss before reclassifications		(568)		(568)
Amounts reclassified from accumulated other comprehensive income		—		—
Income tax benefit related to derivative instruments		119		119
Net current-period other comprehensive loss		(845)		(845)
Balances at April 3, 2020	$	(845)	$	(845)
Other comprehensive loss before reclassifications	$	105	$	105
Amounts reclassified from accumulated other comprehensive income:		—		—
Income tax benefit (expense) related to derivative instruments		(22)		(22)
Net current-period other comprehensive loss		83		83
Balances at July 3, 2020	$	(762)	$	(762)
Other comprehensive loss before reclassifications	$	179	$	179
Amounts reclassified from accumulated other comprehensive income		0		0
Income tax benefit (expense) related to derivative instruments		(19)		(19)
Net current-period other comprehensive loss		160		160
Balances at October 2, 2020	$	(602)	$	(602)

DEBT OBLIGATIONS (Tables)

9 Months Ended

Oct. 02, 2020

DEBT OBLIGATIONS

Schedule of debt obligations, excluding obligations under capital leases


	October 2,		December 27,
	2020		2019
	(in thousands)
Outstanding borrowings on Term A Loan	$	87,500	$	95,000
Outstanding borrowings on Revolving Credit Facility		—		5,000
Outstanding borrowings on Delayed Draw Term Loan		27,750		30,000
Other debt agreements		874		1,060
Total debt		116,124		131,060
Issuance costs and debt discounts		(881)		(709)
Subtotal		115,243		130,351
Less current portion of long-term debt		13,861		13,720
Long-term debt portion	$	101,382	$	116,631

LEASES (Tables)

9 Months Ended

Oct. 02, 2020

LEASES

Summary of the lease expense


	Three Months Ended				Nine Months Ended
	October 2,		September 27,		October 2,		September 27,
	2020		2019		2020		2019
	(in thousands)				(in thousands)
Operating lease cost	$	1,761	$	1,288	$	5,269	$	3,558
Finance lease cost:
Amortization of assets		146		242		456		366
Interest on lease liabilities		6		19		23		28
Total net lease cost	$	1,913	$	1,549	$	5,748	$	3,952

Summary of lease information presented on the Company's condensed consolidated balance sheet


	October 2,			December 27,
	2020			2019
	(in thousands)
Operating leases:
Right-of-use assets	$	21,468		$	22,297

Lease liability	$	6,011		$	5,550
Lease liability, less current portion		16,869			18,411
Total lease liabilities	$	22,880		$	23,961

Finance leases (included in equipment and leasehold improvements, net):
Equipment and leasehold improvements, net	$	2,317		$	1,957
Accumulated depreciation		(1,712)			(1,291)
Total equipment and leasehold improvements, net	$	605		$	666

Finance lease obligations	$	282		$	375
Finance lease obligations, less current portion		243			191
Total finance lease obligations	$	525		$	566

Weighted average remaining lease term (in years):
Operating Leases		4.56			4.59
Finance Leases		1.96			1.47

Weighted average discount rate:
Operating Leases		4.45	%		5.14	%
Finance Leases		4.01	%		4.80	%

Summary of other information and supplemental cash flow information related to finance and operating leases


	Nine Months Ended
	October 2,		September 27,
	2020		2019

	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$	5,162	$	3,645
Operating cash flow from finance leases		23		98
Financing cash flow from finance leases		435		338

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	3,007	$	3,029

Summary of the maturities of operating lease liabilities

The following is a summary of the maturities of lease liabilities as of October 2, 2020:


	Operating		Finance
	(in thousands)
Fiscal year:
Remainder of 2020	$	1,810	$	41
2021		6,597		307
2022		5,754		147
2023		3,917		35
2024		2,600		14
2025 and thereafter		4,577		2
Total lease payments	$	25,255	$	546
Less: Imputed interest		(2,375)		(21)
Total lease obligations		22,880		525
Less: Current obligations		6,011		282
Noncurrent lease obligations	$	16,869	$	243

Summary of the maturities of finance lease liabilities


	Operating		Finance
	(in thousands)
Fiscal year:
Remainder of 2020	$	1,810	$	41
2021		6,597		307
2022		5,754		147
2023		3,917		35
2024		2,600		14
2025 and thereafter		4,577		2
Total lease payments	$	25,255	$	546
Less: Imputed interest		(2,375)		(21)
Total lease obligations		22,880		525
Less: Current obligations		6,011		282
Noncurrent lease obligations	$	16,869	$	243

SEGMENT AND GEOGRAPHICAL INFORMATION (Tables)

9 Months Ended

Oct. 02, 2020

SEGMENT AND GEOGRAPHICAL INFORMATION

Schedule of financial information with respect to the reportable segments


			Engineering		Unallocated				Consolidated
	Energy		& Consulting		Corporate		Intersegment		Total
	(in thousands)
Fiscal Three Months Ended October 2, 2020
Contract revenue	$	87,888	$	16,620	$	-	$	-	$	104,508
Depreciation and amortization		4,072		267		-		-		4,339
Interest expense, net		7		-		1,206		-		1,213
Segment profit (loss) before income tax expense		3,203		2,757		(4,906)		-		1,054
Income tax expense (benefit)		(437)		1,300		(2,449)		-		(1,586)
Net income (loss)		3,641		1,457		(2,458)		-		2,640
Segment assets ⁽¹⁾		348,350		22,755		50,481		(23,130)		398,456
Fiscal Three Months Ended September 27, 2019
Contract revenue	$	97,934	$	19,560	$	-	$	-	$	117,494
Depreciation and amortization		5,425		363		-		-		5,788
Interest expense, net		20		-		1,237		-		1,257
Segment profit (loss) before income tax expense		1,669		2,586		(4,215)		-		40
Income tax expense (benefit)		461		715		(1,552)		-		(376)
Net income (loss)		1,208		1,871		(2,663)		-		416
Segment assets ⁽¹⁾		246,675		23,366		115,701		(23,130)		362,612
Fiscal Nine Months Ended October 2, 2020
Contract revenue		242,394		51,689		-		-		294,083
Depreciation and amortization		13,499		825		-		-		14,324
Interest expense, net		26		-		3,957		-		3,983
Segment profit (loss) before income tax expense		(6,490)		7,953		(15,243)		-		(13,780)
Income tax expense (benefit)		(1,545)		1,894		(3,630)		-		(3,281)
Net income (loss)		(4,944)		6,059		(11,614)		-		(10,499)
Segment assets ⁽¹⁾		348,350		22,755		50,481		(23,130)		398,456
Fiscal Nine Months Ended September 27, 2019
Contract revenue		257,910		55,773		-		-		313,683
Depreciation and amortization		10,353		955		-		-		11,308
Interest expense, net		20		-		3,579		-		3,599
Segment profit (loss) before income tax expense		2,316		6,603		(8,653)		-		266
Income tax expense (benefit)		640		1,825		(3,838)		-		(1,373)
Net income (loss)		1,676		4,779		(4,816)		-		1,639
Segment assets ⁽¹⁾		246,675		23,366		115,701		(23,130)		362,612

(1)	Segment assets are presented net of intercompany receivables.

Schedule of disaggregation of revenue


	Three months ended October 2, 2020
	Energy		Engineering and Consulting		Total
	(in thousands)
Contract Type
Time-and-materials	$	10,936	$	13,719	$	24,655
Unit-based		43,010		2,082		45,092
Fixed price		33,941		820		34,761
Total⁽¹⁾	$	87,887	$	16,621	$	104,508

Client Type
Commercial	$	9,967	$	1,300	$	11,267
Government		14,737		14,657		29,394
Utilities⁽²⁾		63,183		664		63,846
Total⁽¹⁾	$	87,887	$	16,621	$	104,508

Geography ⁽³⁾
Domestic	$	87,887	$	16,621	$	104,508

	Nine months ended October 2, 2020
	Energy		Engineering and Consulting		Total
	(in thousands)
Contract Type
Time-and-materials	$	37,072	$	41,499	$	78,571
Unit-based		122,800		7,180		129,979
Fixed price		82,522		3,011		85,531
Total⁽¹⁾	$	242,394	$	51,689	$	294,083

Client Type
Commercial	$	27,585	$	3,978	$	31,562
Government		58,167		46,390		104,556
Utilities⁽²⁾		156,642		1,321		157,963
Total⁽¹⁾	$	242,394	$	51,689	$	294,083

Geography ⁽³⁾
Domestic	$	242,394	$	51,689	$	294,083

(1)

Amounts may not add to the totals due to rounding.

(2)

Includes the portion of revenue related to small business programs paid by the end user/customer.

(3)

Revenue from the Company’s foreign operations were immaterial for the three and nine months ended October 2, 2020.


	Three months ended September 29, 2019
	Energy		Engineering and Consulting		Total
	(in thousands)
Contract Type
Time-and-materials	$	2,806	$	14,970	$	17,776
Unit-based		67,759		3,556		71,315
Fixed price		27,422		981		28,403
Total ⁽¹⁾	$	97,987	$	19,507	$	117,494

Client Type
Commercial	$	12,028	$	1,550	$	13,578
Government		17,955		17,921		35,876
Utilities ⁽²⁾		68,004		36		68,040
Total ⁽¹⁾	$	97,987	$	19,507		117,494

Geography ⁽³⁾
Domestic	$	97,987	$	19,507		117,494

	Nine months ended September 27, 2019
	Energy		Engineering and Consulting		Total
	(in thousands)
Contract Type
Time-and-materials	$	10,154	$	42,624	$	52,778
Unit-based		188,388		10,719		199,107
Fixed price		59,420		2,378		61,798
Total ⁽¹⁾	$	257,962	$	55,721	$	313,683

Client Type
Commercial	$	28,063	$	4,176	$	32,239
Government		41,400		51,251		92,651
Utilities ⁽²⁾		188,499		294		188,793
Total ⁽¹⁾	$	257,962	$	55,721		313,683

Geography ⁽³⁾
Domestic	$	257,962	$	55,721		313,683

(1)

Amounts may not add to the totals due to rounding.

(2)

Includes the portion of revenue related to small business programs paid by the end user/customer.

(3)

Revenue from the Company’s foreign operations were immaterial for the three and nine months ended September 27, 2019.

EARNINGS PER SHARE (EPS) (Tables)

9 Months Ended

Oct. 02, 2020

EARNINGS PER SHARE (EPS)

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


	Three months ended				Nine months ended
	October 2,		September 27,		October 2,		September 27,
	2020		2019		2020		2019
	(in thousands, except per share amounts)
Net income (loss)	$	2,640	$	416	$	(10,499)	$	1,639
Weighted-average common shares outstanding		11,992		11,217		11,723		11,097
Effect of dilutive stock options and restricted stock awards		425		572		—		617
Weighted-average common shares outstanding-diluted		12,417		11,789		11,723		11,714
Earnings (Loss) per share:
Basic	$	0.22	$	0.04	$	(0.90)	$	0.15
Diluted	$	0.21	$	0.04	$	(0.90)	$	0.14

BUSINESS COMBINATIONS (Tables)

9 Months Ended

Oct. 02, 2020

E3, Inc.

Schedule of consideration for the acquisition


	E3, Inc.
		(in thousands)
Cash paid	$	25,217
Other working capital adjustment		1,973
Issuance of common stock		5,000
Contingent Consideration		7,680
Total consideration	$	39,870

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


	E3, Inc.
		(in thousands)
Current assets	$	5,273
Non-current assets ⁽¹⁾		341
Cash		2,264
Equipment and leasehold improvements, net		409
Right-of-use assets		7,641
Current lease liability		(750)
Non-current lease liability		(7,300)
Liabilities		(4,735)
Backlog		2,600
Customer relationships		6,050
Tradename		4,200
Developed technology		880
In-progress research & development		310
Goodwill		22,687
Net assets acquired	$	39,870

(1)

Excluded from non-current assets are equipment and leasehold improvements, net, right-of-use assets, customer relationships, tradename, backlog and goodwill.

Onsite Energy Corporation

Schedule of consideration for the acquisition


	Onsite Energy
		(in thousands)
Cash paid	$	24,905
Other working capital adjustment		-
Total consideration	$	24,905

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


	Onsite Energy
		(in thousands)
Current assets	$	19,058
Non-current assets ⁽¹⁾		10
Equipment and leasehold improvements, net		39
Right-of-use assets		828
Current lease liability		(168)
Non-current lease liability		(660)
Liabilities		(12,222)
Backlog		1,510
Customer relationships		7,050
Tradename		860
Goodwill		8,600
Net assets acquired	$	24,905

(1)

Excluded from non-current assets are equipment and leasehold improvements, net, right-of-use assets, customer relationships, tradename, backlog and goodwill.

The Weidt Group

Schedule of consideration for the acquisition


	The Weidt Group
		(in thousands)
Cash paid	$	22,136
Other working capital adjustment		-
Total consideration	$	22,136

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


	The Weidt Group
		(in thousands)
Current assets	$	2,317
Non-current assets ⁽¹⁾		25
Equipment and leasehold improvements, net		198
Right-of-use assets		1,730
Current lease liability		(245)
Non-current lease liability		(1,533)
Liabilities		(612)
Backlog		750
Customer relationships		4,240
Tradename		550
Developed technology		3,170
Goodwill		11,546
Net assets acquired	$	22,136

(1)

Excluded from non-current assets are equipment and leasehold improvements, net, right-of-use assets, customer relationships, tradename, developed technology, backlog and goodwill.

Lime Energy

Schedule of unaudited pro forma financial information


	Three Months Ended				Nine Months Ended
	October 2,		September 27,		October 2,		September 27,
	2020		2019		2020		2019
	(in thousands, except per share data)
Pro forma revenue	$	104,508	$	122,505	$	294,083	$	341,914

Pro forma income (loss) from operations	$	1,601	$	(998)	$	(10,509)	$	5,317
Pro forma net income (loss)⁽¹⁾	$	924	$	(23,429)	$	(12,085)	$	(19,820)

Earnings (Loss) per share:
Basic	$	0.08	$	(2.06)	$	(1.03)	$	(1.76)
Diluted	$	0.07	$	(1.96)	$	(1.03)	$	(1.67)

Weighted average shares outstanding:
Basic		11,992		11,379		11,723		11,259
Diluted		12,417		11,951		11,723		11,876

(1)

Adjustments to pro forma net income include income from operations, amortization and interest expenses.

ORGANIZATION AND OPERATIONS OF THE COMPANY (Details)		3 Months Ended								9 Months Ended	12 Months Ended
ORGANIZATION AND OPERATIONS OF THE COMPANY (Details)	Nov. 05, 2020 contract	Jan. 01, 2021	Oct. 02, 2020	Jul. 03, 2020	Apr. 03, 2020	Dec. 27, 2019	Sep. 27, 2019	Jun. 28, 2019	Mar. 29, 2019	Oct. 02, 2020 segment	Jan. 01, 2021	Dec. 27, 2019
Summary of Significant Accounting Policies [Line Items]
Number of reporting segments \| segment										2
Length of fiscal period		91 days	91 days	91 days	98 days	91 days	91 days	91 days	91 days		371 days	364 days
Subsequent Event
Summary of Significant Accounting Policies [Line Items]
Number of contracts cancelled \| contract	0
Energy Segment
Summary of Significant Accounting Policies [Line Items]
Percentage of revenue considered nonessential												40.00%
Other Energy
Summary of Significant Accounting Policies [Line Items]
Percentage of revenue considered essential												60.00%
Minimum
Summary of Significant Accounting Policies [Line Items]
Length of fiscal period					91 days					364 days
Maximum
Summary of Significant Accounting Policies [Line Items]
Length of fiscal period					98 days					371 days

REVENUES (Details) $ in Thousands	3 Months Ended		9 Months Ended
REVENUES (Details) $ in Thousands	Oct. 02, 2020 USD ($)	Sep. 27, 2019 USD ($)	Oct. 02, 2020 USD ($) segment	Sep. 27, 2019 USD ($)	Dec. 27, 2019 USD ($)
Disaggregation of Revenue [Line Items]
Number of reporting segments \| segment			2
Payroll taxes, bonuses and employee benefit costs for all Company personnel	$ 17,530	$ 15,761	$ 53,273	$ 46,167
Facilities costs	1,800	$ 1,300	5,300	$ 3,600
Revenue of the entity recorded in which it acts solely in the capacity of an agent			0
Costs recorded for costs to the entity in which it acts solely in the capacity of an agent			0
Accounts receivable
Disaggregation of Revenue [Line Items]
Retained accounts receivable	$ 5,900		$ 5,900		$ 5,400
Maximum
Disaggregation of Revenue [Line Items]
Percent of revenue (as a percent)	3.00%		3.00%
Minimum
Disaggregation of Revenue [Line Items]
Percent of revenue (as a percent)	2.00%		2.00%
Cost of Sales
Disaggregation of Revenue [Line Items]
Payroll taxes, bonuses and employee benefit costs for all Company personnel			$ 0
Facilities costs			$ 0

SUPPLEMENTAL FINANCIAL STATEMENT DATA - Equipment And Leasehold Improvements, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019	Dec. 27, 2019
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	$ 29,566		$ 29,566		$ 27,334
Accumulated depreciation and amortization	(16,952)		(16,952)		(15,283)
Total equipment and leasehold improvements, net	12,614		12,614		12,051
Depreciation and amortization	4,339	$ 5,788	14,324	$ 11,308
Amortization	146	$ 242	456	366
Furniture and fixtures
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	4,088		4,088		4,614
Computer hardware and software
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	16,962		16,962		14,789
Leasehold improvements
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	2,994		2,994		2,410
Equipment under finance lease
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	2,317		2,317		1,957
Accumulated depreciation and amortization	(1,712)		(1,712)		(1,291)
Total equipment and leasehold improvements, net	605		605		666
Amortization				$ 400	500
Automobiles, trucks, and field equipment
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, gross	$ 3,205		$ 3,205		$ 3,564

SUPPLEMENTAL FINANCIAL STATEMENT DATA - Accrued Liabilities (Details) - USD ($) $ in Thousands	Oct. 02, 2020	Dec. 27, 2019
ACCRUED LIABILITIES
Accrued subcontractor costs	$ 22,448	$ 45,366
Compensation and payroll taxes	2,871	3,286
Accrued bonuses	5,121	7,756
Other	3,710	4,630
Employee withholdings	2,485	3,463
Paid leave bank	995	3,114
Total accrued liabilities	$ 37,630	$ 67,615

SUPPLEMENTAL FINANCIAL STATEMENT DATA - Carrying Value of Goodwill by Reporting Unit (Details) $ in Thousands	9 Months Ended
	Oct. 02, 2020 USD ($)
Changes in carrying value of goodwill
Goodwill at beginning of period	$ 127,647
Additions/Adjustments	2,977
Goodwill at end of period	130,625
Energy
Changes in carrying value of goodwill
Goodwill at beginning of period	126,898
Additions/Adjustments	2,977
Goodwill at end of period	129,876
Engineering and Consulting
Changes in carrying value of goodwill
Goodwill at beginning of period	749
Goodwill at end of period	$ 749

SUPPLEMENTAL FINANCIAL STATEMENT DATA - Gross Amount and Amortization (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 02, 2020	Dec. 27, 2019
Goodwill and other intangible assets
Gross Amount	$ 98,924	$ 98,158
Gross Amount of Intangible Assets	99,234	98,158
Accumulated Amortization	31,841	21,321
Backlog
Goodwill and other intangible assets
Gross Amount	7,944	7,134
Accumulated Amortization	$ 5,907	3,763
Amortization Period (in years)	1 year
Tradename
Goodwill and other intangible assets
Gross Amount	$ 15,911	13,351
Accumulated Amortization	$ 6,471	4,882
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	$ 1,420	2,320
Accumulated Amortization	$ 1,380	1,384
Non-compete agreements \| Minimum
Goodwill and other intangible assets
Amortization Period (in years)	4 years
Non-compete agreements \| Maximum
Goodwill and other intangible assets
Amortization Period (in years)	5 years
Developed technology
Goodwill and other intangible assets
Gross Amount	$ 15,500	14,620
Accumulated Amortization	$ 5,396	3,227
Amortization Period (in years)	8 years
In-process research and technology
Goodwill and other intangible assets
Gross Amount of Indefinite Lived Intangible Assets	$ 310
Customer relationships
Goodwill and other intangible assets
Gross Amount	58,149	60,733
Accumulated Amortization	$ 12,687	$ 8,065
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

DERIVATIVE FINANCIAL INSTRUMENTS (Details) - Cash flow hedge - USD ($) $ in Millions	3 Months Ended	9 Months Ended	12 Months Ended
	Oct. 02, 2020	Oct. 02, 2020	Jan. 01, 2021	Jan. 31, 2019
Derivative [Line Items]
Effective portion of interest rate swap designated as cash flow hedge before tax effect		$ 0.8
Accumulated other comprehensive income to interest expense	$ 0.0	$ 0.0
Interest swap agreement
Derivative [Line Items]
Notional amount				$ 35.0
Fixed rate (in percent)				2.47%
Interest swap agreement \| Forecast
Derivative [Line Items]
Accumulated other comprehensive income to interest expense			$ 0.6

DERIVATIVE FINANCIAL INSTRUMENTS - Fair Values (Details) - Designated as hedging instruments - Interest swap agreement - USD ($) $ in Thousands	Oct. 02, 2020	Dec. 27, 2019
Accrued liabilities.
Derivatives, Fair Value [Line Items]
Fair value of Derivative Instruments	$ (638)	$ (241)
Other noncurrent (liabilities) assets
Derivatives, Fair Value [Line Items]
Fair value of Derivative Instruments	$ (192)	$ (306)

DERIVATIVE FINANCIAL INSTRUMENTS - Others (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019
Cash flow hedge
Derivative [Line Items]
Effective portion	$ 0.2	$ 0.1	$ 0.2	$ 0.5
Fair Value Hedging
Derivative [Line Items]
Effective portion	$ 0.2	$ 0.1	$ 0.2	$ 0.5

DERIVATIVE FINANCIAL INSTRUMENTS -Accumulated balances and reporting period activities (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 02, 2020	Jul. 03, 2020	Apr. 03, 2020
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Balances	$ 161,396	$ 161,737	$ 167,278
Balances	169,376	161,396	161,737
Gain (Loss) on Derivative Instruments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Balances	(762)	(845)	(396)
Other comprehensive loss before reclassifications	179	105	(568)
Income tax benefit (expense) related to derivative instruments	(19)	(22)	119
Net current-period other comprehensive loss	160	83	(845)
Balances	(602)	(762)	(845)
Accumulated Other Comprehensive Loss.
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Balances	(762)	(845)	(396)
Other comprehensive loss before reclassifications	179	105	(568)
Income tax benefit (expense) related to derivative instruments	(19)	(22)	119
Net current-period other comprehensive loss	160	83	(845)
Balances	$ (602)	$ (762)	$ (845)

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121641772&loc=SL7669619-108580

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21463-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 830
-SubTopic 30
-Section 45
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=118261656&loc=d3e32136-110900

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(21))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 55
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121640130&loc=d3e1436-108581

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 830
-SubTopic 30
-Section 45
-Paragraph 20
-URI http://asc.fasb.org/extlink&oid=118261656&loc=d3e32211-110900

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 830
-SubTopic 30
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6450520&loc=d3e32583-110901

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121641772&loc=SL7669625-108580

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(23))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(19))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

DEBT OBLIGATIONS (Details) - USD ($) $ in Thousands	Oct. 02, 2020	Dec. 27, 2019
Debt Obligations
Total debt obligations	$ 116,124	$ 131,060
Issuance costs and debt discounts	(881)	(709)
Total debt maturities	115,243	130,351
Less current portion of long-term debt	(13,861)	(13,720)
Long-term debt portion	101,382	116,631
Term A Loan
Debt Obligations
Total debt obligations	87,500	95,000
Revolving Credit Facility
Debt Obligations
Total debt obligations		5,000
Delayed Draw Term Loan Facility
Debt Obligations
Total debt obligations	27,750	30,000
Other debt agreements
Debt Obligations
Total debt obligations	$ 874	$ 1,060

DEBT OBLIGATIONS - Line of credit (Details)			9 Months Ended	12 Months Ended
DEBT OBLIGATIONS - Line of credit (Details)	May 06, 2020	Jun. 26, 2019 USD ($)	Oct. 02, 2020 USD ($)	Dec. 28, 2018 USD ($)	Dec. 27, 2019 USD ($)	Dec. 20, 2018 USD ($)
Utility Customer Agreement
Debt Instrument [Line Items]
Interest rate (as a percent)						4.332%
Unsecured notes payable			$ 800,000		$ 900,000
Amount committed to repay						$ 1,700,000
2019 Credit Agreement [Member]
Debt Instrument [Line Items]
Minimum fixed charge coverage ratio			1.20
2019 Credit Agreement [Member] \| Debt Covenant Threshold Tranche One
Debt Instrument [Line Items]
Maximum total leverage ratio			3.50
2019 Credit Agreement [Member] \| Debt Covenant Threshold Tranche Two
Debt Instrument [Line Items]
Maximum total leverage ratio			3.25
Term A Loan \| BMO
Debt Instrument [Line Items]
The aggregate amount under the revolving line of credit		$ 100,000,000.0
Delayed Draw Term Loan Facility
Debt Instrument [Line Items]
Maximum borrowing capacity		50,000,000.0
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 50,000,000.0
Revolving Credit Facility \| Maximum
Debt Instrument [Line Items]
Commitment fee (as a percent)	0.45%
Revolving Credit Facility \| Minimum
Debt Instrument [Line Items]
Commitment fee (as a percent)	0.15%
Letters of Credit \| Maximum
Debt Instrument [Line Items]
Commitment fee (as a percent)	2.50%
Letters of Credit \| Minimum
Debt Instrument [Line Items]
Commitment fee (as a percent)	0.84%
Notes payable for IBM
Debt Instrument [Line Items]
Interest rate (as a percent)				4.656%
Interest and principal payments				$ 6,000
Notes payable for IBM \| Software Agreements
Debt Instrument [Line Items]
Software cost				$ 200,000
Unsecured notes payable			$ 75,000		$ 133,000

DEBT OBLIGATIONS - Debt Agreements (Details) - USD ($) $ in Millions	May 06, 2020	May 05, 2020	Jun. 26, 2019
Third Amendment [Member]
Debt Instrument [Line Items]
Maximum aggregate amount of earn-out payments during Relief Period	$ 7.0
Minimum liquidity	5.0
Maximum capital expenditure, debt covenant	$ 7.0
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 50.0
Base rate \| LIBOR \| Third Amendment [Member] \| Debt Interest Period Three [Member]
Debt Instrument [Line Items]
Spread on floating interest rate (as a percent)	0.50%
LIBOR \| LIBOR \| Third Amendment [Member] \| Debt Interest Period One [Member]
Debt Instrument [Line Items]
Spread on floating interest rate (as a percent)		2.00%
LIBOR \| LIBOR \| Third Amendment [Member] \| Debt Interest Period Two [Member]
Debt Instrument [Line Items]
Spread on floating interest rate (as a percent)	2.50%
LIBOR \| LIBOR \| Third Amendment [Member] \| Debt Interest Period Three [Member]
Debt Instrument [Line Items]
Spread on floating interest rate (as a percent)	1.00%
Minimum \| Revolving Credit Facility
Debt Instrument [Line Items]
Commitment fee (as a percent)	0.15%
Minimum \| Revolving Credit Facility \| Debt Interest Period Four [Member]
Debt Instrument [Line Items]
Commitment fee (as a percent)	0.15%
Minimum \| Letters of Credit
Debt Instrument [Line Items]
Commitment fee (as a percent)	0.84%
Minimum \| Letters of Credit \| Debt Interest Period Four [Member]
Debt Instrument [Line Items]
Commitment fee (as a percent)	0.84%
Minimum \| LIBOR \| Third Amendment [Member]
Debt Instrument [Line Items]
Interest rate	0.75%
Minimum \| LIBOR \| Third Amendment [Member] \| Debt Interest Period Four [Member]
Debt Instrument [Line Items]
Interest rate	0.00%
Minimum \| Base rate \| LIBOR \| Third Amendment [Member] \| Debt Interest Period Three [Member]
Debt Instrument [Line Items]
Spread on floating interest rate (as a percent)	0.125%
Minimum \| Base rate \| LIBOR \| Third Amendment [Member] \| Debt Interest Period Four [Member]
Debt Instrument [Line Items]
Spread on floating interest rate (as a percent)	0.125%
Minimum \| LIBOR \| LIBOR \| Third Amendment [Member] \| Debt Interest Period Three [Member]
Debt Instrument [Line Items]
Spread on floating interest rate (as a percent)	1.125%
Minimum \| LIBOR \| LIBOR \| Third Amendment [Member] \| Debt Interest Period Four [Member]
Debt Instrument [Line Items]
Spread on floating interest rate (as a percent)	1.125%
Maximum \| Revolving Credit Facility
Debt Instrument [Line Items]
Commitment fee (as a percent)	0.45%
Maximum \| Revolving Credit Facility \| Debt Interest Period Four [Member]
Debt Instrument [Line Items]
Commitment fee (as a percent)	0.35%
Maximum \| Letters of Credit
Debt Instrument [Line Items]
Commitment fee (as a percent)	2.50%
Maximum \| Letters of Credit \| Debt Interest Period Four [Member]
Debt Instrument [Line Items]
Commitment fee (as a percent)	2.00%
Maximum \| Base rate \| LIBOR \| Third Amendment [Member] \| Debt Interest Period Three [Member]
Debt Instrument [Line Items]
Spread on floating interest rate (as a percent)	1.50%
Maximum \| Base rate \| LIBOR \| Third Amendment [Member] \| Debt Interest Period Four [Member]
Debt Instrument [Line Items]
Spread on floating interest rate (as a percent)	1.00%
Maximum \| LIBOR \| LIBOR \| Third Amendment [Member] \| Debt Interest Period Three [Member]
Debt Instrument [Line Items]
Spread on floating interest rate (as a percent)	2.50%
Maximum \| LIBOR \| LIBOR \| Third Amendment [Member] \| Debt Interest Period Four [Member]
Debt Instrument [Line Items]
Spread on floating interest rate (as a percent)	2.00%

LEASES - Change in accounting policy (Details) $ in Thousands	9 Months Ended
	Oct. 02, 2020 USD ($)
Leases
Operating lease, option to extend	true
Operating lease, option to terminate	true
Residual value guarantee	$ 0
Minimum
Leases
Operating lease, remaining lease term	1 year
Maximum
Leases
Operating lease, remaining lease term	8 years
Operating lease, extension term	5 years
Operating lease, terminate term	1 year

LEASES - Lease expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
LEASES - Lease expense (Details) - USD ($) $ in Thousands	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019
Lease cost
Operating lease cost	$ 1,761	$ 1,288	$ 5,269	$ 3,558
Amortization of assets	146	242	456	366
Interest on lease liabilities	6	19	23	28
Total net lease cost	$ 1,913	$ 1,549	$ 5,748	$ 3,952

LEASES - Impact of Adoption (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019	Dec. 27, 2019
Operating leases:
Right-of-use assets	$ 21,468		$ 21,468		$ 22,297
Lease liability	$ 6,011		$ 6,011		5,550
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Lease liability		Lease liability
Lease liability, less current portion	$ 16,869		$ 16,869		18,411
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Lease liability, less current portion		Lease liability, less current portion
Total lease obligations	$ 22,880		$ 22,880		23,961
Operating Lease, Liability, Statement of Financial Position [Extensible List]	Total lease obligations		Total lease obligations
Finance leases (included in equipment and leasehold improvements, net):
Equipment and leasehold improvements, gross	$ 29,566		$ 29,566		27,334
Accumulated depreciation and amortization	(16,952)		(16,952)		(15,283)
Total equipment and leasehold improvements, net	12,614		12,614		12,051
Finance lease obligations	282		282		375
Finance lease obligations, less current portion	243		243		191
Total lease obligations	$ 525		$ 525		$ 566
Operating Leases	4 years 6 months 21 days		4 years 6 months 21 days		4 years 7 months 2 days
Finance Leases	1 year 11 months 15 days		1 year 11 months 15 days		1 year 5 months 19 days
Operating Leases, discount rate	4.45%		4.45%		5.14%
Finance Leases, discount rate	4.01%		4.01%		4.80%
Operating Lease, Expense	$ 1,800	$ 1,300	$ 5,300	$ 3,600
Facilities and facility related	1,800	$ 1,300	5,300	$ 3,600
Equipment under finance lease
Finance leases (included in equipment and leasehold improvements, net):
Equipment and leasehold improvements, gross	2,317		2,317		$ 1,957
Accumulated depreciation and amortization	(1,712)		(1,712)		(1,291)
Total equipment and leasehold improvements, net	$ 605		$ 605		$ 666

LEASES - Supplemental cash flow information (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$ 5,162	$ 3,645
Operating cash flow from finance leases	23	98
Financing cash flow from finance leases	435	338
Right-of-use assets obtained in exchange for lease liabilities for operating leases	$ 3,007	$ 3,029

LEASES - Maturities of lease liabilities (Details) - USD ($) $ in Thousands	Oct. 02, 2020	Dec. 27, 2019
Operating
Remainder of 2020	$ 1,810
2021	6,597
2022	5,754
2023	3,917
2024	2,600
2025 and thereafter	4,577
Total lease payments	25,255
Less: Imputed interest	(2,375)
Total lease obligations	22,880	$ 23,961
Less: Current obligations	6,011	5,550
Noncurrent lease obligations	16,869	18,411
Finance
Remainder of 2020	41
2021	307
2022	147
2023	35
2024	14
2025 and thereafter	2
Total lease payments	546
Less: Imputed interest	(21)
Total lease obligations	525	566
Finance lease obligations	282	375
Finance lease obligations, less current portion	$ 243	$ 191

COMMITMENTS AND VARIABLE INTEREST ENTITIES - Employee Benefit Plans (Details) $ in Millions	9 Months Ended
	Oct. 02, 2020 USD ($) item	Sep. 27, 2019 USD ($)
COMMITMENTS AND VARIABLE INTEREST ENTITIES
Number of VIE \| item	1
Employee Benefit Plans
Maximum employee contribution as a percentage of compensation under 401 (k) Plan	50.00%
Service period (in months)	3 months
Attained age (in years)	21 years
Defined Contribution Plan, Employer Matching Contribution, Percent of Match	50.00%
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	6.00%
Employer matching contributions \| $	$ 0.9	$ 1.6

- Definition

Amount of contribution received by defined benefit plan from employer which increases plan assets.

+ References + Details

SEGMENT AND GEOGRAPHICAL INFORMATION (Details) $ in Thousands	3 Months Ended						9 Months Ended
	Oct. 02, 2020 USD ($)	Jul. 03, 2020 USD ($)	Apr. 03, 2020 USD ($)	Sep. 27, 2019 USD ($)	Jun. 28, 2019 USD ($)	Mar. 29, 2019 USD ($)	Oct. 02, 2020 USD ($) segment	Sep. 27, 2019 USD ($)	Dec. 27, 2019 USD ($)
SEGMENT INFORMATION
Number of operating segments \| segment							2
Number of reporting segments \| segment							2
Segment reconciliation
Contract revenue	$ 104,508			$ 117,494			$ 294,083	$ 313,683
Depreciation and amortization	4,339			5,788			14,324	11,308
Interest expense, net	1,213			1,257			3,983	3,599
Segment profit (loss) before income tax expense	1,054			40			(13,780)	266
Income tax expense (benefit)	(1,586)			(376)			(3,281)	(1,373)
Net income (loss)	2,640	$ (4,985)	$ (8,154)	416	$ 1,640	$ (417)	(10,499)	1,639
Segment assets(1)	398,456			362,612			398,456	362,612	$ 439,913
Energy
Segment reconciliation
Contract revenue	87,887			97,987			242,394	257,962
Engineering and Consulting
Segment reconciliation
Contract revenue	16,621			19,507			51,689	55,721
Reporting Segments \| Energy
Segment reconciliation
Contract revenue	87,888			97,934			242,394	257,910
Depreciation and amortization	4,072			5,425			13,499	10,353
Interest expense, net	7			20			26	20
Segment profit (loss) before income tax expense	3,203			1,669			(6,490)	2,316
Income tax expense (benefit)	(437)			461			(1,545)	640
Net income (loss)	3,641			1,208			(4,944)	1,676
Segment assets(1)	348,350			246,675			348,350	246,675
Reporting Segments \| Engineering and Consulting
Segment reconciliation
Contract revenue	16,620			19,560			51,689	55,773
Depreciation and amortization	267			363			825	955
Segment profit (loss) before income tax expense	2,757			2,586			7,953	6,603
Income tax expense (benefit)	1,300			715			1,894	1,825
Net income (loss)	1,457			1,871			6,059	4,779
Segment assets(1)	22,755			23,366			22,755	23,366
Unallocated Corporate
Segment reconciliation
Interest expense, net	1,206			1,237			3,957	3,579
Segment profit (loss) before income tax expense	(4,906)			(4,215)			(15,243)	(8,653)
Income tax expense (benefit)	(2,449)			(1,552)			(3,630)	(3,838)
Net income (loss)	(2,458)			(2,663)			(11,614)	(4,816)
Segment assets(1)	50,481			115,701			50,481	115,701
Intersegment
Segment reconciliation
Contract revenue	0							0
Segment assets(1)	$ (23,130)			$ (23,130)			$ (23,130)	$ (23,130)

SEGMENT AND GEOGRAPHICAL INFORMATION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019
Disaggregation of Revenue [Line Items]
Revenue	$ 104,508	$ 117,494	$ 294,083	$ 313,683
Domestic
Disaggregation of Revenue [Line Items]
Revenue			294,083	313,683
Energy
Disaggregation of Revenue [Line Items]
Revenue	87,887	97,987	242,394	257,962
Energy \| Domestic
Disaggregation of Revenue [Line Items]
Revenue			242,394	257,962
Engineering and Consulting
Disaggregation of Revenue [Line Items]
Revenue	16,621	19,507	51,689	55,721
Engineering and Consulting \| Domestic
Disaggregation of Revenue [Line Items]
Revenue			51,689	55,721
Commercial
Disaggregation of Revenue [Line Items]
Revenue	11,267	13,578	31,562	32,239
Commercial \| Energy
Disaggregation of Revenue [Line Items]
Revenue	9,967	12,028	27,585	28,063
Commercial \| Engineering and Consulting
Disaggregation of Revenue [Line Items]
Revenue	1,300	1,550	3,978	4,176
Government
Disaggregation of Revenue [Line Items]
Revenue	29,394	35,876	104,556	92,651
Government \| Energy
Disaggregation of Revenue [Line Items]
Revenue	14,737	17,955	58,167	41,400
Government \| Engineering and Consulting
Disaggregation of Revenue [Line Items]
Revenue	14,657	17,921	46,390	51,251
Utilities
Disaggregation of Revenue [Line Items]
Revenue	63,846	68,040	157,963	188,793
Utilities \| Energy
Disaggregation of Revenue [Line Items]
Revenue	63,183	68,004	156,642	188,499
Utilities \| Engineering and Consulting
Disaggregation of Revenue [Line Items]
Revenue	664	36	1,321	294
Time-and-materials
Disaggregation of Revenue [Line Items]
Revenue	24,655	17,776	78,571	52,778
Time-and-materials \| Energy
Disaggregation of Revenue [Line Items]
Revenue	10,936	2,806	37,072	10,154
Time-and-materials \| Engineering and Consulting
Disaggregation of Revenue [Line Items]
Revenue	13,719	14,970	41,499	42,624
Unit-based
Disaggregation of Revenue [Line Items]
Revenue	45,092	71,315	129,979	199,107
Unit-based \| Energy
Disaggregation of Revenue [Line Items]
Revenue	43,010	67,759	122,800	188,388
Unit-based \| Engineering and Consulting
Disaggregation of Revenue [Line Items]
Revenue	2,082	3,556	7,180	10,719
Fixed price
Disaggregation of Revenue [Line Items]
Revenue	34,761	28,403	85,531	61,798
Fixed price \| Energy
Disaggregation of Revenue [Line Items]
Revenue	33,941	27,422	82,522	59,420
Fixed price \| Engineering and Consulting
Disaggregation of Revenue [Line Items]
Revenue	$ 820	$ 981	$ 3,011	$ 2,378

SEGMENT AND GEOGRAPHICAL INFORMATION - Concentration risk (Details)	3 Months Ended		9 Months Ended
	Oct. 02, 2020 state customer	Sep. 27, 2019 customer	Oct. 02, 2020 state customer	Sep. 27, 2019 customer
Concentration Risk [Line Items]
Number of States in which Entity Operates \| state	24		24
NEW YORK
Concentration Risk [Line Items]
Customer concentration risk percentage				19.60%
Revenue from Contract with Customer Benchmark \| CALIFORNIA
Concentration Risk [Line Items]
Customer concentration risk percentage	32.30%	39.70%	40.20%	28.00%
Revenue from Contract with Customer Benchmark \| NEW YORK
Concentration Risk [Line Items]
Customer concentration risk percentage	19.20%	20.70%	18.40%
Customer Concentration Risk \| Energy Segment
Concentration Risk [Line Items]
Number of customers	0
Customer Concentration Risk \| Revenue from Contract with Customer Benchmark
Concentration Risk [Line Items]
Number of customers		1	1	1
Customer concentration risk percentage		11.70%	12.80%	15.20%
Customer Concentration Risk \| Revenue from Contract with Customer Benchmark \| Energy Segment
Concentration Risk [Line Items]
Number of customers		2	2	2
Customer concentration risk percentage		24.50%	26.80%	30.50%
Customer Concentration Risk \| Revenue from Contract with Customer Benchmark \| Engineering And Consulting Segment
Concentration Risk [Line Items]
Number of customers	1	1	1	1
Customer concentration risk percentage	18.70%	27.40%	19.60%	26.70%
Top Ten Customers \| Customer Concentration Risk \| Revenue from Contract with Customer Benchmark
Concentration Risk [Line Items]
Number of customers	10	10	10	10
Customer concentration risk percentage	46.70%	52.00%	48.60%	50.20%

INCOME TAXES (Details) - USD ($)	3 Months Ended		9 Months Ended
INCOME TAXES (Details) - USD ($)	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019	Dec. 28, 2018
INCOME TAXES
Valuation reserve related to California net operating losses					$ 86,000
Valuation allowance change			$ 0
Unrecognized tax benefits	$ 100,000		100,000
Liability for uncertain tax positions	100,000		100,000
Interest and penalties related to unrecognized tax benefits			20,000.00
Income tax expense (benefit)	$ (1,586,000)	$ (376,000)	$ (3,281,000)	$ (1,373,000)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

EARNINGS PER SHARE (EPS) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Oct. 02, 2020	Jul. 03, 2020	Apr. 03, 2020	Sep. 27, 2019	Jun. 28, 2019	Mar. 29, 2019	Oct. 02, 2020	Sep. 27, 2019
Earnings (Loss) per share:
Net income (loss)	$ 2,640	$ (4,985)	$ (8,154)	$ 416	$ 1,640	$ (417)	$ (10,499)	$ 1,639
Weighted-average common shares outstanding (in shares)	11,992,000			11,217,000			11,723,000	11,097,000
Effect of dilutive stock options and restricted stock awards (in shares)	425,000			572,000				617,000
Weighted-average common shares outstanding-diluted (in shares)	12,417,000			11,789,000			11,723,000	11,714,000
Earnings (Loss) per share:
Basic	$ 0.22			$ 0.04			$ (0.90)	$ 0.15
Diluted	$ 0.21			$ 0.04			$ (0.90)	$ 0.14
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)	329,000			155,000				155,000

BUSINESS COMBINATIONS (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended		12 Months Ended
	Jul. 02, 2019	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019	Dec. 27, 2019
BUSINESS COMBINATIONS
Par value (in dollars per share)		$ 0.01		$ 0.01		$ 0.01
Cash paid at closing						$ 27,000
Revenues.		$ 104,508	$ 117,494	$ 294,083	$ 313,683
Cash paid					$ 46,539
Onsite Energy Corporation
BUSINESS COMBINATIONS
Aggregate Purchase price	$ 24,905
Revenues.		2,800		7,400
Cash paid	24,905
Lime Energy
BUSINESS COMBINATIONS
Revenues.		$ 11,800		$ 35,500
Willdan Energy Solutions \| Onsite Energy Corporation \| Maximum
BUSINESS COMBINATIONS
Aggregate Purchase price	$ 26,400

BUSINESS COMBINATIONS (Acquisitions) (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 28, 2019	Jul. 02, 2019	Mar. 08, 2019	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019	Dec. 27, 2019	Jun. 26, 2019
Consideration for acquisitions
Cash paid							$ 46,539
Cash paid at closing								$ 27,000
Allocation of acquired assets
Goodwill				$ 130,625		$ 130,625		$ 127,647
Revenue and Income from operations
Revenues.				104,508	$ 117,494	294,083	313,683
Income from operations				1,601	1,295	(10,509)	3,834
Delayed Draw Term Loan Facility
Consideration for acquisitions
Maximum borrowing capacity									$ 50,000
E3, Inc.
Consideration for acquisitions
Tax deductible goodwill	$ 22,700
Issuance of common stock	$ 5,000
Number of trading days considered for calculation of weighted average price per share prior to closing date	10 days
Period over which financial targets must be met	3 years
Maximum Payout	$ 12,000
Proceeds from borrowings	30,000
Contingent consideration	7,680
Cash paid	25,217
Other working capital adjustment	1,973
Total consideration	39,870
Cash paid at closing	27,000
Allocation of acquired assets
Current assets	5,273
Non-current assets (1)	341
Cash	2,264
Equipment and leasehold improvements, net	409
Right-of-use asset	7,641
Current lease liability	(750)
Non-current lease liability	(7,300)
Liabilities	(4,735)
Goodwill	22,687
Net assets acquired	39,870
Increase in carrying value of right-of-used assets and non-current lease liability							5,600
Decrease in carrying value of liabilities and goodwill				5,000		5,000
Additional amortization expense charge due to increase in fair value of intangible assets				100		100
Revenue and Income from operations
Revenues.				5,300		17,100
Income from operations				600		3,100
E3, Inc. \| Maximum
Consideration for acquisitions
Earn-Out Payments	12,000
Total consideration	44,000
E3, Inc. \| Backlog
Allocation of acquired assets
Intangible assets	2,600
E3, Inc. \| Customer relationships
Allocation of acquired assets
Intangible assets	6,050
E3, Inc. \| Tradename
Allocation of acquired assets
Intangible assets	4,200
E3, Inc. \| Developed technology
Allocation of acquired assets
Intangible assets	880
E3, Inc. \| In-process research & development
Allocation of acquired assets
Intangible assets	$ 310
Onsite Energy Corporation
Consideration for acquisitions
Tax deductible goodwill		$ 8,600
Cash paid		24,905
Total consideration		24,905
Allocation of acquired assets
Current assets		19,058
Non-current assets (1)		10
Equipment and leasehold improvements, net		39
Right-of-use asset		828
Current lease liability		(168)
Non-current lease liability		(660)
Liabilities		(12,222)
Goodwill		8,600
Net assets acquired		24,905
Decrease in current assets						3,500
Increase in carrying value of goodwill						3,500
Additional amortization expense charge due to increase in fair value of intangible assets				700		700
Revenue and Income from operations
Revenues.				2,800		7,400
Income from operations				1,000		1,000
Onsite Energy Corporation \| Backlog
Allocation of acquired assets
Intangible assets		1,510
Onsite Energy Corporation \| Customer relationships
Allocation of acquired assets
Intangible assets		7,050
Onsite Energy Corporation \| Tradename
Allocation of acquired assets
Intangible assets		860
The Weidt Group
Consideration for acquisitions
Tax deductible goodwill			$ 11,500
Cash paid			22,136
Total consideration			22,136
Allocation of acquired assets
Current assets			2,317
Non-current assets (1)			25
Equipment and leasehold improvements, net			198
Right-of-use asset			1,730
Current lease liability			(245)
Non-current lease liability			(1,533)
Liabilities			(612)
Goodwill			11,546
Net assets acquired			22,136
Revenue and Income from operations
Revenues.				3,700		11,000
Income from operations				500		1,300
The Weidt Group \| Backlog
Allocation of acquired assets
Intangible assets			750
The Weidt Group \| Customer relationships
Allocation of acquired assets
Intangible assets			4,240
The Weidt Group \| Tradename
Allocation of acquired assets
Intangible assets			550
The Weidt Group \| Developed technology
Allocation of acquired assets
Intangible assets			$ 3,170
Lime Energy
Unaudited pro forma financial information
Pro forma revenue				104,508	122,505	294,083	341,914
Pro forma income (loss) from operations				1,601	(998)	(10,509)	5,317
Pro forma net income (loss) (1)				$ 924	$ (23,429)	$ (12,085)	$ (19,820)
Earnings (Loss) per share:
Basic (in dollars per share)				$ 0.08	$ (2.06)	$ (1.03)	$ (1.76)
Diluted (in dollars per share)				$ 0.07	$ (1.96)	$ (1.03)	$ (1.67)
Weighted average shares outstanding:
Basic (in shares)				11,992	11,379	11,723	11,259
Diluted (in shares)				12,417	11,951	11,723	11,876
Revenue and Income from operations
Revenues.				$ 11,800		$ 35,500
Income from operations				$ 2,100		$ 5,400
Willdan Energy Solutions \| Onsite Energy Corporation \| Maximum
Consideration for acquisitions
Total consideration		$ 26,400